7-1

INTERNATIONAL MARKETING
MANAGMENT
Chapter 2

Global Market Segmentation,

Targeting, and Positioning
for Competitive Advantage
Steps in Global Segmentation, 7-2

Targeting, and Positioning

6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s)
Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market
 7-3

• Market segmentation: Dividing a market into

distinct groups of buyers with different needs,
characteristics or behavior, who might require
separate produces or marketing mixes.
• Market targeting process: evaluating each market
segment's attractiveness, then selecting one or
more market segments to enter.
• Market positioning: Arranging for a product to
occupy a clear and desirable place relative to
competing products in the minds of target
consumers. Formulating competitive positioning
for a product and a detailed marketing mix.
Step 1. Market Segmentation 7-4

Levels of Market Segmentation

Mass Marketing
Using the same product and M mix to all consumers
(no segmentation)

Segment Marketing
Different products to one or more segments
(some segmentation)

Niche Marketing
Different products to subgroups within segments
( more segmentation)

Micromarketing
Products to suit the tastes of individuals or local market
(complete segmentation)
Step 1. Market Segmentation 7-5

Bases for Segmenting Consumer

Markets
Geographic
Nations, states,
regions or cities

Demographic
Age, gender,
family size and life cycle,
or income

Psychographic
Social class, lifestyle,
or personality

Behavioral
Occasions, benefits,
uses, or responses
 7-6

Segmenting the consumer markets

• Geographic Segmentation: Dividing an overall market into
homogeneous groups on the basis of their locations
• Demographic segmentation: dividing consumer groups
according to characteristics such as gender, age, income,
occupation, education, ethnicity, household size, and
stage in the family life cycle.
• Psychographic Segmentation: dividing a population into
groups that have similar psychological characteristics,
and lifestyles.
• Behavioral Segmentation : people’s decisions about how
to live their daily lives, including benefits, usage rate,
attitude, and loyalty status.
 7-7

Segmentation Type Description Examples — Variables

Geographic Divides
the market into different Country / region / city, city size, density
geographical units (urban, suburban, rural), ISP domain
Demographic Divides
the market on the basis of Age,gender, income, occupation,
demographic variables education, nationality, family status, Internet
connectivity
Firmographic Divides
the market on the basis of Online/ offline business, number of
company-specific variables employees, company size, job function,
purchasing process
Behavioral Divides
the market based on how Online / offline shopping behavior, web-
customers actually buy and use the product page or site customer arrived from, website
loyalty, prior purchases
Occasion (Situational) Dividesthe market based on the situation Routine occasion, special occasion, time
that leads to a product need, purchase or (time of day, day of week, holidays),
use location (From home, on the road), event
(when writing a business plan, when
shopping), trigger (out of supply)
Psychographic Dividesthe market based on lifestyle and / Personality (laid back, type A), lifestyle (thrill
or personality seekers, fun lovers, recluse), affinity
(community builders, belongers, outcasts)
Benefits Divides the market based on benefits or Convenience, economy, quality, ease of
qualities sought from the product use, speed, information, selection
Step 1. Market Segmentation 7-8

Bases for Segmenting Business

Markets

Personal Demographics
Characteristics

Bases
for Segmenting
Situational Business Operating
Factors Markets Characteristics

Purchasing
Approaches
Step 1. Market Segmentation 7-9

Bases for Segmenting International

Markets

Industrial Markets

Political/
Geographic Economic
Legal

Cultural Intermarket
Step 1. Market Segmentation 7-10

Requirements for Effective Segmentation

Measurable • Size, purchasing power, profiles

of segments can be measured.

Accessible • Segments must be effectively

reached and served.

Substantial • Segments must be large or

profitable enough to serve.

Differential • Segments must respond

differently to different marketing
mix elements & actions.

Actionable • Must be able to attract and serve

the segments.
Step 2. Market Targeting 7-11

Evaluating Market Segments

• Segment Size and Growth

– Analyze sales, growth rates and expected profitability.

• Segment Structural Attractiveness

– Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.

• Company Objectives and Resources

– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
Step 2. Market Targeting 7-12

Market Coverage Strategies

Company
Marketing Market
Mix

A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3

C. Concentrated Marketing
 7-13

Market Coverage Strategies

• Target market: A set of buyers sharing common needs or
characteristics that the company decides to serve.
Un differentiated marketing: A market-coverage strategy in
'which a firm decides to ignore market segment differences and
targets the whole market with one offer or one marketing mix
– Mass marketing
– Focuses on common needs rather than what’s different
• Differentiated marketing: A marker-coverage strategy in
which a firm decides to target several market segments and
designs separate offers and marketing mix for each.
• Concentrated marketing: A market-coverage strategy in
which a firm goes after a large share of smaller market (of one
or a few submarkets).
 7-14

Selecting Target Market Segments

• Market-Targeting Strategies
Step 2. Market Targeting 7-15

Choosing a Market-Coverage
Strategy
Company
Resources

Product
Variability

Product’s Stage
in the Product Life Cycle

Market
Variability

Competitors’
Marketing Strategies
Step 3. Positioning for Competitive 7-16

Advantage

• Product’s Position - the place the product

occupies in consumers’ minds relative to
competing products; i.e. Volvo positions
on “safety”.

• Marketers must:
– Plan positions to give products the greatest advantage
– Develop marketing mixes to create planned positions
Step 3. Positioning for Competitive
7-17

Advantage: Strategies

Product Product
Class Attributes

Away from Benefits

Competitors H
G
Offered
C

D
Against a E
B
Usage
Competitor F
Occasions

Users
Steps to Choosing and Implementing 7-18

a Positioning Strategy

• Step 1. Identifying a set of possible

competitive advantages: Competitive
Differentiation.

• Step 2. Selecting the right competitive

advantage.

• Step 3. Effectively communicating and

delivering the chosen position to the market.
Developing Competitive 7-19

Differentiation
Product Service

Areas for Competitive

Differentiation

Personnel Image
Selecting the Right Competitive 7-20

Advantages

Important

Profitable Criteria Distinctive

for
Determining
Which
Differences
Affordable to Superior
Promote should be

Preemptive Communicable