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International marketing


segmentation: Pt 2


Segmentation is the process of dividing markets into groups of customers who seek similar benefits or who behave in the same way. The objective of the exercise is to achieve maximum sales. Having touched on the subject last month, Ceris Burns, international marketing specialist for the cleaning industry, takes a more in depth look at this important topic.


There is no one size fits all scenario in international marketing segmentation but it is crucial to the success of any marketing plan. Segmentation involves dividing markets into groups of customers with similar needs/behaviour and then using specific marketing messages for each group to achieve maximum sales.


So how do you go about doing segmentation when there are several countries in the mix?


• Country based classification: A traditional way of categorising markets is to drop them into a portfolio matrix to prioritise opportunities by country. Countries can then be classified into three groups: primary, secondary and tertiary opportunities based upon the country’s attractiveness (size, stability, wealth etc) versus its compatibility with the company on a subjective basis. Primary markets, for example, would score high on both axes. With this classification complete, companies would typically use standard methods to segment the markets within countries assessing criteria such as economy, geography, buyer behaviour etc. Taking this approach it can, however, be difficult to devise this second level segmentation due to a lack of information and, as a result, strategies can be quite fragmented.


• Segmentation across country borders: When conducting segmentation it makes sense to remember that countries don’t do the buying, individuals do. It follows, then, that we should get to know international markets in terms of buyers who share a need for a product or service as opposed to focusing too much on national borders. If segmentation is approached by cutting across boundaries then a strategy that will work for similar segments worldwide can be produced. This approach also has the benefit of increasing marketing efficiencies and avoiding national stereotyping in international markets.


• Studying the decision maker: One approach to achieving an effective global segmentation is to borrow from the consumer marketers’ tool kit and to study the decision maker. This entails studying variables such as values, demographics (sex, age, education), psychographics (work habits) and behavioural variables (benefits sought, motivations, buying patterns and loyalty). Research to gather this data can be conducted via a combination of desk research, face to face or online focus groups, surveys and telephone research. Similarities can then be identified and segments identified across country borders. • Recognise similarities & differences: My preferred approach to international segmentation (Hassan and Stephen 2005) is a compromise which considers both country factors and individual characteristics. This approach is based upon the belief that the best strategies recognise similarities and differences across markets rather than within them. Where this approach is adopted, branding tends to be global but the messages communicated are personalised for the local market.


Take the following steps to devise your global segmentation strategy:


1) Identify countries that have infrastructure in place so product/service can be supported and also so the market is accessible (remember roads, telecommunications, media and legislation can be restrictive).


2) Screen and shortlist countries which are most attractive. 3) Create mini segments within these countries (think about product features required etc).


4) Look for similarities across segments and consider potential response to your offer (look at behavioural patterns etc).


5) Analyse segments to identify cross border segments which would respond in a similar way to a marketing strategy.


To share your views and experiences of international marketing segmentation email Ceris at: ceris@cbimarketing.com.


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Sodexo has again been named as one of the best performing companies in its sector to be included in Business in the Community’s (BITC) Corporate


Responsibility Index - the UK’s leading voluntary benchmark for responsible business practice.


The Index, in its eighth year, includes organisations that achieved the 100 highest scores in BITC’s CR Index following an


assessment of management practices and performance in four key areas of corporate responsibility: environment, community, marketplace and workplace. In achieving silver status for the fourth year running, Sodexo has demonstrated that it continues to integrate


corporate responsibility throughout its operations by providing a systematic approach to managing, measuring and reporting on the economic, social and environmental impacts of its business. This is an integral part of the ‘Better Tomorrow Plan’, the company’s worldwide sustainability strategy to 2020. The plan aims to consolidate corporate citizenship efforts across operations by combining values and ethical principles, specific sustainability commitments and an assurance to engage with stakeholders. This year’s CR Index was published in the Financial Times Responsible Business supplement on 7 June.


Thomas Jelley, corporate citizenship manager at Sodexo, said: “We are delighted to have achieved the Silver band once again and are working hard under the umbrella of our Better Tomorrow Plan to achieve the next level of performance.”


Phil Hooper, corporate affairs director, added: “Over the last year, we have taken significant strides to consolidate this approach to corporate citizenship challenges, not least through the launch of the Better Tomorrow Plan. Participation in the CR Index guides this approach and helps us keep track of best practice.”


Stephen Howard, chief executive, BITC, said: “I


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Sodexo ‘first for corporate responsibility’ Company recognised in Business in the Community’s Corporate Responsibility Index


congratulate Sodexo on achieving the Silver band in the 2009 BITC Corporate Responsibility Index. Companies participating in the Index may be at different stages of their responsible business journey, but they have all demonstrated that they take these issues seriously and are leading the field in ensuring this is just how they do business. We believe this is imperative if we are to strengthen and stabilise our businesses and economy.”


Sodexo recently published its fifth annual corporate citizenship report


highlighting its commitment and activity across its business.


www.sodexo.com


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July 2010 C&M5


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