International Marketing: Targeting, Segmentation, and Positioning

In the dynamic world of international marketing, firms must adopt a strategic approach to identify, assess, and enter global markets. Targeting, segmentation, and positioning (TSP) are the core pillars that guide businesses in identifying their audience, catering to their needs, and establishing a competitive advantage. In international marketing, these concepts become more complex due to variations in culture, economic conditions, political systems, and consumer behavior across countries.

Segmentation in International Marketing

Market segmentation involves dividing the global market into distinct subsets of consumers who have common needs or characteristics. The aim is to identify groups of consumers who are likely to respond similarly to a company’s marketing strategy. Effective segmentation in international markets enables firms to tailor products and marketing campaigns to suit the unique preferences and conditions of each segment.

Types of Segmentation:

1. Geographic Segmentation:

   • Markets are segmented based on geographic factors such as countries, regions, or cities. For instance, McDonald’s offers different menus in the U.S., India, and Japan, taking into account local tastes and preferences.

2. Demographic Segmentation:

   • Segments are created based on demographic variables like age, gender, income, education, and occupation. For example, luxury brands may target higher-income consumers in major global cities.

3. Psychographic Segmentation:

   • This method segments markets based on consumers' lifestyles, values, interests, and opinions. Coca-Cola uses psychographic segmentation to target health-conscious consumers with products like Coke Zero.

4. Behavioral Segmentation:

   • Segmentation is based on consumer behavior, such as purchasing habits, brand loyalty, and benefits sought from a product. In international markets, companies may target segments based on how frequently consumers purchase their products or how they use them.

Benefits of Segmentation:

• Better understanding of customer needs in diverse global markets.
• Focused marketing efforts that increase customer satisfaction and brand loyalty.
• Efficient allocation of resources by targeting high-potential segments.

Targeting in International Marketing

Once the market is segmented, companies must choose which segments to target. Market targeting involves evaluating each segment's attractiveness and selecting the one(s) that align with the company’s objectives, resources, and market opportunities.

Targeting Strategies:

1. Undifferentiated (Mass) Targeting:

   • The company views the global market as a single segment and develops a single marketing strategy to reach it. This is often used for commodities or products with universal appeal (e.g., Coca-Cola).

2. Differentiated Targeting:

   • The company targets multiple market segments with different strategies for each. For example, Unilever offers different brands of soap in different regions, such as Lux in India and Dove in Western markets.

3. Concentrated (Niche) Targeting:

   • This strategy focuses on a specific, smaller segment. Luxury car brands like Rolls-Royce or niche cosmetics brands often use concentrated targeting to reach affluent, exclusive customer bases.

4. Micromarketing:

   • Companies tailor their offerings to suit individual customers or small groups. Nike, for instance, allows customers to personalize their shoes, appealing to the growing desire for customization in global markets.

Factors Influencing Targeting:

• Market Size: Large, fast-growing segments are more attractive.
• Growth Potential: Target markets with potential for future expansion.
• Competition: Companies consider the number and strength of competitors.
• Company Resources: A firm’s ability to serve a market depends on its resources.
• Cultural Fit: Cultural alignment with product offerings ensures better market success.

Positioning in International Marketing

Market positioning is the process of designing a company’s offering and image to occupy a distinctive place in the target market’s mind. In international marketing, positioning involves crafting a global strategy that resonates with local consumers while maintaining brand consistency.

Steps in International Positioning:

1. Identify Competitors:

   • In a global context, companies need to understand not just their local competitors but also international players operating in the same markets.

2. Determine Points of Differentiation:

   • International marketers must emphasize the aspects of their products that offer superior value, such as quality, price, features, or brand reputation. For example, Apple positions its products as innovative and premium in all its markets.

3. Create a Positioning Statement:

   • A positioning statement clearly outlines the brand’s value proposition in international markets. For example, Volvo’s positioning as the safest car in the world is a universal message but is marketed differently based on the region’s safety concerns.

Positioning Strategies:

1. Product Attribute Positioning:

   • This focuses on specific features or attributes of the product that appeal to global or local market needs. Toyota emphasizes fuel efficiency in markets concerned with environmental sustainability.

2. Benefit Positioning:

   • This strategy emphasizes the benefits consumers will gain from the product. For example, Visa positions itself as offering global financial convenience and security.

3. Cultural Positioning:

   • In international marketing, positioning strategies may be based on cultural elements. Brands like Disney incorporate universal themes of family entertainment but adapt them to suit local cultures.

4. Price-Quality Positioning:

   • This strategy balances the perception of the product’s quality with its price. Luxury brands such as Louis Vuitton maintain high prices to reinforce their high-quality image globally.

References

1. Kotabe, M., & Helsen, K. (2017). Global Marketing Management. Wiley.
2. Keegan, W. J., & Green, M. C. (2019). Global Marketing. Pearson Education.
3. Cateora, P. R., Gilly, M. C., & Graham, J. L. (2020). International Marketing. McGraw-Hill Education.
4. Hollensen, S. (2017). Global Marketing. Pearson Education.
5. Czinkota, M. R., & Ronkainen, I. A. (2012). International Marketing. Cengage Learning.