Question

Doing market segments internationally can be difficult. What are the things you need to keep in mind when doing so. Please explain in more than 300 words.

Answer 1

Operating in many countries presents new challenges. Because of differences in cultural, economic and political environment among various countries, international markets tend to be more heterogeneous than domestic markets.

Companies can segment international markets using one or a combination of several variables. They can segment by geographic location, by regions such as Western Europe, the Middle East, Africa or the Pacific Rim. Geographic segmentation assumes that nations close to one another will have many common traits and behaviors. Although this is often the case, there are many exceptions. For example, although the United States and Canada have much in common, both differ culturally and economically from neighboring Mexico.

World markets can also be segmented on the basis of economic factors. For example, countries might be grouped by their level of economic development and by population income levels. A country’s economic structure shapes its population’s product needs and therefore, the marketing opportunities it offers.

Countries can be segmented by political and legal factors such as the type and stability of government, its receptivity of foreign firms, monetary regulations, and the complexity of bureaucracy. Such factors play a crucial role in a company’s choice of which countries to enter and how.

Cultural factors can also be used i.e. grouping markets according to common language, religions, values and attitudes.

Cutlure includes Ethnicity: People’s ethnic backgrounds have a big impact on what they buy. If you’ve visited a grocery store that caters to a different ethnic group than your own, you were probably surprised to see the types of products sold there. It’s no secret that the United States is becoming—and will continue to become—more diverse. Hispanic Americans are the largest and the fastest-growing minority in the United States. Companies are going to great lengths to court this once overlooked group. In California, the health care provider Kaiser Permanente runs television ads letting members of this segment know that they can request Spanish-speaking physicians and that Spanish-speaking nurses, telephone operators, and translators are available at all of its clinics

Segmenting international markets on the bases of the aforementioned factors assumes that segments should consist of clusters of countries. However, many companies use a different approach called inter-market segmentation. Using this approach, they form segments of consumers who have similar needs and buying behavior even though they are located in different countries. For example, Mercedes Benz targets the world’s well-to-do groups regardless of their country.