SEGMENTATION, TARGETING,
AND POSITIONING
Global Marketing
1
Chapter 7
MARKET SEGMENTATION
7-2
Represents an
effort to identify
and categorize
groups of
customers and
countries
according to
common
characteristics
TARGETING
The process of evaluating
segments and focusing
marketing efforts on a
country, region, or group
of people that has
significant potential to
respond
7-3
Focus on the segments
that can be reached most
effectively, efficiently,
and profitably
POSITIONING
7-4
Positioning is required to differentiate the product or brand
in the minds of the target market.
GLOBAL MARKET
SEGMENTATION
7-5
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.
CONTRASTING VIEWS OF
GLOBAL SEGMENTATION
• 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 microlevel differences
• Segments micro
markets within and
between countries
7-6
Conventional Wisdom
GLOBAL MARKET
SEGMENTATION
Demographics
Psychographics
Behavioral
characteristics
7-7
Benefits
sought
DEMOGRAPHIC
SEGMENTATION
Income
Population
Age distribution
Gender
Education
Occupation
7-8
What are the
trends?
AGE SEGMENTATION
Global Teens–young people
between the ages of 12 and 19
• A group of teenagers randomly
chosen from different parts of the
world will share many of the
same tastes
7-9
Global Elite–affluent
consumers who are well
traveled and have the money
to spend on prestigious
products with an image of
exclusivity
GENDER SEGMENTATION
In focusing on the
needs and wants
of one gender, do
not miss
opportunities to
serve the other
Companies may
offer product lines
for both genders
7-10
• Nike, Levi Strauss
PSYCHOGRAPHIC
SEGMENTATION
Grouping people according to attitudes, values, and lifestyles
7-11
•
•
•
•
•
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
BEHAVIOR
SEGMENTATION
Focus on whether people purchase a product or not, how
much, and how often they use it
User status
7-12
Law of disproportionality/Pareto’s Law–80% of a company’s
revenues are accounted for by 20% of the customers
BENEFIT SEGMENTATION
Benefit segmentation focuses on the value equation
7-13
• Value=Benefits/Price
Based on understanding the problem a product solves,
the benefit it offers, or the issue it addresses
ETHNIC SEGMENTATION
countries includes ethnic
groups of significant size
• 40+ million Hispanic Americans (14%
of total pop.) with $560 billion annual
buying power
• CA Mexicans have after-tax income of
$100 billion
• The number of Hispanic teens will
rise from 12 percent of the U.S. teen
population to 18 percent in the next
decade
7-14
The population of many
Hispanic Americans
TARGET MARKETING STRATEGIES
15
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.
16
TARGET MARKET STRATEGY
OPTIONS
• Niche marketing
• Single segment of
global market
• Look for global depth
rather than national
breadth
• Ex.: Chanel, Body Shop
• Multi-segment
targeting
• Two or more
distinct markets
• Wider market
coverage
• Ex.: P&G markets
Old Spice and
Hugo Boss for Men
7-17
Concentrated global
marketing
Differentiated
global marketing
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.
18
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
7-19
•
•
•
•
POSITIONING MAP
6-20
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
Beer is associated with this German’s culture; the
symbol on his shirt is not German!
7-21
• Associates the brand’s users, use
occasions, or product origins with a
foreign country or culture
7-22
POSITIONING STRATEGIES
Local consumer culture
positioning
7-23
• Identifies with local cultural
meanings
• Consumed by local people
• Locally produced for local
people
• Used frequently for food,
personal, and household
nondurables
IMPORTING, EXPORTING, AND
SOURCING
Global Marketing
24
Chapter 8
INTRODUCTION
This chapter looks at:
• Export selling and
export marketing
• Organizational export
activities
• National policies on
imports and exports
• Tariff systems
• Key export participants
8-25
Export Selling vs. Export Marketing
Export selling involves selling the same product,
at the same price, with the same promotional
tools in a different place
Export marketing tailors the marketing mix to
international customers
8-26
REQUIREMENTS FOR EXPORT MARKETING
An understanding of the target market environment
The use of market research and identification of market
potential
Decisions concerning product design, pricing, distribution
and channels, advertising, and communications
8-27
NATIONAL POLICIES GOVERNING
EXPORTS AND IMPORTS
Most nations encourage exports
and restrict imports
Goods and services imported
into the U.S. almost doubled in
seven years
In 2008, the total was $2.5
trillion
8-28
GOVERNMENT PROGRAMS THAT
SUPPORT EXPORTS
Tax incentives
Subsidies
Governmental assistance
Free trade zones
8-29
GOVERNMENTAL ACTIONS TO
DISCOURAGE IMPORTS AND BLOCK
MARKET ACCESS
Tariffs ( “Three R’s”)
Nontariff barriers
• Quotas
• Discriminatory procurement
policies
• Restrictive customs
procedures
• Arbitrary monetary policies
• Restrictive regulations
8-30
Port Authority of Thailand: Laem Chabang
EXAMPLES OF TRADE
BARRIERS
Table 8.3 p. 277
EU- 16.5% antidumping tariffs on
Shoes from China
10% on shoes from Vietnam
China- 28% on foreign made auto
parts
8-31
GOVERNMENTAL ACTIONS TO DISCOURAGE
IMPORTS
A nontariff trade barrier (NTB) is any measure other than a tariff
that is an obstacle to the sale of products in a foreign market.
NTBs are also known as hidden trade barriers.
A quota is a government-imposed limit or restriction on the
number of units or the total value of a particular product or
product category that can be imported.
• In 2005, for example, textile producers in Italy and other European
countries were granted quotas on 10 categories of textile imports from
China.
Discriminatory procurement policies can take the form of
government rules and administrative regulations that give local
vendors priority.
• The Buy American Act of 1993
8-32
TARIFF SYSTEMS
Single-column tariff
• Simplest type of tariff
• Schedule of duties in which rate applies to
imports from all countries on the same basis
Two-column tariff
• General duties plus special duties apply
8-33
TARIFF SYSTEMS
8-34
Sample Rates of Duty for U.S. Imports
PREFERENTIAL TARIFF
Reduced tariff rate applied to imports
from certain countries
GATT prohibits the use, with three
exceptions:
• Historical preference arrangements already existed
• Preference is part of formal economic integration
treaty
• Industrial countries are permitted to grant
preferential market access to LDCs
8-35
CUSTOMS DUTIES
Ad valorem duty
• Expressed as percentage of value of goods
Specific duty
• Expressed as specific amount of currency per unit of weight,
volume, length, or other unit of measurement
• $1 per pair of Shoes
• 1000 Baht per ton of the goods imported
Compound or mixed duties
• Apply both ad valorem and specific on the same
items
8-36
OTHER DUTIES AND IMPORT
CHARGES
Anti-dumping Duties
• Dumping is the sale of merchandise in export markets at unfair
prices
• Special import charges equal to the dumping margin
• 48.5% added to tax against Chinese imports of bicycles in EU
Countervailing Duties
• Added duties to offset the subsidies granted in the
export countries
Temporary Surcharges
8-37
Key Export Participants
(Self Study)

 Foreign purchasing
agents
 Export brokers
 Export merchants
 Export management
companies
 Export distributor
 Export commission
representative
 Cooperative exporter
 Freight forwarders
 Manufacturer’s export
representatives
8-38
ORGANIZING FOR EXPORTING IN
THE MARKET COUNTRY
Direct market representation
• Advantages: control and communications
Representation by independent
intermediaries
• Advantages: best for situations with small
sales volume
8-39
EXPORT FINANCING AND
METHODS OF PAYMENT
Documentary credits (Letter of
Credit)
Documentary collections (Bill of
Exchange)
Cash in advance
Sales on open account
8-40
FLOW CHART OF
DOCUMENTARY CREDIT
8-41
8-42
8-43
SOURCING
Must emphasize benefits of sourcing from
country other than home country
Must assess vision and values of company
leadership
Advantage can be gained by
• Concentrating some of the marketing activities in a single
location
• Leveraging company’s know-how
• Tapping opportunities for product development and R&D
8-44
8-45
FACTORS THAT AFFECT
SOURCING
Management vision
Factor costs and conditions
Customer needs
Logistics
Country infrastructure
Political risk
Exchange rate, availability, and
convertibility of local money
8-46
DUTY DRAWBACK
Refunds of duties paid on imports that are
processed or incorporated into other goods
AND re-exported
Reduce the price of imported production
inputs
Used in the U.S. to encourage exports
After NAFTA, U.S. reduced drawbacks on
exports to Canada and Mexico
China had to reduce drawbacks in order to
join the WTO
8-47
LOOKING AHEAD TO
CHAPTER 9
Global Market Entry Strategies: Licensing, Investment,
and Strategic Alliances
8-48