Global Marketing

Topic 6

Segmentation, Targeting,
and Positioning
Learning Objectives
6.1 Identify the variables that global marketers can use to segment global
markets and give an example of each.

6.2 Compare and contrast the three main target market strategy options.

6.3 Describe the various positioning options available to global marketers.

7-3
 7-4

Market Segmentation

•Represents an effort to identify and categorize groups of

customers and countries according to common characteristics
 7-5

Targeting

•The process of evaluating segments and focusing marketing

efforts on a country, region, or group of people that has significant
potential to respond
•Focus on the segments that can be reached most effectively,
efficiently, and profitably
 7-6

Positioning/Differentiation

•Positioning is required to differentiate the product or brand in the

minds of the target market.
6.1 Identify the variables that global marketers can use to segment global
markets and give an example of each.

Types of segmentation methods

1. Demographic segmentation + Geographic segmentation
2. Psychographic segmentation
3. Behavioural segmentation + Benefit segmentation
https://opentext.wsu.edu/cpim/chapter/6-5-bases-for-segmentation/

• Through global market segmentation, a company can identify and group customers or countries
according to common needs and wants. Global teens and global elites are two examples of global
market segments.
• Demographic segmentation can be based on country income and population, age, ethnic heritage, or
other variables.
• Psychographic segmentation groups people according to attitudes, interests, opinions, and lifestyles.
• Behavioral segmentation utilizes user status and usage rate as segmentation variables.
• Benefits segmentation is based on the benefits buyers seek.
1. Demographic Segmentation
• Based on measurable population characteristics
– Age
– Income https://www.dosm.gov.my/

– Gender https://www.mycensus.gov.my/

– Age distribution What are the trends?

– Education A number of global demographic trends—fewer married
couples, smaller family size, changing roles of women,
– Occupation higher incomes and living standards, for example—have
contributed to the emergence of global market segments.

• Generally, national income is the most important variable for global marketers.
Demographic Segmentation https://www.un.org/en/global-issues/population

https://youtu.be/6vL1_kCX6qg

• 600 million South East Asian consumers, 70% under age 40

• India has the youngest demographic profile among the world’s large nations; 2/3 are
younger than 35
• Half of Japanese will be 50+ years. by 2025
• EU consumers under 16 almost as large as over 60
• 20% of Americans (70 million) will be 65+ by 2030
• US ethnic groups-African/Black, Hispanics, & Asian Americans have a combined annual
buying power of $3.5 trillion
• US is home to 28.4 million foreign-born with income of $233b

https://population.un.org/wpp/Graphs/DemographicProfiles/Line/458

https://www.visualcapitalist.com/aging-global-population-problem/
 7-10

a) Segmenting by Income and Population

• Income is a valuable segmentation variable
• For products whose price is low enough, population is
a more important variable

https://www.worldometers.info/world-population/#top20
China and India, World’s Largest Countries
• 1.4 billion population each
• High income, fast growing high-income segments in both
• Consumer packaged goods (CPG) companies are targeting India where the middle
class of 300 million but not all own cars, computers, washing machines
• Mass marketing is problematic due to regional differences of language, culture, history

https://www.pewresearch.org/fact-
tank/2022/07/21/global-population-
projected-to-exceed-8-billion-in-
2022-half-live-in-just-seven-
countries/
b) Market Segments by Age
• 600 million SE Asian consumers, 70% under age 40
• India has the youngest demographic profile among the world’s
large nations; 2/3 are younger than 35
• Half of Japanese will be 50+ y rs. by 2025ea

• EU consumers under 16 almost as large as over 60

• 20% of Americans (70 million) will be 65+ by 2030

Statistics such as these can provide valuable insights to marketers who are scanning the globe for opportunities.
For example, Disney hopes to capitalize on the huge number of young people and their parents’ rising incomes in
India as a means to extend its brand. Managers at global companies must be alert to the possibility that marketing
strategies will have to be adjusted in response to the aging of the population and other demographic trends. For
example, consumer products companies will need to convene focus groups consisting of people age 50 years or
older who are nearing retirement. These same companies will also have to target Brazil, Mexico, Vietnam, and
other developing-country markets to achieve their growth objectives in the years to come.
Market Segments by Age
• Global Teens -12 and 19 years old - “A group of teenagers randomly
chosen from different parts of the world will share many of the same
tastes.”
• This segment is attractive both in terms of its size (approximately 1.3
billion people) and its multi-billion-dollar purchasing power.

• Global Elite -affluent consumers who are well traveled

and have the money to spend on prestigious products
with an image of exclusivity

https://www.prestigeonline.com/my/40-under-40/
c) Gender Segmentation
• Gender segmentation is an obvious choice for some
companies

• Fashion designers & cosmetic companies focus on women

but may also offer men’s products
– Nike is focused on women
– Levi Strauss opened Levi’s for Girls in Paris

https://thevou.com/beauty/mens-makeup-brands/
d) Ethnic Segmentation
• The population of many • Hispanic Americans
countries includes ethnic – 55 million Hispanic
groups of significant size Americans (17% of total
• Three main groups in the pop.) with $2 trillion
U.S. are African-Americans, annual buying power
Asian-Americans, and – “$1 trillion Latina” 24
Hispanic Americans million Hispanic women:
42% single, 35% HOH,
• Subdivide Asians further: 54% working
Thai, Vietnamese, & Chinese
Americans

https://www.nytimes.com/interactive/2017/10/12/business/media/toyota-
camry-ads-different-ethnicities.html
e) Geographic Segmentation

• Geographical units
–Nations, states, regions,
counties, cities, or
neighborhoods

• Nielsen Claritas’ PRIZM model

–Education and affluence
–Family life cycle
–Urbanization
–Race and ethnicity
–Mobility
US Geo-demographic Segmentation

https://claritas360.claritas.com/mybestsegments/#segDetails
2. Psychographic Segmentation
• Based on attitudes, values, and lifestyle
• Lifestyle surveys
– SRI International’s Values and Life Styles, VALS & VALS 2
• Porsche example
– Top Guns (27%): Ambition, power, control
– Elitists (24%): Old money, car is just a car
– Proud Patrons (23%): Car is reward for hard work
– Bon Vivants (17%): Car is for excitement, adventure
– Fantasists (9%): Car is form of escape
 7-19
Psychographic Segmentation:
VALS Framework

http://www.strategicbusinessinsights.com/vals/ustypes.shtml

http://www.strategicbusinessinsights.com/vals/international/china.shtml
The world’s greatest brands are masters of psychographic
segmentation:

• Patagonia understands environmentally conscious outdoor

enthusiasts and trekkers
• Harley Davidson taps into the psyche of riders including their image,
attitude and bucket-list trips
• Snapchat understands youth and their interest in “vanishing” content
• Comic Con connects with fans by making them part of their favourite
show, not just watching it
 3. Behavioral Segmentation
• Behavioral segmentation - divides a market into segments based on consumer
knowledge, attitudes, uses of a product, or responses to a product.

Occasions Benefit sought User status

Usage rate Loyalty status

21
Behavioral Segmentation
• Occasions refer to when consumers get the idea to buy, actually make their purchase, or use
the purchased item. Occasion segmentation can help firms build up product usage. Campbell’s
advertises its soups more heavily in the cold winter months, and Home Depot runs special
springtime promotions for lawn and gardens products. Other marketers prepare special offers
and ads for holiday occasions or nontraditional occasions.
• Benefits sought refers to finding the major benefits people look for in a product class, the kinds
of people who look for each benefit, and the major brands that deliver each benefit. Benefit
segmentation: Schwinn makes bikes for every benefit segment. For example, Schwinn’s urban
bikes are “for riders who want a functional, durable, and stylish bike to commute or ride
casually in urban areas.”
• Markets can be segmented by user status: nonusers, ex-users, potential users, first-time users,
and regular users of a product. Marketers want to reinforce and retain regular users, attract
targeted nonusers, and reinvigorate relationships with ex-users.
Behavioral Segmentation
• Markets can also be segmented by usage rate: light, medium, and heavy product users. Heavy
users are often a small percentage of the market but account for a high percentage of total
consumption. For instance, a recent study showed that heavy seafood consumers in the United
States are a small but hungry bunch. Less than 5 percent of all shoppers buy nearly 64 percent
of unbreaded seafood consumed in the United States.
• Consumers can be loyal to brands, and buyers can be divided into groups according to their
degree of loyalty. Some consumers are completely loyal—they buy one brand all the time and
can’t wait to tell others about it. Other consumers are somewhat loyal—they are loyal to two or
three brands of a given product or favor one brand while sometimes buying others. Still other
buyers show no loyalty to any brand—they either want something different each time they buy,
or they buy whatever’s on sale. A company can learn a lot by analyzing loyalty patterns in its
market, starting with its own loyal customers.
6.2 Compare and contrast the three main target market strategy options.

The three basic categories of target marketing strategies:

1. Standardized marketing
2. Concentrated marketing
3. Differentiated marketing
1. Standardized Global Marketing
• Standardized global marketing is analogous to mass marketing in a single country. It involves
creating the same marketing mix for a broad mass market of potential buyers.
• Standardized global marketing, also known as undifferentiated target marketing, is based on
the premise that a mass market exists around the world. In addition, that mass market is served
with a marketing mix of standardized elements.
• Product adaptation is minimized and a strategy of intensive distribution ensures that the
product is available in the maximum number of retail outlets.
• The appeal of standardized global marketing is clear: lower costs; the same is true of
standardized global communications.
 26

Undifferentiated (Mass Marketing)

Brand/ Company Whole Market (No segments)

Company / Brand Target Market

Coca-Cola Original.
2. Differentiated Global Marketing
• Differentiated global marketing is also known as multi-segment targeting. It
entails targeting two or more distinct market segments with multiple
marketing mix offerings.
• This strategy allows a company to achieve wider market coverage. E.g., in
the sport utility vehicle segment Rover has a Range Rover at the high end
of the market. A scaled down version, the Land rover Discovery is offered
which competes directly with the Jeep Grand Cherokee.
• Other examples, P&G markets old Spice and Hugo Boss for Men.
Differentiated Marketing
3. Concentrated Global Marketing
• Concentrated global marketing involves devising a marketing mix to reach a niche. A
niche is single segment of the global market.
• For example, in cosmetics, Chanel has used to target the upscale, prestige segment of
the market.
• Concentrated targeting is also the strategy employed by the hidden champions of global
marketing: companies unknown to most people that have succeeded by serving a niche
market that exists in many countries. These companies define their markets narrowly
and strive for global depth rather than national breadth. E.g., Body Shop.

https://www.shopify.my/blog/niche-markets
 30

Concentrated Marketing

COMPANY Segment 1

Segment 2

Segment 3

The Body Shop is a values driven, high quality skin and

body care retailer famous for creating a niche market
sector for naturally inspired products.
6.3 Describe the various positioning strategies available to global
marketers.

1. Global consumer culture positioning (GCCP)

2. Foreign consumer culture positioning (FCCP)

3. Local consumer culture positioning (LCCP)

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Positioning Strategies
a) Global consumer culture positioning (GCCP)

– Identifies the brand as a symbol of a particular global culture or

segment

– Effective strategy for communicating with global teens,

cosmopolitan elites.

– Ex: Sony’s “My First Sony” line is positioned as the electronics

brand for youngsters around the globe with discerning parents

– Heineken’s strong brand equity around the globe can be attributed

in good measure to a GCCP strategy that reinforces consumers’
cosmopolitan self-image.

https://blog.hubspot.com/sales/positioning-statement
 7-33

Positioning Strategies
b) Foreign consumer culture positioning (FCCP)

– Associates the brand’s users, use occasions, or product origins with a

foreign country or culture

– Ex: Foster’s Brewing Group’s U.S. advertising proudly trumpets the

brand’s national origin; print ads feature the tag line “Foster’s. Australian
for beer.”

– The “American-ness” of Levi jeans, Marlboro cigarettes, and Harley-

Davidson motorcycles enhances their appeal to cosmopolitans around
the world and offers opportunities for FCCP.

– The name “Haägen-Dazs” implies Scandinavia though the ice cream is

American.
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Positioning Strategies

c) Local consumer culture positioning (LCCP)

– Identifies with local cultural meanings

– Consumed by local people
– Locally produced for local people

– Used frequently for food, personal, and household

nondurables

– Eg: Budweiser’s U.S. advertising; ads featuring the

Clydesdale horses, associate the brand with small-town
American culture
– Eg: Ipoh Old Town White Coffee; ads featuring drinking coffee
in kopitiam.