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International Marketing MKT630

Lesson # 33

INTERNATIONAL MARKET SEGMENTATION

Market segmentation is the process in marketing of dividing a market into distinct subsets (segments)

that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their

needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are

likely to have similar feelings and ideas about a marketing mix comprised of a given product or service,

sold at a given price, distributed in a certain way, and promoted in a certain way.

Broadly, markets can be divided according to a number of general criteria, such as by industry or public

versus private sector. Small segments are often termed niche markets or specialty markets. However, all

segments fall into either consumer or industrial markets. Although it has similar objectives and it

overlaps with consumer markets in many ways, the process of Industrial market segmentation is quite

different.

The process of segmentation is distinct from targeting (choosing which segments to address) and

positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify

groups of similar customers and potential customers; to prioritise the groups to address; to understand

their behaviour; and to respond with appropriate marketing strategies that satisfy the different

preferences of each chosen segment.

Improved segmentation can lead to significantly improved marketing effectiveness. With the right

segmentation, the right lists can be purchased, advertising results can be improved and customer

satisfaction can be increased.

Basis for segmenting consumer markets:

Geographic

nations, regions, states, counties, cities, neighborhoods, climate, population density etc.

Demographic

age, gender, family size, family life cycle, income, occupation, education, religion, race,

nationality etc.

Psychographic

social class, lifestyle, personality etc.

Behavioral

purchase occasion, benefits sought, user status, user rate, loyalty status, readiness status, attitude

toward product etc.

Basis for segmenting business markets:

· Demographics

industry, company size, location

· Operating variables

technology, user/non-user status, customer capability

· Purchasing approaches

purchasing function organization

power structure

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International Marketing MKT630

nature of existing relationships

general purchase policies

purchasing criteria

· Situational factors

urgency, specific application, size of order

· Personal characteristics

buyer-seller similarity, attitudes towards risk, loyalty

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