Segmentation, Targeting, and Positioning

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Segmentation, Targeting, and

Positioning

Global Marketing

Chapter 7

©2011 Pearson Education, Inc. publishing as Prentice Hall

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Market Segmentation

• Represents an effort to identify and categorize groups of customers and countries according to common characteristics


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Targeting

• The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond

• Focus on the segments that can be reached most effectively, efficiently, and profitably


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Positioning

• Positioning is required to differentiate the product or brand in the minds of the target market.


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Global Market Segmentation

• Defined as 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 responses to a company’s marketing mix.


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Contrasting Views of Global Segmentation

• Conventional Wisdom– Assumes heterogeneity between countries– Assumes homogeneity within a country– Focuses on macro level of cultural differences– Relies on clustering of national markets– Less emphasis on within-country segments

• Unconventional Wisdom– Assumes emergence of segments that transcend

national boundaries– Recognizes existence of within-country differences– Emphasizes micro-level differences– Segments micro markets within and between

countries


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Global Market Segmentation

• Demographics• Psychographics• Behavioral

characteristics• Benefits sought

Skiing became a sport in Norway where it was invented 4,000 years ago.


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Demographic Segmentation

• Income• Population• Age distribution• Gender• Education• Occupation

What are the trends?


THAILAND-Demographic facts

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Nationality: --Thai.Population (2009 est.): 67.0 million.Labor force (2009 est.): 38.4 million.Annual population growth rate (2009 est.): 0.5%.Ethnic groups: Thai 89%, other 11%.Religions: Buddhist 93%-94%, Muslim 5%-6%, Christian 1%, Hindu, Brahmin, other.Languages: Thai (official language) Education: Years compulsory--9.Literacy--94.9% male, 90.5% female.Life expectancy--70.51 years male, 75.27 years female.


Thailand-Economy

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Merchandise exports--$188.8 billion.

Major markets--ASEAN, EU, China, U.S., Japan, and Hong Kong.

Merchandise imports--$175.5 billion.

Major suppliers--Japan, ASEAN, China, the Middle East, EU, and

U.S.

Agriculture (12% of GDP): Products--rice, tapioca, rubber, corn,

sugarcane, coconuts, soybeans.

Industry Types--tourism, textiles, garments, agricultural

processing, cement, integrated circuits, jewelry, electronics,

petrochemical etc.


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Per Capita Income


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10 Most Populous Countries


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Psychographic Segmentation• Grouping people according to attitudes, values, and

lifestyles Porsche example from SRI International– Top Guns (27%): Ambition, power, control – Elitists (24%): Old money, car is just a car– Proud Patrons (23%): Car is reward for hard work– Bon Vivants (17%): Car is for excitement, adventure– Fantasists (9%): Car is form of escape


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Behavior Segmentation

• Focus on whether people purchase a product or not, how much, and how often they use it

• User status• Law of disproportionality/Pareto’s

Law–80% of a company’s revenues are accounted for by 20% of the customers


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Benefit Segmentation

• Benefit segmentation focuses on the value equation– Value=Benefits/Price

• Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses


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Target Marketing Strategies


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Standardized/Undifferentiated Marketing

• Focus is on common (not different) needs of consumers.

• Product and marketing program are geared to the largest number of buyers.

• Uses mass advertising and distribution and aims to give the product a a superior image .


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Differentiated/ Multi segment Marketing

• Firm targets several market segments and designs separate offers for each.

• The goal is to have higher sales and a stronger position with each market segment.

• This approach increases the costs of doing business.


P& G Shampoo brands

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Concentrated Marketing

• The focus is acquiring a large share of one or a few segments of niches.

• Generally, there are fewer competitors.

• The Internet is ideal for targeting small niche markets.

• There is some risk in focusing on only one market.


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Target Market Strategy Options

• Concentrated global marketing– Niche

marketing– Single segment

of global market

– Look for global depth rather than national breadth

– Ex.: Chanel, Body Shop

• Differentiated global marketing– Multi-segment targeting– Two or more distinct markets– Wider market coverage– Ex.: P&G markets Old Spice and Hugo

Boss for Men


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Positioning

• Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer– Attribute or Benefit– Quality and Price– Use or User– Competition


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Positioning Map


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Product vs. Brand Positioning


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Positioning Strategies• Global consumer culture

positioning– Identifies the brand as a symbol

of a particular global culture or segment

– High-touch and high-tech products

• Foreign consumer culture positioning– Associates the brand’s users,

use occasions, or product origins with a foreign country or cultureBeer is associated with this German’s culture; the

symbol on his shirt is not German!


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Positioning Strategies• Local consumer

culture positioning– Identifies with local

cultural meanings– Consumed by local people– Locally produced for local

people– Used frequently for food,

personal, and household nondurables

– Ex.: Budweiser is identified with small-town America


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Looking Ahead to Chapter 8

• Importing, Exporting, and Sourcing

Documents

Segmentation, Targeting, and Positioning