Bases for Global Segmentation Market Size & Growth –GDP –Rate of projected growth in income –Population size and growth Demographics Geography Cultural/Psychological characteristics Usage/Consumption patterns Benefits – needs people have for the product vs. comparable products (substitutes)

Computers Sales in the United Arab Emirates Computer sales in U.S. $ millions 1999 e 2000 e 2001 e % change * e – estimated; * projected Source: Report CGG-UAE2002-CH—001F5639WWW.usatrade.gov

Estimated market potential for personal computers in UAE $614.48/$0.002* = 307,240 units Personal computers account for $76.46 million (15%) of $ mil in 2001; 38,230 units If home pc market grows at same rate as total market, 2002 demand should be $76.45 mil x = $92,168, or 46,085 units. (less than 1% of the total pop of 3.1 billion people living in UAE). Assuming we can acquire 5% market share in 2002, that’s 2,305 machines * Assumes avg price = $2000

Market Conditions favoring U.S. entry into UAE pc market Law requiring compulsory IT education in schools expected shortly Growth in construction, hotel, oil & gas industries; pc’s are used by all. U.S. made pc’s are perceived as top quality in UAE U.S. companies currently have 21% share of all pc imports (not including imports from U.S. factories located in non-U.S. locations). UAE market has a per capita income of US $ 19,700. U.S. has strong trade history & relationship with UAE. Foreigners account for approx. 85% of the UAE population UAE imposes no income taxes, no corporate taxes, and no foreign exchange controls

Demographics & Usage* Usage data for network software provides a rough profile of UAE pc users… There are 52,000 internet subscribers, and 143,000 internet users User base composition (network software): –Individuals (40%) –Universities/schools (20%) –Companies (30%) –Government (10%) Officials estimate that 20% of all UAE HHs will be connected by 2000.

Psychographic/Benefit Characteristics* Strong preference for U.S. computer products Price important, but will pay for quality (U.S. perceived as higher quality than European; Asian countries viewed as lowest quality) Low value placed on after-sales service. *Source: Computer Networking, Industry Sector Analysis, April 1, 2000, U.S. Department of State, Brent Greenfield, author

Geography UAE viewed as gateway to other Arab markets, especially Saudi Arabia, Kuwait, Oman, Qatar and Bahrain

Market Segmentation for PCs in UAE Industrial Sector Oil & Gas Industry Hotel & Tourism Industry Education Companies Home Sector Expatriate professionals (85% of pop) Nationals – with kids (compulsory IT) University Students

How to select target market(s): Criteria for targeting (9 W’s, p. 257) Segment size & growth potential Potential competition Company/market fit Select one or more segment to target based on above criteria.

Nine W’s 1.Who buys our product? 2.Who doesn’t? 3.What need or function does our product serve? 4.What problem does our product solve? 5.What competing products address same problems/needs. 6.What price are customers paying? 7.When is product purchased? 8.Where is it purchased? 9.Why is it purchased?