Question

What are the main ways to segment markets? Doing it internationally can be difficult. What are the things you need to keep in mind when doing so.

Answer 1

Main ways to segment markets are based on the demography of a region, based on the geography of a region, based on psychographics, and behavioral characteristics.

Demographic: One needs to keep in mind the per capita income of a region while segmenting markets. The economic growth of the country and the standard of living in general in several regions of the country so as to gain as much revenue as possible in individual markets all over the world. For example sales would be high of luxury items in high per capita growth regions. While the company will have to reduce the prices of such items in low per capital countries, otherwise there would be no sales in such regions.

Geography: Even in countries with high growth rate, some regions are poor, the company wouldn't benefit by scaling in such regions of the country and instead would benefit by expanding in another country of choice, where the tastes and preferences are the same such as in European countries.

Psychographic: The local interests and tastes could be different of various countries in the world. Some countries like more quality products, while others prefer low quality products. Matching the products to local tastes and preferences could go a long way in increasing sales and revenue base.

Behavioral: Some countries prefer to use passenger vehicles for commercial purposes as well, whereas others prefer to use them only as passenger vehicles. Thus the utility scale in international markets is on a different scale for various regions in the world.

In order to gain benefits by entering the international markets, firms and businesses should focus on such key characteristics of growth based on local interests and characteristics.