International Marketing

Fundamentals of E-commerce, Digital Marketing and SMM

Session 2
Segmenting Targeting and Positioning (STP)
Outline
• Review – Session 1
• Session 2 – Segmenting Targeting Positioning (STP)
IDS&M Concept Map
Planning
• Corporate Planning: Generalized goals for the enterprise

• Strategic Planning: Long- and short-term goals of the company

• Marketing Plan (Tactical Planning)

What is planning?
“Systematized way of relating to the future” (Cateora et. al, 2020)

The plan is important, but the “process of planning” is important as well

 The Planning Process
• Subplans
For instance, Marketing uses the strategic plan to
develop its Planning

Source: International Marketing - 18th Edition by P. Cateora, J. Graham, M. Gilly, B. Money, Mc Graw Hill, 2020.
Phase 1: Screening
• Evaluate potential markets

• Screen and eliminate those that are not

promising

• Idea about what to standardize and adapt

about the marketing mix? → Data for Phase 2
Phase 2: A more detailed examination of Marketing Mix
• Market segments → Possibility of common marketing mix

• Cultural differences → Adaptation needs

• Does adaptation cost support market entry?

• In-class Discussion: Coffee Market

• Second screening → Phase 3: Marketing Plan

Phase 2: In-class Discussion – German Coffee Market
• Possible questions….
Phase 3: Marketing Plan
• Develop a marketing plan

• Note: Market entry decision can be taken or not ! → Entry mode choice
Phase 4: Implementing and Control
Outline
• Review – Session 1
• Session 2 – Segmenting Targeting Positioning (STP)
International Marketing
Fundamentals of E-commerce, Digital Marketing and SMM

Session 2
Segmenting Targeting and Positioning (STP)
IDS&M Concept Map
Objectives
• Explain in your own words what market segmentation is
• Explain in your own words the essentials of market segmentation
• Explain in your own words the difference between domestic and
international/global market segmentation
• List and discuss the segmentation variables
• Explain in your own words the process of international market segmentation

• Explain in your own words what targeting is

• Explain in your own words what product positioning is

• Discuss the process of positioning
Recall: International Planning Process
Decide:

• New segments to develop

• Existing segments to withdraw

• Products to develop
• Products to drop
Market Segmentation argument in time…
• 1970s: Standardization vs. Adaptation

• 1980s: Globalization vs. Localization

• 1990s: Global Integration vs. Local Responsiveness

?
Global Homogenization of Global Standardization of
Customer Tastes the Marketing Mix
What is market segmentation?
Source: https://www.ted.com/talks/mary_abbazia_segmentation_the_key_to_grow_community
01:00 – 05:50; 13:50 - End
What is market segmentation?
“A process that involves identifying specific groups based on their needs, attitudes, and interests”
Baack et al., 2019

In-class Discussion: Why market segmentation is one of the keys to success?

- consumer
- business
- government
Market Segmentation

❑ https://www.linkedin.com/pulse/why-market-segmentation-crucial-your-
business-success-allan-dib/
What are the essentials of market segmentation?
“A process that involves identifying specific groups based on their needs, attitudes, and interests”
(Baack et al., 2019)

• Identify customer needs and wants

• Check whether you can meet the needs and wants with your product
• Scan and understand the market potential, considering the external environment…
Check whether the customers can buy your products
Identify the factors influencing the customer choices

Identify the target market segments and the customers in these segments
Why product launches fail?
• Why most product launches fail?
Source: https://hbr.org/2011/04/why-most-product-launches-fail

“Flaw 5: The product is revolutionary, but there’s no market for it.

The Lesson: Don’t gloss over the basic questions: Who will buy this and at what price?”

Recall:
The process of market segmentation…
• Source: https://www.pwc.com.au/consulting/assets/publications/customer-segmentation-apr09.pdf

- Segment 1
- Segment 2
- …

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 What defines a segment?

❑ Similarity in terms of characteristics

❑ Differentiation from the other segments
❑ Size
❑ Demand
❑ Reach (Photo)

Source: Baack, Daniel W., Czarnecka, Barbara, & Baack, Donald (2018). International Marketing. London; Thousand Oaks, California: SAGE
What is international market segmentation?

❑ Identifying segments in a host market and/or across host countries..

International market segmentation: the process

❑ How to proceed?

Start: Country Level → Regional Global

- Cultural Factors
- Other Factors
Recall Culture: Individual – Country (Group) Level Values
1. Individual
Schwartz (2011)

2. Country (Group)
- Hofstede et al. (2010)
- GLOBE Project
House et al. (1999); House et al. (2004) – Ch. 3; Javidan et al. (2004); Javidan &
Dastmalchian (2009)
 Recall Culture: Country (Group) Level Values
• The GLOBE Project – 9 Cultural Dimensions
Global Leadership and Organisational Behaviour Effectiveness
- Performance Orientation: Training and development vs. Family and background
- Assertiveness: Competition vs. Harmony and loyalty
- Future orientation:
- Humane orientation: Human relations, support for others and sympathy for others vs. power, self-enhancement, independence
- Institutional Collectivism: Group harmony and cooperation
- In-group Collectivism: Family and close friends
- Gender Egalitarianism:
- Power Distance
- Uncertainty Avoidance:

Source: Javidan, M., & Dastmalchian, A. (2009). Managerial implications of the GLOBE project: A study of 62 societies. Asia
Pacific Journal of Human Resources, 47(1), 41-58.
 Recall Culture: Country (Group) Level Values
• The GLOBE Project – 6 Leadership Scales
Global Leadership and Organisational Behaviour Effectiveness
- Charismatic/value based
- Team oriented
- Self-protective
- Participative
- Human orientation
- Autonomous

Source: Javidan, M., & Dastmalchian, A. (2009). Managerial implications of the GLOBE project: A study of 62 societies. Asia
Pacific Journal of Human Resources, 47(1), 41-58.
 Recall Culture: Country (Group) Level Values
• The GLOBE Project – Cultural Dimension Scores for Cultures
Global Leadership and Organisational Behaviour Effectiveness

- Cultural Dimension Scores  10 Cultural Clusters (given in the next slide)

Source: House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (Eds.). (2004).
Culture, leadership, and organizations: The GLOBE study of 62 societies. Sage publications.
 Recall Culture: Country (Group) Level Values
The GLOBE Project – Cultural Clusters
• Anglo
• Latin Europe
• Nordic Europe
• Germanic Europe
• Eastern Europe
Can be used for regional segmentation, where applicable.
• Latin America
• Sub-Sahara Africa
• Arab
• Southern Asia
• Confucian Asia
Source:
- Gupta, V., Hanges, P. J., & Dorfman, P. (2002). Cultural clusters: Methodology and findings. Journal of world business, 37(1), 11-15.
- International Management: Managing Across Borders and Cultures, Text and Cases, 10th edition - January 1, 2021
Author: Helen Deresky, Stewart R. Miller Publisher: Pearson, 2021
International market segmentation

❑ CULTURE

❑ REGIONAL TRADE BLOCKS → Common Standards

❑ …
 International “Consumer” Market Segments: Variables

❑ DEMOGRAPHICS
• Gender, Age, Income, Education, Ethnicity

❑ GEOGRAPHIC AREA
❑ GEODEMOGRAPHIC

❑ LIFESTYLE
❑ PSYCHOGRAPHICS: Motivation, interests, …. Considers cultural factors
❑ BENEFIT SEGMENTATION: Utilitarian, Conspicuous, …. consumers
❑ …

Source: Baack, Daniel W., Czarnecka, Barbara, & Baack, Donald (2018). International Marketing. London; Thousand Oaks, California: SAGE
In-class Discussion: Segmentation in Fashion and Clothing
• Source: https://440industries.com/market-segmentation-in-the-fashion-industry/

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In-class Discussion: Segmentation in Fashion and Clothing
• Source: https://smallbusiness.chron.com/list-market-segments-retail-clothing-market-32446.html
- Gender
- Age
- Geographic
- Behavioral
- Life Style
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In-class Discussion: Global / International Market Segmentation

❑ Luxury Goods Market

Source: https://www.fortunebusinessinsights.com/luxury-goods-market-103866

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Global / International Market Segmentation

❑ Consumer Survey Data Segmentation

Source: https://www.euromonitor.com/article/consumer-survey-data-segmentation
- Consumer survey: Target market characteristics
e.g., https://www.surveymonkey.com/market-research/resources/complete-guide-to-segmentation-surveys/…

- Identify Segment Characteristics: Test

- …
 Benefit Segmentation

❑ Benefit Segmentation is based on the advantages consumers receive from a

product or service rather than the characteristics of consumers themselves

Source: Baack, Daniel W., Czarnecka, Barbara, & Baack, Donald (2018). International Marketing. London; Thousand Oaks, California: SAGE
 In-class Discussion: Benefit Segmentation
A segment
Mini-compact (supermini)

C segment
Small family car

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Source: https://gulfnews.com/lifestyle/complete-guide-to-understanding-car-segments-1.1595406
In-class Discussion: Segmentation - Louis Vuitton
Source: https://louisvuittonbrand.wordpress.com/customer-segmentation/

In-class Exercise:
- What is (are) the
segmentation variable?

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International Market Segmentation

❑ Segmenting the base of the pyramid: Source: https://www.youtube.com/watch?v=ofsj7OgR1Y0&app=desktop

Source: https://hbr.org/2011/06/the-globe-segmenting-the-base-of-the-pyramid

Bottom Of The Pyramid

Source: https://www.youtube.com/watch?v=ofsj7OgR1Y0&app=desktop
B2B Market Segmentation

❑ GEOGRAPHY

❑ INDUSTRY
❑ SIZE
❑ SALES VOLUME / REVENUE

❑ PRODUCT USAGE (HOW, WHEN, ???)

❑ VALUE (Price, Quality, Delivery, Service …) – EXPECTATIONS?

Market vs. Customer Segmentation
• Market and customer segmentation: definition and when to use each analysis
Source: https://www.surveymonkey.com/market-research/resources/market-customer-segmentation-definitions/

• Customer Segmentation: The Ultimate Guide

Source: https://www.forbes.com/advisor/business/customer-
segmentation/#:~:text=Customer%20segmentation%20involves%20grouping%20existing%20and%20potential%20cu
stomers%20based%20on
Term Project Slide: Segmenting
In-class Exercise 3: TESLA Case
• Source: https://www.businessinsider.com/tesla-faces-a-problem-with-market-segmentation-2018-3?r=US&IR=T
In-class Discussion: Issues in segmentation?
Source: https://smallbusiness.chron.com/negatives-segmentation-67581.html

Source: Steenkamp, J. B. E., & Ter Hofstede, F. (2002). International market

segmentation: issues and perspectives. International journal of research in
marketing, 19(3), 185-213.
International Marketing
Fundamentals of E-commerce, Digital Marketing and SMM

Session 2
Segmenting Targeting and Positioning (STP)
What is targeting?
Term Project Slide: Targeting
International Marketing
Fundamentals of E-commerce, Digital Marketing and SMM

Session 2
Segmenting Targeting and Positioning (STP)
What is positioning?
• “Creating a perception in a consumer’s mind regarding the nature of a company
and its products relative to those of competitors” (Baack et al., 2019).

Attributes, such as price, quality, innovations….

Huawei brand positioning
• https://fisovee.wordpress.com/2019/07/23/huawei-brand-positioning/

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Brand positioning
• Quality vs. Price
• Product Characteristics
• Product Uses
• Competitors’ Positions
Brand Positioning in China

Source: Brand Positioning in China

https://daxueconsulting.com/brand-positioning-in-
china/?gclid=CjwKCAjw_L6LBhBbEiwA4c46ukhZw04pH247mArw1tlcfvLxC1RRdS3gKPSMJR8ABRIfH3uXlYtqsxoC9qQQAvD_BwE

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Term Project Slide: Positioning
End of Session 3…