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International Marketing ManagementInternational Marketing Management

International Market International Market Segmentation & PositioningSegmentation & Positioning

Anna ZarkadaAnna Zarkada

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External Influences

Culture Economics Technology Politics

Internal Influences Buyer Choices

Product Choice Brand Choice Store Choice Supplier Choice

BuyerCharac-teristics

BuyerDecisionProcess

LocalMarketing

Effort

Influencing Factors of Consumer Buying Behaviour

Today’s Focus

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Steps In Market Segmentation, Market Targeting, Market Positioning

Market Segmentation

• Identify bases for segmenting markets• Develop segment profiles and characteristics

Market Targeting

• Develop measure of segment attractiveness• Select target segments

Market Positioning

• Develop positioning for target segments• Develop a marketing mix for each segment

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What is Market Segmentation?

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…the process of dividing the total market (consumer or business) for a product/ service into several smaller groups, so that the members of each group are similar with respect to the factors that influence demand

What is Market Segmentation?

Needs WantsProduct

UseBehaviour

ConsumerBehaviour

BuyingPreferences

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Market Segmentation

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Market Segmentation

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Market Segmentation

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Early Segmentation

• Largely intuitive and pragmatic

• Based on direct experience

• Relies upon knowledge of Demographics Usage habits

• Identify similarities and differences

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• Uses sophisticated statistical techniques

• Relies upon consumer survey research

• Identifies patterns of Demographics Needs & Values Attitudes Behaviours Lifestyles etc.

More Detailed Segmentation

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Aggregate Production & TransportationNumber of newspapers, cars per capita, population, air passengers/km

HealthLife expectancy, physicians per capita, etc.

TradeImport/GNP, Export/GNP, etc.

LifestylePCs/mobile phones per capita, electricity consumption per capita, etc.

CosmopolitanismForeign visitors per capita, tourist expenditure per capita, tourist receipts, etc.

MiscellaneousConsumer price index, hospital beds, education expenditures, etc.

Macro Segmentation(some country selection criteria)

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= Grouping / clustering countries on the basis of some common characteristics Geographic location, income levels, education system, political & legal system, infrastructure, etc.

Factor Analysis can assist in combining many characteristics into a manageable few dimensions

Cluster Analysis can assist in identifying similarities and differences of markets/segments.

Macro Segmentation(basis for country selection)

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Upper class

Middle-to-upper class

Middle class

Lower class

Argentina 2% 9% 35% 55% Brazil 3 16 29 53 Chile 2 6 42 50 Colombia 2 8 37 53 Ecuador 2 15 22 61 Mexico 2 12 30 56 Paraguay 3 12 34 51 Peru 3 8 33 56 Uruguay 9 20 36 36 Venezuela 1 4 36 59

Walker (1995)

Macro Segmentation(Latin American Markets)

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X, Y, Z prefers to cook with oil, whereas A, B, C markets prefer butter and margarine

D & E prefer front-loading washing machines, whereas the V & W markets prefer top loaders

Coffee

Petrol

Shaving habits

Examples of Segmentation

country clusters and Product Diversification

Micro-Segmentation bases for Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

multiple criteria –

mixed models

Demographic & Psychographic Segmentation

Age and Life Cycle

Life Stage

Gender

Income

Generation

Social Class

Ethnicity & race

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What is a Target Market?

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…is a homogeneous group of customers for whom the seller designs a particular marketing mix

What is a Target Market?

Core selection objective =

Across markets as heterogeneous as possible

Within markets as homogeneous as possible

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www.lion-nathan.com.au

Beer Style: Full strength, well-hopped lager

Alcohol Volume: 4.8%

“A traditional Australian lager with a clean, crisp taste and a satisfying after-bitterness”

Standard drinks/375mL: 1.4

What is a Target Segment?

Beer Style: Moderately-hopped, mid-strength lager

Alcohol Volume: 3.5%

“Balanced smooth flavour and body, complimented by mild bitterness and trace sweetness from extra malt”

Standard drinks/375mL: 1.0

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www.fosters.com.au

Foster’s Lager is one of only a handful of truly global beer brands.

Available in more than 135 countries

“The brand’s strong Australian heritage and sense of ‘fun’ continues to appeal to consumers seeking to savour the unique taste of Australia’s most famous beer”

http://www.fosters.com.au/beerlisting/

What is a Target Segment?

Strategic decisions

based on segmentation & market clustering

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1. Product & Communication extension works well when consumer preferences and competitive

conditions tend to be similar across countries

Coca Cola, Nike, L’Oréal

2. Product extension - Communication adaptation

repositioning a product to a domestic market

Volvo, Nissan Patrol

3. Product localisation - Communication extension

product usage changes but positioning is uniformIKEA, Club MED

Standardisation vs. Adaptation(Five marketing alternatives for global strategies)

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4. Dual adaptation (product & communication)

usage and positioning requirements differ across countries

Levi’s, Corona, BMW

5. Product innovation developing entirely new products for foreign markets

Mercedes M-class

Standardisation vs. Adaptation(Five marketing alternatives for global strategies)

1: Dual extension L’Oréal

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2: Product extension - Communication adaptation Perrier

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melting 4/2009 by OGILVY & MATHER  Paris

Perrier Chill Out Festival Dubai 2009

Australia 2009 -Music: Demian by The Penelopes

3: Product adaptation – communication extention Esso-Exxon-ExxonMobil

formulation adapted to weather, “Put a tiger in your tank”formulation adapted to weather, “Put a tiger in your tank”

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Driver: Pardon me, Mister. But what’s the idea of the Tiger?Station Attendant: The what, sir? Driver: The tiger leaning on the pump! Station Attendant: Oh, well you see, our new power formula Enco Extra gasoline puts a tiger in your tank. Driver: Well, then put a tiger in my tank! Station Attendance: Certainly, sir. Driver: What does the, uh, tiger do? Station Attendant: Well, you’ll notice several things — smooth performance for one. Power formula Enco Extra gives you the high octane many cars need — and extra power. You see, our new power formula cleans the carburetor, neutralizes engine deposits, and helps restore power you’ve been losing. Driver: Amazing. Where is he now? Station Attendant: Who? Driver: The tiger! Station Attendant: In your tank, of course! 

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Save The Tiger Fund dedicated to supporting the conservation of Asia’s remaining wild tigers.

ad:tech New York

Brand Elements

Esso-Exxon-ExxonMobil

4. Dual differentiation - Hallmark message, space, POS handling, promotion

Philippines “No One Throws Away Memories” by Richard TanLong after your phone call has faded awayLong after your warm hello has dimmedI can't forget the mem'ries that you sent my wayThose hallmark memories of yesterdayRemember my birthday when you were awayYour happy return on Christmas dayThat valentine you went but could not run awaySweet hallmark memories of yesterdayWords that you sent meSo simple yet so trueDearest, sincerelyI'll never share my life with someone new

For no one throws a hallmark card away'Coz no one throws away memories

5: Colgate total – Local Brand by design

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• Ground up design to translate across national boundaries• formulation• imagery• consumer appeal

• Market test in countries with different profiles• Philippines• Australia• Colombia• Greece • Portugal• UK

• Sold in 100 countries• Economies of scale and organizational leverage

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France, Italy & Spain prefers to cook with oil, whereas Germany & UK markets prefer butter and margarine

Germany & the UK prefer front-loading washing machines, the French & Australians top loaders

The British, Americans and Australians prefer instant coffee whereas the French, Italians & Germans like it freshly brewed

Diesel driven cars now dominate the European car markets whereas petrol driven cars dominate the US, Japanese and most other markets

Examples of Product Diversification

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Liquid suraxe cleaner (launched France 1969 – 51 countries 2011) • Jif in Holland, Australia• Jifu in Japan• Viss in Germany• Vif in Switzerland• Cif in the UK, France and Spain• Handy Andy in South Africa• Vim μετά Jif και μετά Cif στην Ελλάδα

Examples of Brand Diversification - UnileverUnilever

Examples of Brand Diversification - UnileverUnilever

• Comfort makes up 20% of the global fabric conditioners market• Comfort is the number 1 in 14 of 23 countries

Fabric softener• Comfort USA, Argentina, Brazil, Paraguay, Pakistan, Switzerland, Philippines• Snuggle Ghana, UK (now Comfort)• Kuschelweich Germany, Austria• Coccolino Italy, Poland, Romania, Hungary• Mimosin France, Spain, Colombia, Ecuador & Venezuela• Huggies Australia • Fafa Japan (n.a. anymore)• Cajoline Ελλάδα

Example of Focus strategy: EBRs

• BeBook (€329)

• Cybook (€377,99)

• iLiad (€699)

• Kindle ($259)

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Company Positioning

A company’s strategies and actions related to differentiating itself favourably from competitors in the minds of selected consumers groups

Product Positioning

A product’s image in relation to directly competitive products as well as other products marketed by the same company

Positioning

Positioning example: Fosters group

• 1664*• Leffe*• Matilda Bay• Melbourne• Bitter• Newcastle• Brown Ale*• NT Draught• Power’s• Pure Blonde• Resch’s• Shanghai• Lager• Sheafs Stout*• Stella Artois*• Vailima• VB 35

• Abbotsford• Invalid Stout• Asahi*• Belle-Vue*• Carlsberg*• Carlton• Cascade• Corona*• Crown• Fiji Range• Foster’s Lager• Harp Lager*• Hoegaarden*• KB Lager• Kent Old• Brown• Kronenbourg

The number one performer in three major segments of the Australian beer market - premium, full-strength and lower alcohol, Foster's brands are part of the Australian lifestyle, enjoyed by drinkers throughout the country and indeed the world.

The number one performer in three major segments of the Australian beer market - premium, full-strength and lower alcohol, Foster's brands are part of the Australian lifestyle, enjoyed by drinkers throughout the country and indeed the world.

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www.fosters.com.au

Style: full strength lagerAlcohol: 4.9%Carbs: 3.1 grams/100mLEnergy: 168 kilojoules/100mL; 40 calories/100mLStandard drinks: 1.4 per 375ml, 2.8 per 750mlAvailable: 355mL,750mL bottles and 375mL cans

Available in more than 150 countries

“The brand’s strong Australian heritage and sense of ‘fun’ continues to appeal to consumers seeking to savour the unique taste of Australia’s most famous beer”

Positioning example: the Aussie global beer

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www.fosters.com.au

The original Tasmanian premium beer from Australia's oldest continually operating brewery in the foothills of Mount Wellington in Hobart. Renowned for its legendary taste and exceptionally smooth, full flavour, it's the longer than usual maturation (extended lagering) that develops elegant fruit flavours, and a full mid-palate lingering to a crisp, spicy hop finish. One of Australia's most awarded beers, gold medal for 'Best Premium Beer in Australia‘ 2003.

Style: full strength premium lagerAlcohol: 5.0%

Carbs: 3.0 grams/100mLEnergy: 169 kilojoules/100mL; 40 calories/100mL

Standard drinks: 1.3 per 330mlAvailable: 375mL bottles

Positioning example: the Aussie premium beer

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www.fosters.com.au

COLD was one of the most innovative and successful brand launches of the early 90s. It remains the beer of choice for young adult drinkers. The taste is smooth, crisp and fresh, but beyond taste the brand’s appeal is driven by its attitude and innovative approach – it was the first to be cold-filtered, the first to be packaged in clear glass.

Style: full strength lagerAlcohol: 4.0%

Standard drinks: 1.2 per 375mlAvailable: 375ml bottles

Positioning example: the Aussie youth beer

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(1) Competitor(s)Coca Cola “The real thing”Intel “Intel inside”BMW “Sheer driving pleasure”Bosch “Good, better, Bosch”

(2) Product Class or AttributeDick Smith Foods “Genuine Australian Foods”IKEA “Swedish for Value”Audi “Vorsprung durch Technik”Omo “Outstanding results you can see”

(3) Price & QualityHugo Boss vs. GlouRolex vs. CasioSheraton vs. Holiday InnΒασιλόπουλος vs. Aldi

Positioning Strategies Criteria

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Salient attributes - what do customers look for?

Beers: Light, Bitter, Draught, Ale, Wheat

Evoked set - what brands are offered?

Beers: Heinecken, Corona, Foster’s, Budweiser, Löwenbräu

Attribute settings - how do consumers rank brands against the salient attributes?

Light Beers: XXXX, Fosters, Carlton, Cascade

Preferences - how do brands rank in terms of overall preferences?

Beers: Heinecken, Corona, Foster’s, Budweiser, Löwenbräu

Global Product Positioning(Product Space = defines a product’s/brand’s position)

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Budget Premium

Light

Heavy

Foster’sSpecial Bitter

CarltonLight

Toohey’sBlue

Toohey’sDraught

VictoriaBitter

Foster’s

Toohey’sRed

Cooper’s

Hahn

Cascade

CarltonCrown

HahnCold

CarltonCold

Perceptual Map(Australian Beer Market)

HahnPremium

XXXXSovereign

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Uncle Toby’s, Sanitarium vs. Kellogg’s, Nestlé

CUA, Bank of Qld, HBS vs. HSBC, ING, CitiGroup

Foster’s vs. Heineken, Corona

Many local brands not only survive but prosper because they often -

• Provide more variety for consumers

• Create special niche markets e.g. uniqueness, tradition, heritage, ethnic colour

• Are custom-made to suit local tastes and needs

Positioning Strategies(Local vs. Global Brands)

globalisationglobalisation

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Drawbacks

• Missed Targets

• Lack of Uniqueness

• Sensitive to Protectionism

• Strong Local Competitors

Advantages and Drawbacks

Advantages

• Cost Reduction

• Enhanced Customer Preference

• Improved Quality

• Global Customers

• Global Segments

Tradeoffs

Fully standardized

Fully adapted

Incremental manufacturing cost

Combined costs

Cost of lost sales

Fully standardized

Pitfalls• Insufficient market research

– similarities need to be proved not assumed– local branch support needed

• Over-standardisation– need to consider the whole mix, not just the product

• Poor follow-up– costly exercise, needs commitment and resources

• Narrow vision– HQ vs lead country focus

• Rigid implementation– local units need space and flexibility

Global Product Lines Product lines differ across countries

because of• History• Mergers and Acquisitions• Preferences• Capacity• Channelsbut they need to allow room for new products &for growth

Global Brands•Brand Equity•Consumer based brand equity•Brand Equity measurement

–stature: awareness, knowledge, attractiveness–vitality: actual and potential market size, relevance and differentiation

•Factors leading to global branding–Demand spillover–Global customers–Scale economies

•Brand portfolio–hierarchy (global/regional/local or corporate/market/product)–extensions (risky but exciting)

Brand globalisation potential

• Brand fit assessment– name sound and meaning– country associations– legal availability– relationship to other brands in portfolio– suitability as regional brand

• Implementation– new or replacement brands

• Changeover– fade-in/fade-out (endorsement or double branding)– summary axing

Service Globalisation Potential

• Standardisation potential

• Infrastructure

• Services as unique solutions to local problems

• Requirements:– similarity of circumstances– identification of key concepts– localisation of features without compromising FSA

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TT vs. CitiGroup

AΛΦΑ, Fix vs. Heineken, Corona

Many local brands not only survive but prosper because they often:

• Provide more variety for consumers

• Create special niche markets e.g. uniqueness, tradition, heritage, ethnic colour

• Are custom-made to suit local tastes and needs

Local vs. Global Brands