International Marketing 466
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
I. Basic Concepts
Drucker—marketing and innovation
produce revenues-maximizing profits is #1
responsibility of international marketing.
- Reduction of cost inefficiencies and
duplication efforts among national &
- Opportunities for the transfer of
products, brands and other ideas across
- Emergence of global customers
- Improved linkages among national
marketing infrastructures leading to
development of global marketing
Friedman-One overarching feature—
integration. Globalization characterized by
II. Market Segmentation, Targeting & Positioning
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
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.
Growth potential. Segment should have
significant growth potential.
Summary--firms segment their markets so they
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
2. Customers have more-varied and -sophisticated
needs, tastes, and lifestyles on a global basis than
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
Difference of needs of buyers among
If needs of various segments are not
appreciably different—combine into fewer
segments. Different segments require
different marketing action--meaning
Feasibility of a marketing action to reach
Simplicity and cost of assigning potential
buyers to segments
A global marketing manager must be
able to put a market segmentation plan
Ways to segment international markets.
(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.
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
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
(4) Cost of reaching the segment
- whether the segment is
accessible to a firm's marketing
(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
Choosing specific segments as the focal point for your
Gillette’s target segment: females 15-24 worldwide
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?
Product positioning refers to the place an offering occupies
in consumers' minds on important attributes relative to
Study Guide: Chapter 7
III. Extend, Adapt, Create: Strategic Alternatives
in Global Marketing
Geographical expansion outside home country or
region is one of the major opportunities of global
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.
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
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
Strategy 1: Product-Communication
Extension (Dual Extension)
Easiest and most profitable product
Sell the exact product with the same
advertising and promotional appeals used
domestically to multiple country markets or
Perfect for manufacturers of industrial
Strategy 2: Product Extension-
Product is unchanged, R&D, tooling,
manufacturing set-up and inventory costs
Costs for this approach are identifying
different product functions and revising
ads, sales promotion and communication
Particular advertising or promotional
program not suited for certain country
Strategy 3: Product Adaptation-
This approach to global product planning is
to extend, without change, the home market
communications strategy while adapting the
product to local use or preference
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
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….