International Marketing

SEGMENTATION AND TARGETING

BY: AASTHA SHARMA

ROLL NO:121
MBA(GEN) 4TH SEMESTER
 Objectives
• Identifying the rationale for adopting target marketing strategies in
internal market
• Identify the requirements necessary for effective international
market segmentation
• Introduce the concept of country attractiveness analysis and offer a
blueprint for conducting the analysis
• Identify the bases for consumer segmentation
• Describe the three targeting strategies used by countries
worldwide
• Describe the six positioning strategies that international companies
can use to position their brands in the midst of target consumers
 TARGET MARKETING
The process of focusing on those
segments that the company can serve
most effectively and designing products,
services and marketing programs with
these segments in mind.
 INTERNATIONAL TARGET MARKETING IS
USED TO:
• Identify consumer segments with similar
traits
• Select the segments that company can serve
effectively
• Develop products tailored to each segment
• Offer product to the target market:
• Communicate the traits that differentiate the product
WHY DO INTERNATIONAL SEGMENTATION?

• The reason behind the utilization of market

segmentation is
market homogeneity/heterogeneity
• Based on National boundaries, countries can have:
– Vertical homogeneity(homogeneity within the same country)
– Horizontal homogeneity(homogeneity across countries)
• Two countries lacking vertical homogeneity within
borders may exhibit horizontal homogeneity with an
equivalent segment of the other country, increasing the
market of the product.
 According to
HASSAN and KATSANIS
‘Global Market Segment’
is derived through
“the process of identifying specific segments,
whether they be country groups or individual
consumer goods, of potential consumers with
homogeneous attributes who are likely to
exhibit similar buying behavior.”
Example: They feel that the global elite and global teenager
segments are particularly amenable to global segmentation.
 INTERNATIONAL SEGMENTATION
• The process of identifying consumers and/or
international markets that are similar with
regard to key traits, such as product related
needs and wants , and that would respond
well to a product and related marketing mix.
– Must be performed at both the Country
Level(macro-segmentation) and Consumer
Level(micro-segmentation)
• Extent to which international segments respond differently Differential response
to marketing strategies
• Extent to which the target segment is responsive to Actionability
marketing strategies. Eg: Colgate Palmolive strategy
• Ability to communicate with the international target market
Accessibility
• Extent to which preferences are stable rather than changing
Stability over time
• Extent to which market is large enough to warrant Substantiality
investment
• Ability to estimate size of the market
Measurability
Segmentation
Requirements for Effective International
 Macro-Segmentation: Country
Attractiveness Analysis
• Market potential
• Political, Legal and Financial environment
• Marketing support infrastructure
• Brand/company franchise relative to
competing products/companies
• Degree of market fit with company policies,
goals and resources
 Market Potential
• Indicators
– Gross domestic product(GDP) per capita
– Industrial and agricultural sectors statistics
– Market size and potential
– Consumer buying power
– International investment figures(FDI, other trade
statistics)
Political, Legal and Financial Environment

– Ethnic conflict
– History of war engagement
– Antiforeigner sentiment
– Recent nationalization activity
– Legal ambiguity
– Trade barriers
– Exchange rate controls
Example: Sri lanka, Sudan
Marketing Support Infrastructure
– Availability and reliability of distribution and logistics
provider
– Availability of competent partners for strategic alliance.
Example: Sabanci Holdings in Turkey.
– Adequate local advertising support
– Quality of telecommunication and transportation
infrastructure
– Availability of other service providers
• Marketing research firms
• Financial firms
• Management consulting firms
 Brand/Company Franchise
• Markets can be segmented based on
– The reputation of the product/company in the
market
– The competitive density in the market for the
company’s product
• Here the related dimension of the lead or lag
country is also useful.
 Degree of Market Fit with Company Goals,
Policies and Resources
• For companies with resources and the goal to
saturate world market, no market is too small.
Example: coca cola, Mcdonalds
• Companies with resources but who only cater
to the luxury market will focus on
industrialized countries. Example: Rolex
• Companies with limited resources can afford
to target only one or few countries.
Micro-Segmentation: Focusing on the Target
Customer
• Demographic and Psychographic
segmentation
• Benefit segmentation
• Usage and User segmentation
• Geographic segmentation
 Demographic Segmentation

• Age
• Occupation
• Education
• Income
• Ethnicity
• Race
• Nationality
• Life cycle stage
• Social class
• Urbanization
 Psychographic Segmentation
lifestyles, values, attitudes, interests, opinion
• Hofstede’s dimensions:
– Power distance (US & China)
– Masculinity feminity(US & Sweden)
– Uncertainty avoidance(China & US)
– Individualism collectivism(US & Thailand)

• Global segments
– Global teenagers
– Global elite
 Bases of segmentation

Benefit segmentation Geographic segmentation

• Segmenting based on Segmentation based on
important differences geographic location,
such as country or
between the benefits
region
sought by the target
market from purchasing
a particular product
 Bases of segmentation
Usage User status
• Non users • Ex users
• Occasional users • Potential users
• Medium users • First time users
• Heavy users • Users of competitors
brands
• Regular users
TARGET ING INTERNATIONAL CONSUMERS

• TARGET MARKETING DECISIONS

– COUNTRY SCREENING AND SELECTION

– THE TARGET MARKET STRATEGY

Country Screening and Selection
– Assigning importance score to each country
screening criteria
– Evaluate country performance on each screening
criteria
– Calculate country attractiveness score
Tools for International Market Analysis

• Growth-share( Boston consulting group)

Matrix
• Market Attractiveness/ Company Strength
Matrix
 Target Market Strategy
• Differentiated Targeting Strategy

• Concentrated Targeting Strategy

• Undifferentiated Targeting Strategies

Differentiated Targeting Strategy
– Identifying market segments with different
preferences for a particular product category and
targeting each segment with different brands and
different marketing strategies
– Example: proctor & gamble, offers a vareity of
laundry detergents in North America: Bold, Cheer,
Dreft, Era, Febreze clean wash, Gain, Ivory Snow
and Tide.
Concentrated Targeting strategy
– Select only one market segment and target it with
a single brand.It helps avoid a direct &immediate
competition with major firms.
– Example: mont blanc pens
– Japanese
– Vicco identified a niche abroad for a sugarfree
toothpaste(Vicco SF)
Undifferentiated Targeting Strategy
– Aim the product at the market with a single
strategy regardless of the number of market
segments. It achieves a high sales volume.
Characterized by Market Aggregation.
– Example: powder milk, coca cola
 Positioning the Brand
– Attribute/Benefit positioning
– Price/Quality positioning
– Use/Applications positioning
– Product User positioning
– Product Class positioning
– Competitor positioning