002 Identifying Segments in International Markets PDF

International Marketing
Week 2
Identifying segments in international markets
Objectives:
1. To be able to identify the importance of Market segmentation in
International Marketing
2. To be able to identify the different steps, level and bases in Market
segmentation in International Marketing
A company that decides to operate in a broad market recognizes that it

normally cannot serve all customer in the international market. The
customers are too numerous and diverse in their buying needs so the
company needs to identify the market segments that it can serve most
effectively.
Kotler et. Al (1999) stated that to choose its markets and serve them well,
many international companies are embracing target marketing. In target
marketing, sellers distinguish the major market segments, target one or more
of those segments, and develop products and marketing programs tailored to
each segment.
1|Page
Target marketing requires international company to take three major steps
1. Market Segmentation
2. Market Targeting
3. Market Positioning
Market Segmentation
Market Segmentation is partitioning of a market into smaller parts by

identifying different groups of people with fairly similar needs, a firm can try
to satisfy their customers better and more profitably thru assembling a
marketing mix effort for each market segment. Since 1972, regular worldwide
studies by Profit Impact on Market Strategies (PIMS) of the Strategic Planning
Institute of the US have proven that the higher level of market shares held by
a firm in a market segment, the higher level of profitability by that firm. This
is because both the executive time and resources are better allocated to a
focus group in the market place. The secret therefore, is in spotting and
promptly acting on consumer needs as well as differences in customer’s
needs.
2|Page
Steps in Market Segmentation
Step 1 - Define the market.
The first step in creating market segments is to clearly define the market of
interest.
Example of this is Starbucks, a well-known coffee chain. They are an

international brand with operations in many countries. Primarily they define
their market as takeaway and dine-in quality coffee retailing, rather than at
home coffee and other forms of out-of-home food.
Step 2 - Create market segments
The second step in creating market segments is determining what types of

different consumers form that overall market.
Step 3 - Evaluate the proposed market segments for viability
After developed some market segments we may be required to evaluate

them to ensure that they are usable and logical.
Step 4 - Construct segment profiles
In this step, the company required to describes the segments.
Step 5 – Evaluate the attractiveness of each segment
The company is required to select one target market from the list of market
segments then need to use form of objective assessment.
3|Page
Step 6 – Select target market
Using the assessment information, the company can select the most
appropriate target market for the firm.
Levels of Segmentation in International Marketing
International marketers subdivide markets into segments, so they can do

focus on marketing plans. Each level of market segmentation determines the
strategy a company will follow to promote, distribute and position its product
in the market and respectively target audience or its customers. Market
Segmentation represents an effort to increase a company’s targeting
precision. It can be carried out at four levels: segments, niches, local and
individuals.
1.Mass Marketing- In mass marketing, the seller engages in the mass

production, mass distribution and distribution and mass promotion of one
product for all buyers. This approach was common in many parts of the world.
Due to a closed and regulated marketplace, countries like China, India,
Indonesia, Taiwan and Vietnam had a single brand for many product
categories. Mass Marketing creates the largest potential market, which leads
to the lowest costs, which in turn can translate into either lower prices or
higher margins.
Coca-Cola is another good example of mass marketing. Its television

advertisements can be seen in winter holidays in USA as well which has been
designed to appeal simply to everyone. Since Coca-Cola is a product which
4|Page
spans various niches in terms of popularity; its mass marketing campaign has
proved to be very effective and successful over time.
2. Segment Marketing- A market segment consist of a large identifiable group

within a market. An international company that practices segment marketing
recognizes that buyers differ in their wants, purchasing power, geographical
locations, buying attitudes and buying habits.
In India, Godrej has soaps for different segments. Cinthol is a premium soap
and has extensions of New Cinthol and Cinthol Lime to cater to different needs.
Godrej also offers Fresca which is priced like a popular soap but promoted and
packaged as a premium soap. Godrej also sells Vigil, a family soap for the
discount segments.
3.Niche Marketing- A niche is a more narrowly defined group, typically a small

market whose needs are not being well served. Niche marketing does not
mean a small market, but it involves specific target audience with a
specialized offering.
Colgate and Darlie are leaders in most Asian toothpaste markets. However,
there are niche players such as Eucryl and Pyondontyl who offer specialized
toothpaste for smokers and those with sensitive or bleeding gums
respectively.
4.Local Marketing- In Local marketing, the products tailored according to the

needs and wants of local customer groups
5|Page
Coca-Cola introduced the Fei Yang (High Flyer) brand of soft drink exclusively
for the Taiwan Market. The line comprises teas and juices in such indigenous
and distinctive flavors as oolong with iron Buddha leaves, and lychee and
guava. They are packaged in Tetrapacks to give them separate identify from
Coke.
5.Individual Marketing- In Individual Marketing, this level of segmentation

often customized as per the individual customers.
Dell company has done very impressive work in individual marketing by

offering the customers the freedom to design and configure their product.
Gucci, Hermes, Vertu, Burberry and Louis Vuitton are famous fashion brands
that deal with customers personally. They make clothes and other products
keeping in mind the taste of every individual.
Bases for segmenting international consumer markets
In international market consumer characteristics are used to segment

consumer markets. They commonly used geographic, demographic and
psychographic characteristics.
1.Geographic Segmentation it calls for dividing the market into different

geographical units such as nations, states, regions, provinces, cities or
neighborhoods.
Japan’s Nissin instant noodles are customized regionally. In India, it was

originally launched as cup noodles. This failed as Indians do not sip noodle
6|Page
soup as in Japan. Also, unlike the Japanese, Indians do not use chopsticks. Thus
Nissin adapted by having shorter noodles. The noodles are also spicier and are
vegetarian-based instead of meat-based because of the large population
Indian vegetarians.
2.Demographic Segmentation- it consists of dividing the market into groups

on the basis of demographic variables such as age, generation, family, size,
family type, family life cycle, gender, income, occupation, education, religion,
race and nationality.
For example in religion, brand’s essence of Chicken modified its product for
the Muslim market with a new brand name Bistari which means “wise and
Smart” in Malay. Besides stating clewarly on the packaging that the tonic
drink is halal, it also has a seal with the endorsement from the Muslim
Association. The packaging comes in Islamic green with the letterings similar
to Islamic calligraphy.
3.Psychographic Segmentation- in this type buyers are divided into different

groups on the basis of lifestyle and/or personality.
The Hongkong’s Toppy Ltd. fashion chain consisting of Episode, Jessica and
Excursion is targeted at the sophisticated, trendy and smart casual lifestyles
respectively.
4.Behavioral Segmentation- In this type, buyers are divided into groups on

the basis of their knowledge of, attitude toward, use of, or response to a
product.
7|Page
Mobile phone brand Samsung offers different screen sizes, lens quality and
zooming ability, battery lifespan and other features that relate to benefits
sought, such as using the phone as a mobile office, as a camera and in
traveling long distances.
Market Targeting
Refers strategy that breaks a large market into smaller segments to

concentrate on a specific group of customers within that audience. It defines
a segment of customers based on their unique characteristics and focuses
solely on serving them.
Market Positioning
refers to the ability to influence consumer perception regarding a brand or

product relative to competitors.
8|Page
References:
Websites:
Market Segmentation. Retrieved from: www.segmentationstudyguide.com.
Retrieved on April 1, 2020.
Market Segmentation definition, Levels, Types and Examples. Retrieved
from: www.marketingtutor.net. Retrieved from: April 1, 2020.
Books:
Kotler, Philip, Swee Hoon, Ang, Siew Men, Leong, Chin Tiong, Tan (2009).
Marketing Management an Asian perspective. New Jersey: Prentice Hall Inc.
9|Page

002 Identifying Segments in International Markets PDF

Uploaded by

Copyright:

Available Formats

002 Identifying Segments in International Markets PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

002 Identifying Segments in International Markets PDF

Uploaded by

Copyright:

Available Formats

International Marketing

A company that decides to operate in a broad market recognizes that it

Market Segmentation is partitioning of a market into smaller parts by

Step 1 - Define the market.

Example of this is Starbucks, a well-known coffee chain. They are an

Step 2 - Create market segments

The second step in creating market segments is determining what types of

Step 3 - Evaluate the proposed market segments for viability

After developed some market segments we may be required to evaluate

Step 4 - Construct segment profiles

In this step, the company required to describes the segments.

Step 5 – Evaluate the attractiveness of each segment

Levels of Segmentation in International Marketing

International marketers subdivide markets into segments, so they can do

1.Mass Marketing- In mass marketing, the seller engages in the mass

Coca-Cola is another good example of mass marketing. Its television

2. Segment Marketing- A market segment consist of a large identifiable group

3.Niche Marketing- A niche is a more narrowly defined group, typically a small

4.Local Marketing- In Local marketing, the products tailored according to the

5.Individual Marketing- In Individual Marketing, this level of segmentation

Dell company has done very impressive work in individual marketing by

Bases for segmenting international consumer markets

In international market consumer characteristics are used to segment

1.Geographic Segmentation it calls for dividing the market into different

Japan’s Nissin instant noodles are customized regionally. In India, it was

2.Demographic Segmentation- it consists of dividing the market into groups

3.Psychographic Segmentation- in this type buyers are divided into different

4.Behavioral Segmentation- In this type, buyers are divided into groups on

Refers strategy that breaks a large market into smaller segments to

refers to the ability to influence consumer perception regarding a brand or

You might also like