How marketers can segment international markets?
International Market Segmentation: How to Segment Global MarketsThe globalization of markets means companies rarely do business in only one part of the world anymore. Access to technology continues to impact societal norms, political agendas, media consumption, and, thus, economic growth, in countries around the world, ensuring that most businesses can no longer rely on a “one-size fits all” marketing approach; on the contrary, to remain competitive companies must recognize and cater to a significantly larger and much more diverse audience of consumers, creating multiple — customized — strategies that allow them to develop, position and sell their products on a global scale. The key to much of today’s business, then, is international market segmentation. Take a look at the three basic ways to segment global markets: Show
Macro-SegmentationThe main problem with a global market is, of course, its heterogeneity. When compared to a local or even national market, a global market includes a much broader range of cultural and economic differences. And if the purpose of market segmentation is to divide consumers within a market into groups of people with similar habits and needs so that a company can better tailor its marketing practices to them, then having a population with much more robust and varied characteristics means segmentation is even more warranted. The first step, therefore, is to divide a global market via generalized (i.e., “macro”) country-based characteristics such as GNP (Gross National Product); political or religious perspective; language; or other large-scale socioeconomic and geographic variables. Needless to say, such generic grouping can (and does) have limitations, one of the biggest of which can be the failure to accommodate the intricate needs of individual consumers. However, macro-segmentation is needed initially so that further research can become more focused and precise and doesn’t often cost companies a lot of time or money; much of the information needed for macro-segmentation can be gathered using secondary and/or syndicated market research sources. Micro-SegmentationThe second type of international market segmentation usually follows as the logical narrowing of established macro-segments. With micro-segmentation, companies choose to establish groups of consumers based on specific customer characteristics within the persistent country ones. In this way, consumer attitudes, consumption patterns, lifestyle choices, and other behavioral, demographic, and psychographic variables become the basis for international market segmentation. Unique SegmentationA final type of international market segmentation combines macro- and micro-segmentation, but rather than separating consumers into groups based on their differences within countries, this unique type of international market segmentation focuses on similarities across groups and countries so that shared characteristics across the globe can be identified and used for marketing advantage. For example, consider the “Global Elite” and “Global Teens,” global market segments which are each universally recognized as incorporating a consumer persona with specific characteristics regardless of their geographic domain. Want to Learn More?International market segmentation is neither straightforward nor intuitive. It depends on a complex understanding of a company’s brand and reach, as well as the drivers of unique global markets. Thus, to bolster your marketing creativity, it makes sense to partner with an experienced market research firm. Our team at Research for America, for instance, has decades of experience with dozens of industries around the world. We know how to segment global markets so that our clients garner the insights they need to make profitable businesses decisions. Please contact us to learn more about using international market segmentation to magnify your market research results. To read the full version of this content please select one of the options below:By standardizing the marketing effort over similar worldwide segments and differentiating it across dissimilar worldwide segments, the international marketing manager is able to reap the advantages of both standardization and customization. The choice of the
variables by which to segment the global market is crucial. Traditionally, purely environmental bases (geographic, political, economic, and cultural) were used as bases for international market segmentation. Proposes that international marketers group relevant markets based on both environmental as well as marketing management bases. The marketing management bases are classified as: (1) product‐related; (2) promotion‐related; (3) price‐related; and (4) distribution‐related. Derives number of
propositions with direct implications for international marketing strategy and segmentation with respect to these bases. Highlights the managerial implications of the variables encompassed by these bases. Proposes the empirical investigation of the derived propositions as a research agenda for the future. Keywords
CitationBaalbaki, I.B. and Malhotra, N.K. (1993), "Marketing Management Bases for International Market Segmentation: An Alternate Look at the Standardization/Customization Debate", International Marketing Review, Vol. 10 No. 1. https://doi.org/10.1108/02651339310025839 Publisher:MCB UP Ltd Copyright © 1993, MCB UP Limited Related articlesWhat are the 4 ways to segment the market?Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types.
What are the bases of international market segmentation?Traditionally, purely environmental bases (geographic, political, economic, and cultural) were used as bases for international market segmentation. Proposes that international marketers group relevant markets based on both environmental as well as marketing management bases.
What are the 5 methods of market segmentation?Five ways to segment markets include demographic, psychographic, behavioral, geographic, and firmographic segmentation.
Why is market segmentation important in international marketing?Segmentation helps marketers to be more efficient in terms of time, money and other resources. Market segmentation allows companies to learn about their customers. They gain a better understanding of customer's needs and wants and therefore can tailor campaigns to customer segments most likely to purchase products.
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