Global Marketing

  

Identify at least 3 basic segmentation strategies. Give an example of a company that has used each one. What specific strategic positioning choices do global marketers have? What is Country of Origin (COO) effects. How does COO influence consumers judgement and choices?

 

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Why You Aren’t Buying Venezuelan Chocolate (Links to an external site.)Links to an external site.

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https://hbr.org/2010/12/why-you-arent-buying-venezuelan-chocolate

Examining world market segmentation and brand positioning  (Links to an external site.)
Country of Origin as Brand Element-2

 Based on the above article(s) and guiding questions below, you are required to write an essay of at last 250 words (about 1 page double spaced with 12 font) and spell-checked with minimal grammatical errors.  

Examining world market segmentation and
brand positioning strategies

Salah S. Hassan

The George Washington University, Washington, DC, USA, and

Stephen Craft
University of Montevallo, Montevallo, Alabama, USA

Abstract
Purpose – This paper aims to examine the conceptual as well as empirical linkages between segmentation bases and brand positioning strategies in
the context of discussing practical implications for firms operating in increasingly globalizing markets.
Design/methodology/approach – This paper empirically examines an inventory of market segmentation factors in relation to four global strategic
positioning decision options.
Findings – The two studies reported suggest that a combined use of macro and micro-bases to segment world markets is significantly linked to the
perceived positioning strategies of global top brands, whereas firms seeking more localized positioning strategies use only micro-bases to segment.
Practical implications – 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.

Originality/value – This paper is unique in identifying a link between global brand positioning and segmentation factors.

Keywords Market segmentation, Brand positioning strategy, Global marketing, Brand management, International marketing, Globalization

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this article.

Segmentation of world markets is a frequent topic of
discussion and research among both marketing academics
and practitioners. The increasing importance of segmentation
decisions is attributed, at least in part, to its ability to enhance
the strategic position of the brand. There is consensus among
practitioners and academics that the time and expense of
conducting segmentation studies and implementing
international segmentation systems is justified by the
contribution of segmentation to effective brand positioning
and performance (Özsomer and Prussia, 2000; Aurifeille et al.,
2002; Schuiling and Kapferer, 2004; Cova et al., 2007; Hung
et al., 2007). However, there has been limited attention given
in the literature to identifying the dimensions used to form
international market segments (Steenkamp and Hofstede,
2002). For example, can world markets be segmented based
on geographical factors alone or just on behavioral and
lifestyle variables? In an increasingly global and technology
savvy marketplace where customer segments are becoming
homogenized across national boundaries, behavioral and
lifestyle segmentation may be a necessary addition to
geographical segmentation in world markets (Aulakh and
Kotabe, 1993; Helsen et al., 1993; Nachum, 1994).
Complicating the segmentation issues in world markets is

the need for companies to make strategic positioning

decisions on leveraging brand equity and achieving

economies of scale. In short, the strategic necessity does not

stop at the selection of desirable market segments, but also

includes the need to effectively position brands relative to

market segments. Toward that end, the purpose of this paper

is to empirically examine the relationship between bases of

segmentation and strategic brand positioning strategies in

world markets. Additionally, this paper explores appropriate

scenarios where a company would use different segmentation

and

positioning strategies.

The decision to segment world markets lies in

understanding the degree of globalization achieved in a

given market. If there are no more mass markets in most

individual countries one should hardly expect a single

universal marketing strategy to be effective in worldwide

markets (Schuiling and Kapferer, 2004; Cova et al., 2007;

Hung et al., 2007). However, if segmentation criteria or bases
exist for market segmentation that cut across national

boundaries, then marketing strategies might be developed

that will work for similar segments around the globe (Solberg,

2002; Wright and Nancarrow, 1999; Aurifeille et al., 2002).

The existence of these inter-market segments might create

important opportunities and challenges for firms seeking to

establish brand positions in multiple markets – an

increasingly common strategic goal.

Literature on segmentation of world markets

Most early segmentation research efforts were based on macro

considerations that include factors such as economic (Kotler,

1986); cultural (Whitlock, 1987; Hofstede, 2001); geographic

(Daniels, 1987) and technological (Huszagh et al., 1986).
Current research found that these pre-determined country

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Journal of Consumer Marketing

29/5 (2012)

344

–

356

q Emerald Group Publishing Limited [ISSN 0736-3761]

[DOI 10.1108/07363761211247460]

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bases are inadequate for segmentation when considered

without behavioral bases (Helsen et al., 1993; Nachum,
1994). For example, pre-determined country clusters will be

inadequate without a full account for the degree of

homogeneity related to buyers’ responsiveness to the global

marketing program (Agarwal, 2003). Several segmentation

studies criticized limiting segmentation decisions to macro

bases alone. For example, Hassan and Katsanis (1991)

suggested that world market segmentation based on macro-

bases has three major limitations:
1 segmentation decision is based on country-specific

geographical variables not consumer-behavior variables;
2 it assumes total homogeneity of consumer behavior within

country segments; and
3 it overlooks the existence of homogeneous segments that

transcend across national boundaries.

Wind and Douglas (1972) described “macro” segmentation

as groups of countries that are classified and targeted based on

national market characteristics while “micro” segmentation is

based on analyzing and sub-dividing each qualifying target

country by customer characteristics to form localized market

segments.
There are a number of studies that acknowledge the

growing homogeneity of needs among consumers on a

worldwide basis and the opportunity this represents to

identify global customer segments (Solberg, 2002; Nelson

and Hye-Jin, 2007). For example, Domzal and Unger (1987)

suggest that similar global customer segments can be

identified across countries and regions based on

psychographic and lifestyle analyses, while others have

focused on attitudes toward imported products and country

of origin effects (Crawford et al., 1988).
Despite the growing homogeneity of needs among

consumers on a worldwide basis, some researchers still

focus on the adaptation of products and marketing efforts on

a country-by-country basis, as opposed to the standardization

of products and marketing efforts on a global basis (Kotler,

1986; Sheth, 1986). Others concede that selective

standardization on a global basis may be strategically

advantageous and espouse hybrid strategies of adaptation

and globalization (Porter, 1986; Daniels, 1987). This

approach assumes that globalization is feasible with certain

products and that it is possible to cluster countries based on

the similarity of target customer groups within each country

(Huszagh et al., 1986). Similarly, Douglas and Wind (1987)
concluded that a firm’s international operations may consist

of a mix of strategies, including global products and brands as

well as some regional and country specific products and

brands. Thus, customer segments may be global, country

specific, or based on clusters of countries with similar

characteristics. “Firms focusing on a global market segment

often can effectively use the same capabilities and skills to

target that segment throughout the world” (Craig and

Douglas, 2000).
Kale and Sudharshan (1987) propose a three-step analysis.

First, select the appropriate countries to enter based on

factors such as political climate and communications

infrastructure. Second, identify specific customer segments

to serve within each country based on product and marketing

mix factors. Finally, select customer segments across a range

of countries that may be served with a common marketing

mix without regard to geographic boundaries. In a more

recent study, Hofstede et al. (1999) empirically verified that a
segmentation model can integrate both country factors and

consumer characteristics to better form segments that share
consumption patterns versus traditional models employing

country factors alone. However, the study stopped well short

of addressing the nature of segmentation bases or the linkage
between segmentation bases and brand positioning. While

their research did not seek empirical support for or document
the international segmentation decision process, the findings

reinforce within-country examination of market segment

bases as a key step in the international segmentation strategy
decision process. Steenkamp and Hofstede (2002) proposed a

similar two-step process of first clustering countries by their
cultural and socio-economic traits, then grouping individuals

within these clusters, but selecting customers without regard

to geographic boundaries.
This inter-market segmentation approach refers to “ways of

describing and reaching market segments that transcend
national boundaries or that cut across geographically defined

markets” (Hassan and Blackwell, 1994). This approach

emphasizes that inter-market segments are based on variables
other than national boundaries (Agarwal, 2003). A hybrid

approach that considers both macro bases, as well as micro

bases, is found to be more realistic (Hsieh, 2002). The
existence of inter-market segments is a key condition for the

success of global marketing strategy (Hassan and Craft,
2005). For some consumers, the purchase of a global brand is

seen as a “passport to global citizenship” (Strizhakova et al.,
2008).

Segmentation and strategic brand positioning

Marketing based on a broader view of world markets requires

a careful examination of complex decisions related to strategic

positioning in conjunction with segmentation. Does a firm
want its brand to be positioned the same way in all markets?

Should uniform brand image be a goal of global branding

strategies? What portfolio of brand positioning strategies can
be employed in world markets?
A review of contemporary research on international market

segmentation reveals considerable shortage of empirical

studies that examine the link between segmentation and

global brand positioning. Yet, many segmentation researchers
have stressed the critical importance of the relationship

between segmentation and positioning decisions (Douglas
and Craig, 1995; Wind, 1986) and some find that

segmentation and positioning decisions are central to the

development of global branding strategy (Özsomer and
Altaras, 2008; Douglas et al., 2001). The term
“positioning” often is used to refer to the firm’s decision to
determine the place that its brand and corporate image

occupy in a given market including the type of benefits to be

stressed and the type of segments to be targeted (Douglas and
Craig, 1995; Ries and Trout, 1986; Ries, 1996). In an

international marketing context, the literature is consistent on

the need to base positioning decisions on a broader scope that
provides an understanding of differences and similarities from

one market to another (Solberg, 2002). Therefore,
positioning is described as strategy to identify and direct

marketing resources among intended market segments.

Under this strategy that we term “segment-based strategic
positioning,” the firm would foster the development of

homogeneous responses for demand that differs from

Examining world market segmentation and brand positioning strategies

Salah S. Hassan and Stephen Craft

Journal of Consumer Marketing

Volume 29 · Number 5 · 2012 · 344 – 356

345

responses received from other market segments. The strategic

positioning options can be illustrated best in a two-

dimensional representation of degrees of homogeneity and

heterogeneity among market segments to be addressed as

bases for this research design (Broderick et al., 2007; Douglas

et al., 2001).
One theoretical connection between international

segmentation and brand positioning strategy is the ability of

the firm to standardize brand appeal and marketing programs

to a segment and thereby achieve economies of scale (Levitt,

1983). However, the key connection between international

segmentation and brand positioning strategy is the degree to

which the firm meets its own objectives for aligning the brand

with consumers. Recent studies seeking to draw a specific link

between the scale of segment management and brand position

have reached conflicting results (Özsomer and Prussia, 2000).

Several studies have found that standardization of products to

global or regional market segments is positively related to

brand position (Kotabe and Omura, 1989, Johansson and

Yip, 1994) while others failed to find any relationship between

brand position and scale of segmentation (Samiee and Roth,

1992). Cavusgil and Zou (1994) found that the segment

management scale sometimes contributes to brand

performance for very inexperienced and very experienced

firms but not universally. The link between scale of

segmentation and brand position remains unresolved

(Özsomer and Prussia, 2000, p. 27).
Figure 1 displays the interaction of market segmentation

and strategic positioning decisions in the 2 by 2 matrix. The

first dimension is “same” or “different” market segments

meaning that the firm may choose to target “same” or

“different” segments across multiple markets globally. The

second dimension in Figure 1 represents “same” or

“different” strategic positioning options, meaning that the

firm may seek to achieve similar or differentiated image in a

given world market.
Cell 1 offers the “global strategy” option of substantially

similar brand positioning to substantially similar global

segments (Ries, 1996). The Body Shop developed a

uniform position for its cosmetic lines among

environmentally conscious consumers. This uniform strategy

helped the firm to leverage its image internationally among

consumers with similar attitudes and usage patterns (Douglas

and Craig, 1995). In effect, the company developed a uniform

image worldwide within this international segment.
Cell 2 represents a market “focused strategy” as favored by

the Miele brand strategists. Miele’s reputation for focusing on
quality is appealing to European value of durability. American

consumers have different appliance expectations – they treat
appliances almost as “disposable,” replacing them with a new

color or model when they change homes or when the
appliance breaks down. An appeal to 20-year durability is

unlikely to be successful with American consumers. The
American consumer will desire a maintenance free appliance
with a wide variety of designs and styles. So while Miele may

seek to sell identical products on a global basis to enhance
global competitive advantage through supply-side economies,

it faces great difficulty in the USA unless it positions the
brand to acknowledge the cultural and behavioral differences

between European and American customers. This way Miele
was able to develop an effective focused strategy. Miele

focused on the same segment of customers in Europe and
America, but positioned the same product in two different

ways to account for the cultural differences in appealing to
American consumers’ desire for variety of designs and styles.
Cell 3 represents similar strategic positioning for different

segments or “multinational strategy.” Many European firms
choose same brand appeal for products marketed to US

consumers in order to leverage market leadership or unique
image. Mercedes Benz and BMW position their products as

high quality, expensive, prestige brands. However, prestige
image may not always be what consumers want. Gillette

adopted this multinational strategy (cell 3) that provided a
worldwide appeal based on stimulating primary market

demand for shaving through providing a host of products
for different segments. This multinational strategy of Gillette

has been attributed to enhancing the company’s performance
in dominating the market worldwide. Other examples of
companies that provide a portfolio of products for different

segments worldwide are Coca-Cola, Kodak and Nike.
Cell 4 is the “multi-local strategy” option and probably

exists only as a greenfield entry strategy rather than a market
expansion strategy (Douglas and Craig, 1995). New market

entry or investment in different brands marketed to different
segments would probably be the only justification for such a

strategy. For example, when Nestlé “glocalized” its Nescafe
coffee brand, they recognized what coffee means to a culture,

when it is consumed and how often it is consumed, varies
throughout different cultures. Nestlé is distributed almost

everywhere acknowledging that coffee plays different roles
around the world. Coffee cultures such as the USA and
Germany did not automatically accept instant coffee. In some

countries, Nescafe marketing efforts concentrated on
overcoming the mistaken belief that instant coffee is made

from synthetic materials instead of real coffee. Nescafe’s
competitive success against other European leaders, such as

Jacobs and Tchibo, is based on understanding how aroma,
warmth, and the ritual of coffee drinking touch deeply-held

consumer values. Conscious effort to relate Nescafe
“coffeeness” to different types of coffee drinkers and usage

occasions allowed consumers to determine the brand’s
meaning and appeal in many regions around the globe.
Firms that chose to position brands differently in

accordance with local market realities may represent future
challenges to the organization. As the brand matures in the

market, the organization finds itself in need to optimize the

Figure 1 Segment-based strategic brand positioning matrix

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

346

success achieved in one market to reach more global

consumers. In this case, to target similar market segments

elsewhere, creating a broader market position in other

markets requires more research and development. For

Nestlé to build a successful brand in the US market meant

focusing on loyalty as a primary segmentation base. Instant

coffee by Nestlé leveraged its success in non-coffee consuming

cultures to appeal to attitude and usage patterns of other

world cultures.
As previously stated, there is a clear desire in the existing

literature to connect brand positioning and segmentation in

world markets. In order to better define the parameters of this

relationship, two empirical studies were conducted to examine

the interaction of brand positioning and segmentation

decisions in world markets.

Research model and hypotheses

The appeal of similar brand benefits, similar patterns of

purchase and consumption behavior, and specific shared

values should be the focus of strategic response to market

segments that transcend the geographical boundaries globally.

Global marketers often target lifestyle similarities. For
example, targeting outdoor lifestyles allows Weber barbecues

to enjoy great popularity in Los Angeles and Johannesburg.

Those who love outdoor cooking may live in diverse regions

characterized by very different value systems, but similarities

should dominate comparisons of segment members.
Figure 2 illustrates a research framework of the integrated

approach to link segmentation bases with strategic brand
positions.

Research hypotheses

Four hypotheses were developed to examine the relationship

between three types of segmentation bases and brand

positioning. The first three hypotheses examine the level of

utilization of segmentation bases (hybrid-, micro-, and macro-

levels) and the choice of brand positioning strategy options for

world markets. Hypothesis four examines perceived degrees of

similarities in targeting world segments in association with the

perceived degree of harmonization in the choice of a firm’s

brand positioning strategy:

H1. Hybrid bases of segmentation that include both

relevant macro-level (i.e. geographical and economic)

as well as appropriate micro-level variables (i.e. lifestyle

and behavioral) will be significantly related to global

brand

positioning strategy.

H2. Micro-level bases of segmentation that include relevant

variables (i.e. lifestyle and behavioral) alone will be

significantly related to Multi-local brand positioning

strategy.
H3. Macro-level bases of segmentation that include

relevant variables (i.e. geographical and economic)

alone will not be significantly related to any of the

brand positioning strategy options.
H4. Perceived degrees of similarities in targeting world

segments are associated with the perceived degree of

harmonization in the choice of a firm’s brand

positioning strategy.

This research model is reflective of the following major

developments in the literature:

Figure 2 Research framework linking segmentation bases with brand positions

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

347

. Integrating country variables with behavior patterns
(Hsieh, 2002).

. Not assuming total homogeneity of the country segment
(Agarwal, 2003).

. Acknowledging the existence of a degree of similarity
across national boundaries (Hung et al., 2007).

. Considering the bases of segmentation to be dynamic in
nature (Broderick et al., 2007).

. Defining brand positioning strategy options as a matter of
degree (Ha et al., 2009).

The integrated research framework presented here (see
Figure 2) assumes that treating each country as a totally
homogeneous market is not realistic (Jain, 1989). The basic
ideas of the integrated approach are:
. It assumes various degrees of heterogeneity and

homogeneity in buyers’ preferences for global brands.
. Any degree of preference heterogeneity or homogeneity

for global brands can be attributed to both macro-bases
(i.e. country factors), micro-bases (i.e. behavioral
variables), and any combinations of interactions.

. Any degree of preference heterogeneity can be addressed
by introducing adaptive variations in the marketing
program.

Research study one

This research study consisted of a mail survey targeted to
high-level managers involved in segmentation decisions with a
focus on the international arena. A structured questionnaire
was mailed to 1,097 segmentation decision makers drawn
from a list provided by the Institute for International
Research. The contact names were selected at random from
a listing of over 150,000 managers who are listed in the
segmentation section of the Institute’s database.
Respondents received a three-step integrative mailing

beginning with a warning letter asking for participation, a
letter accompanying the questionnaire, and a post-card
reminder. Respondents were provided with a postage-paid
business reply envelope. As an incentive, a charitable
contribution of one dollar was made to the respondent’s
choice of three charitable organizations for each completion.
In addition, the respondents could request a summary report
of the results of the data collection. The study resulted in 112
completions for a response rate of 10.2 percent.
Table I provides a summary of the experience level of the

participants in the study. It is noteworthy that the
participants’ average in excess of 12 years’ experience in
international marketing and just less than 10 years’ experience
in their respective organizations.

Key measures

The study captured the degree of use of macro-level
segmentation bases. The questionnaire utilized 14 macro-

level segmentation bases from the literature (see list in

Table II). The respondents were asked to rate how each factor

is used on a seven-point scale with 1 representing “never

used” and 7 representing “always used.” The study (n ¼ 107)
established the scale as having high reliability with a

Cronbach’s alpha score of 0.9040. The respondents were

asked to rate how often each factor is used as part of their

international segmentation decisions.
Also, the questionnaire utilized 22 micro-level segmentation

bases drawn from the literature (see list in Table III). The

respondents were asked to rate each within-country bases on a

seven-point scale with 1 representing “never used” and 7

representing “always used.” The study (n ¼ 98) established
the scale as having high reliability with a Cronbach alpha

score of 0.9217. In addition, the study captured the utilization

of the four brand positioning strategies corresponding to the

matrix in Figure 1. Each respondent was asked to rate each

brand positioning strategy option on a seven-point scale with

1 representing “never used” and 7 representing “always

used.”

Analyses

The first step in the data analysis was conducted via principle

components analysis – a form of factor analysis. The resulting

factors were rotated via Varimax rotation and Kaiser

Normalization for the purpose of aiding analysis. As a

condition of running the factor analysis, coefficient alpha was

used to assure interim reliability.The current research

identified three underlying macro-level segmentation bases

including:
1 macroeconomics;
2 geo-demographics; and
3 macro-cultural factors.

In addition, there appear to be four underlying micro-level

segment bases including
1 demographics;
2 attitude and usage;
3 micro-culture; and
4 brand loyalty.

As will be discussed, the results of the current research holds

important implications for understanding segmentation in the

global market and for the strategic positioning of brands

relative to defined market segments.
The next step in the analysis was to determine the

relationship between segmentation bases and strategic brand

positioning option as per the study research design presented

in Figure 2. Toward that end, four regression models were

constructed utilizing the seven segmentation bases derived

from the factor analyses as the independent variables and each

strategic positioning option presented in Figure 2 as

dependent variables. The results of the regression analyses

are presented in Table IV.

Discussion of study one findings

Global market segmentation can be viewed as the process of

identifying segments whether they are country groups or

individual buyer groups, of potential customers with

homogeneous attributes who are likely to exhibit similar

buying behavior patterns. There are four different approaches

for global segmentation:

Table I Characteristics of study participants

n Mean
Std

deviation

Years involved in international marketing 112 12.05 8.15

Number of years with organization 112 9.55 6.85

Years in current position 112 4.25 3.42

Years in industry 112 15.27 10.05

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

348

1 Identifying similar world markets that demand similar

brands (that is, “global strategy” giving more weight to

hybrid bases of segmentation factors).
2 Targeting different segments in different countries with

the same brand (that is, “multinational strategy”

emphasizing geo-demographic factors plus attitudinal

factors) (Takeuchi and Porter, 1986).

3 Identifying similar segments present in many or most

countries (that is, “focused strategy” striking a hybrid

balance between micro-culture and usage behavior).
4 Emphasizing on different segments that demand different

brands (that is, “multi-local strategy” where strong local

brand loyalty is unique in terms of product attributes and

usage patterns).

Table II Factor loadings of macro-level segment bases – rotated component matrix

Questionnaire Items Macroeconomic Macro-cultural factors Geo-demographics

Country level of economic development 0.848

Country legal/regulatory environment 0.789

Level of industrialization 0.777

Form of government 0.759

Political stability 0.755

Country level of technological innovation 0.730

Country per-capita income 0.651

Communication infrastructure 0.618

Market-orientation of economy 0.597

Type of dominant religion 0.811

Language of country 0.718

Cultural identity 0.576

Geographic location 0.775

Population demographics 0.714

Reliability measure (alpha) 0.9148 0.6621 0.4678

Notes: Extraction method: Principal Component Analysis; Rotation method: Varimax with Kaiser Normalization; A rotation converged in six iterations; Loadings
below 0.46 have been suppressed

Table III Factor loadings of micro-level segment bases – rotated component matrix

Questionnaire items Micro-demographics Attitude and usage Micro-culture Brand loyalty

Age 0.850

Income 0.815

Gender 0.781

Education 0.768

Family size 0.747

Lifestyle 0.708

Occupation 0.651

Buyer needs 0.877

Buyer wants 0.867

Segment size 0.676

Product benefits 0.674

Attitude toward product 0.631

Religion 0.838

Ethnicity 0.771

Regional identity 0.721

Urbanization of dwellings 0.583

Language 0.528

Social class 0.472

Degree of existing loyalty 0.843

Degree of potential loyalty 0.823

Frequency of product use 0.651

Personality 0.467

Reliability measure (alpha) 0.8646 0.7470 0.3673 0.8233

Notes: Extraction method: Principal Component Analysis; Rotation method: Varimax with Kaiser Normalization; A rotation converged in seven iterations;
Loadings below 0.46 have been suppressed

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

349

This hybrid segmentation framework looks at both similarities

and differences across world markets. The traditional

international segmentation that prevailed in international

business literature emphasized geographical differentiation by

grouping country and regional clusters (i.e. tendency to

minimize similarities and highlight differences). This study

points to a clear relationship between the choice of brand

positioning strategy and the types of segmentation bases on

which to form target market segments. The hybrid

segmentation approach, which utilizes both macro and

micro-level variables has been shown to be significantly

related to the Global strategy, thus supporting H1.

Additionally micro-level variables, and only micro-level

variables were significantly related to the Multilocal strategy,

thus supporting H2. Supporting H3, in no instance were

macro-level variables alone found to be significant.
Figure 3 overlays the statistically significant segment bases

(Table IV) within the appropriate cells based on the four

strategic brand positioning options. Comparing the brand

positioning strategy with segment bases yields some important

insights. For example, cells 1 and 3 represent achieving

similar brand positions in world markets through “global

strategy” and “multinational” strategy options, they utilized

segmentation variables that include macro-economic, geo-

demographics, attitudinal/usage, and micro-culture. In effect,
the firms that are aiming to achieve unified strategic brand
positions in world markets are using both macro-level
segmentation bases as well as micro-level segmentation bases.
Therefore, firms with similar brand positioning are using

both macro-country segmentation bases as well as behavioral
bases. Across cells 2 and 4 which represent different strategic
brand positions, micro-level bases of segmentation were the
only significant factors. The data suggest that a firm’s decision
regarding the types of bases to be utilized in segmentation
may, in fact, indicate the positioning strategy that this
particular firm is undertaking. Consequently, firms must
evaluate the types of segmentation bases utilized in order to
have a better emphasis on the intended strategic market
position.

Research study two

The second study utilized a convenience sample of
segmentation decision makers from firms representing a
wide range of industries. The study used a key informant
methodology where respondents were independently screened
as to their ability to respond. Key informants are not selected
to be statistically representative but are chosen because they
possess unique knowledge on the topic of interest (Kumar
et al., 1993). Utilizing key informants in strategy research is
appropriate in circumstances where the likelihood of
randomly locating respondents with in-depth knowledge is
low (Seidler, 1974). This study is based on a panel of
international marketing experts composed of 30 informants
from diverse industries like fast moving consumer goods,
marketing research consulting, services, and manufacturing.
Özsomer and Altaras (2008) note that a person unfamiliar
with global brands may have the “somewhat abstract idea that
global brands are the same everywhere”. To avoid such
perception biases, the panel was selected to include globally
knowledgeable participants that represent’s five different
countries from four continents.
The objective of this study was to evaluate the perceived

association between global brand positions and world market
segments. Each expert panel participant received an online
survey where he/she was confronted with a list of the “100
Best Global Brands” by Interbrand/BusinessWeek. This list of

Table IV Regression analysis of strategic positioning options and segmentation bases

Dependent variable

Independent variables

(standardized beta

coefficient)

Similar positioning to

similar segments

(global strategy)

Similar positioning to

different segments

(multinational strategy)

Different positioning to

similar segments

(focused strategy)

Different positioning to
different segments

(multi-local strategy)

Macroeconomic 0.240 * 0.065 0.011 20.145

Macro-cultural factors 20.181 20.021 20.203 0.073

Geo-demographics 20.006 20.239 * 20.005 20.036

Micro-demographics 0.018 0.208 * * 0.132 0.176

Attitude and usage 0.241 * 0.426 * 0.259 * 0.192

Micro-culture 0.307 * 0.071 0.199 * * 0.036

Brand loyalty 0.135 0.092 0.147 0.105 *

R2 0.247 0.210 0.128 0.081
F 3.935 * 3.187 * 1.760 * * 1.056
Df 7 7 7 7

Notes: * Significant at 0.05; * * significant at 0.10

Figure 3 Segment-based strategic brand positioning matrix

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

350

companies included images of corporate brands with

hyperlink to the web site of the BusinessWeek listing on how
each brand is ranked globally. Each panel expert was asked to
provide responses on a scale ranging from 1 to 10 on how they

rate these brands related to the following two questions:
1 On a scale ranging from 1 to 10, please rate how the

following corporate brands target world-market segments

– where: “10” ¼ very similar market segments across the
globe and “1” ¼ very different market segments across the
globe.

2 On a scale ranging from 1 to 10, please rate how the

following brands are positioned on a world-wide basis –

where: “10” ¼ very similar brand position across the
globe and “1” ¼ very different brand position across the
globe.

Each panellist was asked to assign a value of “0” to I do not

know answers or was allowed to skip the question. This way a
respondent who is unfamiliar with either the brand

positioning or the brand’s segmentation strategy would not

influence the findings.
This method of surveying expert panellists was validated,

deemed valuable, and responses were ranked using the
Amabile (1996) consensus assessment technique (CAT)

where higher scores define the most consciences agreement

as assessed by this expert panel. The total scores (N) were
2,344 for positioning and 2,307 for segmentation. A

Kolmogorov-Smirnov test indicates that the distributions of
these scores were approximately normal (positioning ¼ p-value
0.01 and segmentation ¼ p-value 0.01), while the scatter plot
chart (see Figure 4) shows the average expert rating form a
consensus agreement skewed to the upper left quadrant. This

is consistent with prior research and confirms that aligning
brands with broader and more homogenous global segments

will achieve higher levels of performance in the marketplace as

evident in the top status of “100 Best Global Brands” (Kiley
and Helm, 2009).

Findings of study two

With position and segment scores averaging 7.3 and 7.0

respectively, both scores are found to be significantly larger

(p , 0:01) than the critical values of the global strategy cell

minimums of 5 (position) and 5 (segment). The correlation

coefficient of individual panel member ratings is 0.396

(p , 0:001). Therefore we can conclude that perceived
similarities in targeting world segments are associated with

the perceived harmonized brand positioning strategies (H4).

Coupling these results with the fact that the brands are the top

global brands as judged by Kiley and Helm (2009), we can

conclude there is a benefit to the best brands or harmonizing

brand positioning and segmentation strategies.
When these results are taken in conjunction with study 1,

the main outcome that can be safely concluded as a valid

interpretation of this paper’s theoretical and empirical

analysis is that there is a positive association between

global positioning and world market segmentation strategies

and with the globalization of the world markets, there are

more opportunities to create market potential through

stimulating demand for brands with universal appeal. The

association between intended strategic brand positions with

market segmentation decisions is a methodology in which a

global perspective can be adopted to enhance brand appeals

worldwide. The objective is to reveal in different countries,

regions and/or clusters of countries, groups of buyers having

the same expectations and requirements vis-à-vis brand
strategies, despite cultural and national differences, in other

words, targeting the changing global consumers. Those

segments, even if they are relatively small in size within each

country/region/cluster, may represent in total a very

attractive market opportunity for the global marketer. To

adjust to local discrepancies, the physical product or

essential aspects of a service package can be customized

through peripheral services, accessories, or inexpensive

modifications. The potential for globalization is not the

same for each product category and different approaches

can be adapted.

Discussion of study two findings

Of the four strategic brand positioning options, “global

strategy” and “multinational strategy” are argued to be the

most likely to give the firm a significant competitive

advantage, because unified brand image can be leveraged

across markets (that is, globally transcending distinctive

competency). This gives the brand a perceived reputation and

coherence in image and positioning which is internationally

reinforced. The other two positioning strategies have the

merit of taking into consideration differences among target

markets and of introducing adaptations to accommodate

these differences or focusing their marketing offerings to excel

in a specific segment(s) (Lambin, 1997). Nevertheless, the

later strategies (i.e. “focused” and “multi-local”) could

exhibit disadvantages of either high cost of differentiation or

limited economies of scale focusing along with running the

risk of vulnerability to drastic local market changes.

Conclusions

This paper addressed a key aspect of global branding strategy.

It is concluded that bases of segmentation can indicate brand

positioning strategies and subsequently have an effect on the

brand perception in world markets. This paper investigated

how a battery of segmentation bases whether they are country

factors or buyer behavior variables are likely to exhibit

influence on brand positioning strategies perceived positions

Figure 4 Scatter plot of results from the expert panel

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

351

in world markets. There are four different strategic

approaches for global brand positioning:
1 Developing a homogenous market position for the brand

through identifying and targeting buyers, wherever they

are in the world, that exhibit similar behavioral responses

toward the brand.
2 Targeting different segments in different countries with

the same brand appeal.
3 Aligning the brand with segments present in many or most

countries based on locally defined segmentation bases.
4 Focusing on different segments that demand uniquely

differentiated brand.

The traditional segmentation approach that emphasizes

nation-based geo-demographic factors was found to

minimize similarities and highlight differences. The hybrid

approach actively seeks homogeneity in the positioning of the

brand, image, marketing tools and advertising message, while

the multi-local approaches to global market segmentation

maintains emphasis on differences from market to market.

The ultimate agenda, however, is not to have an identically

uniform brand positioning worldwide, rather the strategic

marketing end is to come up with a brand positioning that is

as standardized as possible, while recognizing that allowances

for some local conditions are sometimes both necessary and

desirable (Keegan and Schlegelmich, 1999).

Managerial implications

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.

Future research

The conceptual and empirical findings of this paper pave the

way for embarking on promising and relevant research that is

needed to substantiate and enrich the academic

understanding and managerial practice of aligning the global

brand positioning strategies with market segmentation

options. Consequently, four main research frontiers can be

recommended based on this study to extend the boundaries of

the area of global brand positioning and address the concerns

of market segmentation researchers and strategists aiming to

comprehend and utilize effective global strategies.
First, why and when should global marketers pursue hybrid

segmentation strategies? This research question addresses the

rationale underlying hybrid global market segmentation and

would be expected to produce analytical tools for the

evaluation of each market’s different needs and its

corresponding product offerings. Such research ought to be

conducted with a view toward making economic and

managerial sense of global market segmentation strategies

with special reference to the dimensions of accessibility

(i.e. market segmentation transaction costs) and substantiality

(i.e. segmentation-related economies of scale).
Second, how can global marketers achieve the logical design

of hybrid market segmentation that will facilitate establishing

a coherent positioning strategy? This research stream would

be expected to tackle the “know-how” issues of hybrid global

market segmentation. Such research efforts should strive to

pinpoint how the features of segmentation bases, targeting

agendas, and targeting techniques can be conceptualized and

adopted on empirically-grounded policy guidelines to

augment positioning decisions made and translated into a

relevant and effective marketing mix designs.
Third, what are the implementation issues relevant to the

adoption of hybrid global market segmentation? Answering

this research question should happen through examination of

the success or failure of adopting hybrid global market

segmentation strategies. Such research should be expected to

raise a number of issues related to the effectiveness of global

marketing research and marketing information systems that

help support the implementation of segmentation and

positioning strategies.
Fourth, how can hybrid global market segmentation and

positioning strategy be monitored, benchmarked, and

evaluated? This final research stream should address the

vital need to measure the differing contributions of hybrid

global market segmentation strategies to positioning

effectiveness and the firm’s other strategic marketing ends.

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About the authors

Dr Salah S. Hassan is Chair and Professor of Strategic Brand

Management at the School of Business, The George

Washington University. He received his PhD in 1984 from

The Ohio State University. Dr Hassan was recognized in 2005

with the “Outstanding Marketing Teacher” award by the

Academy of Marketing Science. In recognition of his research

on strategic brand management, he was hosted by the US
Embassy in Germany to speak on nation branding at an
international symposium organized by the Institute for
Cultural Diplomacy and recently was hosted by the US
Embassy in Copenhagen to give a keynote address at a
conference on nation branding and tourism development. Also,

he was invited by the University of Birmingham Thought
Leaders Conference to speak on strategic brand management;
by Kellogg School of Management to speak on unlocking
brand potential; and by Harvard Business School’s Open
Innovations Workshop to speak on harnessing user innovations.
Dr Hassan has published well over 70 articles and papers in

academic journals and trade periodicals. He was granted a
“Highly Commended” paper award by the Journal of Consumer
Marketing in 2004 for an article entitled “Understanding the
new bases for global market segmentation.” Dr Hassan
published two books; Globalization of Consumer Markets and
Global Marketing Perspectives and Cases. Currently, Dr Hassan is
co-authoring an international edition of Marketing
Management, by Philip Kotler and Kevin Keller, Pearson
Publishing (forthcoming, 2012).
Dr Stephen Craft is Professor of Business and Dean of the

Michael E. Stephens College of Business at the University of
Montevallo. He has published widely and was recognized with
a “Highly Commended” paper award by the Journal of
Consumer Marketing in 2004 for an article entitled
“Understanding the new bases for global market

segmentation.” As a professor and consultant, Dr Craft has
advised the senior management of corporate, civic, and
nonprofit organizations. He has conducted or overseen over
150 research studies focused on best-practice governance,
strategic outcomes, and performance measures, often being
called on to measure seemingly un-measurable elements of

performance. Dr Craft has developed or strategically
repositioned brands for consumer products, business
services, and nonprofit causes. Dr Craft has tested messages
and audiences acceptance across a variety of print, online, and
broadcast media. Prior to academia, Dr Craft spent years in
industry holding positions responsible for sales, product

development, customer segment management, and brand
management including positions as Senior Product Manager
for First American Bank and Manager of Marketing Strategies
for Freddie Mac. Dr Craft completed work on his PhD at
The George Washington University (Washington, DC) where
he received his MBA. Stephen Craft is the corresponding

author and can be contacted at: scraft@montevallo.edu

Executive summary and implications for
managers and executives

This summary has been provided to allow managers and executives
a rapid appreciation of the content of this article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefits of the
material present.

One of the more common issues facing marketers in today’s
global business environment is how to segment their markets
across the world. Studies into this issue are time-consuming

and costly, yet essential to aims of improving performance and
successfully positioning the brand. The challenge is to identify

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

354

different segments and then position the brand relative to

each one.
To date, most researchers have adopted a somewhat narrow

focus when considering international segments, often relying

mainly on geographical factors. But globalization has blurred

national boundaries to an extent that marketers need to

consider additional variables when creating segments. To this

end, behavioral and lifestyle factors might be pertinent.
According to some scholars, there are inherent limits in

using macro-elements to segment markets. This approach

uses variables which are country-specific and does not

consider behavioral differences within country segments. In

addition, some homogenous segments transcend national

boundaries but this is not accounted for either.
Given these limitations, segmentation based on micro

characteristics is regarded in some quarters as more feasible.

Consumer-related aspects are at the core of this approach to

segmentation. In part, such thinking has emerged in response

to belief that consumer needs are generally becoming more

homogenous to a degree that the creation of global segments

is a valid option. Marketers have thus considered segments

based on psychographic and lifestyle features, attitudes

towards imported products and country-of-origin (COO)

effects. One consequence is an acknowledgement that

‘clusters of countries with similar characteristics’ can be the

basis of some segments.
Consequently, researchers perceived that the best solution

is to adopt a process of “selective standardization” to

effectively target these segments and those which are global

or country-specific. Nations displaying similar cultural and

socio-economic features are ideal cluster partners. Firms can

then group individual consumers within these clusters, while

ignoring geographical boundaries.
A major challenge facing marketers is the task of aligning

segmentation and strategic positioning decisions. It raises

questions about uniformity of brand image across the world

and whether brands should be positioned the same

everywhere. A shortage of studies linking the two issues

compounds the difficulty. However, gaining awareness of

between-market similarities and differences is seen as

fundamental. Scholars also believe that companies can

achieve economies of scale if managing to “standardize

brand appeal and marketing programs” to international

segments.
Evidence is inconclusive about how the degree of

segmentation impacts on brand position. Researchers have

identified and labeled various strategies used by leading

organizations depending on their segmentation and

positioning objectives:
. Global strategy, whereby the brand is similarly positioned

to global segments which are broadly alike in nature.
. Focused strategy. This could involve positioning the same

product in different ways to account for cultural

disparities between separate markets.
. With a multi-national strategy, companies can exploit

brand appeal to market the same brand to different

segments in different nations.
. A multi-local strategy takes into account what a specific

product means to different segments around the world to

position the brand accordingly.

Companies may find their most significant threats coming

from rivals that vary the position of their brands depending on

local market characteristics. Brand maturity could demand

that such companies exploit their achievements in other

markets in order to meet such challenges.
Hassan and Craft explore these issues further in two

studies. Hypotheses were developed in order to consider

relationships between different approaches to segmentation

and brand positioning. Perceived levels of segment similarities

and perceived levels of “harmonization” in the brand

positioning strategy deployed were also investigated.
In this research, it is not considered realistic to regard each

nation as a “totally homogenous market”. Likewise, varying

degrees of heterogeneity or homogeneity are assumed in

consumer preferences for global brands. Either or both macro

and micro factors can be determinants of this.
In the first study, top managers involved in internationally-

oriented segmentation work were invited to complete a

structured questionnaire by mail. A total of 112 usable

responses were obtained. Subjects were asked to indicate how

often they used various macro-level and micro-level factors

when making international segmentation decisions. Ratings

for each brand positioning strategy were also obtained.
Macroeconomics, geo-demographics and macro-cultural

factors were identified as underlying bases for macro-level

segmentation. For micro-level segmentation, underlying bases

appeared to be demographics, attitude and usage, micro-

culture and brand loyalty. Study data indicated that:
. Hybrid segmentation bases containing macro-level

geographical and economic variables and micro-level

lifestyle and behavioral variables are strongly associated

with a global positioning strategy.
. Micro-level segmentation using lifestyle and behavioral

factors alone is strongly related to a multi-local brand

positioning strategy.
. Segmentation based solely on geographical and economic

macro-level bases is not strongly linked to any of the brand

positioning strategies.

Evidence suggested that companies striving to secure “unified

strategic brand positions” in world markets utilize both macro

and micro-level segmentation bases. For brand positions

different to these, only micro-level bases are significant. From

this, the authors conclude that a clearer emphasis of the

intended brand position can be achieved by carefully selecting

which segmentation bases are utilized.
A panel of segmentation decision makers was used for the

second study. The 30 subjects were chosen because of their

unique knowledge of the topic. Participants were “globally

knowledgeable” and represented different industries, nations

and continents. An online survey was used to elicit how

subjects evaluate the perceived connection between world

market segments and global brand positions. They were asked

to indicate their opinion of how leading corporate brands

target world-market segments and how the brands are

positioned worldwide.
Following analysis of subject responses, the authors reason

that global brands can profit from the harmonization of their

brand positioning and segmentation strategies. They also note

the “positive association between global positioning and world

market segmentation”. An additional observation is that

market globalization has created extra opportunities for

brands boasting universal appeal.
Exploiting this situation needs brand strategies that

effectively target consumers whose expectations and

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356

355

demands are similar regardless of any national or cultural
differences. Such segments could span countries or regions
and be comparatively small in size, yet might still represent a
lucrative marketing option. Hassan and Craft suggest ways in
which to customize the core product or service to satisfy local
idiosyncrasies.
Attaining competitive advantage might be likelier with

global and multinational strategies that leverage a consistent
brand image across different markets. The focused and multi-
local strategies do not provide the same scope to reinforce a
brand’s reputation as widely. High costs associated with
differentiation are another possible negative.
This study highlights the limitation of a conventional

segmentation approach reliant on country-specific
demographic factors. The recommended alternative is
largely standardized brand positioning which permits some
adjustment for local conditions. Marketers should target
consumers from different nations who share key

characteristics deemed relative to the firm’s products and
brands. The authors assert that using these
“multidimensional segmentation factors” together with
suitable brand positioning can help improve the brand’s
global profile.
Aligning brand position and segmentation is: cost effective,

a source of opportunity to transfer the firm’s offerings across
national or regional boundaries, a platform for market
expansion opportunities, and a means to further improve
brand management.
Future research could ascertain the ideal conditions for

using segmentation and positioning strategies, while also
examining design, implementation, monitoring,
benchmarking and evaluation issues.

(A précis of the article “Examining world market segmentation and
brand positioning strategies”. Supplied by Marketing Consultants
for Emerald.)

Examining world market segmentation and brand positioning strategies
Salah S. Hassan and Stephen Craft
Journal of Consumer Marketing
Volume 29 · Number 5 · 2012 · 344 – 356
356

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