Chapter Eleven
Global Segmentation and Positioning
Global Strategy Decisions
Keegan’s Global Strategies
Product-communication extension/adaptation
matrix
Levitt’s Globalization Theory
Cultural homogenization due to technology,
communication
Homogenizing factors
Dynamic preferences
New products
Leading markets
Marketing Strategy Options
(Ch 1, pp 8-11, 17)
Multidomestic
strong cultural influences, localize and adapt
Global
similar buyer preferences, global
customers/competitors
Globalized localization
integrate sourcing, production and marketing
seek balanced growth
coordination of marketing across countries
globalize as much as possible, localize when necessary
converging customers, savvy affiliates
Multidomestic versus Global Markets:
Key Differences
Multidomestic Markets
Market boundaries Markets are defined within country
borders. Customers and
competitors are of local origin.
Customers
Significant differences exist among
customers from different countries;
segments are defined locally.
Competition
Interdependence
Strategies
Exhibit 11.1
Competition takes place among
primarily local firms; even
international companies compete
on a country-by-country basis.
Each local market operation in
isolation from the rest.
Competitive actions in one market
have no impact elsewhere.
Strategies are locally based. Little
advantage exists in coordinating
activities among markets.
Global Markets
Markets transcend country borders.
Customers and/or competitors cross
frontiers to buy and to sell.
Significant similarities exist among
customers from different countries;
segments cut across geographic
frontiers.
Competitors are few and present in
every major market. Rivalry takes on
regional or global scope.
Local markets operate
interdependently. Competitive
actions in one market impact other
markets.
Strategies are regional or global in
scope. Great advantage exists in
coordinating activities within regions
or worldwide.
Market Analysis Tools
Macrosegmentation
Country clustering approaches, diversification vs focus
Microsegmentation
Segmentation requirements – must be actionable
Criteria:economic/demographic/culture/benefits/ lifestyle
Global Product Positionain
Product space and components
New brand – space intact, extended, new
features/perceptions
“Mispositioning” of global brands – price, image, CoO
effects
4-11
A Two-Dimensional
Country Clustering Map
0
• SWE
• DEN
NOR •
FIN• • UKI
•
• AUS
NEZ
• SWI
•
•
NET
SOT
•
• ISR
• AUT
GER
PUE • • • BEL
• JAP
FRA • CHI
• MAC
• VEN
• SPA
PHI • • BRA
TUR • IND
ITA•
•
• • • PER
•
•
• THI
PAK
ARG MEX COL
.9
.8
,7
.6
.5
.4
.3
.2
.1
0
-.1
-.2 -.1
0
Protestant
Exhibit 4.4
.1
.2
.3
Catholic
.4 .5 .6
Factor VI
.7
.8
.9
1.0
4-13
A Market-Oriented Clustering
of World Markets
Cluster
Demographic make-up
Dependent societies
Most countries in
Africa, Asia and a few
in South America
Seekers
Most Latin America:
some in Asia
(Indonesia, Thailand,
Philippines) and some
in Africa (Morocco,
Tunisia, Egypt).
Exhibit 4.5
Marketing implications
Population growth: 3%
Median age: 16
Children: 5+
Infant mortality:
100 per 1,000 births
Life expectancy:
40 years
GNP per capita: less
than $300
Demand goods and services related to
food, clothing, housing, education and
medical care.
Investments related to extractive activities
(agriculture and mining) are undertaken.
Government/state economic enterprises
are the major buying groups.
Poor infrastructure and access to rural
markets are major impediments.
Population growth:
1.5 to 2.5%
Median age: 20
Children: 4+
Infant mortality: 50 to
100 per 1,000 births
Life expectancy:
60 years
GNP per capita: less
than $900
Infrastructure-related projects are high
priority (construction equipment,
machinery, chemicals, etc.).
Good opportunities for technology sales
and turnkey projects.
Independent trading groups and a few
large holding companies have much
influence.
Increased urbanization but a "mass
market" does not yet exist.
Source: Cavusgil, 1990, pp. 206-7. Reprinted by permission of Butterworth-Heinemann, Ltd.., and the author.
Market Positioning Map of Selected
Automobile Brands (1984)
Has a touch of class
A car I’d be proud to own
Distinctive looking
Conservativelooking.
Appeals to
older people
• Lincoln
BMW •
• Porsche
4.
Cadillac •
5.
Mercedes •
• Chrysler 2.
• Pontiac
• Buick
Oldsmobile •
Ford •
Dodge •
Plymouth •
• Chevrolet
• Datsun
1.
• Toyota 3.
• VW
Spirited
performance.
Sporty looking
Fun to drive.
Appeals to
young people
Very practical
Gives good gas mileage
Affordable
Source: John Koten, “Car Maker’s Use ‘Image’ Map as Tools to Position Products,” The Wall Street Journal,
March 22, 1984, pp. 31. Reprinted by permission of The Wall Street Journal, ©1984 Dow Jones & Company,
Inc. All rights reserved worldwide
Chapter Terms and Essay
Terms
Cluster analysis, country-of-origin effects,
diversification, focus, lifestyle, Keegan’s matrix, Levitt’s
globalization, segmentation criterion, mispositioning
Essay
Pepsico’s Pizza Hut (Global Marketers article) franchise
wishes to expand throughout the world. It must
choose between a global, multidomestic and globalized
localization strategy. Define and explain each of these
options. Recommend one to this firm, explaining your
reasons for your recommendation.
Nestle’s Branding Video
How has Nestle SA developed its product and
branding strategies in international markets?
Explain.
What advantages/disadvantages does this approach
create relative to local brands? Explain.
What advantages/disadvantages does this approach
create relative to global brands? Explain.
Chapter Eleven
Global Segmentation and Positioning