market segmentation and brand positioning strategies

What is it about?

This paper is unique in identifying a link between global brand positioning and segmentation factors. It examines the conceptual and empirical linkages between segmentation bases and brand positioning strategy options for firms operating in increasingly globalizing markets. The two studies reported in this paper suggest that a combined use of macro and micro-bases to segment world markets is significantly linked to the positioning strategies employed by global top brands, whereas firms seeking more localized positioning strategies use only micro-bases to segment. The conceptual and empirical findings reported in this paper 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 segmentation and strategic brand positioning decisions in world markets.

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Why is it important?

The two reported studies have clear managerial implications for firms involved in marketing outside of their home country. First, the literature reviewed shows that buyer needs are converging in key markets across national boundaries. This represents both a challenge and opportunity for marketing organizations. One means to address this convergence is to target buyers who share important characteristics relative to the firms’ products and brands that transcend across countries. The current study clearly suggests to managers that global strategies for brand positioning might be targeting segments based on hybrid factors as demonstrated through research frameworks in Figures 1 and 2. The two studies also provide specific empirical evidence for the critical importance of aligning the strategic position of the brand with world market segments based on a battery of multidimensional factors used as identifiers. Many managers involved in segmentation use a single set of segmentation basis when making segmentation decisions. There are several good reasons for not limiting segmentation design to a single type of variable, and to integrate multidimensional criteria supported by this research. A segmentation scheme based solely on a single strategic basis may have comparatively limited utility to the firm. The effective use of hybrid bases or multidimensional segmentation factors in conjunction with an appropriate brand positioning strategy may have clear positive implications to enhance the leadership role of the brand in global markets. The strategic implications of effective alignment between the intended brand position and the segmentation strategy are fourfold. First, effective segmentation will lead to cost efficiencies 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, significant 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.

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