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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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Prentice-Hall
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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Prentice-Hall
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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6
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
7
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.,
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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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12
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
18
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
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21
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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