Transcript Johansson - Tunghai University

Chapter
11
Global Segmentation and
Positioning
McGraw-Hill/Irwin
© 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Outline
 The Managerial Context
 Micro-Segmentation
 Macro-segmentation
 Targeting Segments
 Global Product Positioning
 Global S-T-P Strategies
 Takeaways.
The Global Marketer’s Mindset
The typical context for globalized marketing is not the
usual “close to customer” mindset.
Rather, the point is usually to coordinate marketing
activities across a wide variety of markets where the
firm does business.
A top-down approach easily leads to insensitivity
towards local customers and local requirements, and
conflicts with local subsidiaries.
The Global Marketer: Customer-oriented?
1. Selling orientation – sell what we make, the
product line is given.
2. Standardization of products as much as
possible.
3. Coordination via new reporting lines to
make sure everyone is on board.
4. Centralization of the marketing effort to
make sure all speak the same language.
The Global Marketer’s Mindset
 Because of the natural inclination to ignore local
variations in customer preferences and local
requirements, global marketing can easily lead to mispositioned products and inappropriate promotional
appeals.
 It can also, of course, lead to local resistance and
animosity, not good considering anti-globalization and
anti-Americanism sentiments.
 The key is to strike the optimal balance between local
adaptation and global efficiency.
Segmentation-Targeting-Positioning
 The typical way of approaching global marketing
strategy is similar to the so-called S-T-P framework:
 1. Segmentation – the splitting up of the total market into
segments of more homogeneous subgroups.
 2. Targeting – the selection of which one(s) of these
subgroups the company should market its product to.
 3. Positioning – exactly how the company should present
the product to the target market(s) so its perception is
most advantageous relative to competition.
Two-Stage Global Segmentation
 It is common to distinguish two stages of global
segmentation
 1. Macro-segmentation – the division of a number of
countries into subgroups of more similar clusters
 2. Micro-segmentation – the identification of local
segments which are similar across the countries in a
cluster.
 The micro-segmentation techniques used in domestic
markets are also useful in global segmentation.
Micro-Segmentation
TYPICAL SEGMENTATION CRITERIA
• Economic
- the most basic local segmentation criterion is still
economic development
• Demographic - the age and family structure in different countries
play an important role in determining global segments
• Culture - people care about their identify even though a lot has
been said in the media about the emergence of global segments of
people
• Benefits - the most clear cut segmentation criteria focus on the
benefits sought
• Lifestyle – consumers start developing their own lifestyle with
buying behavior involving more than simple necessities
Micro-Segmentation
WHICH CRITERIA SHOULD YOU USE TO SPLIT UP THE MARKET?
Useful segmentation criteria must accomplish three
goals:
1. Should show us what influences the segment’s
buying behavior, both consumption level and choice
between competing brands
2. Should be reflected in published data so that the size
of the segment can be calculated
3. Should help identify the media through which
marketers can communicate with the segment
Micro-Segmentation
WHEN DO YOU HAVE A GOOD SEGMENTATION SCHEME?
Useful market segments possess these characteristics:
•
IDENTIFIABLE – what distinguishes them?
•
MEASURABLE – how many belong to each segment?
•
REACHABLE – how to distribute to, communicate to,
each segment?
•
ABLE TO BUY – can they afford it?
•
WILLING TO BUY – do they want it?
Macro-Segmentation
MACROSEGMENTATION – clustering of countries on the basis of
common characteristics deemed to be important for marketing
purposes, e.g. data on:
• Population
size
•Level of development
• Population character
• Rate of growth in GNP
• Disposable income levels
• Infrastructure
• Educational background
• Political affiliation
• Primary languages
Typical Macro-Segmentation Criteria
Factor
number
Name and number
of descriptors
Selected descriptors
Aggregate economic, of
level of development (47)
Population size (31)
Gross national product, radios in use,
passenger kilometers flown.
Total midyear population
Personal economic, or
standard of living (32)
Canada—conditions on which
Canada ranks highest (12)
Linguistic affinity (10)
Income per capita, newsprint consumption
per capita, birth rate (negatively related)
Newsprint production, visitor arrivals in
the U.S. geographic area
Adults who read English or speak it
VII.
YC—Code for private
descriptors (11)
International participation (22)
VIII.
Trade capacity (12)
Brand and industry sales of a consumer
product, number of Roman Catholics
Membership in international organizations,
foreign tourist arrivals, airfare to Tokyo
Exports, number of Protestants
IX.
Climate or price stability (10)
X.
Mortality (5)
I.
II.
III.
IV.
V.
VI.
Sunny days per year, temperature
of key city, price index (negative)
Infant death rate, number of Moslems
Macro-Segmentation on Standard of
Living and Religion
0
.9
.8
,7
Factor III
.6
Standard of
Living
.5
• ISR
.4
• MAC
.2
.1
Catholic
• AUT
PUE •
• • BEL
FRA
• CHI
• VEN
• SPA
•
BRA
PHI •
ITA•
• PER
•
•
•
MEX COL
ARG
• JAP
.3
Protestant
• SWE
• DEN
NOR •
FIN• • UKI
• AUS
•
NEZ
• SWI
•
NET
•
SOT •
GER
TUR
•
•
PAK
0
• IND
• THI
-.1
-.2
-.1
0
.1
.2
.3
.4
.5
.6
.7
.8
Factor VI Religion
.9
1.0
Macro-Segmentation on “Think” and “Feel”
Dimensions
Macro-Segmentation Based on Lifestyle
6 PAN-EUROPEAN LIFESTYLE SEGMENTS
TRADITIONALIST
18%
HOMEBODY
14%
RATIONALIST
23%
PLEASURIST
17%
STRIVER
15%
TRENDSETTER
13%
Relative size of segments in percent, of the
European Market, as developed by the RISC
research agency
Targeting Segments
 The choice of which countries and which segment(s) to
target involves an analysis of projected profitability over
the planning horizon.
 The basic computation involves forecasting sales in a
segment and the market share that the firm can expect to
achieve. These techniques were covered in the
forecasting chapter (no.4).
 Predicting competitive reactions is also necessary,
especially if the target segment is likely to be brand loyal.
 The choice of target countries should also consider the
tradeoff between focus and diversification.
Targeting Segments
 Diversification versus Focus Strategy
 Diversification Strategy
 In developing a global strategy, some companies make a
conscious effort to be a player in different countries and
different market segments. Difficulties in one market segment
or country can be offset by gains elsewhere.
 Focus Strategy
 Markets and segments can be given more attention and
markets positions fortified. This is particularly advantageous
when the country or segment competitive rivalry is intense (see
hyper-competition in chapter 2, for example).
Diversification vs Focus
Factors
Diversity if:
Growth rate
Demand stability
Competitive lag
Spillover
Need to adapt product
Need to adapt promo
Marginal sales
Need for control
Entry barriers
Low
Low
Short
High
Low
Low
Diminishing
Low
Low
Focus if:
High
High
Long
Low
High
High
Increasing
High
High
Global Product Positioning
 Product Positioning involves using the marketing mix
(the 4Ps) to present the product to the selected target
market(s) so that it is perceived in the most favorable
way relative to preferences and competition.
 To identify the optimal position, global marketing draws
on the same techniques as domestic marketers in
mapping out a visual representation of how the
customers view the competing brands on the market.
 This visual mapping is usually called “perceptual space”
or, more commonly, the “product space.”
U.S. Product Space of Autos 1968
SPORTY
Jaguar Sedan
Ford Mustang
AMC Javelin
Plymouth
Barracuda
Mercury
Cougar
Ideal point for subject I
Ford Thunderbird V8
Chevrolet
Corvair
Lincoln
Continental
Ideal point for subject J
Ford Falcon
LUXURIOUS
Chrysler
Imperial
Buick Le Sabre
Global Product Positioning
Four sets of data to construct the product space
Salient Attributes - data on what attributes a customer looks for in a
product
Evoked Set - identifying what brands are considered by the buyer
Attribute Ratings - how the individual rates the brands in the evoked
set on salient attributes
Preferences - how the brands rank in terms of overall preferences
Product Space with Segment Sizes
Has a touch of class. Distinguished looking
Lincoln
Conservative
looking
Cadillac
4
BMW
Chrysler
Mercedes
Ford
Sporty
looking.
Pontiac
Chevrole
t
Appeals to
older people
Porsche
2
Buick
Oldsmobil
e
1
Datsun
Toyota
3
Dodge
Plymouth
5
VW
Very practical. Gives good gas mileage.
Fun to
drive.
Global Product Positioning
THERE ARE THREE DIFFERENT EFFECTS ON BUYERS WHEN A
GLOBALLY STANDARDIZED PRODUCT OR BRAND IS
INTRODUCED ON A LOCAL MARKET:

1. THE NEW BRAND SIMPLY TARGETS ONE UNTAPPED
SEGMENT.

2. THE PRODUCT SPACE IS ALTERED, BY ADDING
DIMENSIONS OR EXTENDING ENDPOINTS.

3. BUYER PREFERENCES ARE CHANGED.
IN PRACTICE, ALL THREE PROCESSES ARE OFTEN AT WORK
SIMULTANEOUSLY.
Global Product Positioning

IT IS RARE THAT CUSTOMERS’ PERCEPTIONS REMAIN
UNCHANGED WHEN A GLOBALLY STANDARDIZED PRODUCT
ENTERS THE MARKET.

EXTENDED PRODUCT SPACE THIS OCCURSWHEN
GLOBALLY STANDARDIZED PRODUCTS OFFER MORE OF
THE SALIENT FEATURES DESIRED. THE NEW FEATURES
TEND TO ENLARGE THE SPACE WHICH DEFINE THE
PRODUCT. (EX: MORE MEMORY IN PCs)

ADDED DIMENSIONS THIS OCCURS WHEN THE
GLOBALLY STANDARDIZED PRODUCT OFFERS IMPORTANT
NEW FEATURES (EX: CAMERA ON A CELL-PHONE)
Honda Accord Extends the Product Space
ECONOMY
Overall Rating
Honda
Accord
BMW 320i
VW Rabbit
Toyota
Celica
Datsun
200SX
Mazda
Audi 4000
PERFORMANCE
Chrysler Kcar
Chevrolet
Citation
Ford
Mustang
Global Product Positioning

WHEN PRODUCTS ARE STANDARDIZED AND NOT
ADAPTED TO THE PARTICULAR MARKET, THEY ARE
OFTEN “MISPOSITIONED” (NOT HITTING THE TARGET
BULLSEYE).

THERE ARE THREE REASONS WHY CONSUMERS MIGHT
STILL BUY MISPOSITIONED PRODUCTS:

BRAND IMAGE

COUNTRY OF ORIGIN

LOWER PRICE
Brand Image

MISPOSITIONED PRODUCTS CAN BE ATTRACTIVE TO
POTENTIAL CUSTOMERS BECAUSE OF BRAND IMAGE AND
STATUS. GLOBAL BRANDS OFTEN DO BETTER THAN
LOCAL BRANDS THAT MAY BE BETTER SUITED TO
CUSTOMER NEEDS FOR THAT AND OTHER REASONS:

CONSPICUOUS CONSUMPTION --LET EVERYONE SEE
WHAT YOU BUY AND HOW MUCH YOU BUY.

LOWER PERCEIVED RISK AND COGNITIVE
DISSONANCE -- WHEN GIVING A GIFT, FOR EXAMPLE
Country-of-Origin

WHERE A PRODUCT OR BRAND COMES FROM OFTEN
COUNTS A GREAT DEAL WITH CONSUMERS.

COUNTRY-OF-ORIGIN EFFECT DEALS WITH
QUALITY PERCEPTIONS OF PRODUCTS. THIS EFFECT
DIFFERS BY PRODUCT CATEGORY. ALSO, THE QUALITY
LEVEL AT WHICH A COUNTRY PRODUCES IS FACTORED
IN.

COUNTRY-OF-ORIGIN BIAS CUSTOMERS TEND TO
OVERSTATE THE POSITIVE AND NEGATIVES OF
PRODUCT ATTRIBUTES AND THIS CAN CAUSE A BIAS
TOWARDS PRODUCTS FROM A GIVEN COUNTRY.
Lower Price
 THROUGH A REDUCED PRICE, A CUSTOMER IS OFTEN
INDUCED TO BUY A MISPOSITIONED BRAND BECAUSE
THEY FEEL THAT THEY AR GETTING A “GOOD DEAL.”
 HOWEVER, THIS CAN BACKFIRE ON THE MARKETER,
SINCE THE PRICE PAID GRADUALLY LOSES SALIENCE,
WHILE THE LESS DESIRABLE BRAND STAYS AS A
REMINDER.
Global S-T-P Strategies
 Market Segmentation Cases
 Similar Segment
 The target segment is the same across countries
 Different Segment
 The target segment differs across countries
 Product Positioning Dimensions
 Similar Positioning
 Indicates a positioning which is the same across countries
 Different Positioning
 Indicates that the positioning theme is adapted across
countries.
Global S-T-P Strategies
Local Micro-Segment
Similar
Nike
Different
IKEA
Similar
Mobile phones
Positioning
Volvo
Levi’s
Different
Pampers
Honda Prelude
Takeaway
Because global marketing involves coordination of marketing
across countries, the mindset of the global marketer is
different from that of the typical domestic marketer.
It is not as customer oriented in any one local market..
It is important to strike the right balance between a global and
local orientation.
Takeaway
The typical approach to global segmentation occurs in two
stages:
Macro-segmentation of countries in a first stage,
followed by
micro-segmentation where target segments in the chosen
countries are identified.
Takeaway
Statistically based clustering techniques can be used
with trade regions to group the countries into macrosegments of markets with similar economic & cultural
characteristics.
Takeaway
Successful local positioning of a product or brand requires an
in-depth analysis of how the local market might react to the
entry of a foreign or global brand.
Takeaway
Even if the target segments are the same across countries,
positioning may differ. And even where the positioning is the
same across countries, the segments might differ.
The reasons involve differing environmental conditions
surrounding product usage and different competitive
situations.