In global marketing, market segmentation becomes especially critical because of wide divergence in cross-border consumer needs and lifestyles. In other side, the firms resources was limited. Once the management has chosen its target segments, management needs to determine a competitive positioning strategy for its products.
Segments ideally should possess the following set of properties:
The first step in doing international market segmentation is deciding which criteria to use in the task. For it, we can pick and choose the variables that you want. However, for the segmentation to be meaningful, the market segments and the response variable the company is interested in should have a linkage. Usually it is not a trivial exercise to figure out a priori which of the variables will contribute to the segmentation.
The variables for segmentations are :
Demographic variables are among the most popular segmentation criteria. One reason for the popularity is that they are very easy to measure.
¨ Socioeconomic Variables
Caveats in using per capita income as an economic development indicator: Monetization of transactions within a country, Gray and Black Market sections of the economy and Income disparities
In Socioeconomic, we can use Purchasing Power Parity (PPP) criteria to make segmentation. The others are Human development index (HDI) classification and Socioeconomic Strata (SES) Analysis
¨ Behavior-based segmentation
Behavioral segmentation criteria include degree of brand / supplier loyalty, Usage rate (based on per capita consumption), Product penetration (that is, the percentage of the target market that uses the product or the brand) and Benefits sought after. Benefit segmentation is often used in global marketing for product positioning, product design or product adaptation purposes.
Marketers can group consumers according to their lifestyle. Lifestyle segmentation is especially popular in advertising circles. Many lifestyle segmentation schemes are very general and not related to a specific product category. Others are derived for a specific product or service area. Distinctions can also be made between whether a given typology was prepared for a specific country or a given region.