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Global Marketing: Five Basic Segmentation Strategies and Four General Positioning Strategies
Five Basic Segmentation Strategies
Global marketing is a lot like national marketing, at least as far as the need to determine who the company will sell to and how they will sell it to them. The company must also differentiate their product from many likely, that will be about the same.
First though, the business must decide what part of the market they are going to sell to. While there are many strategies, there are five basic strategies to segmenting these consumer groups. -The first one would be demographic segmentation. This can include several sub-categories like age, gender, income levels and many more “measurable characteristics” (). A good example of a company using this type of segmenting would be Life Alert. As the demographic of the country changes and ages rapidly, more elderly products like Life Alert are being marketed to the aging population.
Another strategy of segmentation would be psychographic. This type of strategy will play on the way consumers feel, believe and how they want to live. Many companies will not only sell a product, they will also sell a lifestyle. A good example of this type of approach would be Mercedes. As most Americans cannot afford such a high dollar car, they must differentiate their product as one for those that want to live the “Joneses” lifestyle.
The third basic segmentation strategies is to group consumers up by how and how much they buy. When using this approach, consumers can be put into several subcategories of user rates and user status. User rates will refer to how much of a product a consumer will use throughout the year. This works well for businesses like Johnson & Johnson, who sells many products that are bought multiple times throughout the year, products like aspirin. User status subcategories would refer to if they are a present user, new user, potential user, old user, etc.
A marketer can also choose to use the benefit segmentation approach. In this style, the consumers will be split up into want they want or how they benefit from each particular product. An example product would be compression socks, which can be used for a few different reasons. The company can market the product for diabetes users, or they can choose to sell it to fight off the unsightly marks of varicose veins. Either consumer type will buy the socks, though marketing to both may be less effective than marketing to each group independently.
The last basic segmentation technique is ethnic segmentation. This is of course, breaking up consumers into their ethnic categories. While many companies now will include all or as many ethnic persons as possible in their commercials, to encompass and include all ethnicities. Other companies will choose to target only one ethnic consumer, or each ethnicity separately.
Which segmentation strategy is most effective?
Four General Positioning Strategies
So once the consumers have been counted and separated into their appropriate groups and piles. Now a company must decide their positioning. Positioning in marketing, global or at home, refers to the way that the company will differentiate their product from all the rest. Like segmentation strategies, there are four general positions that have many sub-categories.
Like segmentation, attributes and benefits of the product is a way to differentiate themselves from the rest of the flock. This can be anything from being the “proven best” at solving a problem or an additional piece of the product that solves a need, that the other companies do not.
Quality and price are another general positioning strategy that can be applied, think Wal-Mart. They do not bring in customers because of their great products made from China, people go for the Low Prices Everyday. Consumers know that they can get almost anything, cheaply made, yet cheaper than the competitors.
Use or user approach is used by many companies, this is when a business uses a person or celebrity to promote their product. They are creating the illusion that if you use their product, you will somehow become like the user they have on commercials, using their product. Think Wheaties and the many athletes that have graced it’s cover.
The last general positioning strategy is competition. This means to use your businesses competitors to differentiate your product. If a consumer is unhappy with a certain product, a company can use that to their advantage and make known the differences their product holds.
Keegan, W.J., and Green, M.C. (2013). Global Marketing (7th ed.). New Jersey: Prentice Hall.