Chapter 7
The International Marketing Plan
LEARNING OBJECTIVES
After studying this chapter students should be able to:
• Develop a general understanding of international marketing strategy at the different
levels of the international organization and provide some insights into the
international marketing planning process of selected companies.
• Identify the rationale for adopting a particular target marketing strategy in
CHAPTER SPOTLIGHTS
• Rationale for Target Marketing: In order to select the countries and segments that
the company can serve most efficiently, and in order to communicate product traits
that best appeal to target consumers, companies must utilize international target
marketing.
• International Market Segmentation: Involves identifying countries and consumers
CHAPTER OVERVIEW
This chapter explains the rationale and principles of international target marketing and
segmentation. It identifies the requirements necessary for effective international
consumer segmentation and describes the different targeting and positioning strategies
used by companies worldwide.
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CHAPTER OUTLINE
7-1 Developing an International Marketing Strategy:
7-1a Developing an International Marketing Plan
The international company develops marketing strategies for the target market.
7-2 The Rationale for Target Marketing:
Target marketing is used to identify segments of international consumers that are
7-3 International Market Segmentation:
7-3a Requirements for international segmentation: In order to be effective, market
segmentation, whether by country or by consumers, must meet the following
requirements:
1) Measurability: Individual market segments should be easily identified and
they should be measurable. This can be difficult to accomplish for
international market segments due to lack of reliable population statistics,
and difficulties in evaluating culture-related dimensions.
2) Substantiality: The segment should be large enough to warrant
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6) Differential response: Segments should be easy to distinguish from each
7-3b Macrosegmentation: Country Attractiveness Analysis
Macrosegmentation involves grouping countries based on criteria such as
economic performance, marketing support infrastructure, etc. The purpose of
macrosegmentation is to select and target the countries that present the highest
potential to the company. The criteria that firms can use to group countries are:
1) Market potential: Can be evaluated based on economic development using
such indicators as GDP per capita, market size, and consumer buying
well in markets with high political risk or ambiguities in the legal system.
3) Marketing support infrastructure: Constitutes an important factor in
evaluating overall country attractiveness. Country attractiveness is
assessed based on the availability and reliability of distribution and
7-3c Microsegmentation: Focusing on the Target Consumer
Microsegmentation identifies clusters of consumers who respond in a similar way
to a company’s marketing strategies.
1) Bases for microsegmentation include:
a) Demographic and psychographic segmentation: Demographics are
statistics that describe the population such as age, gender, race, ethnic
group, national origin, income, education, occupation, social class,
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7-4 Targeting International Consumers
7-4a Target market decisions: Country Screening and Selection
Country screening and selection processes are important because they ensure that
markets that present the most promise to the company are selected.
Countries are selected using a three-stage screening process:
1) Assigning an importance score to country screening criteria: Involves
aggregating a selection of criteria, with each criterion having an
7-4b Target market decision: the target market strategy
Companies use three main strategies to target their international markets:
1) Differentiated targeting strategy: Companies identify or create market
segments that want different benefits from a product and target them with
7-5 Positioning the Brand:
7-5a Attribute/benefit positioning: Uses product attributes and benefits to position it in
the consumers’ mind relative to competitors’ products and services.
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7-5b Price/quality positioning: Products are positioned as either offering the best value
7-5c Use or applications positioning: Positioning a product as having a precise
7-5e Product class positioning: Differentiating the company as a leader in a particular
product category. Company defines the product.
7-5f Competitor positioning: Comparing the firm’s brand with that of competitors.
KEY TERMS
Accessibility: The ability to communicate with the international target market.
Actionability: The extent to which the target market segment is responsive to the
marketing strategies used.
Competitor Positioning: The process of comparing the firm’s brand with those of
competitors, directly or indirectly.
Concentrated Targeting: The process of selecting only one market segment and
targeting it with one single brand.
Demographic Segmentation: The process of identifying market segments based on age,
gender, race, income, education, occupation, social class, life-cycle stage, and household
size.
Global Youth Segment: A psycho-demographic global group of teenagers considered to
be astute consumers with precise desires for brand name clothing products and entertain-
ment.
Measurability: The ability to estimate the size of a market segment.
Price/Quality Positioning: A strategy whereby products and services are positioned as
offering the best value for the money.
Stability Over Time: The extent to which preferences are stable, rather than changing,
in a market segment.
Substantiality: The extent to which the market is large enough to warrant investment.
Target Market: Consumers and/or international markets that are similar in aspects
relevant to the company.
Target Marketing: The process of focusing on those segments that the company can
serve most effectively and designing products, services, and marketing programs with
these segments in mind.
DISCUSSION QUESTIONS
1) International planning involves planning activities at different levels of an
organization. Describe the planning processes that take place at each level of an
international company.
At the corporate level, the strategic plan allocates resources and establishes
objectives for the whole enterprise worldwide. The corporate plan has a long-term focus
2) International marketing managers use a number of criteria to ensure that
segments are useful. Describe the effective types of market segmentation and offer
examples of each.
The requirements for effective segmentation are numerous. Measurability, or the
ability to estimate the size of a market segment, is an important requirement that ensures
2) Macrosegmentation refers to country-level segmentation, and microsegmentation
refers to consumer-level segmentation. What bases and strategies do marketing
managers use for segmenting their international markets using macro- and
microsegmentation?
When segmenting their international markets using macrosegmentation, firms use
several strategies to group countries. Market potential, evaluated based on the rate of
economic development through reliable market indicators such as GDP per capita and
When using microsegmentation, the company uses different approaches to
segmentation. Demographic and psychographic segmentation identify market segments
based on age, urbanization and social class, education, etc., and lifestyles, values,
attitudes, interests, and opinions, along with cultural variables such as religion. Benefit
4) Describe the principal targeting strategies. Go to the Mercedes USA home page.
What targeting strategy does the company use? Explain.
There are three targeting strategies. The differentiated targeting strategy is one in
which the firm identifies, or even creates, market segments with different preferences for
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5) Go to the VALS 2 Web page and read the description of each population
segment; also, go to the PRIZM Web page. What segments would you ascribe to
Mercedes users based on VALS 2?
6) What are the six positioning strategies? What strategies does Mercedes USA use
for its U.S. market? Does Mercedes use different strategies for its international
market? (Go to other English-language Mercedes sites to answer this question.)
Attribute/benefit positioning focuses on product attributes and benefits,
differentiating each brand from the other company brands and from those of the
REVIEW QUESTIONS
True/False
1. False
Multiple Choice
1. D
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CASE 7-1
Prosperity Painting Equipment
1) Provide a competitive analysis for Prosperity Painting Equipment
Prosperity Painting Equipment is well position to take advantage of the Chinese market
growth: Its size and potential for growth are paralleling the potential growth of the
Chinese automobile industry and its greatest relative advantage is that it is located in
2) What are the bases for segmentation appropriate for Prosperity Painting
Equipment’s industry? Note: Refer to the automobile industry in your analysis.
The automobile industry is a very attractive market for Prosperity Paint Equipment. For
Prosperity Painting Equipment to be successful in this market, it must identify several
bases for segmentation on which it can found a target market or markets. The single
biggest factor of segmentation for Prosperity Painting Equipment is whether or not the
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3) Identify the different automobile-manufacturing segments based on the degree of
focus on the Chinese market, joint-venture partnership, and export orientation.
The automobile manufacturer’s degree of focus on the Chinese market and mode of
foreign operations create several segments. The Chery, is well positioned in the Chinese-
4) Present a targeting strategy that is appropriate for Prosperity Painting
Equipment.
Due to the preference of manufacturers to use local suppliers, Prosperity Painting
Equipment should focus on companies that manufacture in China. Further, as they are