Market Segmentation Practices in Nepal- Bikram Adhikari

Most  of  the  marketers  are  still  practicing  traditional  marketing  concept.  Thus,  implementation  of  marketing  concept  in  Nepal  is  at  an  initial  stage.  Traditionally,  Nepalese  market  is  supply  driven because of the minimum supply and maximum demand situation of the market. In that situation,  most  of  the  marketers  practice  mass  marketing  approach.  That  means  marketers  prefer to implement traditional marketing concept by producing same product in mass scale to enjoy  economies  of  scale.  It  indicates  no  market  segmentation  in  Nepalese  market  because  of  supply driven economy. After  the  restoration  of  democracy  in  2046  BS  and  adoption  of  economic  liberalization  policy,  private sector emerged and then slowly Nepalese market started to change from supply driven economy  to  demand  driven  economy.  Increased  competition  has  compelled  the  Nepalese  organization to implement market segmentation approach.

Market segmentation practices in Nepal can be explained as follows: 

Lack of Originality 

Most  of  the  Nepalese  marketers  are  imitating  their  market  segmentation  practices  from  multinational  companies.  It  lacks  creative  and  original  segmentation  strategies.  For  example:  Nebico  Digestive  biscuits  is  imitated  from  foreign  brands,  most  of  the  MBA  program  of  Nepalese University, most of the installment program of housing, vehicles, etc. are copied from others. 

Not Systematic 

Those  Nepalese  marketers  who  are  implementing  market  segmentation  are  not  marketing  research based. They are segmenting their market on the basis of rule of thumb. For examples, saving  account  offered  by  Nepalese  bankers  are  children  saving,  women  saving,  senior  citizen  saving,  etc.  which  are  not  research  based.  Similarly  instant  noodles  offered  by  different  companies   in   different   flavours   are   also   the   good   examples   of   non   systematic   market   segmentation. That is why brand failure rate of new instant noodle is very high in Nepal. 

Bases for Market Segmentation 

Popular  bases  used  by  Nepalese  marketers  are  geographic  and  demographic  bases.  For  example, 5 development region, 14 zones, 77 districts, etc. are common in market segmentation. Most of the department store and super markets are situated in urban and suburban areas. Big shopping center, movie theaters are in core cities. Major hospitals and schools are colleges are in urban  markets.  Most  of  the  chain  stores  are  based  on  geographic  market  segmentation.  Similarly,   age,   gender,   income,   are   popular   demographic   variables   for   Nepalese   market   situation.  St.  Mary’s  School,  Padma  Kanya  Campus,  Maternity  hospital,  beauty  parlor,  have  targeted female customers. Bikes, handsome parlor, Gym center, have targeted male customer. Use  of  family  size  and  stage  of  family  life  cycle  is  also  increasing  for  segmentation.  They  are  using for housing, tour package, etc.

Similarly,  use  of  psychographic  and  behavioural  bases  are  also  increasing.  In  the  past,  these  variables were neglected. For examples, jeans, shoes, cosmetics, liquor, cigarette watch, mobiles, hotel and restaurants are using psychographic variables for market segmentation. Faded jeans, Surya,  Khukuri.  Pilot,  Shikhar  cigarette,  Tuborg  and  Carlsberg  beer,  Romanov  Vodka,  Pulsar,  bullet, FZ bikes, etc. are using psychographic bases for market segmentation. Desired  benefit,  occasion,  loyalty  status,  usage  rate  are  also  started  to  practice  in  Nepalese  market  for  market  segmentation.  Use  of  behavioural  bases  for  market  segmentation  can  be  observed  like  toothpaste  (strong  teeth,  fresh  breath),  bathing  soap  and  shampoo  (strong  hair,  non-sticky hair, thick hair, anti dandruff), edible oil (healthy, taste), etc. In  conclusion,  use  of  market  segmentation  approach  in  Nepalese  market  is  increasing  day  by  day.  They  have  also  started  to  use  modern  bases  like  behavioural  bases  and  psychographic  bases for market segmentation in comparison to traditional use of geographic and demographic bases. 

Increased  competition,  increased  customer  knowledge  and  awareness,  changing  technology  and   demand-supply   situation   have   forced   Nepalese   marketers   to   implement   market   segmentation  approach.  To  survive  in  the  changing  marketing  environment,  it  is  inevitable  them to change their marketing approach for market segmentation. 

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