MARKET SEGMENTATION AND ITS BENEFITS
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1 MARKET SEGMENTATION AND ITS BENEFITS Students Name COLLEGE NAME
2 Ad 1: Tata Nano: Cheapest Car in India Tata Nano in India was projected as a cheapest car in India. With a population of more than 1.2 billion, country has huge market potential for the new car buyers. There are three demographic characteristic considered here. In age group, India has 65% population within the age group of hence the target audience for the Tata Nano as it can be seen in picture is young and middle aged. In India, the wage earner and decision maker is primarily husband as proportion of married working woman is very less in the country. Hence the picture shows that of the Father. (Male). The third demographic characteristic is the income group. It is targeting lower middle class to middle class income group in the society who do not own a car and are looking at value for money. Hence the ad mentions about the mileage and is claiming to be Country s best fuel efficient car, this is to emphasize a point that this is the best fuel efficient car you can get compared to options available in the market. First psychographic characteristics targeted by the company is people with simple lifestyle and looking for value for money for their purchases. Fuel efficiency is the primary factor rather than driving experience and luxury. Other factor is it is trying to empower the buyer by considering him smart decision maker as the line mentions Take your own. Picture of son enjoying like flying ride on the father s shoulder is trying to send a message that Tata Nano can give the happiness to your child by providing the experience similar to flying in Airplane. Ad 2 Hyundai i20: Redefining Style and Efficiency with Uber cool i20. Hyundai i20, is a car that is positioned in the market for the middle class to upper middle class income group where for middle class it will the first car buying while for the upper middle class income group it will be second car for their children or spouse. The target audience demographic is primarily youth and young crowd who are looking for style and coolness quotient along with value for money.the age group for the car buyer is primarily 21 to 35 including male and female both as the color option given is vibrant. Car has a stylish exterior and has lot valuable features in the interiors hence the psychographic characteristic that it is trying to target is the style and trend quotient in the buyer who wants to be in fashion and still wants to ensure that it is not expensive. Only mileage does not matter but it has to come with style, looks and latest features. This is reason the print ad is displaying price, savings as well as the added valuable features in the each boxes. Value added feature shown are smart pedal, rain sensing wipers, air bags and fully automotive temperature control which is trying to send a message to the smart buyers that 1
3 this car is fully equipped with next generation innovation and is providing these features at affordable prices. 2
4 Ad 3 Volkswagen Das Auto Polo Volkswagen Das Auto Polo is relatively new entrant in the market and has positioned itself as Car that delivers luxury, performance and driving experience. Target audience is the upper middle class income group for whom quality is more important than the money. Their attitude is to buy a product that is good in quality and adds value to personal comfort at the cost of money. The age group from 26 to 50 are majority of the buyers. They are young and educated individual having a paycheck above average in their society. This ad is also gender independent and hence do not carry picture of male or female in the ad hence targeted at both. It is targeted in the urban as well as the rural market because the ad features about the pothole which are common in rural areas and in urban cities during monsoon. Hence it is trying to target the comfort seeking qualities in buyer with unavailability of adequate infrastructure available. Person cannot go and fix the road, it is the job of government but he can go and buy the car which provides comfort in such roads. Since the emphasis is more on comfort and quality, ad is clear in terms of its target audience and hence do not carry any information regarding price and mileage like previous two ads. The multifunction steering function is also one feature that is trying to increase the comfort by making driver able to change the audio easily while driving. Hence their target is comfort and quality. Ad 4Mahindra Scorpio - SUV Mahindra Scorpio is the SUV in the Indian market first of its kind that delivers power, performance and looks. The target audience for the SUV is upper middle class to affluent class who prefers to go on adventure trip, have an attitude of displaying power, proving their mettle and enjoy freedom over anything else. These are the psychographic characteristics print ad is trying to target hence the print ad shows SUV on a dangerous rides. This sends a message of adventurous, freedom and power. Adventurous and free life attitude is preferred by both male and female in the upper middle class and affluent society hence the ad is targeted at both the gender. This is the reason print ad does not carry any image of driver. The primary age group for this will be from 26 to 55 but the primary target audience in that age bracket will be the one who loves the pleasure of 4x4 driving and adventure. In the social society like India, freedom is one of the quality which is pursued by few but desired by many. Hence by this ad it is trying to connect to those audience as well who wants to pursue freedom and power. The feature mention technical details like HP, engine capacity and warranty. This communicate to the target audience 3
5 who is aware of various technical features of the car and is assured of warranty as persona plans for lot of adventurous rides. 4
6 Market Segmentation and its Benefits Market segmentation is the process that organization use to identify and focus the target market on the basis of demographic, psychographic and geographic segmentation. Organization needs a data based on the potential demand for the product available in the market and to understand that demand first it needs to understand for which segment in the society does the product cater to and what are the potential benefits organization can provide to this segment. Demographic segmentation divides the market into different segments based on age group, income group and gender. It is important to know that product is targeted for which demographic segment as it will decide the promotion and communication strategy. Also, it will decide the pricing strategy for the product. The psychographic segmentation divides the market based on the lifestyle, attitude and behavior of the individual. The focus is more on identifying the internal self of the customer and communicating the association of product with internal self of the target customer. This is a very diverse segmentation and based on various lifestyle, changing trends in the society this segment changes and requires the company to revisit the market environment frequently. Geographic segmentation is the segmenting the market based on the geography. With globalization and evolution of internet, physical boundaries and geographical constraints have reduced but it is important to know the geography company is targeting as the other segmentation strategy will vary based on different geography. Even psychographic segmentation varies in the same country based on rural and urban market. Once the market segmentation is identified it has several benefits to the organization. It becomes easier to focus on product innovation, product differentiation and developing competitive advantages. The primary three benefits of market segmentation are as follows. 1. Focus and Clarity: Market segmentation provides organization the required focus and clarity regarding its target market. Better focus also means that energy and resources are directed towards the right direction in turn providing the maximum return for the investments. Clarity about the target customers also facilitates the organization to focus on product differentiation and product innovation. 2. Better Communication: With clear market segmentation, it helps marketing and promotion team to clearly communicate product attribute to its target audience. 3. Competitive advantage: Market segmentation provides competitive advantage to the company by clear communication, better profitability and increased product innovation. 5
7 6
8 References Allenby, Greg M. and James L. Ginter (1995) "Using Extremes to Design Products and Segment Markets," Journal of Marketing Research, 32 (November), ArnabMitra, AkshaySaxena- 2013,Credit Suisse - Indian Consumer Survey 2013 Dickson, Peter R. (1992) "Toward a General Theory of Competitive Rationality," Journal of Marketing, 56, 1-10 Haley, Russell I. (1968) "Benefit Segmentation: A Decision-Oriented Research Tool," Journal of Marketing, 32 (July), Hyundai i20 official website - accessed on 7-Apr Mahindra Scorpio official website accessed on 7-Apr RajanSambandam 2009, Market Segmentation: One Method, Four Examples, on 7-Apr accessed Smith, Wendell (1956) "Product Differentiation and Market Segmentation as Alternative Marketing Strategies," Journal of Marketing, 21 (July), 3-8. Volkswagen Vento Official Website - Accessed on 7-Apr YezdiNagaporewalla 2012, KPMG India - The Indian Automotive Industry, Evolving Dynamics Tata Motors Official Website - accessed on 7-Apr
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