Linking global market segmentation decisions

with strategic positioning options

Salah S. Hassan
School of Business, The George Washington University, Washington, DC, USA, and
Stephen H. Craft
Birmingham-Southern College, Birmingham, Alabama, USA

Abstract
Purpose – The purpose of this paper is to examine empirically the relationship between positioning strategies and bases of segmentation in
international markets.
Design/methodology/approach – A principal component analysis was conducted to determine the major macro- as well as micro-bases of
segmentation that are linked with strategic positioning decision options. Further, a regression analysis was used to examine the effect of each of the
segmentation bases on the different strategic positioning options used by segmentation managers.
Findings – This study suggests the combined use of both macro- and micro-bases of segmentation in order to leverage similar strategic positioning
across global markets. However, micro-bases of segmentation are suggested for firms seeking differential positioning strategies.
Research limitations/implications – The conceptual and empirical findings of this study 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 linking global segmentation with
strategic positioning decisions. Future research should focus on the use of hybrid segmentation strategies; its logical design; implementation issues;
and its evaluation mechanism.
Practical implications – This study provides specific empirical evidence of the relationship between strategic use of segmentation bases and strategic
positioning. An effective use of the proposed framework will have various strategic marketing implications for firms; including cost efficiencies,
opportunities to transfer products globally, expansion opportunities of current operation, and development of more effective brand management
decisions.
Originality/value – The proposed global strategic segmentation and positioning matrix is a new tool that guides managers to position their brands
effectively in world markets.

Keywords International marketing, Market segmentation, Brand management, Product positioning, Strategic marketing, Globalization

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this article.
Can global market segmentation decisions be based solely on
geopolitical and economic factors or can global segmentation
decisions be based 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 necessary addition to geopolitical and economic
segmentation in international markets (Aulakh and Kotabe,
1993; Helsen et al., 1993; Nachum, 1994; Luqmani et al.,
1994). Complicating the segmentation issues in global
markets is the need for companies to make strategic
positioning decisions in an increasingly competitive and
transparent marketplace in order to leverage brand equity and
The Emerald Research Register for this journal is available at
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The current issue and full text archive of this journal is available at
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Journal of Consumer Marketing
22/2 (2005) 81– 89
q Emerald Group Publishing Limited [ISSN 0736-3761]
[DOI 10.1108/07363760510589244]
achieve economies of scale. In short, the strategic necessity
does not stop at the selection of desirable market segments,
but also includes the need to position brands effectively
relative to the market segment. Toward that end, the purpose
of this paper is to examine empirically the relationship
between positioning strategies and bases of segmentation in
international markets.
The debate over this issue has intrigued marketers since
Levitt (1983) introduced the concept of “segment
simultaneity” in his thought-provoking article describing the
globalization of markets. He described this phenomenon as
the “proletarianization” of global markets where everyone
everywhere wants to have world brands. What he described,
in fact, was the existence of similar market segments and
consumers in different countries for whom low price and high
quality would be common criteria for making buying
decisions.
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 the USA,
for example, one should hardly expect a single universal
marketing strategy to be effective on a worldwide basis.
However, if 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. The existence of these intra-market segments might
create important opportunities and challenges for firms

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 Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
seeking to establish brand positions in multiple markets – an
increasingly common strategic goal. This paper provides an
empirical study of the linkages between segmentation bases
and positioning strategy decision options. The key research
issues addressed here are:
. Would a combined use of both macro- as well as micro-
segmentation bases leverage similar strategic positioning
across global markets?
.
Would limiting the use of segmentation bases to the micro
level be linked to localized, strategic brand positions?
Bases for global market segmentation
Most early segmentation efforts were based on macro
considerations that include factors such as economic
(Kotler, 1986); cultural (Whitlock, 1987); geographic
(Daniels, 1987) and technological (Huszagh et al., 1986).
Current research found that these pre-determined country
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.
World markets have evolved to imply global segments
defined based on market variables other than national
boundaries. A hybrid approach that considers both country
bases as well as buyer response bases is found to be more
realistic (Hassan et al., 2003). 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. There are sizable world markets where consumer
segments are converging across cultural and national
boundaries. The challenge in leveraging brand equity is to
identify and profile these segments on an inter-market basis
and to develop strategies to reach them with globalized
brands. The existence of inter-market segments is a key
condition for the success of global marketing programs.
Hybrid segmentation strategies were developed as frameworks
to evaluate markets on a worldwide basis and to identify
indicators/attributes of brands that are suitable to the
implementation of global marketing programs (Helsen et al.,
1993; Luqmani et al., 1994; Kale and Sudharshan, 1987;
Kreutzer, 1988; Hassan and Katsanis, 1991).
Market segmentation strategy must be examined to
determine the best bases for global brand positioning.
Global consumer markets are best understood as groups of
buyers who share the need and desire for a product and the
ability to pay for it, not just those who share a national border.
Buyers in a segment seek similar benefits from, and exhibit
similar behavior in buying a product. Although these
consumers may live in different areas of the world and come
from very different backgrounds and value systems, they have
commonalties in association with a given global brand. Many
of these similarities are associated with the brand image and
the lifestyle it projects (Luqmani et al., 1994).
The emergence of inter-market segments means that global
firms must integrate macro-level bases with micro-level bases
in their segmentation (Hassan et al., 2003). The appeal of
similar brand benefits, similar patterns of purchase and
consumption behavior, and specific shared values should be
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Journal of Consumer Marketing
Volume 22 · Number 2 · 2005 · 81 –89
the focus of strategic response to global segments that
transcend the geopolitical boundaries of nations. 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.
Historically, segmentation researchers have segmented the
market based on objective presupposed attributes (Wind,
1978). This a priori segmentation method selects a pre-
recognized battery of descriptive characteristics for each
country. Contemporary segmentation research calls for a
micro-based measurement technique that focuses on buyer
preferences. This post hoc method utilizes a battery of
variables that seek to differentiate buyer preferences (Green
and Krieger, 1991). This hybrid model segments the world
markets based on:
.
similar purchase patterns exhibited in multiple countries;
and
.
allowing countries to belong to different clusters.
Effective segmentation methods ultimately must integrate
country-based factors with buyer-based variables.
Figure 1 illustrates a framework of the integrated approach
to segment design (Hassan et al., 2003). It is suggested that an
integrated approach will be a more realistic response to forces
of market globalization such as the convergence of consumer
needs (Levitt, 1983). Therefore, it is proposed that effective
global segmentation will be based on a hybrid bases that
includes relevant macro-level factors (i.e. geopolitical and
economic) as well as appropriate micro-level variables (i.e.
lifestyle and behavioral). Major facets of this approach
include:
.
integrating country variables with behavior patterns;
. not assuming total homogeneity of the country segment;
.
acknowledging the existence of a degree of similarity
across national boundaries;
Figure 1 A framework for global segmentation bases and strategic
positioning
 Linking global market segmentation decisions Journal of Consumer Marketing
Salah S. Hassan and Stephen H. Craft Volume 22 · Number 2 · 2005 · 81 –89

.
considering the bases of segmentation to be dynamic in Figure 2 Global strategic segmentation and positioning matrix
nature; and
.
defining market globalization as a matter of degree.
The integrated approach assumes that treating each country
as a totally homogeneous market is not realistic (Jain, 1989).
Also, it will be unrealistic to assume the existence of a single
world segment that homogeneously responds to standardized
marketing programs. 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 equally to macro-bases
(i.e. country factors), micro-bases (i.e. behavioral
variables), and any combinations of interactions; and
.
any degree of preference heterogeneity can be addressed
by introducing adaptive variations in the marketing
program.

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 marketing
strategies? What portfolio of global positioning strategies can
be employed?
Segmentation-based strategic positioning
A review of contemporary research on international
segmentation reveals a considerable shortage of empirical
studies that examine the link between segmentation and
strategic positioning. Yet, many segmentation researchers
have stressed the critical importance of the relationship
between segmentation and positioning decisions (Douglas
and Crai, 1995; Wind, 1986). Segmentation and positioning
decisions are central to the development of global marketing
strategy. 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 Crai, 1995; Ries and Trout, 1986;
Ries, 1996). In an international marketing context, the
literature is consistent with the need to base positioning
decisions on a broader scope that provides an understanding
of differences and similarities from one market to another.
Therefore, positioning is described as strategy to identify and
direct marketing resources among intended market segments.
Under this strategy that we term “segmentation-based
strategic positioning”, the firm would cause the
development of homogeneous responses for demand that
differs from responses received from other market segments.
The strategic positioning options can be illustrated best in a
two-dimensional representation of similarities and differences
among market segments to be addressed as bases for
discussion of this research agenda. Figure 2 displays the
interaction of market segmentation and strategic positioning
options in the two-by-two 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. The second dimension in Figure 2
represents “same” or “different” strategic positioning
options, meaning that the firm may seek to achieve similar or
differentiated image in a given marketplace.
Cell 1 offers the “focused strategy” option, that 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 uniformed
strategy helped the firm to leverage its image internationally
among consumers with similar attitudes and usage patterns
(Douglas and Crai, 1995). In effect, the company developed a
uniform image worldwide within this focused international
segment.
Cell 2 represents an “optimization strategy”, where the firm
develops a differentiated brand position to reach similar
segments across the world. For example, Miele, the leading
German appliance manufacturer that is known throughout
Europe for its high-end home appliances, appeals differently
to similar market segments globally. Miele targets the high-
end segment of the Euro-consumer market that values
durability. On the other hand, in entering the American
market, Miele realized that American consumers have
different appliance expectations, where 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. Thus, in appealing to the
high-end segment of the American appliance market, Miele
optimizes the brand’s upscale image differently by appealing
to the needs of worry-free buyers. In this case they are
marketing identical products with different positioning
appeals to enhance global competitive advantage through
supply-side economies. Miele would have faced great
difficulty in the American market unless it modified its
brand image in targeting the upscale market in a way that is
consistent with its global marketing strategy. Acknowledging
the cultural and behavioral differences of European and
American customers was the only way for Miele to develop an
effective global marketing program.

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Cell 3 represents similar strategic positioning across International Research. The contact names were selected at
different world segments or “geo-centric strategy”. Many random from a listing of over 150,000 managers who are
European firms choose different positioning strategies for listed in the segmentation section of the Institute’s database.
products marketed to US consumers to leverage global brand Respondents received a three-step integrative mailing
leadership or unique image. BMW and Mercedes Benz beginning with a warning letter asking for participation, a
position their products as high quality, expensive, prestige letter accompanying the questionnaire, and a postcard
brands. However, prestige image may not always be what reminder. Respondents were provided with a postage-paid
consumers want. Gillette adopted this brand leveraging business reply envelope. As an incentive, a charitable
strategy (cell 3) that provided a worldwide appeal based on contribution of one dollar was made to the respondent’s
stimulating primary market demand for shaving choice of three charitable organizations for each completion.
through providing a host of products for different segments. In addition, the respondents could request a summary report
This geo-centric strategy of Gillette has been attributed to of the results of the data collection. The study resulted in 112
enhancing the company’s performance in dominating the completions for a response rate of 10.2 percent.
market worldwide. Also, other companies like Coca-Cola,
Kodak and Nike provide a portfolio of products for different Key measures
segments worldwide. The study captured the degree of use of macro country level
Cell 4 is the “localization” option and probably exists only of segment bases. The questionnaire utilized 14 macro-level
as an entry strategy rather than a market expansion strategy segmentation bases from the literature (see list in Table I). The
(Douglas and Crai, 1995). New market entry or investment in respondents were asked to rate each factor on a seven-point
different products marketed to different segments would scale with 1 representing “never used” and 7 representing
probably be the only justification for such a strategy. For “always used”. The study (n ¼ 107) established the scale as
example, when Nestlé globalized its Nescafé coffee brand, having high reliability with a Cronbach’s alpha score of
they recognized that “what coffee means to a culture, when it 0.9040.
is consumed and how often it is consumed, varies throughout The questionnaire utilized 22 micro behavioral level
different cultures”. Distributed almost everywhere, coffee segmentation bases drawn from the literature (see list in
plays different roles around the world. Coffee cultures such as
the USA and Germany did not automatically accept instant
coffee. In some countries, Nescafé marketing efforts Table I Factor loadings of macro-level segment bases – rotated
concentrated on overcoming the mistaken belief that instant component matrix
coffee is made from synthetic materials instead of real coffee. Macro- Macro-cultural Geo-
Nescafé’s competitive success against European leaders, such Questionnaire items economic factors demographics
as Jacobs and Tschibo, is based on understanding how aroma,
warmth, and the ritual of coffee drinking touch deeply-held Country level of
consumer values. Conscious effort to relate Nescafé economic development 0.848
“coffeeness” to different types of coffee drinkers and usage Country legal/
occasions allowed consumers to determine the brand’s regulatory environment 0.789
meaning and appeal in many regions around the globe. Level of
Firms that chose to position brands differently in industrialization 0.777
accordance with local market realities may represent future Form of government 0.759
challenges to the organization. As the brand matures in the Political stability 0.755
market, the organization finds itself in need to optimize the Country level of
success achieved in one market to reach more global technological
consumers. In this case, to target similar market segments innovation 0.730
elsewhere, creating a broader market position in other Country per-capita
markets requires more research and development. For
income 0.651
Nestlé to build a successful brand in the US market meant
Communication
focusing on loyalty as a primary segmentation base. Instant
infrastructure 0.618
coffee by Nestlé leveraged its success in non-coffee consuming
Market-orientation of
cultures to appeal to attitude and usage patterns of other
economy 0.597
world cultures.
As previously stated, there is a clear connection between Type of dominant
brand positioning and segmentation in international markets. religion 0.811
In order to define better the parameters of the relationship, an Language of country 0.718
empirical study was conducted to examine the interaction of Cultural identity 0.576
brand positioning and segmentation decisions in international Geographic location 0.775
markets. Population
demographics 0.714
Research study Reliability measure
The current research study consisted of a mail survey targeted (alpha) 0.9148 0.6621 0.4678
to high-level managers involved in segmentation decisions Notes: Extraction method: principal component analysis. Rotation method:
with a focus on the international arena. A structured Varimax with Kaiser Normalization. A rotation converged in six iterations.
questionnaire was mailed to 1,097 segmentation decision Loadings below 0.46 have been suppressed
makers drawn from a list provided by the Institute for

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Table II). The respondents were asked to rate each within- The next step in the analysis was to determine the role of the
country bases on a seven-point scale with 1 representing segment bases in the product/segment positioning for study
“never used” and 7 representing “always used”. The study organizations. Towards that end, four regression models were
(n ¼ 98) established the scale as having high reliability with a constructed utilizing the seven segmentation bases derived
Cronbach alpha score of 0.9217. In addition, the study from the factor analysis as the independent variables and each
captured the utilization of the four brand positioning strategic positioning option presented in Figure 2 as
strategies corresponding to the matrix in Figure 2. The dependent variables. The results of the regression analyses
respondents were asked to rate each brand positioning are presented in Table III.
strategy on a seven-point scale with 1 representing “never There is a clear relationship between the choice of
used” and 7 representing “always used”. positioning strategy and the choice of bases on which to
form market segments. Figure 3 overlays the statistically
Analyses significant segment bases (Table III) within the appropriate
The first step in the data analysis was conducted via principal cells based on the four strategic positioning options.
components analysis – a form of factor analysis. The resulting Comparing the brand positioning strategy with segment
factors were rotated via Varimax rotation and Kaiser bases yields some important insights. For example, in cells 1
Normalization for the purpose of aiding analysis. As a and 3 that represent the two global segmentation approaches
condition of running the factor analysis, coefficient alpha was with the objective of achieving similar strategic market
used to assure internal reliability. positions, hybrid segmentation bases that include
The current research identified three underlying macro- macroeconomics, geo-demographics, micro-demographics,
level segmentation bases including macroeconomics, geo- and attitude and usage were all significant. In effect, the
demographics, and macro-cultural factors. In addition, there firms that are aiming to achieve unified strategic positions in
appear to be four underlying micro-level segment bases world markets are using both macro-level segmentation bases
including demographics, attitude and usage, micro-culture, as well as micro-level segmentation bases. Therefore, firms
and brand loyalty. As will be discussed, the results of the with similar brand positioning are using both macro-country
current research holds important implications for segmentation bases as well as behavioral bases. Across cells 2
understanding segmentation in the global market and for and 4, which represent different strategic positions, micro-
the positioning of products relative to defined market level bases of segmentation were the only significant factors.
segments. The data suggests that a firm’s decision regarding the types of
bases to be utilized in segmentation may in fact indicate the
Table II Factor loadings of micro-level segment bases – rotated positioning strategy that this particular firm is undertaking.
component matrix Consequently, firms must evaluate the types of segmentation
Attitude bases utilized in order to have a better emphasis on the
Micro- and Micro- Brand intended strategic market position.
Questionnaire items demographics usage culture loyalty
Age 0.850 Discussion
Income 0.815
Global market segmentation can be viewed as the process of
Gender 0.781 identifying segments whether they are country groups or
Education 0.768 individual buyer groups, of potential customers with
Family size 0.747 homogeneous attributes who are likely to exhibit similar
Lifestyle 0.708 buying behavior patterns. There are four different approaches
Occupation 0.651 for global segmentation:
Buyer needs 0.877 (1) Identifying clusters of countries that demand similar
Buyer wants 0.867 products (that is, regional selling giving more weight to
Segment size 0.676 geopolitical and economic segmentation factors).
Product benefits 0.674 (2) Targeting different segments in different countries with
Attitude toward product 0.631 the same product (that is, differentiated selling
Religion 0.838 emphasizing behavioral and lifestyle segmentation
Ethnicity 0.771 factors) (Takeuchi and Porter, 1986).
Regional identity 0.721 (3) Identifying segments present in many or most countries
Urbanization of dwellings 0.583 (that is, universal selling striking a hybrid balance
Language 0.528 between various macro and micro segmentation factors).
Social class 0.472 (4) Focusing on similar segments that demand similar
Degree of existing loyalty 0.843 products (that is, niche selling with a focus on cross-
Degree of potential loyalty 0.823 national similarities in need for unique product attributes
Frequency of product use 0.651 and usage patterns).
Personality 0.467 Of the four segmentation approaches, universal segmentation
Reliability measure (alpha) 0.8646 0.7470 0.3673 0.8233 and global niching are argued to be the most innovative and
Notes: Extraction method: principal component analysis. Rotation method: also the most likely to give the firm a significant competitive
Varimax with Kaiser Normalization. Rotation converged in seven iterations. advantage, because brand image can be leveraged across
Loadings below 0.46 have been suppressed markets (that is, globally transcending distinctive
competency). This gives the brand a reputation and

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Table III Regression analysis of strategic positioning options and segmentation bases
Dependent variable
Independent variables Similar positioning to Similar positioning to Different positioning to Different positioning to
(standardized beta similar segments (focused different segments similar segments different segments
coefficient) strategy) (geo-centric strategy) (optimization strategy) (localization 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 Global strategic segmentation and positioning matrix

coherence in image and positioning which is internationally
reinforced. The other two diverse segmentation approaches
have the merit of taking into consideration differences among
countries 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 segmentation strategies could exhibit disadvantages of
either high cost of differentiation or limited economies of scale
of focusing along with running the risk of vulnerability to
drastic local market changes. Therefore, the hybrid approach
that integrates country level and behavioral characteristics is
viewed as the preferred segmentation strategy.
The universal (hybrid) segmentation as a global market
strategy looks for similarities across world markets. The
traditional segmentation that emphasizes differentiation
strategies is multi-domestic (i.e. they tend to minimize
similarities and highlight differences). The universal or hybrid
approach to global market segmentation actively seeks
homogeneity in brand, image, marketing tools and
advertising message, while the multi-domestic 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 reported study has clear managerial implications for
firms involved in marketing outside of their home country.
First, the literature reviewed and the current study are
consistent in the assessment that buyer needs are converging
in key markets. This represents both a challenge and

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Salah S. Hassan and Stephen H. Craft
opportunity for marketing organizations. One means to
address this convergence is to target cross-national groups
of buyers who share important characteristics relative to the
firms’ products and brands. The current study clearly
suggests to managers that these “inter-market” segments
might best be empirically identified and targeted through the
integration of macro and micro segmentation bases as
demonstrated through the framework. The current study
also provides specific empirical evidence of a relationship
between the strategic use of segmentation and strategic
positioning.
Many managers involved in segmentation use a single set of
segmentation basis when making segmentation decisions. The
current study clearly demonstrates that there is every reason
to not limit segmentation design to a single type of variable
and to integrate multidimensional criteria such as in the
framework presented. 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 inter-market
segmentation in conjunction with an appropriate corollary
product/brand positioning may have clear positive economic
implications to the firm. The economic implications of
effective inter-market segmentation to managers in marketing
organizations 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 élite. 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 linking global
market segmentation with strategic positioning decisions.
Consequently, four main research frontiers can be
recommended based on this study to extend the boundaries
of the area of global market segmentation and address the
concerns of marketing 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 their
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
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Volume 22 · Number 2 · 2005 · 81 –89
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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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.
Segmentation should help drive product positioning in
global markets
We all recognize that today’s markets are no longer limited to
individual countries or regions. Despite the best efforts of
protectionist governments, globalization represents reality for
most of us. Our competitor is as likely to be in Singapore or
Sweden as they are to be in the next town. However,
marketing strategy has not kept pace with the rapid expansion
of global business, international trade and new technologies.
We remain – to a large part – wedded to approaches
developed in the slower, quieter times past.
Hassan and Craft challenge this thinking by examining the
strategic realities of global marketing. We are not right to treat
individual markets as discrete cells in a marketing strategy;
nor is it correct to adopt a same size fits all approach. Global
marketing is both subtle and complex.
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Why treat foreign places differently from home?
In our home market – the place we understand best and
where our product, communications and distribution have
been honed – the “market” is only ever part of the whole
consumer universe. Only the most arrogant of marketers
assumes that every consumer is a potential buyer – most of us
recognize and act on the different segments that make up the
total market. Market segmentation is a crucial tool for the
development of strategy.
In foreign parts we seem to forget what we have learned at
home and segment by geography, levels of economic
development and assumptions about local markets. This is
wrong since international markets are just as heterogeneous as
our home market, meaning that our product’s appeal still
reaches to only parts of the market. As a result we have
differentiated strategies at home and undifferentiated
strategies in the international market. If we are to take
advantage of globalization’s benefits, we have to change the
approach. As Hassan and Craft point out “. . . behavioral and
lifestyle segmentation may be necessary addition to
geopolitical and economic segmentation in international
markets”.
Having established the need to segment in international
marketing just as we have always done at home, we need to
recognize that our marketing ceases to be targeted at an
individual segment in a particular local market but at a set of
consumers found in all the different local markets. This is the
essence of globalization – the coming together of consumer
tastes, preferences and behaviors. However, we should beware
of the “one size fits all” approach.
International marketing requires a hybrid strategy
Hassan and Craft identify that “. . . the hybrid approach that
integrates country level and behavioral characteristics is
viewed as the preferred segmentation strategy”. We do not
replace local variations with a set of identified global segments
and then target those segments without reference to country
level variations. This assumes too much international
homogeneity – as our authors point out, a shared interest in
high-quality home appliances does not mean a shared set of
reasons for a given purchase decision.
What we see here is the evolution of a set of strategies
dependent on the degree to which the main drivers of
consumer decision-making coincide. Hassan and Craft set
this out in a 2 £ 2 grid representing four generic strategies –
focused, geo-centric, optimized and localized. Each, taken in
isolation, is valid for a given set of circumstances. The
marketer’s task is to identify the specific circumstances for a
particular brand. Thus the positioning of the brand becomes a
vital element that has to link with the identification of target
market segments.
Which comes first – positioning or segmentation?
In many ways this is a “chicken and egg” question. For most
products there are target segments inherent in the product’s
characteristics. These may be simple socio-demographic
considerations such as ability to afford the product or they
could relate to specific lifestyle choices or preferences.
However, Hassan and Craft argue that strategic positioning
decisions need to be based on an understanding of market
segmentation.
Defining this approach to making marketing strategy
choices becomes simpler when we apply the four generic
strategies. We can focus on a given set of “lifestyle values” and
 Linking global market segmentation decisions
Salah S. Hassan and Stephen H. Craft
design generic strategies with only minor local variations (the
Body Shop’s concentration on environmental issues and
opposition to animal testing is used by the authors to illustrate
this approach). Our strategy can identify a given socio-
demographic group such as up-scale homemakers and vary
the strategy to match buying behavior (an optimizing
approach). Our strategy can use the same positioning to
reach differing market segments in different markets chiefly
through a multitude of product variations (a geo-centric
approach). Or we can design specific strategies for specific
markets that reflect very different usage and attitudes (a
localized approach).
Regardless of the right choice for our brand, each of these
strategies connects decisions about product positioning with
decisions about which market segments to target. Our
decisions about positioning affect the choices we make
about market segmentation and segmentation decisions
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Volume 22 · Number 2 · 2005 · 81 –89
influence the way in which we position the brand. And,
although the simplicity of Hassan and Craft’s model is
appealing, the result is a considerable number of choices.
Despite this apparent complexity, most marketers start with
a given product positioning and segmentation approach in
their home market. The simplest way to extend into
international markets for many is to follow inter-market
segments – groups repeated across national and regional
boundaries that have similar lifestyles and/or buying behavior.
While consideration of local sensitivities is still needed, these
segments provide the roads along which a brand travels from
local to global markets. It is vital that we understand them and
appreciate how they can be used to extend product reach.
(A précis of the article “Linking global market segmentation
decisions with strategic positioning options”. Supplied by
Marketing Consultants for Emerald.)