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23/4/2014
1Global MarketingWarren J. Keegan Mark C. GreenGlobal MarketingWarren J. Keegan Mark C. GreenSegmentation, Targeting, and PositioningChapter 7Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
Global MarketingWarren J. Keegan Mark C. GreenSegmentation, Targeting, and PositioningChapter 7IntroductionHow to identify like groups of potential customers?How to chose the groups to target?How to segment those groups?How to position the brand in the mind of the customer?
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Market SegmentationRepresents an effort to identify and categorize groups of customers and countries according to common characteristics
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TargetingThe process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respondFocus on the segments that can be reached most effectively, efficiently, and profitably
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PositioningPositioning 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 segmentswhether they be country groups or individual consumer groupsof potential customers with homogeneous attributes who are likely to exhibit similar responses to a companys marketing mix.
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Contrasting Views of Global SegmentationConventional WisdomAssumes heterogeneity between countriesAssumes homogeneity within a countryFocuses on macro level of cultural differencesRelies on clustering of national marketsLess emphasis on within-country segments
Unconventional WisdomAssumes emergence of segments that transcend national boundariesRecognizes existence of within-country differencesEmphasizes micro-level differencesSegments micro markets within and between countriesCopyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
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Kate Stephenson (KS) - In the note, where does the Sapna Nayak quote end? Please address.Global Market SegmentationDemographicsPsychographicsBehavioral characteristicsBenefits sought
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Demographic SegmentationIncomePopulationAge distributionGenderEducationOccupation
What are the trends?Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Facts and TrendsIn India the number of people under the age of 14 is greater than the entire US population
In the EU, the number of consumers aged 16 and under is rapidly approaching the number of consumers aged 60-plus
Asia is home to 500 million consumers aged 16 and under
Half of Japans population will be age 50 or older by 2025
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A widening age gap exists between the older populations in the West and the large working-age populations in developing countriesIn the European Union, the number of consumers aged 16 and under is rapidly approaching the number of consumers aged 60-plusAsia is home to 500 million consumers aged 16 and underHalf of Japans population will be age 50 or older by 2025
Demographic Segmentation
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Segmenting by Income and Population Income is a valuable segmentation variable2/3s of worlds GNP is generated in the Triad but only 12% of the worlds population is in the TriadDo not read into the numbersSome services are free in developing nations so there is more purchasing powerFor products with low enough price, population is a more important variable
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Per Capita Income
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10 Most Populous Countries
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Age Segmentation
Global Teens-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
Global Eliteaffluent consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity
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Gender SegmentationIn focusing on the needs and wants of one gender, do not miss opportunities to serve the otherCompanies may offer product lines for both gendersNike, Levi Strauss
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Psychographic Segmentation
Grouping people according to attitudes, values, and lifestyles SRI International and VALS 2Porsche exampleTop Guns (27%): Ambition, power, control Elitists (24%): Old money, car is just a carProud Patrons (23%): Car is reward for hard workBon Vivants (17%): Car is for excitement, adventureFantasists (9%): Car is form of escape
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Psychographic SegmentationThe Euroconsumer:Successful IdealistComprises from 5% to 20% of the population; consists of persons who have achieved professional and material success while maintaining commitment to abstract or socially responsible idealsAffluent MaterialistStatus-conscious up-and-comers many of whom are business professionals use conspicuous consumption to communicate their success to othersCopyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
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Psychographic SegmentationThe Euroconsumer:Comfortable Belongers25% to 50% of a countrys populationconservative most comfortable with the familiar content with the comfort of home, family, friends, and community
Disaffected Survivorslack power and affluenceharbor little hope for upward mobility tend to be either resentful or resigned concentrated in high-crime urban inner cityattitudes tend to affect the rest of society
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Psychographic Segmentation:Sonys U.S. Consumer Segments
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Behavior Segmentation
Focus on whether people purchase a product or not, how much, and how often they use itUser statusLaw of disproportionality/Paretos Law80% of a companys revenues are accounted for by 20% of the customersCopyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
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Benefit Segmentation
Benefit segmentation focuses on the value equationValue=Benefits/PriceBased on understanding the problem a product solves, the benefit it offers, or the issue it addresses
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Ethnic SegmentationThe population of many countries includes ethnic groups of significant size
Three main groups in the U.S. include African-Americans, Asian-Americans, and Hispanic Americans
Hispanic Americans50 million Hispanic Americans (14% of total pop.) with $978 billion annual buying power$1 trillion Latina 24 million Hispanic women: 42% single, 35% HOH, 54% working
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Assessing Market PotentialBe mindful of the pitfallsTendency to overstate the size and short-term attractiveness of individual country marketsThe company does not want to miss out on a strategic opportunityManagements network of contacts will emerge as a primary criterion for targeting
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Assessing Market Potential
Three basic criteria:Current size of the segment and anticipated growth potentialPotential competitionCompatibility with companys overall objectives and the feasibility of successfully reaching the target audience
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Current Segment Size and Growth
Is the market segment currently large enough to present a company with the opportunity to make a profit?
If the answer is no, does it have significant growth potential to make it attractive in terms of a companys long-term strategy?
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Potential CompetitionIs there currently strong competition in the market segment?Is the competition vulnerable in terms of price or quality?
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Feasibility and CompatibilityWill adaptation be required? If so, is this economically justifiable in terms of expected sales?
Will import restrictions, high tariffs, or a strong home country currency drive up the price of the product in the target market currency and effectively dampen demand?
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Feasibility and CompatibilityIs it advisable to source locally? Would it make sense to source products in the country for export elsewhere in the region?
Is targeting a particular segment compatible with the companys goals, brand image, or established sources of competitive advantage?
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Framework for Selecting Target MarketsDemographic information is a starting point but not the decision factorProduct-Market must be consideredMarket defined by product categoryMarketing model drivers must be consideredFactors required for a business to take root and growAre there any enabling conditions present?Conditions whose presence or absence will determine success of the marketing model
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9 Questions for Creating a Product-Market ProfileWho buys our product?Who does not buy it?What need or function does it serve?Is there a market need that is not being met by current product/brand offerings?What problem does our product solve?What are customers buying to satisfy the need for which our product is targeted?What price are they paying?When is the product purchased?Where is it purchased?Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall
Target Market Strategy OptionsStandardized global marketingMass marketing on a global scaleUndifferentiated target marketingStandardized marketing mixMinimal product adaptationIntensive distributionLower production costsLower communication costs
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Target Market Strategy OptionsConcentrated global marketingNiche marketingSingle segment of global marketLook for global depth rather than national breadthEx.: Chanel, Estee Lauder
Differentiated global marketingMulti-segment targetingTwo or more distinct marketsWider market coverageEx.: P&G markets Old Spice and Hugo Boss for Men
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Positioning StrategiesGlobal consumer culture positioningIdentifies the brand as a symbol of a particular global culture or segmentHigh-touch and high-tech productsForeign consumer culture positioningAssociates the brands users, use occasions, or product origins with a foreign country or culture
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Positioning StrategiesLocal consumer culture positioningIdentifies with local cultural meaningsConsumed by local peopleLocally produced for local peopleUsed frequently for food, personal, and household nondurablesEx.: Budweiser is identified with small-town America
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Looking Ahead to Chapter 8
Importing, Exporting, and Sourcing
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