“One of the most important developments in the history of marketing has been the realization that many overall markets are up of significantly different groups or sub-makets. The people or organizations comprising each of these groups are often sufficiently similar as to be treated as a separate market in terms of product offering, communication strategy pricing policy, distribution and other marketing mix elements”(Lancaster, et al,2002). The growth of international market segments has resulted in firms producing goods and services that are more closely related to the needs of different sub-groups. Instead of treating all customers as a homogenous, firms need to identify sub-groups of customers whose needs can be more effectively meet.
According to Levitt (1974)”the marketer should stop thinking of customers as a part of same massively homogenous market. He/she must start thinking of them as numerous small islands of distinctiveness. Each of which requires its own unique strategies in product policy, in promotional strategy, in pricing, in distribution methods and in direct selling techniques
Generally international market parts have geographical separation, which are opportune and also productive segmentation criteria depending on homogeneity. However, social variables or lifestyles might also be significant. In fact, firms have complexity deciding on whether to goal international ethnic part, a nationalized part or a cross border local part. Usunier suggest (Usunier, Lee, 2009) “process that begins with a review of the cultural literature to gather information that identifies and details cultural grouping before segmenting market.” The matter of local, national segmentation, which is mostly significant in large nations such as the United States and economic groups like the European Union (EU).
“Several nationalities can speak the same language or have similar race and heritage, but it does not follow that similarities exist in other respect.” (Graham, Cateora, 2002).As the case of Spanish-speaking group, for instance, countries such as Mexico, Spain and Chile would result in a group of extremely different markets. “Thus, although language must be considered in assessing country markets, it can not be used by itself as a basis for evaluating their attractiveness.” (Muhlbacher, Dahringer, Leihs,2006).South America has mostly been illustrated as a Spanish speaking, and ethnically Hispanic part of the world. “More than 450 different languages are spoken in the region. Nowhere is this linguistic and cultural complexity more true then the Andean sub-region, from Venezuela to Chile, which has more than 200 Amerindian linguistic groups. Furthermore, more of the indigenous languages are being accepted and used as languages of education, having officially recognized alphabets and writing system.”(Burton,2009)
According to Schiffman & Kanuk(2004) subcultural analysis helps the international marketer to focus on natural market segments.While processing this analysis the marketer should decide whether the beliefs,values and customs shared by members of a specific subgroup make them desirable candidates for special marketing attention.”For example,the non hispanic (white) population of the US,which made up to 71% of Americans in the year 2000 is projected to represent about 53% of the US population by the year 2050”.Moreover “the state of California in 1999 reported that the state's multicultural or combined minority population became the state's majority population.
Since Hofstede`s original study there have been many studies covering a multitude of companies and countries over a large number of time periods. There are, however, three non-trivial problems connected to the Hofstede approach:
1. Cultural clusters are not homogenous over all parts of a country as there can be significantly different subcultural groups within a country.
2. Some subcultural groups cross national boundaries.
3. The definitions of cultural dimensions used in Hofstede-type approaches reflect a particular sociological and anthropological view of the world. (Hofstede 1980)
Religious subculture is an another important example. There are more than200 different organized religious subcultures in the world. The members of all these religious groups at times are likely to make purchase decisions that are influenced by their religious identity. The widely known religious are Christian, Muslim and catholic.
According to US census data, one in ten Americans is foreign born, for these Americans have a strong sense of identification and pride in culture of their ancestors. The number of Hispanic Americans had grown by more than 60% during the 1990s.These 35.3 million Americans represent about 12% of the US population and approximately $452 billion puchasin power in 2001.35% of the Hispanics are 18 years-old or younger.This subcultural group can be considered as a single market based on common language and culture.
The US census bureau found that 13%of the US population is African-American with a purchasing power estimated to be $573 billion.Asian-American community's purchasing power experienced 125% increase to $254 billion from 1990 to 2000.This tends to be loyal customers.It is very important to keep in mind that Asian-Americans comes from diverse cultural backgrounds.Although Asian-Americans have many similarities,international marketer should avoid thinking Asian-American as a single market that is to say they are not homogenous.For instance,Vietnamese Americans follow the traditional model in which man makes the decision for large purchases,whereas Chinese Americans husband and wife are more likely to share in decision making process.
To get a product or service to the right international market,firstly a marketer should segment the market then target a single segment and position within the segment. “Given the heterogeneity of most markets,segmentation in both domestic and international markets entails breaking down the market for a particular product or service into segments of customers which differ in terms of their response to marketing strategies”(Wind &Douglas 1972). By segmenting market,the managers can manage its marketing policies to the needs of specific segment.This results in greater sales and profitability,consumer satisfaction,competitive positions for existing brands.
“In domestic markets consumer characteristics such as age,sex,social class,personality,brand loyality, product usage and attitudes toward the given brand are often used as bases for segmentation.International market on the other hand a further dimension has to be considered namely that of country characteristics”(Wind & Douglas 1972).Each country has specific environmental conditions,cultural and social patterns,economical power,technology etc…They all affect the buying patterns.”Culture will be an adequate basis of segmentation only if the difference in the response of two cultures (the variance between segments) will be greater than the differences in response among members of a given culture (variance within segments)”(Wind 1967).
The degree of intra-country homogeneity varies from one country to another. In case of Japan, the society as a whole is remarkably homogeneous. Although some local and ethnic diversities as well as differences among income classes are to be found, the differentials are not pronoced . there are some reasons why Japan is comparatively homogeneous country. It is small country in terms of area , making its populace geographically concentrated. National arrogance and management philosophy also help to falsify a high degree of unity. As a result , people work together pleasantly to attain common aims. The need to work hard together was fostered originally by the need to mend the economy after World War II, and the lessons learned from this experience have not been forgotten.
Canada, in contrast, is a large country in terms of geography, its population, though much smaller than that of Japan, is much more geographically dispersed, and regional differences exist among the provinces, each having its own unique characteristics. Furthermore, ethnic differences are clearly visible to anyone who travels across Canada. (Onkvisit, Shaw 2004)
Cultures set down suitable beliefs, traditions, customs, and values that are then socially shared. though some cultural manners are worldwide, many others are unique and vary from country to country. And in spite of national norms , cultural differences as a law even exist within each country.
While there may be a tendency to misunderstand different cultures and subcultures, this temptation should be resisted. Being the force that it is, the culture of one country should not be judged as superior to the culture of another one. Each culture has its own particular values and social practices, and the international marketer will be much further ahead if marketer tries to walk in the other person`s shoes in order to understand more clearly that person`s concerns and ideas
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