Linking global market segmentation decisions with strategic positioning options

Abstract

PurposeThe purpose of this paper is to examine empirically the relationship between positioning strategies and bases of segmentation in international markets.Design/methodology/approachA 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.FindingsThis 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/implicationsThe 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 implicationsThis 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/valueThe proposed global strategic segmentation and positioning matrix is a new tool that guides managers to position their brands effectively in world markets.