Linking global market segmentation decisions

with strategic positioning options

Salah S. Hassan
School of Business, The George Washington University, Washington, DC, USA, and
Stephen H. Craft
Birmingham-Southern College, Birmingham, Alabama, USA
Abstract
Purpose The purpose of this paper is to examine empirically the relationship between positioning strategies and bases of segmentation in
international markets.
Design/methodology/approach A principal component analysis was conducted to determine the major macro- as well as micro-bases of
segmentation that are linked with strategic positioning decision options. Further, a regression analysis was used to examine the effect of each of the
segmentation bases on the different strategic positioning options used by segmentation managers.
Findings This study suggests the combined use of both macro- and micro-bases of segmentation in order to leverage similar strategic positioning
across global markets. However, micro-bases of segmentation are suggested for rms seeking differential positioning strategies.
Research limitations/implications The conceptual and empirical ndings of this study pave the way for embarking on promising and relevant
future research that is needed to substantiate and enrich the academic understanding and managerial practice of linking global segmentation with
strategic positioning decisions. Future research should focus on the use of hybrid segmentation strategies; its logical design; implementation issues;
and its evaluation mechanism.
Practical implications This study provides specic empirical evidence of the relationship between strategic use of segmentation bases and strategic
positioning. An effective use of the proposed framework will have various strategic marketing implications for rms; including cost efciencies,
opportunities to transfer products globally, expansion opportunities of current operation, and development of more effective brand management
decisions.
Originality/value The proposed global strategic segmentation and positioning matrix is a new tool that guides managers to position their brands
effectively in world markets.
Keywords International marketing, Market segmentation, Brand management, Product positioning, Strategic marketing, Globalization
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Can global market segmentation decisions be based solely on
geopolitical and economic factors or can global segmentation
decisions be based on behavioral and lifestyle variables? In an
increasingly global and technology savvy marketplace where
customer segments are becoming homogenized across
national boundaries, behavioral and lifestyle segmentation
may be necessary addition to geopolitical and economic
segmentation in international markets (Aulakh and Kotabe,
1993; Helsen et al., 1993; Nachum, 1994; Luqmani et al.,
1994). Complicating the segmentation issues in global
markets is the need for companies to make strategic
positioning decisions in an increasingly competitive and
transparent marketplace in order to leverage brand equity and
achieve economies of scale. In short, the strategic necessity
does not stop at the selection of desirable market segments,
but also includes the need to position brands effectively
relative to the market segment. Toward that end, the purpose
of this paper is to examine empirically the relationship
between positioning strategies and bases of segmentation in
international markets.
The debate over this issue has intrigued marketers since
Levitt (1983) introduced the concept of segment
simultaneity in his thought-provoking article describing the
globalization of markets. He described this phenomenon as
the proletarianization of global markets where everyone
everywhere wants to have world brands. What he described,
in fact, was the existence of similar market segments and
consumers in different countries for whom low price and high
quality would be common criteria for making buying
decisions.
The decision to segment world markets lies in
understanding the degree of globalization achieved in a
given market. If there are no more mass markets in the USA,
for example, one should hardly expect a single universal
marketing strategy to be effective on a worldwide basis.
However, if bases exist for market segmentation that cut
across national boundaries, then marketing strategies might
be developed that will work for similar segments around the
globe. The existence of these intra-market segments might
create important opportunities and challenges for rms
The Emerald Research Register for this journal is available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0736-3761.htm
Journal of Consumer Marketing
22/2 (2005) 8189
q Emerald Group Publishing Limited [ISSN 0736-3761]
[DOI 10.1108/07363760510589244]
81
seeking to establish brand positions in multiple markets an
increasingly common strategic goal. This paper provides an
empirical study of the linkages between segmentation bases
and positioning strategy decision options. The key research
issues addressed here are:
.
Would a combined use of both macro- as well as micro-
segmentation bases leverage similar strategic positioning
across global markets?
.
Would limiting the use of segmentation bases to the micro
level be linked to localized, strategic brand positions?
Bases for global market segmentation
Most early segmentation efforts were based on macro
considerations that include factors such as economic
(Kotler, 1986); cultural (Whitlock, 1987); geographic
(Daniels, 1987) and technological (Huszagh et al., 1986).
Current research found that these pre-determined country
bases are inadequate for segmentation when considered
without behavioral bases (Helsen et al., 1993; Nachum,
1994). For example, pre-determined country clusters will be
inadequate without a full account for the degree of
homogeneity related to buyers responsiveness to the global
marketing program.
World markets have evolved to imply global segments
dened based on market variables other than national
boundaries. A hybrid approach that considers both country
bases as well as buyer response bases is found to be more
realistic (Hassan et al., 2003). This inter-market segmentation
approach refers to ways of describing and reaching market
segments that transcend national boundaries or that cut
across geographically dened markets (Hassan and
Blackwell, 1994). This approach emphasizes that inter-
market segments are based on variables other than national
boundaries. There are sizable world markets where consumer
segments are converging across cultural and national
boundaries. The challenge in leveraging brand equity is to
identify and prole these segments on an inter-market basis
and to develop strategies to reach them with globalized
brands. The existence of inter-market segments is a key
condition for the success of global marketing programs.
Hybrid segmentation strategies were developed as frameworks
to evaluate markets on a worldwide basis and to identify
indicators/attributes of brands that are suitable to the
implementation of global marketing programs (Helsen et al.,
1993; Luqmani et al., 1994; Kale and Sudharshan, 1987;
Kreutzer, 1988; Hassan and Katsanis, 1991).
Market segmentation strategy must be examined to
determine the best bases for global brand positioning.
Global consumer markets are best understood as groups of
buyers who share the need and desire for a product and the
ability to pay for it, not just those who share a national border.
Buyers in a segment seek similar benets from, and exhibit
similar behavior in buying a product. Although these
consumers may live in different areas of the world and come
from very different backgrounds and value systems, they have
commonalties in association with a given global brand. Many
of these similarities are associated with the brand image and
the lifestyle it projects (Luqmani et al., 1994).
The emergence of inter-market segments means that global
rms must integrate macro-level bases with micro-level bases
in their segmentation (Hassan et al., 2003). The appeal of
similar brand benets, similar patterns of purchase and
consumption behavior, and specic shared values should be
the focus of strategic response to global segments that
transcend the geopolitical boundaries of nations. Global
marketers often target lifestyle similarities. For example,
targeting outdoor lifestyles allows Weber barbecues to enjoy
great popularity in Los Angeles and Johannesburg. Those
who love outdoor cooking may live in diverse regions
characterized by very different value systems, but similarities
should dominate comparisons of segment members.
Historically, segmentation researchers have segmented the
market based on objective presupposed attributes (Wind,
1978). This a priori segmentation method selects a pre-
recognized battery of descriptive characteristics for each
country. Contemporary segmentation research calls for a
micro-based measurement technique that focuses on buyer
preferences. This post hoc method utilizes a battery of
variables that seek to differentiate buyer preferences (Green
and Krieger, 1991). This hybrid model segments the world
markets based on:
.
similar purchase patterns exhibited in multiple countries;
and
.
allowing countries to belong to different clusters.
Effective segmentation methods ultimately must integrate
country-based factors with buyer-based variables.
Figure 1 illustrates a framework of the integrated approach
to segment design (Hassan et al., 2003). It is suggested that an
integrated approach will be a more realistic response to forces
of market globalization such as the convergence of consumer
needs (Levitt, 1983). Therefore, it is proposed that effective
global segmentation will be based on a hybrid bases that
includes relevant macro-level factors (i.e. geopolitical and
economic) as well as appropriate micro-level variables (i.e.
lifestyle and behavioral). Major facets of this approach
include:
.
integrating country variables with behavior patterns;
.
not assuming total homogeneity of the country segment;
.
acknowledging the existence of a degree of similarity
across national boundaries;
Figure 1 A framework for global segmentation bases and strategic
positioning
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
82
.
considering the bases of segmentation to be dynamic in
nature; and
.
dening market globalization as a matter of degree.
The integrated approach assumes that treating each country
as a totally homogeneous market is not realistic (Jain, 1989).
Also, it will be unrealistic to assume the existence of a single
world segment that homogeneously responds to standardized
marketing programs. The basic ideas of the integrated
approach are:
.
it assumes various degrees of heterogeneity and
homogeneity in buyers preferences for global brands;
.
any degree of preference heterogeneity or homogeneity for
global brands can be attributed equally to macro-bases
(i.e. country factors), micro-bases (i.e. behavioral
variables), and any combinations of interactions; and
.
any degree of preference heterogeneity can be addressed
by introducing adaptive variations in the marketing
program.
Strategic brand positioning
Marketing based on a broader view of world markets requires
a careful examination of complex decisions related to strategic
positioning in conjunction with segmentation. Does a rm
want its brand to be positioned the same way in all markets?
Should uniform brand image be a goal of global marketing
strategies? What portfolio of global positioning strategies can
be employed?
Segmentation-based strategic positioning
A review of contemporary research on international
segmentation reveals a considerable shortage of empirical
studies that examine the link between segmentation and
strategic positioning. Yet, many segmentation researchers
have stressed the critical importance of the relationship
between segmentation and positioning decisions (Douglas
and Crai, 1995; Wind, 1986). Segmentation and positioning
decisions are central to the development of global marketing
strategy. The term positioning often is used to refer to the
rms decision to determine the place that its brand and
corporate image occupy in a given market including the type
of benets to be stressed and the type of segments to be
targeted (Douglas and Crai, 1995; Ries and Trout, 1986;
Ries, 1996). In an international marketing context, the
literature is consistent with the need to base positioning
decisions on a broader scope that provides an understanding
of differences and similarities from one market to another.
Therefore, positioning is described as strategy to identify and
direct marketing resources among intended market segments.
Under this strategy that we term segmentation-based
strategic positioning, the rm would cause the
development of homogeneous responses for demand that
differs from responses received from other market segments.
The strategic positioning options can be illustrated best in a
two-dimensional representation of similarities and differences
among market segments to be addressed as bases for
discussion of this research agenda. Figure 2 displays the
interaction of market segmentation and strategic positioning
options in the two-by-two matrix. The rst dimension is
same or different market segments meaning that the rm
may choose to target same or different segments across
multiple markets. The second dimension in Figure 2
represents same or different strategic positioning
options, meaning that the rm may seek to achieve similar or
differentiated image in a given marketplace.
Cell 1 offers the focused strategy option, that of
substantially similar brand positioning to substantially
similar global segments (Ries, 1996). The Body Shop
developed a uniform position for its cosmetic lines among
environmentally conscious consumers. This uniformed
strategy helped the rm to leverage its image internationally
among consumers with similar attitudes and usage patterns
(Douglas and Crai, 1995). In effect, the company developed a
uniform image worldwide within this focused international
segment.
Cell 2 represents an optimization strategy, where the rm
develops a differentiated brand position to reach similar
segments across the world. For example, Miele, the leading
German appliance manufacturer that is known throughout
Europe for its high-end home appliances, appeals differently
to similar market segments globally. Miele targets the high-
end segment of the Euro-consumer market that values
durability. On the other hand, in entering the American
market, Miele realized that American consumers have
different appliance expectations, where they treat appliances
almost as disposable, replacing them with a new color or
model when they change homes or when the appliance breaks
down. An appeal to 20-year durability is unlikely to be
successful with American consumers. The American
consumer will desire a maintenance-free appliance with a
wide variety of designs and styles. Thus, in appealing to the
high-end segment of the American appliance market, Miele
optimizes the brands upscale image differently by appealing
to the needs of worry-free buyers. In this case they are
marketing identical products with different positioning
appeals to enhance global competitive advantage through
supply-side economies. Miele would have faced great
difculty in the American market unless it modied its
brand image in targeting the upscale market in a way that is
consistent with its global marketing strategy. Acknowledging
the cultural and behavioral differences of European and
American customers was the only way for Miele to develop an
effective global marketing program.
Figure 2 Global strategic segmentation and positioning matrix
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
83
Cell 3 represents similar strategic positioning across
different world segments or geo-centric strategy. Many
European rms choose different positioning strategies for
products marketed to US consumers to leverage global brand
leadership or unique image. BMW and Mercedes Benz
position their products as high quality, expensive, prestige
brands. However, prestige image may not always be what
consumers want. Gillette adopted this brand leveraging
strategy (cell 3) that provided a worldwide appeal based on
stimulating primary market demand for shaving
through providing a host of products for different segments.
This geo-centric strategy of Gillette has been attributed to
enhancing the companys performance in dominating the
market worldwide. Also, other companies like Coca-Cola,
Kodak and Nike provide a portfolio of products for different
segments worldwide.
Cell 4 is the localization option and probably exists only
as an entry strategy rather than a market expansion strategy
(Douglas and Crai, 1995). New market entry or investment in
different products marketed to different segments would
probably be the only justication for such a strategy. For
example, when Nestle globalized its Nescafe coffee brand,
they recognized that what coffee means to a culture, when it
is consumed and how often it is consumed, varies throughout
different cultures. Distributed almost everywhere, coffee
plays different roles around the world. Coffee cultures such as
the USA and Germany did not automatically accept instant
coffee. In some countries, Nescafe marketing efforts
concentrated on overcoming the mistaken belief that instant
coffee is made from synthetic materials instead of real coffee.
Nescafes competitive success against European leaders, such
as Jacobs and Tschibo, is based on understanding how aroma,
warmth, and the ritual of coffee drinking touch deeply-held
consumer values. Conscious effort to relate Nescafe
coffeeness to different types of coffee drinkers and usage
occasions allowed consumers to determine the brands
meaning and appeal in many regions around the globe.
Firms that chose to position brands differently in
accordance with local market realities may represent future
challenges to the organization. As the brand matures in the
market, the organization nds itself in need to optimize the
success achieved in one market to reach more global
consumers. In this case, to target similar market segments
elsewhere, creating a broader market position in other
markets requires more research and development. For
Nestle to build a successful brand in the US market meant
focusing on loyalty as a primary segmentation base. Instant
coffee by Nestle leveraged its success in non-coffee consuming
cultures to appeal to attitude and usage patterns of other
world cultures.
As previously stated, there is a clear connection between
brand positioning and segmentation in international markets.
In order to dene better the parameters of the relationship, an
empirical study was conducted to examine the interaction of
brand positioning and segmentation decisions in international
markets.
Research study
The current research study consisted of a mail survey targeted
to high-level managers involved in segmentation decisions
with a focus on the international arena. A structured
questionnaire was mailed to 1,097 segmentation decision
makers drawn from a list provided by the Institute for
International Research. The contact names were selected at
random from a listing of over 150,000 managers who are
listed in the segmentation section of the Institutes database.
Respondents received a three-step integrative mailing
beginning with a warning letter asking for participation, a
letter accompanying the questionnaire, and a postcard
reminder. Respondents were provided with a postage-paid
business reply envelope. As an incentive, a charitable
contribution of one dollar was made to the respondents
choice of three charitable organizations for each completion.
In addition, the respondents could request a summary report
of the results of the data collection. The study resulted in 112
completions for a response rate of 10.2 percent.
Key measures
The study captured the degree of use of macro country level
of segment bases. The questionnaire utilized 14 macro-level
segmentation bases from the literature (see list in Table I). The
respondents were asked to rate each factor on a seven-point
scale with 1 representing never used and 7 representing
always used. The study (n 107) established the scale as
having high reliability with a Cronbachs alpha score of
0.9040.
The questionnaire utilized 22 micro behavioral level
segmentation bases drawn from the literature (see list in
Table I Factor loadings of macro-level segment bases rotated
component matrix
Questionnaire items
Macro-
economic
Macro-cultural
factors
Geo-
demographics
Country level of
economic development 0.848
Country legal/
regulatory environment 0.789
Level of
industrialization 0.777
Form of government 0.759
Political stability 0.755
Country level of
technological
innovation 0.730
Country per-capita
income 0.651
Communication
infrastructure 0.618
Market-orientation of
economy 0.597
Type of dominant
religion 0.811
Language of country 0.718
Cultural identity 0.576
Geographic location 0.775
Population
demographics 0.714
Reliability measure
(alpha) 0.9148 0.6621 0.4678
Notes: Extraction method: principal component analysis. Rotation method:
Varimax with Kaiser Normalization. A rotation converged in six iterations.
Loadings below 0.46 have been suppressed
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
84
Table II). The respondents were asked to rate each within-
country bases on a seven-point scale with 1 representing
never used and 7 representing always used. The study
(n 98) established the scale as having high reliability with a
Cronbach alpha score of 0.9217. In addition, the study
captured the utilization of the four brand positioning
strategies corresponding to the matrix in Figure 2. The
respondents were asked to rate each brand positioning
strategy on a seven-point scale with 1 representing never
used and 7 representing always used.
Analyses
The rst step in the data analysis was conducted via principal
components analysis a form of factor analysis. The resulting
factors were rotated via Varimax rotation and Kaiser
Normalization for the purpose of aiding analysis. As a
condition of running the factor analysis, coefcient alpha was
used to assure internal reliability.
The current research identied three underlying macro-
level segmentation bases including macroeconomics, geo-
demographics, and macro-cultural factors. In addition, there
appear to be four underlying micro-level segment bases
including demographics, attitude and usage, micro-culture,
and brand loyalty. As will be discussed, the results of the
current research holds important implications for
understanding segmentation in the global market and for
the positioning of products relative to dened market
segments.
The next step in the analysis was to determine the role of the
segment bases in the product/segment positioning for study
organizations. Towards that end, four regression models were
constructed utilizing the seven segmentation bases derived
from the factor analysis as the independent variables and each
strategic positioning option presented in Figure 2 as
dependent variables. The results of the regression analyses
are presented in Table III.
There is a clear relationship between the choice of
positioning strategy and the choice of bases on which to
form market segments. Figure 3 overlays the statistically
signicant segment bases (Table III) within the appropriate
cells based on the four strategic positioning options.
Comparing the brand positioning strategy with segment
bases yields some important insights. For example, in cells 1
and 3 that represent the two global segmentation approaches
with the objective of achieving similar strategic market
positions, hybrid segmentation bases that include
macroeconomics, geo-demographics, micro-demographics,
and attitude and usage were all signicant. In effect, the
rms that are aiming to achieve unied strategic positions in
world markets are using both macro-level segmentation bases
as well as micro-level segmentation bases. Therefore, rms
with similar brand positioning are using both macro-country
segmentation bases as well as behavioral bases. Across cells 2
and 4, which represent different strategic positions, micro-
level bases of segmentation were the only signicant factors.
The data suggests that a rms decision regarding the types of
bases to be utilized in segmentation may in fact indicate the
positioning strategy that this particular rm is undertaking.
Consequently, rms must evaluate the types of segmentation
bases utilized in order to have a better emphasis on the
intended strategic market position.
Discussion
Global market segmentation can be viewed as the process of
identifying segments whether they are country groups or
individual buyer groups, of potential customers with
homogeneous attributes who are likely to exhibit similar
buying behavior patterns. There are four different approaches
for global segmentation:
(1) Identifying clusters of countries that demand similar
products (that is, regional selling giving more weight to
geopolitical and economic segmentation factors).
(2) Targeting different segments in different countries with
the same product (that is, differentiated selling
emphasizing behavioral and lifestyle segmentation
factors) (Takeuchi and Porter, 1986).
(3) Identifying segments present in many or most countries
(that is, universal selling striking a hybrid balance
between various macro and micro segmentation factors).
(4) Focusing on similar segments that demand similar
products (that is, niche selling with a focus on cross-
national similarities in need for unique product attributes
and usage patterns).
Of the four segmentation approaches, universal segmentation
and global niching are argued to be the most innovative and
also the most likely to give the rm a signicant competitive
advantage, because brand image can be leveraged across
markets (that is, globally transcending distinctive
competency). This gives the brand a reputation and
Table II Factor loadings of micro-level segment bases rotated
component matrix
Questionnaire items
Micro-
demographics
Attitude
and
usage
Micro-
culture
Brand
loyalty
Age 0.850
Income 0.815
Gender 0.781
Education 0.768
Family size 0.747
Lifestyle 0.708
Occupation 0.651
Buyer needs 0.877
Buyer wants 0.867
Segment size 0.676
Product benets 0.674
Attitude toward product 0.631
Religion 0.838
Ethnicity 0.771
Regional identity 0.721
Urbanization of dwellings 0.583
Language 0.528
Social class 0.472
Degree of existing loyalty 0.843
Degree of potential loyalty 0.823
Frequency of product use 0.651
Personality 0.467
Reliability measure (alpha) 0.8646 0.7470 0.3673 0.8233
Notes: Extraction method: principal component analysis. Rotation method:
Varimax with Kaiser Normalization. Rotation converged in seven iterations.
Loadings below 0.46 have been suppressed
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
85
coherence in image and positioning which is internationally
reinforced. The other two diverse segmentation approaches
have the merit of taking into consideration differences among
countries and of introducing adaptations to accommodate
these differences or focusing their marketing offerings to excel
in a specic segment(s) (Lambin, 1997). Nevertheless, the
later segmentation strategies could exhibit disadvantages of
either high cost of differentiation or limited economies of scale
of focusing along with running the risk of vulnerability to
drastic local market changes. Therefore, the hybrid approach
that integrates country level and behavioral characteristics is
viewed as the preferred segmentation strategy.
The universal (hybrid) segmentation as a global market
strategy looks for similarities across world markets. The
traditional segmentation that emphasizes differentiation
strategies is multi-domestic (i.e. they tend to minimize
similarities and highlight differences). The universal or hybrid
approach to global market segmentation actively seeks
homogeneity in brand, image, marketing tools and
advertising message, while the multi-domestic approaches to
global market segmentation maintains emphasis on
differences from market to market. The ultimate agenda,
however, is not to have an identically uniform brand
positioning worldwide, rather the strategic marketing end is
to come up with a brand positioning that is as standardized as
possible, while recognizing that allowances for some local
conditions are sometimes both necessary and desirable
(Keegan and Schlegelmich, 1999).
Managerial implications
The reported study has clear managerial implications for
rms involved in marketing outside of their home country.
First, the literature reviewed and the current study are
consistent in the assessment that buyer needs are converging
in key markets. This represents both a challenge and
Table III Regression analysis of strategic positioning options and segmentation bases
Dependent variable
Independent variables
(standardized beta
coefcient)
Similar positioning to
similar segments (focused
strategy)
Similar positioning to
different segments
(geo-centric strategy)
Different positioning to
similar segments
(optimization strategy)
Different positioning to
different segments
(localization strategy)
Macroeconomic 0.240

0.065 0.011 20.145

Macro-cultural factors 20.181 20.021 20.203 0.073
Geo-demographics 20.006 20.239

20.005 20.036
Micro-demographics 0.018 0.208

0.132 0.176
Attitude and usage 0.241

0.426

0.259

0.192
Micro-culture 0.307

0.071 0.199

0.036
Brand loyalty 0.135 0.092 0.147 0.105

R
2
0.247 0.210 0.128 0.081
F 3.935

3.187

1.760

1.056
df 7 7 7 7
Notes:

Signicant at 0.05;

Signicant at 0.10
Figure 3 Global strategic segmentation and positioning matrix
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
86
opportunity for marketing organizations. One means to
address this convergence is to target cross-national groups
of buyers who share important characteristics relative to the
rms products and brands. The current study clearly
suggests to managers that these inter-market segments
might best be empirically identied and targeted through the
integration of macro and micro segmentation bases as
demonstrated through the framework. The current study
also provides specic empirical evidence of a relationship
between the strategic use of segmentation and strategic
positioning.
Many managers involved in segmentation use a single set of
segmentation basis when making segmentation decisions. The
current study clearly demonstrates that there is every reason
to not limit segmentation design to a single type of variable
and to integrate multidimensional criteria such as in the
framework presented. A segmentation scheme based solely on
a single strategic basis may have comparatively limited utility
to the rm. The effective use of hybrid bases or inter-market
segmentation in conjunction with an appropriate corollary
product/brand positioning may have clear positive economic
implications to the rm. The economic implications of
effective inter-market segmentation to managers in marketing
organizations are fourfold. First, effective segmentation will
lead to cost efciencies resulting from reduced duplication of
effort in multiple markets where similar segment members are
represented. Second, segmentation can be the means for
opportunities to transfer products, brands, and ideas across
subsidiaries in different countries or world regions. Third,
signicant market expansion opportunities result with the
emergence of inter-market segments such as global teenagers
and socioeconomic elite. Finally, enhancing our
understanding of global market segmentation strategies will
pave the way for more effective brand management decisions
that may result in better market performance.
Future research
The conceptual and empirical ndings of this paper pave the
way for embarking on promising and relevant research that is
needed to substantiate and enrich the academic
understanding and managerial practice of linking global
market segmentation with strategic positioning decisions.
Consequently, four main research frontiers can be
recommended based on this study to extend the boundaries
of the area of global market segmentation and address the
concerns of marketing researchers and strategists aiming to
comprehend and utilize effective global strategies.
First, why and when should global marketers pursue hybrid
segmentation strategies? This research question addresses the
rationale underlying hybrid global market segmentation and
would be expected to produce analytical tools for the
evaluation of each markets different needs and their
corresponding product offerings. Such research ought to be
conducted with a view toward making economic and
managerial sense of global market segmentation strategies
with special reference to the dimensions of accessibility (i.e.
market segmentation transaction costs) and substantiality
(i.e. segmentation-related economies of scale).
Second, how can global marketers achieve the logical design
of hybrid market segmentation that will facilitate establishing
a coherent positioning strategy? This research stream would
be expected to tackle the know-how issues of hybrid global
market segmentation. Such research efforts should strive to
pinpoint how the features of segmentation bases, targeting
agendas, and targeting techniques can be conceptualized and
adopted on empirically-grounded policy guidelines to
augment positioning decisions made and translated into a
relevant and effective marketing mix designs.
Third, what are the implementation issues relevant to the
adoption of hybrid global market segmentation? Answering
this research question should happen through examination of
the success or failure of adopting hybrid global market
segmentation strategies. Such research should be expected to
raise a number of issues related to the effectiveness of global
marketing research and marketing information systems that
help support the implementation of segmentation and
positioning strategies.
Fourth, how can hybrid global market segmentation and
positioning strategy be monitored, benchmarked and
evaluated? This nal research stream should address the
vital need to measure the differing contributions of hybrid
global market segmentation strategies to positioning
effectiveness and the rms other strategic marketing ends.
References
Aulakh, P.S. and Kotabe, M. (1993), An assessment of
theoretical and methodological development in
international marketing: 1980-1990, Journal of
International Marketing, Vol. 1 No. 2, pp. 5-28.
Daniels, J.D. (1987), Bridging national and global marketing
strategies through regional operations, International
Marketing Review, Vol. 2 No. 3, Autumn, pp. 29-44.
Douglas, S.P. and Crai, C.S. (1995), Global Marketing
Strategy, McGraw-Hill, New York, NY, p. 554.
Green, P.E. and Krieger, A.M. (1991), Segmentation
markets with conjoint analysis, Journal of Marketing,
Vol. 55 No. 4, pp. 20-31.
Hassan, S.S. and Blackwell, R. (1994), Global Marketing
Perspectives and Cases, The Dryden Press, Fort Worth, TX.
Hassan, S.S. and Katsanis, L.P. (1991), Identication of
global consumer segments: a behavioral framework,
Journal of International Consumer Marketing, Vol. 3 No. 2,
pp. 11-28.
Hassan, S.S., Craft, S.H. and Kortam, W. (2003),
Understanding the new bases for global market
segmentation, Journal of Consumer Marketing, Vol. 20
No. 5, Winter, pp. 446-60.
Helsen, K., Jedidi, K. and DeSarbo, W.S. (1993), A new
approach to country segmentation utilizing multinational
diffusion patterns, Journal of Marketing, Vol. 57, October,
pp. 60-71.
Huszagh, S.M., Fox, R.J. and Day, E. (1986), Global
marketing: an empirical investigation, Columbia Journal of
World Business, Vol. 20 No. 4, Winter, pp. 31-43.
Jain, S.C. (1989), Standardization of international marketing
strategy: some research hypothesis, Journal of Marketing,
January, pp. 70-9.
Kale, S.H. and Sudharshan, D. (1987), A strategic approach
to international segmentation, International Marketing
Review, Vol. 4, Summer, pp. 60-70.
Keegan, W.J. and Schlegelmich, B.B. (1999), Global
Marketing Management: A European Perspective, Prentice-
Hall, London.
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
87
Kotler, P. (1986), Global standardization courting
danger, Journal of Consumer Marketing, Vol. 3 No. 2,
Spring, pp. 13-15.
Kreutzer, R.T. (1988), Marketing mix standardization:
an integrated approach in global marketing, European
Journal of Marketing, Vol. 22 No. 10, pp. 19-30.
Lambin, J.-J. (1997), Strategic Marketing Management,
McGraw-Hill, London.
Levitt, T. (1983), The globalization of markets, Harvard
Business Review, Vol. 61, May-June, pp. 92-102.
Luqmani, M., Yavas, U. and Quraeshi, Z.A. (1994),
A convenience-oriented approach to country
segmentation, Journal of Consumer Marketing, Vol. 11
No. 4, pp. 29-40.
Nachum, L. (1994), The choice of variables for
segmentation of the international market, International
Marketing Review, Vol. 11 No. 3, pp. 54-67.
Ries, A. (1996), Focus: The Future of Your Company Depends on
It, Harper Collins, New York, NY.
Ries, A. and Trout, J. (1986), Positioning: The Battle for Your
Mind, McGraw-Hill, New York, NY.
Takeuchi, H. and Porter, M.E. (1986), Three roles of
international marketing in global industries,
in Porter, M.E. (Ed.), Competition in Global Industries,
The Harvard Business School Press, Boston, MA.
Whitlock, J.M. (1987), Global marketing and the case for
international product standardization, European Journal of
Marketing, Vol. 21 No. 9, pp. 32-44.
Wind, Y. (1978), Issues and advances in segmentation
research, Journal of Marketing Research, Vol. XV, August,
pp. 318-37.
Wind, Y. (1986), The myth of globalization, Journal of
Consumer Marketing, Vol. 3, Spring, pp. 23-6.
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of this article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benets of the
material present.
Segmentation should help drive product positioning in
global markets
We all recognize that todays markets are no longer limited to
individual countries or regions. Despite the best efforts of
protectionist governments, globalization represents reality for
most of us. Our competitor is as likely to be in Singapore or
Sweden as they are to be in the next town. However,
marketing strategy has not kept pace with the rapid expansion
of global business, international trade and new technologies.
We remain to a large part wedded to approaches
developed in the slower, quieter times past.
Hassan and Craft challenge this thinking by examining the
strategic realities of global marketing. We are not right to treat
individual markets as discrete cells in a marketing strategy;
nor is it correct to adopt a same size ts all approach. Global
marketing is both subtle and complex.
Why treat foreign places differently from home?
In our home market the place we understand best and
where our product, communications and distribution have
been honed the market is only ever part of the whole
consumer universe. Only the most arrogant of marketers
assumes that every consumer is a potential buyer most of us
recognize and act on the different segments that make up the
total market. Market segmentation is a crucial tool for the
development of strategy.
In foreign parts we seem to forget what we have learned at
home and segment by geography, levels of economic
development and assumptions about local markets. This is
wrong since international markets are just as heterogeneous as
our home market, meaning that our products appeal still
reaches to only parts of the market. As a result we have
differentiated strategies at home and undifferentiated
strategies in the international market. If we are to take
advantage of globalizations benets, we have to change the
approach. As Hassan and Craft point out . . . behavioral and
lifestyle segmentation may be necessary addition to
geopolitical and economic segmentation in international
markets.
Having established the need to segment in international
marketing just as we have always done at home, we need to
recognize that our marketing ceases to be targeted at an
individual segment in a particular local market but at a set of
consumers found in all the different local markets. This is the
essence of globalization the coming together of consumer
tastes, preferences and behaviors. However, we should beware
of the one size ts all approach.
International marketing requires a hybrid strategy
Hassan and Craft identify that . . . the hybrid approach that
integrates country level and behavioral characteristics is
viewed as the preferred segmentation strategy. We do not
replace local variations with a set of identied global segments
and then target those segments without reference to country
level variations. This assumes too much international
homogeneity as our authors point out, a shared interest in
high-quality home appliances does not mean a shared set of
reasons for a given purchase decision.
What we see here is the evolution of a set of strategies
dependent on the degree to which the main drivers of
consumer decision-making coincide. Hassan and Craft set
this out in a 2 2 grid representing four generic strategies
focused, geo-centric, optimized and localized. Each, taken in
isolation, is valid for a given set of circumstances. The
marketers task is to identify the specic circumstances for a
particular brand. Thus the positioning of the brand becomes a
vital element that has to link with the identication of target
market segments.
Which comes rst positioning or segmentation?
In many ways this is a chicken and egg question. For most
products there are target segments inherent in the products
characteristics. These may be simple socio-demographic
considerations such as ability to afford the product or they
could relate to specic lifestyle choices or preferences.
However, Hassan and Craft argue that strategic positioning
decisions need to be based on an understanding of market
segmentation.
Dening this approach to making marketing strategy
choices becomes simpler when we apply the four generic
strategies. We can focus on a given set of lifestyle values and
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
88
design generic strategies with only minor local variations (the
Body Shops concentration on environmental issues and
opposition to animal testing is used by the authors to illustrate
this approach). Our strategy can identify a given socio-
demographic group such as up-scale homemakers and vary
the strategy to match buying behavior (an optimizing
approach). Our strategy can use the same positioning to
reach differing market segments in different markets chiey
through a multitude of product variations (a geo-centric
approach). Or we can design specic strategies for specic
markets that reect very different usage and attitudes (a
localized approach).
Regardless of the right choice for our brand, each of these
strategies connects decisions about product positioning with
decisions about which market segments to target. Our
decisions about positioning affect the choices we make
about market segmentation and segmentation decisions
inuence the way in which we position the brand. And,
although the simplicity of Hassan and Crafts model is
appealing, the result is a considerable number of choices.
Despite this apparent complexity, most marketers start with
a given product positioning and segmentation approach in
their home market. The simplest way to extend into
international markets for many is to follow inter-market
segments groups repeated across national and regional
boundaries that have similar lifestyles and/or buying behavior.
While consideration of local sensitivities is still needed, these
segments provide the roads along which a brand travels from
local to global markets. It is vital that we understand them and
appreciate how they can be used to extend product reach.
(A precis of the article Linking global market segmentation
decisions with strategic positioning options. Supplied by
Marketing Consultants for Emerald.)
Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
Journal of Consumer Marketing
Volume 22 Number 2 2005 8189
89