International Market Segmentation Based on Consumer–Product Relations

Abstract

With increasing competition in the global marketplace, international segmentation has become an ever more important issue in developing, positioning, and selling products across national borders. The authors propose a methodology to identify cross-national market segments, based on means–end chain theory. The methodology offers the potential for integrating product development and communication strategies by linking product characteristics to consumer benefits and values. For that purpose, a model is developed that identifies relations between the consumer and the product at the segment level, which increases the actionability and responsiveness of the segments. The model accounts for different response tendencies, across and within countries, that commonly hamper identification of cross-national segments. A Monte Carlo study shows that the model performs well in recovering the parameters across a wide range of conditions. The segmentation model is applied to consumer data on yogurt collected in 11 countries of the European Union. Four international segments are identified and found to be related to consumer sociodemographics, consumption patterns, media consumption, and personality. The authors show that the model has high predictive validity and outperforms the standard clustering approaches traditionally employed in international segmentation.