Comments on: How is Market Segmentation necessary to run the business in a globally competitive environment? http://www.maciowa.com/market-segmentation/how-is-market-segmentation-necessary-to-run-the-business-in-a-globally-competitive-environment Marketing, Advertisting & Communication Mon, 26 Dec 2011 09:42:40 +0000 http://wordpress.org/?v=2.7 hourly 1 By: superschupp http://www.maciowa.com/market-segmentation/how-is-market-segmentation-necessary-to-run-the-business-in-a-globally-competitive-environment/comment-page-1#comment-8213 superschupp Fri, 25 Sep 2009 18:22:59 +0000 http://www.maciowa.com/market-segmentation/how-is-market-segmentation-necessary-to-run-the-business-in-a-globally-competitive-environment#comment-8213 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!<br><b>References : </b><br>The undercover Economist - Tim Harford 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!
References :
The undercover Economist - Tim Harford

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