International market segmentation: issues and perspectives

Abstract

With the increasing globalization of the business world, international segmentation becomes an ever more important concept in marketing. The globalization forces now at work push many companies to extend or reorganize their marketing strategies across borders and target international segments of consumers. It is the purpose of this paper to review the international market segmentation literature and to identify its future prospects and threats. We critically assess the current status of international market segmentation research and provide a systematic overview of 25 previous empirical studies with respect to the samples used for segmentation, segmentation bases and methods, geographic configuration of segments, and validation efforts. We discuss a number of conceptual and methodological issues that deserve more attention if international market segmentation is to fulfill its high potential. The conceptual issues include construct equivalence of the segmentation basis used, level of aggregation in the segmentation process, and choice of the segmentation basis. The methodological issues include measure equivalence and sample equivalence of the segmentation basis, segmentation methods employed, and whether national sample sizes should be proportional to population sizes. We describe a case study to illustrate and integrate the various issues and conclude with suggestions for future research to stimulate further advances in the area.