1 Global Marketing Chapter 7 Market Segmentation Represents an effort to identify and categorize groups of customers and countries according to common characteristics 7 2 Targeting The process of evaluating segments and focusing marketing efforts on a country region or group of people th ID: 644731
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Slide1
Segmentation, Targeting, and Positioning
1
Global Marketing
Chapter 7Slide2
Market Segmentation
Represents an effort to identify and categorize groups of customers and countries according to common characteristics
7-
2Slide3
Targeting
The process of evaluating segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respondFocus on the segments that can be reached most effectively, efficiently, and profitably
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3Slide4
Positioning
Positioning is required to differentiate the product or brand in the minds of the target market.
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4Slide5
Global Market Segmentation
Defined as the process of identifying specific segments—whether they be country groups or individual consumer groups—of potential customers with homogeneous attributes who are likely to exhibit similar responses to a company’s marketing mix.
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5Slide6
Contrasting Views of Global Segmentation
Conventional WisdomAssumes heterogeneity between countriesAssumes homogeneity within a countryFocuses on macro level of cultural differencesRelies on clustering of national marketsLess emphasis on within-country segmentsUnconventional WisdomAssumes emergence of segments that transcend national boundariesRecognizes existence of within-country differencesEmphasizes micro-level differencesSegments micro markets within and between countries
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6Slide7
Global Market Segmentation
DemographicsPsychographicsBehavioral characteristicsBenefits sought
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7Slide8
Demographic Segmentation
IncomePopulationAge distributionGenderEducationOccupationWhat are the trends?
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8Slide9
Age Segmentation
Global Teens–young people between the ages of 12 and 19A group of teenagers randomly chosen from different parts of the world will share many of the same tastesGlobal Elite–affluent consumers who are well traveled and have the money to spend on prestigious products with an image of exclusivity
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9Slide10
Gender Segmentation
In focusing on the needs and wants of one gender, do not miss opportunities to serve the otherCompanies may offer product lines for both gendersNike, Levi Strauss
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10Slide11
Psychographic Segmentation
Grouping people according to attitudes, values, and lifestyles Porsche example from SRI InternationalTop Guns (27%): Ambition, power, control Elitists (24%): Old money, car is just a carProud Patrons (23%): Car is reward for hard workBon Vivants (17%): Car is for excitement, adventureFantasists (9%): Car is form of escape
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11Slide12
Behavior Segmentation
Focus on whether people purchase a product or not, how much, and how often they use itUser statusLaw of disproportionality/Pareto’s Law–80% of a company’s revenues are accounted for by 20% of the customers
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12Slide13
Benefit Segmentation
Benefit segmentation focuses on the value equationValue=Benefits/PriceBased on understanding the problem a product solves, the benefit it offers, or the issue it addresses
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13Slide14
Ethnic Segmentation
The population of many countries includes ethnic groups of significant sizeHispanic Americans40+ million Hispanic Americans (14% of total pop.) with $560 billion annual buying powerCA Mexicans have after-tax income of $100 billionThe number of Hispanic teens will rise from 12 percent of the U.S. teen population to 18 percent in the next decade
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14Slide15
Target Marketing Strategies
15Slide16
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.
16Slide17
Target Market Strategy Options
Concentrated global marketingNiche marketingSingle segment of global marketLook for global depth rather than national breadthEx.: Chanel, Body ShopDifferentiated global marketingMulti-segment targetingTwo or more distinct marketsWider market coverageEx.: P&G markets Old Spice and Hugo Boss for Men
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17Slide18
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.
18Slide19
Positioning
Locating a brand in consumers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offerAttribute or BenefitQuality and PriceUse or UserCompetition
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19Slide20
Positioning Map
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20Slide21
Positioning Strategies
Global consumer culture positioningIdentifies the brand as a symbol of a particular global culture or segmentHigh-touch and high-tech productsForeign consumer culture positioningAssociates the brand’s users, use occasions, or product origins with a foreign country or culture
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21
Beer is associated with this German
’
s culture; the symbol on his shirt is not German!Slide22
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22Slide23
Positioning Strategies
Local consumer culture positioningIdentifies with local cultural meaningsConsumed by local peopleLocally produced for local peopleUsed frequently for food, personal, and household nondurables
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Importing, Exporting, and Sourcing
Global Marketing
Chapter 8Slide25
8-
25Introduction
This chapter looks at:
Export selling and export marketing
Organizational export activities
National policies on imports and exports
Tariff systems
Key export participantsSlide26
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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 MarketingSlide27
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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 communicationsSlide28
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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 trillionSlide29
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29
Government Programs that
Support Exports
Tax incentives
Subsidies
Governmental assistance
Free trade zonesSlide30
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30
Governmental Actions to Discourage Imports and Block Market Access
Tariffs (
“
Three R
’
s
”
)
Nontariff barriersQuotas
Discriminatory procurement policies
Restrictive customs procedures
Arbitrary monetary policies
Restrictive regulations
Port Authority of Thailand:
Laem
ChabangSlide31
Examples of Trade Barriers
Table 8.3 p. 277EU- 16.5% antidumping tariffs on Shoes from China10% on shoes from VietnamChina- 28% on foreign made auto parts
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31Slide32
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 1993
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32Slide33
8-
33Tariff 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 applySlide34
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34Tariff Systems
Sample Rates of Duty for U.S. ImportsSlide35
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35Preferential 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 LDCsSlide36
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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
Compound or
mixed duties
Apply both ad valorem and specific on the same itemsSlide37
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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 Slide38
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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
Manufacturer
’
s export representativesSlide39
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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 volumeSlide40
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Export Financing and
Methods of Payment
Documentary credits
(
Letter
of
Credit
)
Documentary collections
(
Bill
of
Exchange
)
Cash in advance
Sales on open accountSlide41
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41
Flow Chart of
Documentary CreditSlide42
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42
Slide43
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43Slide44
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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 company
’
s know-how
Tapping opportunities for product development and R&DSlide45
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45Slide46
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46Factors that Affect Sourcing
Management vision
Factor costs and conditions
Customer needs
Logistics
Country infrastructure
Political risk
Exchange rate, availability, and convertibility of local moneySlide47
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47Duty 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 WTOSlide48
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48Looking Ahead to Chapter 9
Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances