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SEGMENTATION, TARGETING, AND POSITIONING 1 Global Marketing Chapter 7.

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Presentation on theme: "SEGMENTATION, TARGETING, AND POSITIONING 1 Global Marketing Chapter 7."— Presentation transcript:

1 SEGMENTATION, TARGETING, AND POSITIONING 1 Global Marketing Chapter 7

2 MARKET SEGMENTATION Represents an effort to identify and categorize groups of customers and countries according to common characteristics 7-2

3 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 7-3

4 POSITIONING Positioning is required to differentiate the product or brand in the minds of the target market. 7-4

5 GLOBAL MARKET SEGMENTATION Defined as the process of identifying specific segmentswhether they be country groups or individual consumer groupsof potential customers with homogeneous attributes who are likely to exhibit similar responses to a companys marketing mix. 7-5

6 CONTRASTING VIEWS OF GLOBAL SEGMENTATION Conventional Wisdom Assumes heterogeneity between countries Assumes homogeneity within a country Focuses on macro level of cultural differences Relies on clustering of national markets Less emphasis on within-country segments Unconventional Wisdom Assumes emergence of segments that transcend national boundaries Recognizes existence of within-country differences Emphasizes micro- level differences Segments micro markets within and between countries 7-6

7 GLOBAL MARKET SEGMENTATION Demographics Psychographics Behavioral characteristics Benefits sought 7-7

8 DEMOGRAPHIC SEGMENTATION Income Population Age distribution Gender Education Occupation What are the trends? 7-8

9 AGE SEGMENTATION Global Teens– Global Teens–young people between the ages of 12 and 19 A group of teenagers randomly chosen from different parts of the world will share many of the same tastes Global Elite Global Elite–affluent consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity 7-9

10 GENDER SEGMENTATION In focusing on the needs and wants of one gender, do not miss opportunities to serve the other Companies may offer product lines for both genders Nike, Levi Strauss 7-10

11 PSYCHOGRAPHIC SEGMENTATION Grouping people according to attitudes, values, and lifestyles Porsche example Porsche example from SRI International 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 7-11

12 BEHAVIOR SEGMENTATION Focus on whether people purchase a product or not, how much, and how often they use it User status Law of disproportionality/Paretos Law–80% of a companys revenues are accounted for by 20% of the customers 7-12

13 BENEFIT SEGMENTATION 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 7-13

14 ETHNIC SEGMENTATION The population of many countries includes ethnic groups of significant size Hispanic Americans 40+ million Hispanic Americans (14% of total pop.) with $560 billion annual buying power40+ million Hispanic Americans (14% of total pop.) with $560 billion annual buying power CA Mexicans have after-tax income of $100 billion The number of Hispanic teens will rise from 12 percent of the U.S. teen population to 18 percent in the next decade 7-14

15 TARGET MARKETING STRATEGIES 15

16 CONCENTRATED MARKETING The focus is acquiring a large share of one or a few segments of niches. Generally, there are fewer competitors. The Internet is ideal for targeting small niche markets. There is some risk in focusing on only one market. 16

17 TARGET MARKET STRATEGY OPTIONS Concentrated global marketing Niche marketing Single segment of global market Look for global depth rather than national breadth Ex.: Chanel, Body Shop Differentiated global marketing Multi-segment targeting Two or more distinct markets Wider market coverage Ex.: P&G markets Old Spice and Hugo Boss for Men 7-17

18 DIFFERENTIATED/ MULTI SEGMENT MARKETING Firm targets several market segments and designs separate offers for each. The goal is to have higher sales and a stronger position with each market segment. This approach increases the costs of doing business. 18

19 POSITIONING 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 7-19

20 POSITIONING MAP 6-20

21 POSITIONING STRATEGIES Global consumer culture positioning Identifies the brand as a symbol of a particular global culture or segment High-touch and high-tech products Foreign consumer culture positioning Associates the brands users, use occasions, or product origins with a foreign country or culture 7-21 Beer is associated with this Germans culture; the symbol on his shirt is not German!

22 7-22

23 POSITIONING STRATEGIES Local consumer culture positioning Identifies with local cultural meanings Consumed by local people Locally produced for local people Used frequently for food, personal, and household nondurables 7-23

24 24 IMPORTING, EXPORTING, AND SOURCING Global Marketing Chapter 8

25 8-25 INTRODUCTION This chapter looks at: Export selling and export marketing Organizational export activities National policies on imports and exports Tariff systems Key export participants

26 8-26 Export selling involves selling the same product, at the same price, with the same promotional tools in a different place Export marketing tailors the marketing mix to international customers Export Selling vs. Export Marketing

27 8-27 REQUIREMENTS FOR EXPORT MARKETING An understanding of the target market environment The use of market research and identification of market potential Decisions concerning product design, pricing, distribution and channels, advertising, and communications

28 8-28 NATIONAL POLICIES GOVERNING EXPORTS AND IMPORTS Most nations encourage exports and restrict imports Goods and services imported into the U.S. almost doubled in seven years In 2008, the total was $2.5 trillion

29 8-29 GOVERNMENT PROGRAMS THAT SUPPORT EXPORTS Tax incentives Subsidies Governmental assistance Free trade zones

30 8-30 GOVERNMENTAL ACTIONS TO DISCOURAGE IMPORTS AND BLOCK MARKET ACCESS Tariffs ( Three Rs) Nontariff barriers Quotas Discriminatory procurement policies Restrictive customs procedures Arbitrary monetary policies Restrictive regulations Port Authority of Thailand: Laem Chabang

31 EXAMPLES OF TRADE BARRIERS Table 8.3 p. 277 EU- 16.5% antidumping tariffs on Shoes from China 10% on shoes from Vietnam China- 28% on foreign made auto parts 8-31

32 GOVERNMENTAL ACTIONS TO DISCOURAGE IMPORTS A nontariff trade barrier (NTB) is any measure other than a tariff that is an obstacle to the sale of products in a foreign market. NTBs are also known as hidden trade barriers. A quota is a government-imposed limit or restriction on the number of units or the total value of a particular product or product category that can be imported. In 2005, for example, textile producers in Italy and other European countries were granted quotas on 10 categories of textile imports from China. Discriminatory procurement policies can take the form of government rules and administrative regulations that give local vendors priority. The Buy American Act of

33 8-33 TARIFF SYSTEMS Single-column tariff Simplest type of tariff Schedule of duties in which rate applies to imports from all countries on the same basis Two-column tariff General duties plus special duties apply

34 8-34 TARIFF SYSTEMS Sample Rates of Duty for U.S. Imports

35 8-35 PREFERENTIAL TARIFF Reduced tariff rate applied to imports from certain countries GATT prohibits the use, with three exceptions: Historical preference arrangements already existed Preference is part of formal economic integration treaty Industrial countries are permitted to grant preferential market access to LDCs

36 8-36 CUSTOMS DUTIES Ad valorem duty Expressed as percentage of value of goods Specific duty Expressed as specific amount of currency per unit of weight, volume, length, or other unit of measurement $1 per pair of Shoes 1000 Baht per ton of the goods imported mixed duties Compound or mixed duties Apply both ad valorem and specific on the same items

37 8-37 OTHER DUTIES AND IMPORT CHARGES Anti-dumping Duties Dumping is the sale of merchandise in export markets at unfair prices Special import charges equal to the dumping margin 48.5% added to tax against Chinese imports of bicycles in EU Countervailing Duties Added duties to offset the subsidies granted in the export countries Temporary Surcharges

38 8-38 Key Export Participants (Self Study) Foreign purchasing agents Export brokers Export merchants Export management companies Export distributor Export commission representative Cooperative exporter Freight forwarders Manufacturers export representatives

39 8-39 ORGANIZING FOR EXPORTING IN THE MARKET COUNTRY Direct market representation Advantages: control and communications Representation by independent intermediaries Advantages: best for situations with small sales volume

40 8-40 EXPORT FINANCING AND METHODS OF PAYMENT Documentary credits (Letter of Credit) Documentary collections (Bill of Exchange) Cash in advance Sales on open account

41 8-41 FLOW CHART OF DOCUMENTARY CREDIT

42 8-42

43 8-43

44 8-44 SOURCING Must emphasize benefits of sourcing from country other than home country Must assess vision and values of company leadership Advantage can be gained by Concentrating some of the marketing activities in a single location Leveraging companys know-how Tapping opportunities for product development and R&D

45 8-45

46 8-46 FACTORS THAT AFFECT SOURCING Management vision Factor costs and conditions Customer needs Logistics Country infrastructure Political risk Exchange rate, availability, and convertibility of local money

47 8-47 DUTY DRAWBACK Refunds of duties paid on imports that are processed or incorporated into other goods AND re-exported Reduce the price of imported production inputs Used in the U.S. to encourage exports After NAFTA, U.S. reduced drawbacks on exports to Canada and Mexico China had to reduce drawbacks in order to join the WTO

48 8-48 LOOKING AHEAD TO CHAPTER 9 Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances


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