Should My Segmentation be Globabl or Localized?
A well done segmentation is often the most powerful tool in a research arsenal. It helps humanize a customer base, optimize marketing efforts, create a common lexicon across organizations, and prioritize targeting and growth opportunities.
As US based commerce and technology expands across new borders, it is paramount that the decision to develop a locally or globally driven segmentation approach is carefully explored.
The Case for Global:
From an efficiency perspective, the idea of a well-planned global segmentation is appealing. It creates one framework from which the entire organization can innovate, create, distribute, and market its offerings. It realizes the limitations an organization may have in developing unique offerings or messages to each region and focuses on the macro environment in which a company operates. This unified strategy can often create a strong brand identity which serves as a powerful equity among consumers. A global segmentation can work well for companies that operate in markets with homogeny across factors which drive strategic decisions such as accessibility, category/brand familiarity, consumer need states, usage occasions, and demographics.
The Case for Local:
A local segmentation takes into consideration the unique playing field of each region in which a company operates. It realizes that developed, developing, and underdeveloped markets may have different needs and customer bases, and it allows the segment solution room to incorporate these variations. A local segment solution has the benefit of being well attuned to regional needs and can show extreme sensitivity to market needs which often promotes strong brand loyalty among that market. It is most appropriate when the inputs into strategic decisions are driven by heterogeneous needs across markets or markets that are fundamentally different.
The Case for Glocal:
It is also important to remember that local and global approaches do not need to be mutually exclusive. The development of an overarching segmentation which has local variations can often create a dynamic approach which highlights commonalities across markets while recognizing their differences. The drawback to this "panacea" approach is often the investment required to bring it to fruition. It requires alignment from stakeholders, budget and the time required to guide the hybrid approach to completion.
Stay tuned for more market research tips coming in the following weeks!