The economy of Taiwan is an open and export-oriented one, and the success or failure of strategic planning in export markets will, therefore, greatly affect the growth of the economy. The success, however, is highly dependent on the market information that is available to the government decision units and export industries. The purpose of this study is to provide the market segmentation information to the units involved in strategic planning so that the marketing of Taiwan’s export goods can be more efficient.
Thirty three social and economic variables from one hundred and twenty seven countries in the world were used in the study. Eight latent variates were first extracted from these social and economic variables using factor analysis, and then the eight latent variates were used to classify all countries into twelve homogeneous market clusters. The stability of this classification was subject to discriminant analysis, 96.06 percent of the countries being correctly classified into their respective categories.
This market segmentation provides valuable information for decision units in forming the policy of export market diversification. Exports in one country may be extended to countries in the homogeneous market cluster. The marketability will be similar, while the risk due to political reasons may be significantly reduced. The cost of strategic planning will be lowered in the integrated segment, as compared with that for individual countries.
