Segmenting Business and International Markets: Requirements and Strategies

Segmenting Business Markets

Business buyers can be segmented geographically, demographically or by benefits sought, user status, usage rate and loyal status. Almost every company serves at least some business markets. (Ex. Starbucks has developed marketing programs for coffees and for food).

Segmenting International Markets

Few companies have the resources to operate in all, or even most of the countries of the world. Some large companies, sell products in more than 200 countries, but most international firms focus on a smaller set of countries. Different countries, can vary greatly in their economic, cultural and political make up. Companies can segment international markets using one or a combination of several variables. They can segment by:

• Geographic location: It assumes that nations close to another will have many common traits and behaviours, but with exceptions: Cuba, USA.
• Economic factors: countries might be grouped by population income levels.
• Political and legal factors: Type and stability of the government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy.
• Cultural factors: Grouping markets according to common languages, religions…

Segmenting international markets is not necessary to be reached by previous criteria, the Intermarket or Cross-Market, forms segments of customers who have similar needs and buying behaviours even though they are located in different countries.

Requirements for Effective Segmentation

To be useful, market segments must be:

• Measurable: The size, purchasing power, and profiles of the segments can be measured.
• Accessible: Effectively reached and served.
• Substantial: Large or profitable enough to serve. A segment should be the largest possible homogeneous group.
• Differentiable: Conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and women respond similarly they don’t constitute different segments.
• Actionable: Designed for attracting and serving the segments.