International market selection (IMS)
Segmentation and targeting
http://wps.pearsoned.co.uk/ema_uk_he_hollensen_essglobmark_1/99/25468/6519957.cw/index.html
Most information in this presentation are from the source: Hollensen, Global Marketing 4e, Pearson
Education 2008.

IMS and segmentation
¢Which market/s to enter? (cca 200 countries)
¢What the „right market“ to enter is?
¢What is „international market“?
Ø1. a country or a group of countries
Ø2. a group of customers with nearly the same characteristics (from several countries)
•
•Market opportunities:
•
üExisting markets
üLatent markets – recognized potential
üIncipient markets – market does not exist now -  indication/trends – future emergence of need
•
•

Uppsala model of the internationalization process
             THE FIRM
vDegree of internationalization and overseas experience
vSize/amount/quality of resources
vType of industry/natue of business
vInternationalization goals
vExisting networks of relationships
           THE ENVIRONMENT
vInternational industry structure
vDegree of the internationalization of the market
vHost country:
üMarket potential
üCompetition
üPsychis/geographic distance
üMarket similarity
INTERNATIONAL MARKET SEGMENTATION
   INTERNATIONAL MARKET SELECTION

Market screening (segmentation) model
the firm
environment
Selection of the relevant segmentation criteria
Development of the appropriate segments
Screening of segments to narrow down the list of markets/countries
Choice of target markets
Microsegmentation:develop segments in each qualified country or across countries
Market entry – how many markets, when, how - sequences

Segmentation criteria
¢      General characteristics
¢
¢Geographic – PRIMARY  - clustering
¢Language – communication + patterns of thoughts
¢Political factors – regulations, stimuli…
¢Demography – age, gender…
¢Economy – development, income…
¢Industrial structure – Poland and Finland?
¢Technology
¢Social organization – family, classes…
¢Religion
¢Education – literacy, knowledge, skills…
¢
¢     Specific characteristics
¢Cultural
¢Lifestyle
¢Personality
¢Attitudes and tastes
¢High degree of  measurability, accessibility and actionability
¢
¢Measurability = the degree to which the size and purchasing power of resulting segments can be
measured
¢Accessibility = the degree to which the resultung sgments can be effectively reached and served
¢Profitability/substantiality = the degree to which the segments are sufficinetly large and/or
profitable
¢Actionability = the degree to which segments has sufficient resources to formlate effective
mmarketing programmes and make  things happen
¢
¢
¢
¢
¢Low degree of  measurability, accessibility and actionability (but high degree of relevance)
¢

Screening of markets/segments – preliminary screening
¢According to external criteria (= the state of market) -  macro-oriented methods:
¢A) PESTLE + 5 (6) comp. Forces (PORTER)
¢B) RISK
¢Business Environment Risk Index (BERI) http://www.beri.com/ (e.g. political stability, economic
growth, laour costs/productivity, communications, profess. services and contractors…)
¢The Goodnow and Hansz temperature gradient – country´s environmental factors rated on a
temperature gradient (…legal barriers, cultural unity…)
¢……The Economist, own risk evaluation…
¢C) shift-share approach – „…the average growth rate of imports for a particular product for a
basket of countries is calculated, then each country´s actual growth rate is compared with the
average growth rate. The difference identifies growing or declining markets…“ Hollensen, p. 252)
¢http://www.andrew.cmu.edu/user/jp87/URED/readings/Shift_Share.pdf
¢

Screening of markets/segments – preliminary or/and fine-grained screening – clustering example
(Western European market)
C08NF006

Screening of markets/segments –  fine-grained screening - e.g. GE matrix – market
attractiveness/competitive strength
¢Market/country attractiveness
¢
¢Market size  and growth (total and segments)
¢Buying power
¢Market seasons and fluctuations
¢Average industry margin
¢Competitive conditions (concentration, intensity, entry barriers…)
¢Market prohibitive conditions and government regulations
¢Infrastructure
¢Economic and political stability
¢Psychic distance
¢      Competitive strength
¢
¢Market share
¢Marketing ability and capacity (country specific know-how)
¢Products fit to market demand
¢Price
¢Contribution margin
¢Image
¢Technology position
¢Product quality
¢Market support
¢Quality of distribution and service
¢Financial resources
¢Access to distribution channels
Country- of - origin image

The market attractiveness/
competitive strength matrix
C08NF004

SEGMENTING MARKETS WITHIN COUNTRIES
¢Similar structure of demand and customer/consumer habits
¢Demographic/economic factors
¢Lifestyles (Activities,Interests,Opinions)
¢Costumer/consumer motivations
¢Buyer behaviour – e.g.benefit sought, loyalty patterns, information search behaviour, product
characteristics required..
¢etc.
¢CULTURAL AFFINITY ZONES – SOCIO-DEMOGRAPHICS CHARACTERISTICS – same anywhere?
Screen shot 2010-03-07 at 10.15.22.PNG

Example of IMS process
C08NF008


Unilever´s global portfolio
Mk/SBUA
MkA
MkA
MkA
MkA
CA
CA
CA
CA
CA
Ice-cream
Frozen
foods
Meal sauces
   cheeses
foods
detergents
Specialty chemicals
Product busin.
Product categ.
brands
regions
countries
N. America
Europe
Asia
L. America
Magnum
Solero
Carte d´Or
Ranieri
Germany
UK
France
Denmark
Greece
H
H
Textové pole: H
H
H
H
H
H
H
H
H
MA – market attract.
CA – comp. Strength
H-high
L  low

Ahold worldwide