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MCOM 2nd Year Global Segmentation To Trade Study Material Notes

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MCOM 2nd Year Global Segmentation To Trade Study Material Notes
MCOM 2nd Year Global Segmentation To Trade Study Material Notes


MCOM 2nd Year Global Segmentation To Trade Study Material Notes | Index

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A market segment refers to a group of countries that are alike in respect to their responsiveness to some aspect of marketing strategy. Marketing tation may be defined as a technique of dividing different countries into neous groups. The concept of segmentation is based on the fact that a business can not serve the entire world with a single set of policies because there are dispacities among can not serve the entire world with a single set of policies because There are dispacities among countries-both economic and cultural. An international marketer, therefore, should pick out one or more countries are target markets. A company may not find it feasible to do business immediately with the entire spectrum of countries forming a segment. In that case, the firm may design its marketing programs and strategies for those countries it does enter and draw upon its experience with those countries in dealing with new markets.

Peter. D. Bennett, market segmentation is the process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinctive marketing strategy. The process begins with a basis of segmentation-a product specific factor that reflects differences in customers’ requirements or responsiveness to marketing variables (possibilities are purchase behaviour, usage, benefits sought, intentions, preference or loyalty).

Today, global companies are likely to segment world markets according to one or more key criteria : geography, demographics, psychographies, behavioural characteristics, and benefits sought. It is also possible to cluster different natural markets in terms of their environments, (e.g., the presence or absence of government regulation in a particular industry to establish groupings. Another powerful tool for global segmentation is horizontal segmentation by user category.

The basis of market segmentation are :

1. Demographic Segmentation. Demographic segmentation is based on measurable characteristics of population’s such as age, gender, income, education, and occupation. A number of demographic trends-ageing population, fewer children, more women working outside the home, and higher incomes and living standards–suggest the emergence of global segments.

2. Geographic Segmentation. Geographic segmentation is dividing the world into geographic subsets. The advantage of geography is proximity. Markets in geographic segments are closer to each other and easier to visit on the same trip or to call on during the same time window. Geographic segmentation also has major limitations. The mere fact that markets are in the same world geographic region does not mean that are similar.

3. Psychographic Segmentation. Psychographic segmentation involves grouping people in terms of their attitudes, values, and life styles. Data are obtained from questionnaires that require respondents to indicate the extent to which they agree or disagree with a series of statements. In the United States, psychographies is primarily associated with SKI international, a market research organisation whose original VALS and updated VALS to analyses of U.S. consumers are widely known.

4. Benefit Segmentation. International benefit segmentation focuses on the numerator of the value equation–the B in V = B/P. This approach can

achieve excellent results by virtue of marketers’ superior understanding of the problem a product solves or the benefit it offers, regardless of geography,

5. Behaviour Segmentation. Behaviour segmentation focuses on whether people buy and use a product, as well as how often and how much they use it Consumers can be categorised in terms of usage rates. For example: heavy a medium, light and non-user. Consumers can also be segmented according to s user status; potential users, non-users, ex-uses, regulars, first times, and users to of competitors’ products. Although bottled water may be considered a luxury h product in some middle income markets. Nestle is marketing bottled water in t Pakistan where there is a huge market of non-users, who, dispite their low g income, are willing to pay 18 a bottle for clean water because of the wides spread presence of arsenic poisoning in well water and the pollution of surface P water.


1 Global companies normally follows following segmentation strategies :

1. National Market Segments. Where markets are segmented according to variables which largely ignore national boundaries, e.g., demographic, brying practices, preferences, etc. The strategy concentrates on identifying similiarities in customer needs across countries rather than emphasising country/cultural differences.

2. Global Market Segments. Which involves serving the same market segments in multiple markets but on a national basis segmentation is on the basis of geography/nationality which emphasises cultural differences rather than similarities between countries.

3. Mixed Market Segments. Which is largely a combination of the first, two some national markets may be of a sufficient size of warrant individual isation. Others may be clustered into similar market segments.

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