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					International Marketing 466
Week 4
Prof. Hasson

Chapter 7 Global Segmentation and Positioning
Chapter 8 Global Marketing Strategies
Chapter 9 Global Market Entry Strategies
Pages 12-21 in An Approach to Developing Effective Global Marketing
Comunications & Plans


“A firm’s customers and competitors are determined by the products it
offers.”

I.   Basic Concepts
       Drucker—marketing and innovation
        produce revenues-maximizing profits is #1
        responsibility of international marketing.
       Global Marketing
         - Reduction of cost inefficiencies and
           duplication efforts among national &
           regional subs.
         - Opportunities for the transfer of
           products, brands and other ideas across
           subs.
         - Emergence of global customers
         - Improved linkages among national
           marketing infrastructures leading to
           development of global marketing
           infrastructure
       Friedman-One overarching feature—
        integration. Globalization characterized by
        the Web

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II.   Market Segmentation, Targeting & Positioning
Segmenting
Breaking down diverse markets into manageable segments
for purpose of increasing profitability.

Why Segment Markets?

      Organization can respond more effective to
      wants of groups of prospective buyers thereby
      increasing sales and profits.
           1.Markets are complex.

            Definition of market segmentation-- importance
            of grouping people according to similarity of their
            needs and the benefits they are looking for in
            making a purchase.

      2.    Markets are rarely homogenous

      3. People have different needs and wants, even though it
         would be easier for marketers if they didn’t.

      4. Needs and benefits must be related to specific
         tangible marketing actions the firm can take.
         Actions must satisfy customer needs and
         segments


                                                                 2
   Segment Properties
         Measurable. Easy to define and measure.
         Sizable. Large enough to be worth going after.
         Accessible. Easy to reach via the media.
         Actionable. 4 P’s can be developed to evoke the
          desired response from the target market.
         Competitive intensity.
         Growth potential. Segment should have
          significant growth potential.

Summary--firms segment their markets so they
can:
     Respond more effectively to the wants of groups
      of prospective buyers

       Increase its sales and profits.

Therefore: Market Segmentation links market
needs to an organization’s marketing program


Growing Importance of Segmentation

 1. Population growth has slowed in most major
    industrialized countries and more product-markets
    are maturing.

 2. Customers have more-varied and -sophisticated
    needs, tastes, and lifestyles on a global basis than
    ever before.

                                                           3
          Customer sophistication is due to global social,
          economic and technological forces
     Important trend toward universal or global
      segments. Transends national boundaries and,
      have common needs—MTV generation,
      businesspeople, affluent, etc.
     Unique segments-preferences substantial
     Shifts from mass to micro marketing

  3. Marketing organizations --facilitated the
     implementation of specialized marketing
     programs by broadening and segmenting
     their own services


Criteria to Use in Forming Segments

          Potential for increased profit and ROI
          Similarity of needs of potential buyers within
           a segment—product features or advertising
           media used
          Difference of needs of buyers among
           segments
              If needs of various segments are not
              appreciably different—combine into fewer
              segments. Different segments require
              different marketing action--meaning
              greater cost.


                                                         4
       Feasibility of a marketing action to reach
         a segment.
       Simplicity and cost of assigning potential
         buyers to segments
         A global marketing manager must be
         able to put a market segmentation plan
         into effect.

Ways to segment international markets.
       (1) Geography

       (2) Level of Development.
       -High levels of literacy, standard of living,
       educational and health infrastructure, wide
       variety of media and media penetration

        (3) Cultural cohort group—
        demographic or psychographic group
        that slices across multiple cultures.
              (a) Psychographic variables are
              consumer activities, interests, and opinions.

                        Benefits offered. Important
                         benefits offered different
                         customers are a very useful
                         way to segment markets.
                        Usage rate


                                                              5
Steps to segmenting—STP Marketing
Example; Gillette for Women

        1) Identify market needs—Breaking down
        diverse markets into manageable segments
        Gillette’s market: analyzed via demographic
        segmentation

        2) Develop a market-product grid and
        estimate size of markets.
        Select target markets
         Dividing the market into segments,

                - Picking the target segments

                              (1) Size - the estimated size of
                              the market in the segment.

                              (2) Expected growth - a
                              projection of the size of the
                              market segment in the future.

                              (3) Competitive position - the
                              firm's position in the segment
                              relative to current competition
                              and expected future
                              competition.

                              (4) Cost of reaching the segment
                              - whether the segment is


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                         accessible to a firm's marketing
                         actions.


                         (5) Compatibility with the
                         organization's objectives and
                         resources - whether the firm can
                         economically reach the segment
                         with the good or service it offers.

3)     Execute marketing program
Targeting
Choosing specific segments as the focal point for your
marketing efforts.
Gillette’s target segment: females 15-24 worldwide
Positioning
Segmenting is not enough. After segmenting foreign
markets, and targeting the markets it wants to pursue, the
multinational or global company needs to determine
positioning strategy to use to appeal to chosen segments.

Positioning is the fifth P--aligning the marketing mix to
yield distinctive appeal for the target segment.

Gillette’s positioning: a new product line designed by
women for women—advertising theme—Gillette for
Women: Are you Ready?




                                                             7
Product positioning refers to the place an offering occupies
in consumers' minds on important attributes relative to
competitive offerings.


Study Guide: Chapter 7

Segment properties
Positioning
Universal segments
STP Marketing
Unique segments
Segment criteria


III. Extend, Adapt, Create: Strategic Alternatives
in Global Marketing

Geographical expansion outside home country or
region is one of the major opportunities of global
marketing.

Companies can grow in different ways. See
Alternative Growth Strategies in Global
Markteting Guide page 47.

Extension strategy-marketing a standardized
product, using standardized communications
approach in multiple markets, or both.




                                                               8
Adaptation Strategy-Changing elements of design,
function or packaging in response to needs or
conditions in specific markets.

    An adaptation communication strategy—
    different messages for different markets

Rule: As with segmentation—making product
design changes may increase sales can’t exceed
changing a product’s design and testing of it in
market.

Decision to expand can result as company desires,
economic, political and sociocultural
considerations. While tastes and preferences are
converging vs. significant differences still exist in
terms of what customers want and need.

Laws and regulations frequently lead to product
design adaptations.


     Strategy 1: Product-Communication
      Extension (Dual Extension)

     Easiest and most profitable product
     marketing strategy.
     Sell the exact product with the same
     advertising and promotional appeals used

                                                        9
 domestically to multiple country markets or
 segments.

 Perfect for manufacturers of industrial
 products

 Strategy 2: Product Extension-
  Communication Adaptation

  Product is unchanged, R&D, tooling,
  manufacturing set-up and inventory costs
  are avoided.

  Costs for this approach are identifying
  different product functions and revising
  ads, sales promotion and communication
  programs.

  Particular advertising or promotional
  program not suited for certain country
  environments.

 Strategy 3: Product Adaptation-
  Communication Extension

  This approach to global product planning is
  to extend, without change, the home market
  communications strategy while adapting the


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     product to local use or preference
     conditions.

    Strategy 4: Product-Communication
     Adaptation (Dual Adaptation)

     Use this strategy when environmental or
     consumer preferences differ and the same
     may be true of the function a product serves
     or consumers acceptance of ads.

     Global companies use product and
     communication adaptation.

     Multinational companies use dual
     adaptation—it is definitional

IV. Diffusion Theory & Adoption Process
          See pages 15-18 in An Approach….
V. Modes of Entry
See pages 20 –21 in an Approach….




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