Steps in Segmentation, 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 Selection Criteria Targeting

2. Develop Profiles
of Resulting Segments
Market Segmentation
1. Identify Bases
for Segmenting the Market
 GLOBAL MARKET SEGMENTATION

 The process of dividing the world market into

distinct subsets of customers that behave in
the same way or have similar needs.
 The process of identifying specific segments
– whether they be country groups or
individual consumer groups of potential
customers with homogeneous attributes who
are likely to exhibit similar buying behaviour.
Step 1. Market Segmentation
Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Sameproduct
productto
toall
allconsumers
consumers
(no
(nosegmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Differentproducts
productsto
toone
oneor
ormore
moresegments
segments
(some
(somesegmentation)
segmentation)

Niche
Niche Marketing
Marketing
Different
Differentproducts
productsto
tosubgroups
subgroupswithin
withinsegments
segments
(more
(moresegmentation)
segmentation)

Micromarketing
Micromarketing
Products
Productsto
tosuit
suitthe
thetastes
tastesof
ofindividuals
individualsand
andlocations
locations
(complete
(completesegmentation)
segmentation)
Local Marketing Individual Marketing
Tailoring brands/ promotions Tailoring products/ programs
to local customer groups to individual customers
Requirements for Effective
International Segmentation
 Measurability
• Size, purchasing power, profiles of segments
can be measured.
 Substantiality
Segments are large or profitable enough to
serve
 Stability over time
Requirements for Effective
International Segmentation
 Accessibility
• Segments can be effectively reached and
served.
 Actionability
Effective programs can be designed to attract
and serve the segments.
 Differential response
Segments must respond differently to
different marketing mix elements &
programs.
International Macro-
Segmentation
 Market potential – indicators:
Gross domestic product (GDP) per capita
Industrial and agricultural sector statistics
Market size and potential
Consumer buying power
Investment figures (FDI, other trade statistics)
International Macro-
Segmentation
 Political, legal and financial environment
of country
Ethnic conflict
History of war engagement
Antiforeigner sentiment
Recent nationalization activities
Legal ambiguity
Trade barriers
Exchange rate controls
International Macro-
Segmentation
 Marketing support infrastructure
Availability and reliability of distribution and
logistics providers
Availability of competent partners for strategic
alliances
Quality of telecommunication and transportation
infrastructure
Availability of other service providers:
○ Marketing research firms
○ Financial firms
○ Management consulting firms…
International Macro-
Segmentation
 Strength of brand – brand franchise
 Degree of market fit with company policies,
goals, and resources
 Micro
Segmentation
Step 1. Market Segmentation
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

Behavioural
Occasions, benefits
sought, user status,
usage rate, loyalty
Bases of Segmentation
 Geographic Segmentation
 Demographic Segmentation
 Psychographic Segmentation
 Behaviour Segmentation
 Benefit Segmentation
 Vertical Vs. Horizontal Segmentation
Geographic Segmentation
 Dividing the market into Geographic subsets
 The markets in geographic subsets are closer
to each other
 Proximity does not mean that countries /
markets are same
 For e.g. Japan and Vietnam are in east Asia
but one is High Income, post industrial
society and the other is emerging, less
developed , pre industrial society.
 Demographic Segmentation
Based on Age, Gender, Income, Education,
and Occupation
- Age - Race
- Occupation - Nationality
- Education - Life-cycle
- Income stage
- Social class
- Ethnicity
- Urbanization
Psychographic Segmentation
 Attitude, Values and Lifestyles, Interests,
opinions
- Hofstede dimensions:
• Power-distance
• Masculinity-femininity
• Uncertainty avoidance
• Individualism-collectivism
-
Behavior Segmentation
 Whether people buy and use a product
 How often & how much they use it
 Customers can be categorised in terms of
usage rates:
Heavy, medium, light or non users
Potential users, non user, first timers, ex users,
regulars and users
Nestle is marketing bottled water in Pakistan , where
ther is a huge market of non users who despite
there
Benefit Segmentation
 When a product can solve a problem
regardless of geography
Vertical Vs Horizontal
Segmentation
Global Targeting
 Act of evaluating & comparing the
identified groups and then selecting one or
more of them as the prospect(s) with the
highest potential.
 Global segments:
Global teenagers
Global elite
Country Screening and
Selection
 Assign importance score to each
country screening criteria
 Evaluate country performance on
each of the screening criteria
 Calculate country attractiveness
score
Step
Step 2.
2. Market
Market Targeting
Targeting
Market
MarketCoverage
CoverageStrategies
Strategies
Company
Company
Marketing
Marketing Market
Market
Mix
Mix

A. Undifferentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
B. Differentiated Marketing

Segment
Segment11
Company
Company
Marketing
Marketing Segment
Mix Segment22
Mix
Segment
Segment33
C. Concentrated Marketing
Criteria for Targeting
 Current Segment Size & Growth Potential
Is the mkt segment large enough that it
presents a company with the opportunity to
make profit?
If not today, does it have high growth
potential so that it is attractive in long term?
For e.g. China represents attractive
opportunities in many industries
Only 3 million credit cards used by businesses
One computer for every 12500 people
One car for every 20,000 chinese
Criteria for Targeting
 Potential Competition
A market with strong competition may be a
segment to avoid or one in which to utilize a
different strategy
 Compatibility & Feasibility
Selecting a Global Target Market
Strategy
 Standardized Global Marketing
Same marketing mix for a broad market
Greater sales volume
Low production cost
For e.g. Coca Cola one of the world’s global
brands uses the appeal of youthful fun in global
advertising.
Selecting a Global Target Market
Strategy
 Concentrated Global Marketing
Devising a marketing mix to reach a single
segment of the global market.
 For e.g. Cosmetics
Selecting a Global Target Market
Strategy
 Differentiated Global Marketing
Identify or create market segments desiring
different product benefits and target each
segment with a different brand and different
marketing strategies
Targeting two or more distinct market segments
with different marketing mixes.
Allows a company to achieve wider market
coverage.
Example: Procter & Gamble
Step 3. Positioning for Competitive
Advantage: Strategies

Product
Product Product
Product
Class
Class Attributes
Attributes

Away
Awayfrom
from Benefits
Benefits
Competitors
Competitors Offered
Offered

Against
Againstaa Usage
Usage
Competitor
Competitor Occasions
Occasions

User
UserClass
Class
Global Product Positioning
 Location of the product in the minds of your
customer
1) Identify competitors
2) Determine how they are perceived by consumers
3) Determine positioning in consumer’s minds
4) Analyze customers
5) Select positioning
6) Monitor position
Global Product Positioning
 Attribute/Benefit
 Price/Quality
 Uses or Application
 Product User
 Product Class
 Competition
High Tech Positioning