Market segmentation China

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Market Segmentation in China

Segmentation is the process of breaking down the market into groups which have common characteristics, attitudes and behaviors. This is essential in identifying customer needs and wants. Here, Daxue Consulting make efforts to bring you largest benefits started from market segmentation in China. We provide you better matching of customer needs, which helps to enhance profitability, create opportunities for growth, enhance the effectiveness of targeting communication, improve customer retention for your product and enlarge market share.

Generically, there are three approaches to marketing. However, in China, we mainly advise you to pay attention to concentrated strategy or differentiated strategy.

Concentrated or differentiated strategy in China

In the concentrated strategy, a firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example, for China`s cosmetics market, a firm focuses on consumers with low price sensitivity who will choose branded products with more effective but less harmful ingredients. Also, even branded cosmetics companies follow the differentiated strategy: they offer normal expensive products for mid-to high-end consumers as well as a supreme luxury brand for the supreme group of the pyramid.

Market Segmentation criteria

Note that segmentation calls for some tough choices. There may be a large number of variables that can be used to differentiate Chinese consumers of a given product category. Thus, we need to determine which variables will be most relevant in distinguishing different groups of Chinese consumers and in the process of market segmentation in China. The first one is demographic and social-economic variables which essentially refer to personal statistics such as income, gender, education, marital status and family structure. Another basis for segmentation is behavior. Some Chinese, especially elderly people, are brand-loyal and tend to stick with their preferred brands even when a competing one is on sale. Some consumers are frequent users of a product while others are not. For example, research conducted by the wine industry shows that some 80% of the product is consumed by 20% of the consumers—presumably a rather intoxicated group. Also, there are psychological variables. While some consumers want to outstand from the crowd, others want to be as similar to others. Furthermore, we work to seek different benefits that consumers really value when selecting a product or a service.


See also : product testing China / market entry China