segmentation & indian automobile industry
Post on 20-Aug-2015
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PRESENTATION ON
SEGMENTATION & THE INDIAN AUTOMOBILE
INDUSTRY
IntroductionEver since the pioneering article on segmentation, by Wendell Smith in 1956, marketers the
world over are in agreement with regards to the heterogeneity of the global market.
With an increase in the number of manufacturers and suppliers, consumers have more variety in
the various product classes. Therefore, there are differences in consumer preferences.
Consumers have begun to react differently to the marketing actions of firms based on the
product class, benefits sought, brand image, alternatives, so on and so for.th. As a result, it
has become difficult to predict consumer behavior.
As a result, company marketers have tried to find a solution to this problem by the grouping of
consumers. Companies have begun to offer a multitude of products and brands, to the
various groups of consumers. They have thus moved away from mass
Marketing, and have become more focused in their marketing endeavors. This focused
marketing based on identified groups, is called segmentation.
“The identification of target customer groups (a homogeneous group of people with
similar type of needs/wants) is called “market segmentation”, where customers
with similar requirements (expectations) and buying characteristics are aggregated
into the same group.”
Marketers and researchers are therefore constantly searching for new ways of
segmenting the market. As a result, several techniques for segmenting the market
have developed over time, each using different variables depending on which
variables the researching author considered to have the most impact on consumer
decisions.
objectiveThe aim of this study is to investigate the concept of segmentation, in the Indian
automobile industry. A review of the existing literature has been done in the
following chapter so as to come to grips with the existing segmentation techniques
and the various considerations that must be taken into account. The questions that
this work attempts to answer are concerning the available segmentation
techniques available in literature, the current method of segmentation as practiced
by the existing companies in the industry and the thought process of consumers
with regards to automobiles (the motivation behind purchasing what they
purchase). Following this, the answers thus attained, will be looked through as a
whole so as to try suggesting better means of segmentation and to try and improve
currently employed techniques.
Q 1- Which age bracket do you fit into? a) 20 – 30 years c) 40 – 50 years b) 30 – 40 years d) Above 50 years
20-30 years29%
30-40 years46%
40-50 years23%
above 50 years1%
Age
Q2- What is your approximate annual income ?a)Male b) Female 1- More than 3 lakh 1-More than 3 lakh2-Less than 3 lakh 2-Less than 3 lakh
more than 3 lakh70%
less than 3 lakh30%
Male
more than 3 lakh60%
less than 3 lakh40%
Female
Q3-What is your occupation?a)Student c)Business
b)Service d)Other
Student35%
Service25%
Business30%
Other10%
Occupation
Q4-Do your family members affect your purchase decisions in automobiles?
a)Completely c) Very little b)To a large extent d) Not at all
Completely38%
To a large extent
44%
Very little16%
Not at all1%
Purchase
Q5-When you buy a vehicle, how important is the price?
a) Extremely important c) Not very important b) Important d) Not at all important
Extremely important
43%Important
52%
Not very important3%
not important2%
Price
Q6-When you buy a vehicle, how important is the brand (price is of no consequence)?
a) Extremely important c) Not very important b) Important d) Not at all important
Ex-tremely impor-
tant21%
Important42%
Less important36%
Not at all1%
Q7-What kind of a vehicle would you like? a) A very good brand (Looks and style do not matter) b) A good brand (Looks and style matter a little) c) A good looking car (Brand matters a little) d) A very good looking car (Brand does not matter)
Very good brand14%
Good brand57%
Good looking19%
very good looking10%
Q8- How important is culture and tradition to you? a) Very important c) Not very important b) Important d) Not at all important
Very important66%
Important20%
Not very11%
Not at all3%
Q9-Do you like it and want, when other people notice your car positively?
a) Very much c) A little b) Yes d) Not at all
Very much34%
Yes44%
A little17%
Not at all5%
Q10- Please rate yourself in a social context: a) Very outgoing b) Outgoingc) Not very outgoing
Very outgoing31%
Outgoing49%
Not very outgoing20%
Q11-To what extent do you value product
performance and characteristics over brand value? a) Product performance and characteristics only b) Mostly product performance and characteristics c) Less of product performance and characteristics more brand d) Brand only
Product per-formance
27%
Mostly per-formance
27%
Less per-formance
44%
Brand only1%
Q12-Are you willing to try new brands or stay with an already used brand?
a) Always willing to try new brands b) Sometimes willing to try new brands c) Like staying with a used brand
Always wiling25%
Sometimes will-ing
30%
Like staying45%
Q13-Do you find out all the details of the product or do you just trust the brand?
a) Find out all the details even if good brand b) Trust the brand
All details62%
Trust on brand38%
Q14-Do the geographic aspects (climate, terrain etc) of the place of residence or place of usage affect your choice of vehicles?
a) Definitely c) A little b) To a certain extent d) Not at all
Definitely62%
Certain extent21%
A little16%
Not at all1%
Q15- Do you tend to form opinions about brands based on your earlier experiences?
a) Yes b) No
Yes85%
No15%
Conclusion & Findings
If we actually begin exploring in detail, the various methods in which a market can be
segmented, the list may never end.
segmentation is a question of perceptions, people perceive the world in different ways.
While it is possible that some perceptions may be similar between different people,
it is very improbable that all perceptions be the same.
It is on this small possibility of similarities, that marketing’s most inherent concept is
based. Every person is different, and segmentation tries to find commonalities in
this world of differences.
The Indian automobile industry is as yet at an evolutionary stage. While there is most
certainly potential in the industry, it has not yet been understood well enough.
In this industry at the infancy stage, marketers must be patient and observe if they are to
succeed in segmenting it in some way. This section, we will briefly go over the findings,
highlight certain limitations of this study and, make certain recommendations for future
research.
The questionnaires showed that at the beginning of the segmentation process in the Indian
automobile industry, geographic segmentation could be used to segregate the rural
sector from the urban sector.
The rural sector showed a very high level of price sensitivity where a vehicle purchases meant
a very significant investment by rural standards.
While the urban sector showed similar price sensitivities to the rural sector, these were not as
acute, and the segmentation process was more complicated as a number of other variables
affected the purchase behavior of consumers.
Aside from this, the findings showed that the family structure played an important role
in the decision making process
Age was identified as another factor for segmentation, where younger people
between the ages 20 – 30 years, preferred fast, good looking and involving cars.
There were significant differences found between extroverted and introverted
consumers. Also, this aspect helped explain brand preference to a certain extent.
It also showed that demographic segmentation was still a popular choice among
manufacturers due to the ease of implementation and a false feeling of having
understood the market. While other methods of segmentation are being followed,
they are not being pursued with the required commitment.
THANKYOU
Raghav Aggarwal
Sanjay Verma
Parveen Mehta
Shagun Sharma
Sunil Mehta
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