Global Marketing, 6e (Keegan/Green)

6e  (Keegan/Green)
Chapter 7 Segmentation, Targeting,
Targeting, and Positioning

1) Many Chinese women use whitening

wh itening creams to lighten and brighten their complexions since
white skin is associated with wealth.
Answer: TR!
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%) Market 'egmentation is the process o# e(aluating the segments and #ocusing marketing e##orts
on a country region or group o# people that has signi#icant potential to respond.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,) 'ushi *ala#el Tandoori

Tandoori Chicken or $ia are in demand in many parts o# the world. This
 phenomenon can be due to pluraliation o# consumption and segment simultaneity.
Answer: TR!
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AAC'-: Multicultural and "i(ersity
"i(ersity

/) The #act that signi#icant numbers o# pia0lo(ing consumers are #ound in many countries
indicates that they are eating the exact same thing in all parts o# the world.
Answer: *A+'!
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) Con(entional wisdom about market segmentation calls #or acknowledging

ackno wledging the emergence o#
global market segments that transcend national boundaries.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

2) The process o# global market segmentation begins with the choice o# one or more (ariables
( ariables to
use as a basis #or grouping customers.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

3) A #act #ound by demographic segmentation is that by the year %&,& %& percent o# the .'.
 population or 3& million will be 2 years old or older.
older.
Answer: TR!
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AAC'-: Analytic 'kills

4) The assumption o# homogeneity should be the cornerstone o# a company5s market

segmentation e##ort.
Answer: *A+'!
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 8) About two0thirds o# world 97 is generated in the Triad
Triad countries whereas only about 1%
 percent o# the world5s population is located in those countries.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

1&) The nited 'tates ranks number one among nations in terms o# both per capita income and in
terms o# income ad;usted #or purchasing power.
Answer: *A+'!
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AAC'-: Analytic 'kills

11) 'wedish companies such as 7<!A !ricsson and 'aab ha(e looked beyond their borders #or
signi#icant growth opportunities since they ha(e a high per capita income.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

1%) =hen assessing market segments in terms o# income data global companies should a(oid
targeting countries with per capita incomes o# less than >3.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

1,) An extrapolation o# current economic growth trends suggest that China with its combination
o# high real income growth and relati(ely low population growth is a strong candidate to
 become a leading world economic power.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

1/) Ten
Ten most populous countries in the world account
acco unt #or roughly 2& percent o# the world
 population.
Answer: TR!
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AAC'-: Analytic 'kills

1) sing a(erages alone it is possible to underestimate

un derestimate a market5s potential #or example #ast0
growing higher income segments are present both in 7ndia and China.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

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12) The (ast ma;ority o# 7ndia5s population comprises a ?bullock cart? segment whose
households lack most com#orts but typically own a tele(ision.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

13) A psychographic study showed that $orsche buyers could be di(ided into se(eral distinct
categories one consisting o# ?Top 9uns? who buy $orsches and expect to be noticed.
Answer: TR!
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14) Categories such as ?success#ul idealists? and ?a##luent materialists? can be used to describe
 psychographic segments.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

18) The segmentation and targeting approach used by the same company can (ary #rom country
to country.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

%&) *or beha(ior segmentation marketers use the 4&@%& rule when assessing the consumers5
usage rate which means that %& percent o# the company5s re(enues or pro#its are accounted #or
 by 4& percent o# the #irm5s products or customers.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

%1) 9lobal bene#it segmentation is based on a marketer5s understanding o# the problem a product
sol(es the bene#it it o##ers or the issue it addresses regardless o# geography.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

%%) -ased on the trends and segmentation o# !urope5s 'ingle Market marketers are particularly
ad(ised to take the 9olden 9rays seriously and market brands that pro(ide happiness
con(enience and time sa(ings.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

%,) The widespread adoption o# the 7nternet and other new technologies will result in new
segmentation approaches to be de(eloped in response to changing business en(ironment.
Answer: TR!
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AAC'-: Re#lecti(e Thinking
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%/) Thai Americans ietnamese Americans and Chinese Americans each o# whom speak a
di##erent language can be separated by ethnic segmentation.
Answer: TR!
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AAC'-: Analytic 'kills

%) =hen assessing potential country target markets management should rely hea(ily on its
network o# contacts as a primary criterion #or targeting.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

%2) About 1., million cars are sold each year in 7ndiaB in absolute terms this is a relati(ely small
number.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

%3) 7ndia is the world5s #astest growing cell phone market with the industry expanding at a rate o# 
& percent annually with  million new subscribers added e(ery month. This is an indication o#
continued pri(ate0sector growth.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

%4) A market segment or country market characteried by strong competition may be a segment
to target since it will be easier to enter a pro(en market.
Answer: *A+'!
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AAC'-: Analytic 'kills

%8) onda #irst created the market #or small0displacement dirt bikes and then mo(ed up market
with bigger bikes targeted at casual riders.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

,&) Marketing model dri(ers are key elements or #actors reDuired #or a business to take root and
grow in a particular country market en(ironment.
Answer: TR!
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AAC'-: Analytic 'kills

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,1) 7n 7ndia re#rigeration is not widely a(ailable and this restricts many #oreign companies to
market items that need re#rigeration. This can be considered as o ne o# the ?enabling conditions?
that needs to be considered in a marketing model.
Answer: TR!
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AAC'-: Analytic 'kills

,%) =hen making a decision about market entry timing a company5s management team should
understand that the #irst0mo(er always becomes the market leader.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,,) -e#ore targeting the orth American market the +exus marketing team succeeded in making
+exus the number one luxury0car nameplate in Eapan.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,/) 'tandardied global marketing is analogous to mass marketing in a single country and is also
known as di##erentiated target marketing.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,) "i##erentiated global marketing represents a more ambitious approach than concentrated
target marketing.
Answer: TR!
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,2) There is a signi#icant di##erence between the ?mass market? and the ?premium market.? 7n
the premium market customers are looking #or a good deal whereas in the mass market
customers are looking #or a product that #ul#ills their expectations.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,3) -M=5s slogan ?the ultimate dri(ing machine? is an example o# an attribute or bene#it which
has pro(en success#ul in their positioning strategy.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

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,4) 7<!A the home #urnishings retailer based in 'weden wraps itsel# in the 'wedish #lag F
literally since inside and out their stores are decorated in the national colors o# blue and yellow.
This is an example o# local consumer culture positioning.
Answer: *A+'!
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AAC'-: Re#lecti(e Thinking

,8) -enetton uses the slogan ?nited Colors o# -enetton? to position itsel# as a brand concerned
with the unity o# humankind. This type o# strategy is re#erred to as 9CC$ Gglobal consumer
culture positioning).
Answer: TR!
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AAC'-: Re#lecti(e Thinking

/&) 7n *rance the ational Assembly appro(ed a bill that would reDuire Apple to share the
iTunes so#tware codes with other companies so that music downloads would play on all digital
music players not ;ust i$ods.
Answer: TR!
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AAC'-: Re#lecti(e Thinking

/1) Market segmentation represents:

A) targeting prospecti(e customers.
-) #inding customers who can respond to ad(ertisement.
C) promoting products and ser(ices internationally.
") identi#y customers who can help in promoting products.
!) an e##ort to identi#y and categorie customers based on common characteristics.
Answer: !
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AAC'-: Re#lecti(e Thinking

/%) =hen identi#ying global market segments a #undamental guiding p rinciple should be the
need to determine:
A) shared demographic characteristics.
-) similar languages.
C) similar needs and buying beha(ior.
") similar ethnic backgrounds.
!) similar geographic regions.
Answer: C
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AAC'-: Re#lecti(e Thinking

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/,) 9lobal marketing authority Theodore +e(itt has noted that many ethnic and regional #oodsH 
sushi #or exampleHis en;oying popularity in many countries o# the world. This obser(ation is
known as:
A) the pluraliation o# consumption.
-) the ethnicitiation o# consumption.
C) the democratiation o# consumption.
") the sophistication o# consumption.
!) the domestication o# consumption.
Answer: A
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AAC'-: Re#lecti(e Thinking

//) =hich o# the #ollowing does not represent ?con(entional wisdom? regarding global
segmentationI
A) assume heterogeneity between countries
-) assume homogeneity within a gi(en country
C) #ocus hea(ily on macro0le(el cultural di##erences
") acknowledge the existence o# within country di##erences
!) assigning secondary priority to within country microsegments
Answer: "
"i##: , $age Re#: %&/
AAC'-: Re#lecti(e Thinking

/) 7ncome and population are two (ariables that can be used in which type o# segmentationI
A) ethnic segmentation
-) demographic segmentation
C) psychographic segmentation
") beha(ioral segmentation
!) gender segmentation
Answer: -
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AAC'-: Re#lecti(e Thinking

/2) 7deally #or comparati(e purposes 97 and other measures o# national income con(erted to
.'. dollars should be calculated on the basis o#:
A) per capita income.
-) purchasing power parities.
C) high income countries.
") low income countries.
!) local currency.
Answer: -
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AAC'-: Re#lecti(e Thinking

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 /3) !ricsson 7<!A 'aab and other companies based in 'weden ha(e looked beyond their
 borders #or signi#icant growth market because:
A) it has high total annual income.
-) it has low total annual income.
C) it has a smaller population.
") it is land locked geographically.
!) it has relaxed export policies.
Answer: C
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AAC'-: Re#lecti(e Thinking

/4) The concentration o# income in the high0income and large0population countries means that a
company can be ?global? by targeting buyers in:
A) ;ust & countries.
-) ;ust %& countries.
C) ;ust 1& or #ewer countries.
") ;ust ,& countries.
!) none o# the abo(e
Answer: C
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AAC'-: Analytic 'kills

/8) A global segment is re#erred to as ?global elite? which include:

A) people between the ages o# 1% and 18.
-) a##luent well0tra(eled persons.
C) graying population.
") technology pro#essionals.
!) persons ha(ing power.
Answer: -
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AAC'-: Analytic 'kills

&) -ased on %&&3 pro;ections the top ten nations ranked by 97 does not include:
A) nited 'tates.
-) Eapan.
C) Russia.
") 'pain.
!) 7taly.
Answer: C
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AAC'-: Analytic 'kills

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1) Mc"onald5s operates in o(er 1%& countries howe(er 4& percent o# its restaurants are located
in nine countries which does not include the #ollowing country market:
A) Australia.
-) -rail.
C) 9ermany.
") 7ndia.
!) Eapan.
Answer: "
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AAC'-: Analytic 'kills

%) $sychographic segmentation in(ol(es grouping people in terms o# their:

A) combined household income.
-) age and income.
C) attitudes (alues and li#estyle.
") psychological well being.
!) gender.
Answer: C
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AAC'-: Re#lecti(e Thinking

,) $orsche A9 uses the label ?Top 9uns? to describe one segment o# its customers namely
those who care about power and control and who expect to be noticed. 'uch a pro#ile would be
 based on which type o# segmentationI
A) demographic
-) occupational
C) psychographic
") beha(ioral
!) gender 
Answer: C
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AAC'-: Re#lecti(e Thinking

/) A marketing manager #or the Mars candy company is studying a single0country
 psychographic pro#ile that includes segment labels such as ?Cossacks? and ?kuptsy.? =hat
country does the sur(ey co(erI
A) 7ndia
-) Eapan
C) Russia
") China
!) ietnam
Answer: C
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 ) ?9eneration J? ?9olden 9rays? and ?9loberations? are three market segments that ha(e
 been described in:
A) Eapan.
-) Russia.
C) the !uropean nion.
") the nited 'tates.
!) -rail.
Answer: C
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AAC'-: Re#lecti(e Thinking

2) =hich o# the #ollowing is not a characteristic associated with the 9olden 9rays segment in
!urope5s single marketI
A) consider it important to mix #un and work 
-) en;oy high0tech gaming
C) deluged with passi(e in#ormation
") expect biotechnology to extend li#e expectancy
!) share #ew #amily acti(ities
Answer: !
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AAC'-: Re#lecti(e Thinking

3) =hich o# the #ollowing is not a characteristic associated with the 9eneration J segment in
!urope5s single marketI
A) share numerous #amily acti(ities
-) less re(erence toward established authorities
C) (iew leisure time in ?pay0per0play? terms
") increasingly tech0sa((y
!) deluged with positi(e in#ormation
Answer: !
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AAC'-: Re#lecti(e Thinking

4) Tambrands markets #eminine hygiene products around the globe. The company di(ides
markets on the basis o# past present and #uture product usage. =hich kind o# segmentation does
this representI
A) demographic
-) occupational
C) psychographic
") beha(ioral
!) geographic
Answer: "
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AAC'-: Re#lecti(e Thinking

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8) "iageo $+CB K' in K 'pirit A-B and 'eagram and other marketers know that Russians
consume a great deal o# odka. This type o# market segmentation can be classi#ied as:
A) demographic.
-) beha(ioral.
C) psychographic.
") occupational.
!) bene#it.
Answer: -
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AAC'-: Re#lecti(e Thinking

2&) ?sage rates? and ?user status? are important criteria #or which segmentation (ariableI
A) demographic
-) occupational
C) psychographic
") beha(ioral
!) bene#it
Answer: "
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AAC'-: Re#lecti(e Thinking

21) =hich o# the #ollowing is probably the biggest impediment to Tambrands5s e##orts to expand
the market #or its Tampax brand #eminine hygiene products in de(eloping nationsI
A) lack o# demographic in#ormation
-) underde(eloped distribution in#rastructure
C) religious and cultural mores
") pre#erence #or less expensi(e local brands
!) lack o# ad(ertisement and promotion
Answer: C
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AAC'-: Multicultural and "i(ersity

2%) $rocter K 9amble has identi#ied a group o# consumers in !urope who are willing to pay
 premium prices #or pet #ood that will impro(e the health o# their pets. This is an example o#
 LLLLLLLL segmentation:
A) demographic
-) psychographic
C) ethnic
") beha(ioral
!) bene#it
Answer: !
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AAC'-: Re#lecti(e Thinking

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2,) =hich o# the #ollowing is true about e##orts by automakers to target the ispanic segment in
the nited 'tatesI
A) onda Toyota *ord and 9M all began targeting the segment years ago.
-) onda and Toyota began targeting the segment years agoB *ord and 9M launched their e##orts
more recently.
C) *ord and 9M began targeting the segment years agoB onda and Toyota launched their e##orts
more recently.
") nly *ord and 9M are targeting the ispanic segment.
!) none o# the abo(e
Answer: -
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AAC'-: Analytic 'kills

2/) =hich o# the #ollowing best describes the decision by 'outh <orean automaker <ia Motors
about targeting the .'. automoti(e marketI
A) <ia is staying away because Eapanese competition is too strong.
-) <ia is staying away because o# slow growth in the sport utility segment.
C) <ia is aggressi(ely launching inexpensi(e (alue0priced (ehicles.
") <ia is selecti(ely targeting upscale .'. buyers.
!) <ia is a(oiding America because it cannot a##ord the expense o# a .'. product launch.
Answer: C
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AAC'-: Analytic 'kills

2) =hich o# the #ollowing criteria should marketers use when assessing opportunity in global
target marketsI
A) current sie o# the segment
-) anticipated growth potential
C) competition
") compatibility with company5s o(erall ob;ecti(es.
!) all o# the abo(e
Answer: !
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AAC'-: Re#lecti(e Thinking

22) -asic criteria that marketers should keep in mind while assessing opportunities in global
market include all o# the #ollowing except:
A) current sie o# the market segment.
-) anticipated growth potential o# the market.
C) compatibility with company5s o(erall ob;ecti(es.
") competition in the market.
!) securing #irst mo(er ad(antage.
Answer: !
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AAC'-: Re#lecti(e Thinking

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23) The #easibility o# targeting a particular market segment can be n egati(ely impacted by
(arious #actors which does not include:
A) regulatory hurdles.
-) cultural barriers.
C) lack o# distribution system.
") time reDuired to establish business.
!) surplus demand.
Answer: !
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AAC'-: Re#lecti(e Thinking

24) Companies like Coca0Cola had the #irst0mo(er ad(antage since they were the #irst company
to enter a global market. owe(er there are also #irst0mo(er disad(antages which include:
A) best chance o# becoming world leader.
-) ad(antage in adapting to the local culture.
C) lead in ad(ertising and promotion exposure.
") gain business experience.
!) substantial in(estments in marketing.
Answer: !
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AAC'-: Re#lecti(e Thinking

28) Managers must decide how well a company5s product #its the country market by asking the
#ollowing Duestions except:
A) =ill adaptation be reDuiredI
-) =ill import restriction dri(e up the product priceI
C) 7s it ad(isable to source locallyI
") =ill strong home currency ha(e an ad(erse impact on product priceI
!) =ill it be possible to neglect home country regulationsI
Answer: A
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AAC'-: Re#lecti(e Thinking

3&) The basis #or global marketing expert "a(id Arnold5s #ramework #or screening intercountry
comparisons include:
A) demographic data.
-) ?top0down? segmentation analysis.
C) ?bottom0up? segmentation analysis.
") income le(el.
!) population data.
Answer: C
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AAC'-: Re#lecti(e Thinking

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31) The 'watch 9roup markets watches in all price ranges #rom the 'watch brand at the low end
to luxury brands such as +ongines -lancpain and -reguet. =hich target market strategy does
this illustrateI
A) standardied global marketing
-) concentrated global marketing
C) di##erentiated global marketing
") psychographic global marketing
!) none o# the abo(e
Answer: C
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AAC'-: Re#lecti(e Thinking

3%) $ositioning re#ers to the act o#:

A) determining on what points on the globe to target.
-) ensuring a choice retail shel# location.
C) di##erentiating a brand in customer5s mind.
") #ormulating a pri(ate label strategy.
!) #ormulating a companion product.
Answer: C
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AAC'-: Re#lecti(e Thinking

3,) *or years ads #or ol(o automobiles stressed sa#ety #eatures and protection in the e(ent o# a
crash. Thus ol(o automobiles de(eloped a reputation based on which positioning strategyI
A) use@user 
-) attribute@bene#it
C) competition
") high touch
!) Duality@price
Answer: -
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AAC'-: Re#lecti(e Thinking

3/) Ads by -M= ad(ertise it as the ?ultimate dri(ing machine? which is described as positioning
 based on:
A) high touch.
-) use@user.
C) attribute@bene#it.
") competition.
!) Duality@price.
Answer: C
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AAC'-: Re#lecti(e Thinking

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3) 'ome o# -ody 'hop5s recent ad(ertising has emphasied the di##erence between the
company5s principles and those o# ?mainstream? cosmetics companies on such issues as animal
testing. As described here -ody 'hop5s ads illustrate positioning by LLLLLLLL.
A) competition
-) niche
C) Duality@price
") attribute@bene#it
!) culture
Answer: A
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AAC'-: Re#lecti(e Thinking

32) =hich o# the #ollowing is generally true about the marketing o# high0touch products such as
#ine china and crystalI
A) 7t relies eDually on specialied in#ormation and image.
-) 7t relies less on image and more on specialied in#ormation.
C) 7t relies less on specialied in#ormation and more on image.
") either image nor specialied in#ormation is rele(ant to the marketing o# high0touch
 products.
!) 7t relies partially on specialied in#ormation and partially on image.
Answer: C
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AAC'-: Re#lecti(e Thinking

33) Consumers shopping #or high0touch products such as #ine per#ume are generally energied
 by LLLLLLLL moti(es.
A) emotional
-) rational
C) both emotional and rational
") neither emotional nor rational
!) high tech
Answer: A
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AAC'-: Re#lecti(e Thinking

34) =hen a marketer understands that a product satis#ies a buyer5s rational criteria while also
e(oking an emotional response the marketer should:
A) only target consumers in high0income countries.
-) utilie a multitiered targeting strategy rather than a concentrated strategy.
C) commission psychographic segmentation studies to augment demographic da ta.
") create ad(ertising that re#lects a bipolar high0tech and high0touch approach.
!) #ollow normal targeting strategy.
Answer: C
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38) =hich o# the #ollowing is true o# ad(ertising #or the eineken and *oster5s brands in the
nited 'tatesI
A) -oth eineken and *oster5s utilie the 9CC$ strategy.
-) -oth eineken and *oster5s utilie the *CC$ strategy.
C) eineken utilies the 9CC$ strategyB *oster5s utilies the *CC$ strategy.
") eineken utilies the *CC$ strategyB *oster5s utilies the 9CC$ strategy.
!) eineken utilies the +CC$ strategyB *oster5s utilies the 9CC$ strategy.
Answer: C
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AAC'-: Re#lecti(e Thinking

4&) Thinking about .'. ad(ertising #or *oster5s and -udweiser beer one can obser(e that:
A) *oster5s uses *CC$ -udweiser uses +CC$.
-) *oster5s uses +CC$ -udweiser uses *CC$.
C) both *oster5s and -udweiser use +CC$.
") both *oster5s and -udweiser use *CC$.
!) both *oster5s and -udweiser use 9CC$.
Answer: A
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AAC'-: Analytic 'kills

41) =hat is psychographic segmentation and how do marketers use it in targeting di##erent world
marketsI
Answer: $sychographic segmentation in(ol(es grouping people in terms o# their attitudes
(alues and li#estyles. Respondents are care#ully selected by asking Duestions to assess their
attitudes (alues and li#estyles. There are di##erent companies that pro(ide ser(ices and help in
assessing these psychographic (ariables. "i##erent groups are gi(en names based on the
attributes which describe their attitudes (alues and li#estyles. Automakers rely on this
segmentation since the purchase beha(ior o# a considerable sie o# consumers is dependent on
 psychographic (alues. A psychographic study showed that $orsche buyers could be di(ided into
se(eral distinct categories. ne o# the categories ?Top 9un? was #ound to buy $ orsches and
expect to be noticed. $roud $atrons and *antasists on the other hand #ound such conspicuous
consumption as irrele(ant. Thus automakers can design autos based on the pre#erences o#
 populations grouped under each category. 7t is pre#erable to market to a mind0set rather than a
 particular age group. *or #inding such a group psychographic studies are important. These
analyses are expensi(e and reDuire care#ul interpretations. 'R7 7nternational one o# the market
research organiations has de(eloped A+'@A+' % analyses o# consumers based on
 psychographic (alues. A research team in !urope identi#ied #our li#estyle groups: 'uccess#ul
7dealists A##luent Materialists Com#ortable -elongers and "isa##ected 'ur(i(ors. The #irst two
groups represent the elite while the latter two represented the mainstream !uropean consumers.
7t should be noted that the segmentation and targeting approach used by a company can (ary
#rom country to country. Methods that can truly assess a population segment o# a coun try should
 be employed #or psychographic segmentation.
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4%) "ue to globaliation ?it is a small world a#ter all.? Also (ast scale migration o# populations
due to (arious reasons including opportunities has created large segments o# ethnic population.
Considering these #acts highlight the ethnic segmentation and its importance.
Answer: "ue to se(eral reasons in many countries the population consists o# ethnic groups. *or
example in the nited 'tates there are three ma;or ethnic segments F A#rican@-lack AmericansB
Asian AmericansB and ispanic Americans. 7n other countries there are such di##erent
combinations o# ethnic population. !ach segment shows great di(ersity and can be #urther
subdi(ided. !(en those coming #rom one country may ha(e di##erences in language culture
religion and other attitudinal aspects. Their purchasing beha(ior is di##erent within groups and
sub0groups. *rom a marketing standpoint these groups o##er great opportunity. Companies in a
(ariety o# industry sectors primarily #ood and be(eragesB household g oods and #inancing
ser(ices can bene#it by targeting these groups. *or example Eapanese automakers ha(e been
success#ul in targeting ethnic populations in di##erent parts o# the world.
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AAC'-: Re#lecti(e Thinking

4,) =hat are some o# the pit#alls in assessing market potential and choosing target markets or
segmentsI
Answer: A#ter segmenting the market the next important step is to assess the attracti(eness o#
the identi#ied segments. This is an important part when assessing emerging country markets as
 potential targets. 'e(eral potential pit#alls in assessment should be taken into account. 7n general
there is a tendency to o(erstate the sie and short0term attracti(eness o# indi(idual country
markets. This can happen i# estimates are based primarily on demographic data such as income
and population. *or example the population #igures in 7ndia and China can create a bloated
image. 'hort0term pro#itability may be hard due to pre(ailing conditions in these emerging
markets. $ersistence and long0term outlook o#ten pays o## in new markets. A second pit#all may
originate #rom pressures placed on marketers by shareholders or competitors. The possibility o#
missing out on entering a condition is in itsel# a stress0causing #actor. Marketers may #ind
themsel(es o(erwhelmed at times by such pressures and the urge to react Duickly. Another #actor
may be the decisions made based on con(enience or opinion o# persons@ad(isors not residing in
the home country. The right representati(es or distributors should be selected in order to be
success#ul.
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 4/) 7n 7ndia 2& million middle class men and women earn more than > %3 per month. The
segment is growing rapidly and is expected to increase to 3, million by %&1&. Joung consumers
are buying international brands and the economy is strong. 7ndia is also the world5s #astest
growing cell phone market. The industry is expanding at a rate o# & percent annually with 
million new subscribers added e(ery month. 'till barriers originating in the political and
regulatory en(ironments ha(e shackled pri(ate0sector growth. Considering all o# the abo(e0
mentioned aspects is the market segment large enough #or a company to utilie the opportunity
and make a pro#itI "oes it ha(e enough potential #or #uture growth to make it attracti(e #or any
company to pursue a long0term strategyI
Answer: All o# the in#luencing #actors should be taken into consideration be#ore targeting any
country. 7t is possible that the segment in a single0country market might be small e(en a narrow
segment can be ser(ed pro#itably i# the segment exists in se(eral countries. ne o# the ma;or
#actors that should be considered is the purchasing power. 7n 7ndia the purchasing power is seen
 by the purchasing o# international branded items although there is a big disparity among income
le(els. The segment o# the population is considerable to portray pro#it by selling goods and
ser(ices. $ercentages there#ore can be decei(ing in such situations. Also by (irtue o# its sie
and purchasing power the global segment can be extremely attracti(e to consumer goods
companies. The huge country market pre(alent in 7ndia or China combined with the segment
sie and growth potential has to be taken into account. There may also be di##erences between
 populations residing in urban areas compared to the ones in rural areas. Although the ma;ority o#
 population resides in rural areas in 7ndia the numbers o# urban consumers are large enough and
will be able to a##ord di##erent consumer goods. The #act that there is a h uge market #or cell
 phones is indicati(e o# the potential business opportunities. Consideration should be gi(en to all
these #actors be#ore entering into 7ndia or any other similar country.
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4) Assume that the market segment is ;udged to be large enough and the strong competitors are
either absent or deemed to be (ulnerable then is it sa#e to enter the countryI Eusti#y your answer
 by gi(ing reasons.
Answer: 7# the market segment is ;udged to be large enough and there is no strong existing or
 potential competitors one should not assume that it is sa#e to enter the country. There are se(eral
other #actors that can negati(ely impact a business. *or example signi#icant regulatory hurdles
may be present that limit market access. The company may also encounter cultural barriers or
religious restrictions. ther marketing0speci#ic issues can arise. *or example in 7ndia three to
#i(e years are reDuired to build an e##ecti(e distribution system #or many consumer products.
Also the appro(als may take a considerably long period o# time. Thus apparent potential does
not guarantee success. Managers ha(e a di##icult decision in such conditions. 7# there are certain
 pre(ailing conditions that reDuire adaptation o# products then that should be taken into account.
Also it is important to consider the Duestion o# whether targeting a particular segment is
compatible with the company5s o(erall goals its brand image or established sources o#
competiti(e ad(antage.
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 42) "iscuss the basics o# a #ramework #or selecting target markets highlighting the salient
#eatures o# "a(id Arnold5s #ramework.
Answer: A #ramework #or selecting target markets should take into account the market sie o#
the targeted market. The market sie should then be multiplied by the competiti(e ad(antage in
that country. Multiplying the market sie and competiti(e ad(antage index yields a market
 potential. The next step in the analysis reDuires an assessment o# the (arious market access
considerations. *inally multiplying the market potential by the terms o# access index gi(es the
#inal market potential. This #ramework takes into account the competiti(e ad(antage market
 potential and the terms o# access. This #ramework should pro(e use#ul as a preliminary screening
tool #or intercountry comparisons. owe(er it does not go #ar enough in terms o# assessing
actual market potential. 9lobal marketing expert "a(id Arnold has de(eloped a #ramework that
goes beyond demographic data and considers other marketing0oriented assessments o# market
sie and growth potential. Thus instead o# a ?top0down? segmentation analysis beginning with
#or example income or population data #rom a particular country Arnold5s #ramework is based
on a ?bottom0up? analysis that begins at the product0market le(el. The product0market re#ers to a
market de#ined by a product category. *or example in the automoti(e industry that would re#er
to luxury car market. Arnold5s #ramework incorporates two core concepts: marketing model
dri(ers and enabling conditions. Marketing model dri(ers are key elements or #actors reDuired
#or a business to take root and grow in a particular country market en(ironment. The dri(ers may
di##er depending on whether a company ser(es consumer or industrial markets. !nabling
conditions are structural market characteristics whose presence or absence can determine where
the marketing model can succeed. *or example in 7ndia re#rigeration is not widely a(ailable in
shops and market #ood stalls. This creates challenges #or storing dairy products and con#ections.
'o the enabling conditions are (ery important. A#ter marketing0model dri(ers and enabling
conditions ha(e been identi#ied the management should weigh the estimated costs associated
with entering and ser(ing the market with potential short0 and long0term re(enue streams. ne
way to determine the marketing model dri(ers and enabling conditions is to create a product0
market pro#ile.
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 43) A#ter e(aluating the identi#ied segments decisions ha(e to be made whether to pursue a
 particular opportunity or not. Assuming the decision is made to proceed an appropriate targeting
strategy must be de(eloped. !xplain the basic categories o# target marketing strategies and how
they can be implemented.
Answer: The three basic categories o# target marketing strategies are: standardied marketing
concentrated marketing and di##erentiated marketing. 'tandardied global marketing is
analogous to mass marketing in a single country. 7t in(ol(es creating the same marketing mix #or 
a broad mass market o# potential buyers. 7t is also known as undi##erentiated target marketing
since it is based on the premise that a mass market exists around the world. $roduct adaptation is
minimied and a strategy o# intensi(e distribution ensures that the product is a(ailable in the
maximum number o# retail outlets. The appeal o# standardied global marketing is due to the
lower production costs. The concentrated target marketing in(ol(es de(ising a marketing mix to
reach a niche. A niche is single segment o# the global market. *or example in co smetics Chanel
has used to target the upscale prestige segment o# the market. Concentrated targeting is also the
strategy employed by the hidden champions o# global marketing. Companies unknown to most
 people that ha(e succeeded by ser(ing a niche market that exists in many countries. These
companies de#ine their markets narrowly and stri(e #or global depth rather than national breadth.
The narrowing o# market de#inition is the key principle in this strategy. The third category
di##erentiated global marketing represents a more ambitious approach than concentrated target
marketing. 7t is also known as multisegment targeting. 7t entails targeting two or more distinct
market segments with multiple marketing mix o##erings. This strategy allows a company to
achie(e wider market co(erage. *or example in the sport utility (ehicle segment Ro(er has a
Range Ro(er at the high end o# the market. A scaled down (ersion the +and Ro(er "isco(ery is
o##ered which competes directly with the Eeep 9rand Cherokee. The *reelander its newest
(ehicle has been on sale in !urope #or se(eral years. Thus there is a multi0pronged approach to
marketing.
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 44) arley0"a(idson a (ery popular ad(enture seeking company is (ery well known in the
nited 'tates. ow did they de(elop ?think global act local? strategies to target ad(enture
seekers in global marketsI
Answer: arley0"a(idson G0") company has grown impressi(ely during its #irst 1&& years o#
operation. As the twenty0#irst century began they started mo(ing o(erseas with ha(ing
dealerships in about /4 countries. There was a six0month waiting period in many countries to get
their motorcycles. The company was (ery slow to mo(e in o(erseas markets as well as slow in
reacting to a growing threat #rom Eapanese manu#acturers. Their marketing e##orts were not (ery
aggressi(e and e(en their print ad(ertising used word0#or0word translations o# their .'. ads. -y
late 184&5s they realied that they wer losing their competiti(e edge and they needed to think
global but act local. 7n Eapan 0"5s rugged image and high Duality helped make it the best0
selling imported motorcycle. 'till their tag line #rom the .'. ?ne steady constant in an
increasingly screwed0up world? did not go (ery well with Eapanese consumers since they really
did not connect with the meaning o# the slogan. *inally the president o# the 0"5s Eapanese
di(ision con(inced the .'. manu#acturer to use ad(ertising campaigns using Eapanese
characters and (erbiage. A rickshaw and a geisha represented the background depicting the
Eapanese #ashion and customied bikes. 7n !urope 0" disco(ered that an ?e(ening out? means
something di##erent than it does in America. The company sponsored a rally in *rance where
 beer and li(e rock music were a(ailable until midnight. The rally went until , or / am. Again it
shows the cultural di##erences that needed to be considered by 0". The company had to make
design changes since 9erman bikers o#ten tra(eled at a speed exceeding 1&& miles per hour.
Also the 9erman marketing e##ort included #ocusing on accessories to increase rider p rotection.
They realied the core picture and demand o# the !uropean customers and de(eloped their
strategies accordingly. The demand increased considerably and those who were dri(ing
motorbikes were actually high0income earners. The company intentionally keep s low production
limits to emphasie high Duality.
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 48) Colgate Total toothpaste is positioned as the brand that addresses all aspects o# oral health.
'uch positioning is (ery important #rom the business point o# (iew. ow does positioning help in
deciding on a marketing strategyI =hat are the di##erences between using ?attribute or bene#it?
and ?Duality and price? as positioning strategyI
Answer: $ositioning re#ers to the act o# di##erentiating a brand in customers5 minds in relation to
competitors in terms o# attributes and bene#its that the brand does and does not o##er. 7t is the
 process o# de(eloping strategies #or marketing purposes. 7t is #reDuently used in con;unction with
the segmentation (ariables and targeting strategies. ?Attribute or bene#it? strategies are used to
expose a particular product attribute bene#it or other special #eature. Aspects such as economy
reliability multiple uses durability and simplicity are (ery commonly used to describe the
attributes o# a product or ser(ice. *or example isa5s ad(ertising theme ?7t5s !(erywhere Jou
=ant to -e? exposes its bene#it o# being use#ul at any place in the world. Thus these types o#
slogans themes or ;ingles (ery cle(erly outline the bene#its or attributes o# a product. A similar
strategy that is used is related to ?Nuality and $rice.? This strategy can be considered in light o# a
continuum #rom high #ashion@Duality and high price to good (alue. 'watch watches ad(ertise
their Duality 'wiss origin as well as a##ordable price. This way price is always tied to the Duality
and durability o# the product or ser(ice.
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AAC'-: Analytic 'kills

8&) =hat are the ma;or di##erences between 9lobal *oreign and +ocal consumer culture
 positioningI =hy are these di##erences signi#icantI 9i(e examples o# how companies are trying
to lure customers using these positioning strategies.
Answer: 9lobal consumer culture positioning G9CC$) is de#ined as a strategy that identi#ies the
 brand as a symbol o# a particular global culture or segment. 7t has pro(en to be an e##ecti(e
strategy #or communicating with global teens cosmopolitan elites and globe0 trotting laptop
warriors who consider themsel(es members o# a transnational commerce culture. *or example
'ony5s slogan ?My #irst 'ony? is positioned as the electronics brand #or youngsters around the
globe with discerning parents. -enetton uses the slogan ?nited Colors o# -enetton? to position
itsel# as a brand concerned with the unity o# humankind. Categories o# products that lend
themsel(es to this positioning are both associated with high le(els o# cu stomer in(ol(ement and
 by a shared ?language? among users. igh tech products such as i$odB i$honeB M$, playersB
(ideo camerasB and all such technology0prone items #all into these categories.

*oreign consumer culture positioning G*CC$) associates the brand5s users use occasions or
 production origins with a #oreign country or culture. *oster5s -rewing 9roup5s .'. ad(ertising
 proudly uses the brand5s nation origin in all o# its print ads and other promotions as being
Australian. +ocal consumer culture positioning G+CC$) strategy associates the brand with local
cultural meanings re#lects the local culture5s norms portrays the brand as co nsumed by local
 people in the national culture or depicts the product as locally produced #or local consumers.
-udweiser5s .'. ad(ertising particularly #ocuses on local aspects.
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