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May 19, 2008 By Charles R. Taylor
Lifestyle Matters Everywhere Marketers Need to Stop Targeting Consumers by Country and Instead Target Based on Habits, Likes, Dislikes
Charles R. Taylor
Over the past several decades, it has become clear that around the world, consumers' habits, likes and dislikes are becoming much more similar. Sushi is becoming a common dinner option for many in Middle America, for example, and one can easily find Chinese and European students wearing Major League Baseball caps on their college campuses. But despite the trend toward a more global consumer, there has been little effective implementation of cross-market segmentation. Instead, marketers continue to demographically segment markets largely on a country-by-country basis, with very little focus on cross-market segmentation. While there has been periodic talk of a few marketers targeting the "global teen" or "global elite" segments, very little has been discussed on how to identify and target cross-national market segments. The time is now for grouping consumers together -- independently of their home country. Cross-market segmentation refers to grouping consumers across all markets in which a product is offered, independent of nationality. The growth of the global economy has initiated a market experiencing significant convergence in consumer tastes and preferences in several product categories. Marketers have been aware of this for some time now with respect to luxury goods. As observed by Radha Chadha and Paul Husband in their book, "The Cult of the Luxury Brand," more than half of the world's $80 billion (annual) market comes from Asian consumers. Consumers around the world seek out brands such as Gucci, Ferragamo, Coach, Chanel, Armani, Burberry and Ralph Lauren. Remarkably, more than 90% of women in their 20s in Tokyo own a Louis Vuitton. Given the striking evidence of a global market particularly in the luxury industry, what do marketers and advertisers selling these types of goods need to do to be competitive? Transnational preferences The results of recent studies I have conducted -- in conjunction with Dr. Eunju Ko of Yonsei University in Seoul, among others -- indicate that targeting consumers by lifestyle will provide better results than targeting by country of origin. In our recently published article in International Marketing Review, U.S., Korean and European female consumers' reactions to advertising campaigns run by Chanel in the Asian, European and American editions of Vogue magazine were analyzed. In assessing reactions to the ad campaign, findings proved lifestyle to be a more important segmentation criterion than the consumers' country of origin. In addition to eliciting consumer reactions to the advertisements, the study asked consumers questions about their
Villanova School of Business 2008 Media Report