1. The 3 key considerations when segmenting an international market would involve the market segmentation, targeting and positioning. Firstly, market segmentation involves a group of customers who share similar sets of needs and wants. Market segmentation is consistent with the marketing concept and customer orientation and enables the firm to focus their marketing resources. It also helps the firm to gain competitive advantages using their expertise in the customer base.
There are 4 main levels of segmentation, which include preference segments, niche, local, and lastly the individual. In preference segmentation, homogenous preferences exist when consumers want the same things, diffused preferences when consumers want different things and clustered preferences when natural segments from groups with shared preferences. In the case of HSBC, it would depend if customers are looking for the services offered by the bank or if they prefer other banks.
Secondly, in the niche segment, the customer group is more narrowly defined as seeking a mix of benefits. This is shown by HSBC’s offering of pet insurance which is relatively not well known but has proven popular with a growth rate of 125% a year.
The three major players in the soft drink market are PepsiCo, Inc., the Coca-Cola Company, and the Dr. Pepper Snapple Group (Change Lab Solutions, n.d.). All of them use effective market segmentation to target specific markets. Effective target marketing requires that marketers, segment the market, by identifying and profiling to find a distinct group of buyers who differ in their wants and needs ...
The third point, which is the local segment, involves marketing programs for local customer groups in trading areas, neighbourhoods, and even industrial stores. Grassroots marketing is also included under this category. Connecting this back with HSBC, which call themselves the “world’s local bank”, and also how the bank focuses on serving the local markets. Additionally, HSBC maintains their local presence and local knowledge of each area they set up in. They also blend their local knowledge with the worldwide operating platform.
Lastly, the individual segment is one where customerisation combines operationally driven mass customization with customized marketing such that consumers are encouraged to design the service according to their needs.
HSBC has also partnered to sponsor more than 250 cultural and sporting events with a special focus on helping the youth, growing education and embracing communities.
The next point would be segmenting consumer markets. This is done using geographic, demographic, psychographic, and behavioural methods.
Geographic refers to dividing the market into different geographical units namely, nations, states, region, cities or neighbourhoods. HSBC demonstrated their local knowledge with the marketing campaign where the wanted to prove to the New Yorkers that this London-based bank was one with local knowledge. They set up a contest for the cabbies and promised the winner a year’s job of driving for the company.
Next would be the demographic segmentation. In this segmentation, consumers are divided by age and life cycle, life stage, gender, income, generation and social class. In Malaysia, HSBC targeted the student segment with their “smart card” and no-frills credit cards. HSBC also set up “Premium Centers” for their high-value customers.
In the psychographic segmentation, it is believed that customers are inspired by ideals, achievement or self-expression. The groups with high resources are made up of the innovators, thinkers, achievers and the experiencers. On the other hand, the groups with lower resources are the believers, strives, makers and the survivours.
Marketing Concept and Marketing Segmentation in Practice: Haagen-DaazINTRODUCTION Haagen-Dazs were the pioneers in the market for creating distinctive and indulgent taste experiences by marketing to an untapped segment - the adult ice cream lovers. The Haagen-Dazs brand quickly developed a loyal following. Its early success was created by word of mouth and praise. Without the benefit of ...
Lastly, in behavioural segmentation, it is further divided into decision roles and behavioural. In the decision roles, this includes roles like the initiator, influencer, decider, buyer and the user. In the behavioural role, this includes the occasions, benefits, user status, usage rate, buyer-readiness, loyalty status, and also their attitudes to the service offered by HSBC.
In segmenting business markets, demographics, operating variable, purchasing approaches, situational factors and personal characteristics are to be taken into account. If HSBC were to provide their services to other businesses, these would be the appropriate factors to consider.
The second key consideration when segmenting an international market is target marketing. This involves accessing the market’s attractiveness and also selecting the market segments. For HSBC, having full market coverage is not possible hence, catering to the specific needs of customers by providing different options of credit cards and offering special outlets for their high-value customers.
The segmentation process consists of the need-based segmentation, segment identification, segment attractiveness, segment profitability, segment positioning, segment acid-test and the market mix strategy. It is important that they are measurable, substantial, accessible, differentiable and actionable in order to be effective.
The last key considerating when segmenting an international market is market positioning. This helps to develop the position for target segments as well as marketing mix for the segments. In the case of HSBC, wanting to be known as the “world’s local bank” has shown that they are committed to serving the local community with their positioning as a global-spanning institution. In order to choose a positioning strategy, they can first identidy the possible set of competitive advantages on which to build a position, followed by choosing the right competitive advantages and finally, selecting an overall positioning strategy. They must effectively communicater and deliver their position to the market.