Market segmentation

Market segmentation refers to the various segments of the market based on the common characteristics of the customers. Thus a market segment consists of a larger identifiable group within a market.

It is the analytical process of identifying the groups of buyers on the basis of differences in their desires or requirements. Market segmentation is bending supply to the will of demand.

In order to divide the total market into appropriate segments, an entrepreneur must consider segmentation variables, which are parameters that identify the particular dimensions that distinguish one form of market behavior from another.

For most products, the total potential market is too diverse or heterogeneous to be treated as a single market. Organizations tailor their offerings to fit the carefully defined needs of specific groups of customers by dividing the public at large into specific sub-markets.

Once the market segment is clearly identified, it becomes easier for an organization to make a product to appear different from those of its competitors.

For companies trading in numerous countries around the world, there is clearly an enormous attraction in finding a single global segmentation model that can be applied to every country.

The experience of ‘globalization’ has highlighted for many of these companies that they have to ‘act local’ in order to succeed in their market.

The basic goal of market segmentation is to determine the target market, which consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Market segmentation

Product and Market Development Across Cultures

Product and Market Development Across Cultures
Although some companies view themselves as pure marketing organizations that only focus on branding, the basis of existence of a global company is its product or services and the ability to develop or adapt product concepts for different markets. The most important decisi0n of a company is which products or product variations to market to which markets, therefore, marketers would work in close contact with research and development.

Many products sell better in some markets than in others, the cause of such variations can be wealth or culture. If the cause of low penetration of a specific product in a specific country is culturally defined, products should be adapted to better fit that culture.

New product market combination must be developed when products enter new markets of different configurations. Life insurance, for example, is a product for individualistic cultures; entering a market with a collectivistic culture demands different products. An example could be offering parent related pension insurance to the Singapore yuppies whose new mobile lifestyles make it more difficult to fulfill their obligations to look after their parents, a strong element of their collectivistic and Confusion values.

Well defined cultural differences can help to develop more appropriate products or product adaptations for different cultures. If certain do-it-yourself products do not sell as well in strong as in weak uncertainty avoidance cultures, adapt the product to the need for competence. Add instructions, offer training, whatever helps the market to feel more competent. Similarly, electronic appliances such as remote control devices should be easy to use for weak uncertainty avoidance cultures, but may have complicated details for strong uncertainty avoidance cultures where people want to control the process.
Product and Market Development Across Cultures