Segmenting and Targeting Markets

SEGMENTING AND TARGETING MARKETS 4

Segmentingand Targeting Markets

Institutionaffiliation

Segmentingand Targeting Markets

GeneralMotors (GM) operates in various countries globally under a philosophythat every market segment in each nation has to contribute to itscost of capital. The organization works with an objective ofattaining the aforementioned set goal either by designing measures ofenhancing customer acquisition or pulling out of the market segment.For instance,the company pulled out of the European market as a consequence ofcontinued losses resulting from a shrinkage in market control.According to Stoll (2017), in 2016, the Detroit car manufacturer madelosses amounting to 0.3 million dollars. The automobile makerresolved to sell its European unit, termed as Vauxhall to Peugeot andas a consequence, Groupe PSA SA, will have a 16 percent market sharein the Europe’s automobile industry.

Themove by GM to exit Europe is aimed at lowering manufacturing costsand slashing the amount of money the company needs to keep on hand.As a result of the high prevalence of the fickle tastes amongconsumers in theEuropean market, regulators have implemented policies that wouldcompel GM to invest heavily in a segment of which the companycontrols only 5.7 percent of the shares (Stoll, 2017). The course ofaction adopted by the organization will see its yearly sales of 10million reduced by more than ten percent in favor of Toyota Motorsand Volkswagen. The automobile market in Europe is threatenedby regulatory, political, and consumer inclination all of whichtogether implicates on the need for a car maker to consider productdifferentiation among other strategies used to gain market controland consumer loyalty. GM aims at using the $ 2 billion saved from theexit to purchase buybacks and to enhance its focus in the UnitedStates truck segment (Stoll, 2017).

References

Stoll,M. (2017). GM’sOpel Exit Is Rare No-Confidence Vote in European Market.WSJ.Retrieved 6 April 2017, fromhttps://www.wsj.com/articles/gms-opel-exit-is-rare-no-confidence-vote-in-european-market-1488815141