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Assignment 2 Market Segmentation

Assignment 2 Market Segmentation. Derived demand Customer description Competitive Situation Market Potential. Market Conditions favoring U.S. entry into UAE pc market. Law requiring compulsory IT education in schools expected shortly

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Assignment 2 Market Segmentation

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  1. Assignment 2 Market Segmentation Derived demand Customer description Competitive Situation Market Potential

  2. Market Conditions favoring U.S. entry into UAE pc market • Law requiring compulsory IT education in schools expected shortly • Growth in construction, hotel, oil & gas industries; pc’s are used by all. • U.S. made pc’s are perceived as top quality in UAE • U.S. companies currently have 21% share of all pc imports (not including imports from U.S. factories located in non-U.S. locations). • UAE market has a per capita income of US $ 19,700. • U.S. has strong trade history & relationship with UAE. • Foreigners account for approx. 85% of the UAE population • UAE imposes no income taxes, no corporate taxes, and no foreign exchange controls

  3. Derived demand Growth in the businesses & industries that use pcs Demand for pcs in UAE

  4. Bases for Global Segmentation • Market Size & Growth • GDP • Rate of projected growth in income • Population size and growth • Demographics • Cultural/Psychological characteristics • Usage/Consumption patterns • Benefits – needs people have for the product vs. comparable products (substitutes)

  5. Customer Profile: pc usage in the UAE Usage data for network software provides a rough profile of UAE pc users… • There are 52,000 internet subscribers, and 143,000 internet users • User base composition (internet connections): • Individuals (40%) • Universities/schools (20%) • Companies (30%) • Government (10%) • Officials estimate that 20% of all UAE HHs will be connected by 2000.

  6. Industrial Sector Oil & Gas Industry Hotel & Tourism Industry Education Companies Home Sector Expatriate professionals (85% of pop) Nationals – with kids (compulsory IT) University Students Market Segmentation for PCs in UAE

  7. How to select target market(s): • Criteria for targeting (9 W’s) • Segment size & growth potential • Potential competition • Company/market fit Select one or more segment to target based on above criteria.

  8. Customer Characteristics • Strong preference for U.S. computer products • Price important, but will pay for quality (U.S. perceived as higher quality than European; Asian countries viewed as lowest quality) • Low value placed on after-sales service. *Source: Computer Networking, Industry Sector Analysis, April 1, 2000, U.S. Department of State, Brent Greenfield, author

  9. Nine W’s: Customer description • Who buys our product? • Who doesn’t? • What need or function does our product serve? • What problem does our product solve? • What competing products address same problems/needs. • What price are customers paying? • When is product purchased? • Where is it purchased? • Why is it purchased?

  10. Competitive Situation • Similar and substitute products • U.S. companies + Mexican • Name your top competitors • Will top competitors represent a threat? Strong, moderate, weak? • What characteristics must YOUR company have in order to compete with other companies

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