Market Segmentation, Targeting and Positioning: Understanding Global Consumer Diversity, Slides of Economics

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Chapter 7

Segmentation, Targeting, and

Positioning

Introduction

We have different customers. Each customer is

free to have her own aspirations. Our intention is

to respond as well as possible to each customer

aspiration. Some want to be gorgeous, some want

to be natural, and we just have to offer them the

best quality and the best product to satisfy their

wishes and their dreams.

—L’Oreal CEO Jean-Paul Agon

On understanding segmentation

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

Positioning

Positioning is required to differentiate

the product or brand in the minds of

the target market.

Contrasting Views of Global

Segmentation

Conventional wisdom

Assumes heterogeneity among countries Assumes homogeneity within a country Focuses on macro-level 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 among countries

Global Market Segmentation

Demographics

Psychographics

Behavioral characteristics

Benefits sought

Demographic Facts and Trends

A widening age gap exists between the older

populations in the West and the large working-age

populations in developing countries

In the European Union, the number of consumers

ages 16 and under is rapidly approaching the number

of consumers ages 60-plus

Asia is home to 500 million consumers ages 16 and

under

Half of Japan’s population will be age 50 or older by

Demographic Facts and Trends

America’s three main ethnic groups—African/Black

Americans, Hispanic Americans, and Asian

Americans—represent a combined annual buying

power of $1 trillion

The United States is home to 28.4 million foreign-

born residents with a combined income of $

billion

By 2030, 20 percent of the U.S. population—

million Americans—will be 65 or older versus 13

percent (36 million) today

India has the youngest demographic profile among

the world’s large nations: more than half its

population is under the age of 25

Per Capita Income

2004 Income Adjusted for

• 1. Luxembourg $56, 2004 Per Capita Income
• 2. Norway 51,
• 3. Switzerland 49,
• 4. United States 41,
• 5. Denmark 40,
• 6. Iceland 37,
• 7. Japan 37,
• 8. Sweden 35,
• 9. Ireland 34,
• 10. United Kingdom 33,
  • 1. Luxembourg $61, Purchasing Power
  • 2. United States 39,
  • 3. Norway 38,
  • 4. Switzerland 35,
  • 5. Ireland 32,
  • 6. Iceland 32,
  • 7. Austria 31,
  • 8. Denmark 31,
  • 9. Hong Kong 31,
  • 10. Belgium 31,

10 Most Populous Countries

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

Psychographic Segmentation

Grouping people according to attitudes,

values, and lifestyles

SRI International and VALS 2

Porsche example

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

Psychographic Segmentation

The Euroconsumer

Comfortable belongers

• 25 to 50% of a country’s population
• Conservative
• Most comfortable with the familiar
• Content with the comfort of home, family, friends, and community

Disaffected survivors

• Lack power and affluence
• Harbor little hope for upward mobility
• Tend to be either resentful or resigned
• Concentrated in high- crime urban inner city
• Attitudes tend to affect the rest of society

Psychographic Segmentation:

Sony’s U.S. Consumer Segments