“We are saying you've got to understand and choose the

customers you want to serve. Don't just go after everyone.

Define the target market carefully through segmentation
and then really position yourself as different and as
superior to that target market. Don't go into that target
market if you're not superior.”
Phillip Kotler

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
 The Need for STP Strategy in Global Markets
 Global Market Segmentation Strategies
• Country-based (Macro) Segmentation
• Consumer-based (Micro) Segmentation
• B to B segmentation
• The Long Tail: Every customer can be a segment
 Targeting
 Criteria for Targeting
 Selecting a Global Target Strategy
 Undifferentiated Approach
 Differentiated Approach
 Concentrated Approach
 Customized Approach
 Positioning
• Process
• Example
 Summary
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 STP allows marketers to determine the
value their product or service can deliver to
customers
• Segmentation
 Identification of specific types of customers
• Targeting
 Identifying methods to reach customer segments
• Positioning
 Communicating value in appealing ways to targeted
segments

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 Toidentify and engage the right customer
segments, but also to preserve the true
identity of the brand while answering the
need to position it in very customized,
segment-specific communications

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 Segmentation is defined by the American
Marketing Association as “the process of
subdividing a market into distinct subsets of
customers that behave in the same way or
have similar needs.”
• The process is challenging, however,
• When done well, the practice can give a firm a
substantial competitive advantage

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 Five
criteria must be present for a group of
customers to be a ‘segment.’ Each segment
must be:
1. Measurable
2. Different enough to warrant changes in the
marketing mix
3. Accessible through marketing and distribution
channels
4. Large enough to be profitable
5. Stable enough to allow for proper targeting and
measurable response
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 Country-based, or macro, segmentation

 Consumer based, or micro, segmentation

• Company-based segmentation in the case of
business to business market scenarios

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 Usesgeographic, demographic and socioeconomic
variables such as location, GNP per capita,
population size or family size to group countries
intro market segments
• Enables a company to centralize its operations and save
on production, sales, logistics and support functions
• Doesn’t take into consideration consumer differences
within each country and among the country markets that
are clustered together
• Fails to acknowledge the existence of segments that go
beyond the borders of a particular geographic region

9-8
 Consumers are grouped based on common
characteristics such as cultural preferences,
values and attitudes, or lifestyle choices
• Employs psychographic and behavioristic
segmentation variables
• Certain segments identified to have the same
characteristics may be present on a global scale,
while others may be particular to a specific country
or region

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Insert Box 9-1

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 The basic tenet of VALS is that people
express their personalities through their
behaviors
 VALS specifically defines consumer
segments on the basis of those personality
traits that affect behavior in the marketplace.
• A related method of psychography is Global Scan,
which measures attitudes, consumer values and
buying patterns.

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Figure 9-2

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 Several
major differences are apparent
between the consumer and business-to-
business segmentation processes
• The B2B market rarely exceeds several hundred
company clients, while consumer markets number
literally millions of customers
• Business volume far outstrips individual consumer
purchasing
• The dynamics of the B2B purchasing process are far
more complex
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 Industry
 Geography
 Decisionmaker demographics and lifestyle
 Surveyed data
 Firmographics and payment behavior

9-14
 More of a tool for advertising and branding
than effective segmentation that guides
marketers in finding meaningful groups of
consumers likely to buy their product
 Marketers today are spending more effort
trying to understand customers—their self-
image, aspirations and tastes—when they
should be trying to understand the “jobs” that
customers need done and bring to market
products that help with those jobs

9-15
 Promulgated by Chris Anderson
• Technology is turning mass markets into millions of
niches
• The trend creates a ‘long tail’ graph
 Hits sales represent the bulkier, steeper trend line
 A long, thinning ‘tail’ of many unknown products that had
no chance of exposure prior to the web
• In the online world of unlimited shelf space,
products can succeed by catering to these specific
niches

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 Insert Table 9-2

 Thetrend can be optimized by global marketers

who continue marketing their most popular
products to stay profitable, but broaden their
portfolio cost-effectively to attract the long tail
audiences
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 Market size

 Growth rate

 Competitive position

 Market accessibility

 Customer fit
9-18
 Also called mass or  Global
brands share
standardized characteristics
marketing • Same positioning
 Company is basing its worldwide
marketing on the • Single product category
common needs of its • Company name is brand
customers, instead of name
on the differences • Access to global village
Even in commoditized markets, the
• Social responsibility
undifferentiated strategy is
beginning to fade away as global
competition intensifies
9-19
 Aims
to adapt the product and the
marketing mix to each target market
segment

 Most global brands use a version of this

approach to stay competitive and expand
their appeal to more market segments
through products and advertising designed
specifically for their needs and tastes

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Figure 9-2

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 Concentrated (Niche Targeting)
• Company focuses intensely on one segment of the
market and designs its marketing efforts with that
segment in mind
 Decreased competition and dominant share are ‘pros’
 But, lack of ‘portfolio diversification’ means greater financial
risk

 Customized (Micromarketing)
• Deeper segmentation of the target market and more
nuanced and specialized products and marketing
campaigns aimed at very specific sub-segments of
consumers
 Greatly enhanced by online research and communication
 Behavioral targeting involves tracking the sites visited by
internet users and displaying ads related to their interests
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 The consumer compares similar brands and
products and creates a mental map of each
related to his or her individual needs and
wants
 The marketer’s goal is to influence the
position brands have in the minds of
consumers in relation to competitor brands
 Successful positioning results in strong,
long-term emotional ties to the brand

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 Through global market segmentation, the similarities and differences of
potential buying customers can be identified and grouped
 Marketers can use macro or micro scale segmentation
 To target the appropriate consumer segments, marketers must evaluate
and compare them on the basis of market size, growth potential, market
accessibility, competitive position and compatibility
 Selecting the right market targeting strategy, marketers must decide
whether to use an undifferentiated, differentiated, concentrated or
customized approach
 Marketers strive to influence the position their brands have in the
minds of consumers in relation to competitor brands

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