Pacific Business Daily

How is Market Segmentation necessary to run the business in a globally competitive environment?

How is Market Segmentation necessary to run the business in a globally competitive environment? Describe levels of Market Segmentation as well.

Public Comments

1. Market segmentation is basically identifying how much the market in each country will bear. The American pharmaceutical industry is a great example of this. A drug that sells for $1000 per month in the US can sell for $50 per month in the third world. Why, you might ask would anyone selling a $1000 item, sell it for $50? Good question! Consider that the drug (after development costs) can be produced for $10 per month. If the product is sold in the third world at $50 then the company is better off by $40, because, at the price the drug is sold in the US, the drug simply would not sell. Better to sell at a $40 profit than to wait for a $990 profit that will never happen!