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General Motors in China

1. How Is General Motors (China) segmenting its customers?

General Motors Corporation (GM) ranks number one on the Fortune 500, and GM is a premiere American company by any measure. In 2004, however, General Motors employs more people outside of the United States than the company employs within the United States (HooverÆs Inc., 2004). The increasingly outward focus of General Motors reflects a corporate strategy based on the companyÆs recognition of shifts in the loci of opportunities for the company from the domestic sphere to the global domain. GM has established an operational division for China that markets (a) automobiles manufactured in the United Stares and (b) automobiles manufactured by joint-venture partners in China. All automobiles marketed in China by GM carry the GM product label.

At the present time, GM segments the consumer market for passenger automobiles in China by (a) income and (b) job status. With respect to income, the market is segmented by those consumers earning (a) more than the equivalent of US$30,000 annually, (b) earning in the equivalent range of US$3,000-to-US$30,000, and (c) earning below the equivalent of US$3,000. With respect to job position, GM segments the consumer market for passenger automobiles in China (a) entrepreneurs (business owners), (b) corporate and government professionals, and (c) all others.

2. What are the target markets identified by General Motors (China)?

At the present time, GM has defined the primary target market for the companyÆs passenger automobiles as entrepreneurial persons earning more than the equivalent of US$30,000 per year. There are two primary justifications for targeting this specific segment of the China market. The first reason is that credit-purchase of private automobiles in China has not been introduced in China. There are legal, structural, political, and social issues that must be dealt with before credit-purchase can become a viable ...

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