Market segmentation Practices in Nepal

Nepal is a developing country advancing towards industrialization. It has completed tenth long-term plans and the eleventh has been undergoing. Business, agricultural industry and other industries have been affected by unstable politics, ever-changing economic policies, corruption etc. The labor oriented industries have also reached a condition of
adopting existence strategy and the capital oriented industries also have not been able to compete in the global market. Only some assembly industries also have not been able to compete in the global market. Only some assembly industries and multinational companies have been doing well in Nepal. Nepal should encourage the small and agro based industries.

In the background of such industrial condition, Nepal has become a member of SAFTA and World Trade Organization (WTO). The pace of development of transport and communication has become fast. This affects the Nepalese market. So, the Nepalese entrepreneurs and businessmen have become conscious about market segmentation. The practice of market segmentation in Nepal can be studied under two heading: non-systematic segmentation and systematic segmentation.

1. Non-systematic segmentation

Market research should be carried out for systematic segmentation of market. It needs a lot of expense. Such kind of expense is supposed as extravagance in Nepal. The Nepalese entrepreneurs and businessman use non-systematic practices of market segment.
  • Competitors’ strategy: This is mostly used in Nepal. If the strategy what the competitors’ adopt is used, neither risk nor cost for market research is needed to bear. Although such strategy and practices are not original, the success can be achieved in competitors’ market share. The Nepal’s noodle companies have adopted this strategy.
  • Past experience: The Nepalese entrepreneurs and businessmen cannot adopt changes easily. They like to maintain their traditional experiences. The market segments are the same as they were in the past. They segment total market in the same methods even today.
  • Hunches: The other much practiced strategy of non-systematic segmentation is hunches strategy. Market can be segmented on the basis of knowledge, experience and background or imitation. This strategy may become successful or failure, it has no surety.
  • Indian product’s strategy: The flow of Indian products is much in Nepal. The Nepalese organizations adopt the same market segmentation strategy what the Indian business organizations adopt. Most of the Nepalese entrepreneurs and business organizations have practiced this strategy of market segmentation.

2. Systematic segmentation

In Nepal, not only non-systematic but also the market is segmented in systematic way on the basis of market research. Big business houses and multinational companies are found more mindful in market segmentation. They have adopted this (systematic segmentation) strategy in marketing their products. Mostly, systematic segmentation of market is made on the following bases in Nepal:-
  • Geographic segmentation: Geographic segmentation is based on the area, size of city, population density, climate etc. Geographic segmentation is found very popular in Nepal. It is also very simple.
  • Demographic segmentation: In Nepal, markets are segmented on the basis of population. Age, gender, family size, family life cycle, occupation, education, religion, etc. are the main bases of this segmentation. This is also very popular and much practiced in market segmentation.
  • Psychographic segmentation: In Nepal, markets are also segmented on the basis of customer’s psychology. The business organizations divide market on the basis of consumers’ social classes (lower, middle, or upper), life style (achievers, believers, or strivers), personality or status (compulsive, gregarious, authoritarian, or ambitious) etc.
  • Behavioral segmentation: In Nepal, behavioral segmentation of market is also in practice. The main bases of this segmentation are purchasing time, (regular or special), benefit, (quality, service, economy), consumers level (regular consumer, ex-consumer, future consumer), rate of consumption, (less, general, much), level of loyalty (full, high, low, middle), tendency towards products (indifference, positive, negative) etc.

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