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MARKET SEGMENTATION AND ITS BENEFITS

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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

15-59 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

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this car is fully equipped with next generation innovation and is providing these features at

affordable prices.

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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

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who is aware of various technical features of the car and is assured of warranty as persona plans

for lot of adventurous rides.

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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.

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References • Allenby, Greg M. and James L. Ginter (1995) "Using Extremes to Design Products and

Segment Markets," Journal of Marketing Research, 32 (November), 392-403.

• 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), 30-35.

• Hyundai i20 official website - http://www.hyundai.com/in/en/Showroom/Cars/i20-

2012/PIP/index.html accessed on 7-Apr-2014.

• Mahindra Scorpio official website http://www.mahindrascorpio.com/ accessed on 7-Apr-

2014

• RajanSambandam – 2009, Market Segmentation: One Method, Four Examples,

http://www.greenbook.org/marketing-research/examples-market-segmentation accessed

on 7-Apr-2014.

• Smith, Wendell (1956) "Product Differentiation and Market Segmentation as Alternative

Marketing Strategies," Journal of Marketing, 21 (July), 3-8.

• Volkswagen Vento Official Website -

http://www.volkswagen.co.in/en/models/TheVento/gallery.html Accessed on 7-Apr-

2014.

• YezdiNagaporewalla – 2012, KPMG India - The Indian Automotive Industry, Evolving

Dynamics

• Tata Motors Official Website - http://www.tatamotors.com/ accessed on 7-Apr-2014

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