Global Marketing Ninth Edition - Chapter 7 PDF
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Warren J. Keegan, Mark C. Green
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This document is a chapter from the Global Marketing textbook, focusing on market segments, targeting strategies, and brand positioning.
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Global Marketing Ninth Edition Chapter 7 Segmentation, Targeting, and Positioning Copyright © 2017, 2015, 2013 Pearson Education, I...
Global Marketing Ninth Edition Chapter 7 Segmentation, Targeting, and Positioning Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Learning Objectives (1 of 2) 7.1 Identify the variables that global marketers can use to segment global markets and give an example of each. 7.2 Explain the criteria that global marketers use to choose specific markets to target. 7.3 Understand how global marketers use a product-market grid to make targeting decisions. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Learning Objectives (2 of 2) 7.4 Compare and contrast the three main target market strategy options. 7.5 Describe the various positioning options available to global marketers. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Global Market Segmentation (1 of 2) The process of dividing the world market into distinct subsets of customers that have similar needs (for example, country groups or individual interest groups). Pluralization of Consumption or segment simultaneity theory was advanced by Professor Theodore Levitt 4 decades ago stating that consumers seek variety and new segments will appear in many national markets. i.e., sushi, pizza Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Global Market Segmentation (2 of 2) Types of segmentation methods – Demographic segmentation – Psychographic segmentation – Behavior segmentation – Benefit segmentation Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Geographic Segmentation Dividing the world into geographic subgroups The advantage of geography is proximity However, just because people are in close proximity does not mean they are similar Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Demographic Segmentation (1 of 2) Based on measurable population characteristics – Age – Income – Gender – Age distribution – Education – Occupation – Generally, national income is the most important variable Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Demographic Segmentation (2 of 2) 500 million Asian consumers aged 16 and younger India has the youngest demographic profile among the world’s large nations; half are younger than 25, 14 yr. olds & younger equal the entire U.S. population Half of Japanese will be 50+ yrs. by 2025 20% of Americans (70 million) will be 65+ by 2030 U.S. Ethnic groups-African/Black, Hispanics, & Asian Americans have a combined annual buying power of $233 billion Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Income & Population Segmentation 2/3 world GNI in the Triad, 12% o population Don’t use income as the only variable for assessing market opportunity Use Purchasing Power Parity Do not read into the numbers Some services are free in developing nations so there is more purchasing power For products with low enough price, population is a more important variable Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Market Segments by Income & Population Global Teens-12 and 19 yr. olds – “A group of teenagers randomly chosen from different parts of the world will share many of the same tastes.” Global Elite-affluent consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved 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 opening shops for women – Levi Strauss opened Levis for Girls in Paris Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Psychographic Segmentation Based on attitudes, values and lifestyle Lifestyle surveys – SRI International’s Values and Life Styles, VALS & V ALS2 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 Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Euroconsumers (1 of 2) The Euroconsumer: – Successful Idealists-5% to 20% of the population; consists of persons who have achieved professional and material success while maintaining commitment to abstract or socially responsible ideals – Affluent Materialists-Status-conscious ‘up-and- comers’- many of whom are business professionals – use conspicuous consumption to communicate their success to others Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Euroconsumers (2 of 2) Comfortable Belongers Disaffected Survivors – 25% to 50% of a – lack power and country’s population affluence – conservative – harbor little hope for – most comfortable upward mobility with the familiar – tend to be either – content with the resentful or resigned comfort of home, – concentrated in high- family, friends, and crime urban inner city community – attitudes tend to affect the rest of society Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Behavior Segmentation (1 of 2) Focus on whether people purchase a product or not, how much, and how often they use it User status 80/2 Rule or Law of Disproportionality or Pareto’s Law-80% of a company’s revenues are accounted for by 20% of the customers Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Behavior Segmentation (2 of 2) Benefit segmentation focuses on the value equation – Value=Benefits/Price Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Euroconsumers The population of many Hispanic Americans countries includes ethnic – 50 million Hispanic groups of significant size Americans (14% of Three main groups in total pop.) with $978 the U.S. include African- billion annual buying Americans, Asian- power Americans, and Hispanic – “$1 trillion Latina” 24 Americans million Hispanic women: 42% single, 35% HOH, 54% working Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Assessing Market Potential (1 of 2) Be mindful of the pitfalls – Tendency to overstate the size and short-term attractiveness of individual country markets – The company does not want to ‘miss out’ on a strategic opportunity – Management’s network of contacts will emerge as a primary criterion for targeting Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Assessing Market Potential (2 of 2) Three basic criteria: – Current size of the segment and anticipated growth potential – Potential competition – Compatibility with company’s overall objectives and the feasibility of successfully reaching the target audience Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Criteria for Targeting Current size of the segment and growth potential Potential competition Compatibility and feasibility Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Current Segment Size & 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 company’s long-term strategy? Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Potential Competition (1 of 2) Is there currently strong competition in the market segment? Is the competition vulnerable in terms of price or quality? Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Potential Competition (2 of 2) Only 1 % of Chinese have credit cards. Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Feasibility and Compatibility Will 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? Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Framework for Selecting Target Markets Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved 9 Questions for Creating a Product-Market Profile (1 of 2) Who 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? Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved 9 Questions for Creating a Product-Market Profile (2 of 2) 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 © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Product-Market Decisions Review current and potential products for best match for country markets or segments Create a matrix with countries and products to help with analysis Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Target Market Strategy Options (1 of 2) Standardized Global Marketing or Undifferentiated target marketing – Mass marketing on a global scale – Standardized marketing mix – Minimal product adaptation – Intensive distribution – Lower production costs – Lower communication costs Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Target Market Strategy Options (2 of 2) Concentrated Global Differentiated Global Marketing Marketing – Niche marketing – Multi-segment targeting – Single segment of – Two or more distinct global market markets – Look for global depth – Wider market coverage rather than national – Ex.: P&G markets Old ample breadth Spice and Hugo Boss – Ex.: Chanel, Estee ample for Men Lauder Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Positioning (1 of 4) Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer – Attribute or Benefit – Quality and Price – Use or User – Competition Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Positioning (2 of 4) Attribute or Benefit Quality and Price – Economy – Continuum from – Reliability high price/quality and high price to – Durability good value BMW: The Ultimate Driving Stella Artois beer: Machine or Visa: It’s Reassuring Expensive Everywhere You Want To Be FCCP: Grey Goose Foreign Consumer Culture (France), Ketel One Positioning: Focus on import (the Netherlands) benefits Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Positioning (3 of 4) Use or User Competition – Associates the brand – Implicit or explicit with a user or class reference to of users competition Max Factor: The Dove: Campaign for Real makeup that makeup Beauty artists use – 2% of women worldwide think they are beautiful – New definition of beauty Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Positioning (4 of 4) Global consumer culture Local consumer culture positioning positioning – Identifies the brand as a – Identifies with local cultural symbol of a particular meanings global culture or segment – Consumed by local people – High-touch and high-tech – Locally produced for local products people Foreign consumer culture – Used frequently for food, positioning personal, and household – Associates the brand’s nondurables users, use occasions, or – Ex.: Budweiser is ample product origins with a identified with small-town foreign country or culture America Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved Copyright Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved