Global Segmentation

1
International segmentation
2
Criteria for good segmentation

• Screening markets
• market entry based on KSFs
• A viable segment is
• measurable
• sizeable
• accessible
• actionable
• competitive
• growing

3
Reasons for segmentation

• find common purchase motives
• build global segments
• economies of scale
• alternative to close psychic distance
• screening markets/countries
• based on macro data despite limitations
• develop criteria for go/no go and those with
  future possibilities

4
Segmenting foreign markets

• Approaches to international segmentation Within
  vs. between country differences (intermarket vs.
  intramarket groups)
• Positioning in different markets

5
Approaches to International Market Segmentation

• Countries as segments (Macro-level
  segmentation--country aggregate characteristics
  are used to classify country--e.g.,
• demographics (age distribution, urbanization,
  ethnic composition)
• socioeconomic (level of development
• Segments within countries
• intramarket segmentation (unique segmentation
  scheme for each country
• intermarket segmentation some segments overlap
  between countries

6
Intramarket vs. Intermarket segmentation
INTRAMARKET
INTERMARKET

• No overlap between countries

• Some, but not all,segments overlap between the
  two countries
• Comparable segments may differ in size between
  countries

COUNTRY 1
COUNTRY 1
COUNTRY 2
COUNTRY 2
A
A
G
E
A
B
C
B
F
B
H
C
D
H
C
D
7
Intermarket vs. Intramarket Differences, Part I

• Average differences between countries but also
  significant differences within countries
• Segment structure may be similar, but segment
  sizes are likely to differ
• Relative vs. absolute differences--what is
  upscale in a given country?

8
Intermarket vs. Intramarket Differences, Part II

• Global brands can serve similar consumers across
  borders --gt possible economies of scale
• Product life cycle--segments in one country may
  follow or lead those of other country

9
Contrasting views of global segmentation

• Conventional Wisdom
• Assumes heterogeneity between countries
• Assumes homogeneity within a country
• Focuses on macro level 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

10
The European shampoo market customer
preferences
France Germany Italy Spain
U.K
11
The European shampoo market views about Elsève
(before relaunch)
France Germany Italy Spain
U.K
12
Relaunch and positioning across markets
13
Psychographic Segmentation intermarket segments

• Grouping people according to attitudes, value,
  and lifestyles
• SRI International and VALS 2
• Porsche example
• 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

14
Marketing strategy