 A group of individuals or organizations that share similar characteristics  Respond in the same way to a product  Products may appeal to a different segment in foreign markets

 Three characteristics of a qualified market segment:  Need for the product  Ability to pay  Authority to purchase ◦ Example: in many countries only the head of household may make major purchases—other family members may not have ability to pay or the authority to buy

 Undifferentiated segmentation strategy  Looks at all customers as one market  Works when a market segment is too small to target  Also works well when a brand is dominant (Coke)  Concentrated segmentation strategy  Focuses on one clearly defined market segment  Business looks for a segment with few competitors  Differentiated segmentation strategy  Targets two or more segments with unique strategies  Used for markets that are large or growing

1. Demographic segmentation 2. Cultural segmentation 3. Geographic segmentation 4. Product usage segmentation

 Population characteristics such as age, gender, race, income, and education  Same demographic group within a culture may react to a marketing strategy the same way  Globally, there may be differences in consumers’ needs & wants, even within same demographic group  Demographic trends used to identify new markets:  E.g., Growth in incomes or populations

 Characterized by lifestyle characteristics such as consumers’ values, activities, interests, and opinions  Advertisements designed to show how a product fits lifestyle  Many products sold to support consumers’ idealized lifestyle—the preferred lifestyle they would like to live ◦ Example: although Chinese are not always adventurous, they buy Jeeps to appear adventurous

 Looks at:  Where customers are located ◦ Rural versus suburban versus urban ◦ Level of economic development within a country

 Related to frequency of product use or benefits derived from using the product  Heavy users purchase large amounts of a product  Many consumers use products because of the benefits they provide

1. Organization characteristics 2. Industry factors 3. Purchasing situation 4. Trading blocs  Different marketing strategies may be needed to meet legal requirements for different countries

 Size of the business,  Ownership  Geographic location  Amount of product used  Large global businesses may have centralized purchasing and buy in large quantities  Small independent companies are more diverse and geographically scattered

 Product categories  Product benefits  End market served  Global companies in the same industry often have the same types of customers who need the same benefits from the products they purchase

 Stage of the buying process  Other buying factors such as culture  First-time buyers have different needs than businesses that are simply reordering a product  Different cultures require different strategies for developing business relationships and selling

 Enable marketers to look at industrial markets by country groups  European Union—common trading rules allow similar sales strategies across countries  NAFTA (North American Free Trade Agreement)  CAFTA (Central American Free Trade Agreement)

 International markets may be found domestically:  Large cultural groups maintain lifestyles closer to their cultural heritage than to mainstream  Asian-Americans:  Emphasis on family ties, strong work ethic, education  Wealthiest cultural segment in U.S  Hispanic-Americans:  Original settlers of the southwest U.S, or whose backgrounds are from Spanish-speaking countries in Latin America  Emphasis on family ties, strong religious affiliations, work ethic  Domestic intercultural markets are often geographically clustered.