Transnational segmentation across international boundaries
Market segmentation involves the systematic analysis of market characteristics: the relationship between the demand and certain consumer traits, needs and preferences and the manner in which specific goods fits into certain market segments in the process of need – satisfaction. In most cases market segmentation is applied on the basis of geographical, demographical and psycho graphical information or a combination of such data. Every marketing problem, however must obviously be approached in the light of particular objectives and circumstances.
Consequently the research needs and the criteria used for purposes of marketing segmentation will differ from one product to another and one type of market segment to another(Winer, R. S. ,2007). In traditional marketing research survey were mainly aimed at collecting information on standardized demographical and social economic variables such as age, population group, language differences, and levels of education, occupation and income groups.
A more recent development in research for market segmentation purposes is the analysis of the market in terms of consumer motivation and expectation as well as actual buying behavioral patterns (Ansoff, H. I. ,1965). There are a certain groups of variables which are employed for the purposes of segmenting market for consumer goods. These include geographical, demographical, socio –economic and psycho graphical factors in an analysis of consumer characteristic and behavior.
Depending on the nature of the relevant products and the distinguishing nature of market segments, the analysis of certain variables might be superfluous and it might be necessary to give special attention to the other variables (Winer, R. S. ,2007). The market can go further and try to analyze certain consumer reactions (changes in behavioral patterns) to his policy and strategy for segmentation purposes. There are a number of aspects that should be take into account in analyzing such possible consumer reactions.
The approach is that both objective and subjective criteria must be employed in an attempt to study consumer reactions to each of the elements of the marketing mix. The methods used to investigate these reactions are of course qualitative, difficult and expensive to apply and the results are often unreliable (Wernerfelt, B. , 1984 and Weitzel, W. & Johnson, E. , 1989). The demographic and socio –economic segmentation of consumers represent the most common traditional based segmentation.
These variables includes level of education and income, ethnic groupings, language groups, age, sex, family size and the position of decision – makers / purchasing agents in the family life cycle. The main reason why such information is generally used as criteria for segmentation purposes is that it is usually readily available. Some of these variables will be dealt with briefly in the following paragraphs(Winer, R. S. ,2007). Levels of income: Consumption is to a large extent a function of disposable income.
Thorough analysis of consumer income, income distributions and the manner in which consumer units appropriate their disposable income (expenditure patterns) is thus essential in any quantitative market study. Information on differences and trends in the distribution of income on a geographical basis and by ethnic group can be particularly valuable in the demarcation of regional market segments and target market segments. Income data on cities and parts of cities is also used for purposes of decision making on the location or branch stores and shopping centre (Armstrong G.& Kotler P. 2007).
A decrease in percentage of families with a very low disposable income (especially amongst non –white population groups). Coupled with rapid rate of growth in the number of consumer units in the higher income brackets, spells a dramatic increase in free purchasing power. The level of discretionary income (free purchasing power) of any community is of special significance since it implies a growing market potential for durable consumer goods, some luxury goods and certain types of services.
Information on the relationship between income and consumer expenditure on particular categories of goods and services is particularly useful for purposes of market segmentation (Armstrong G. & Kotler P. 2007). The research surveys of the bureau of the market research university of south Africa amongst urban and non –whites households and their proportional expenditure on certain categories of goods and services(Winer, R. S. ,2007). Levels of education.
The educational level of consumers can be closely related to occupational structures and income distribution patterns in a market. The educational levels of the various population groups in the republic of south Africa differ markedly and this exerts an important influence on the potential use of especially printed communication media in particular non white market segments (Armstrong G. & Kotler P. , 2007). Age group. The size of various groups will affect the demand of some groups in international market. Youth groups demand different types of products as well as the aged.
When entering international market the company will analyze and know the demographic segmentation in terms of each group so that they will know the amount of product that will be sold in that country. A country like china, the us, Canada will demand different qualities of products as compared to a country like Nigeria, Indonesia and India. This is because of the population set up of those countries. In these other countries there are many youths as compared to the U. S(Winer, R. S. ,2007). Sex The sex groups male and female have different characteristics and have different demand for different products.
Women with large disposable income will increase the demand for household appliances, food and other devices which are for women while men would demand things like cars, beer and other luxurious drinks. This is because women are associated with Families and it has been proved a woman with money is a family asset as compared to man. This behavior is also reflected in consumption. Therefore a company wishing to enter international market will be required to audit the market and know the ratio of men to women who have disposable income before introducing the product(Winer, R. S. ,2007)..Sample Essay of PapersOwl.com