Market Segmentation Paper

Shopping for a car, SUV, or truck today is just like putting together the perfect outfit complete with the ideal accessories. When shopping for the perfect “ride,” not only does the buyer have a wide range of choices, but the buyer also has a wide range of accessories or options from which to choose. Yes, price does play the most major role in a vehicle's purchase. The days of the 70s when one could buy a new car for $4,000 plus have vanished just like the days of the cowboy riding off into the sunset on his favorite horse Trigger. But after the physical reactions of the sticker price shock, what does a driver need when rolling down the road? What options or accessories, does her or she need for a safe, comfortable ride?

Autozone, the top retailer in the United States has always based its strategy on DIY customers with cars over seven years old (Parnell, 2014). As technology has evolved, cars have become more difficult to work on, hence, a new target market of do-it-for-me is continuing to grow. Sales of 2.3 billion were reported for the second quarter of 2017, and the company cited higher supply chain and shrink costs (Landis, 2017).

Furthermore, Chevrolet is known for its innovative product modification and it must continue to adapt and meet the customer needs through differentiation, customization, and diversity in order to continue to excel for another century (Ferrell & Hartline,

A quick scan of the automotive landscape, especially in the United States, reveals that consumers are snapping up SUVs and pickup trucks to the detriment of coupes, sedans, and wagons. Some brands, such as Buick, are selling as many as three SUVs to one car, underscoring the wholesale shift away from traditional transportation choices.

In early January 2012, Joseph Wierda, BMW’s X3 Product Manager, reviewed the latest sales numbers of the popular X3 Series compact SUV. He was, in particular, interested in the effects of BMW’s customization program called “Dream It. Build It. Drive It.” on both unit sales and overall profitability. This new integrated sales and marketing program allowed customers to create a fully customized BMW X3 SUV and have it delivered to their driveway in only a few weeks. The program scored some important points with the media. For example,

Market segmentation is essential for creating value of the product in the minds of customers and consumers. Market segmentation is the process of dividing the target market into subgroups of people who are homogeneous in respect to their needs and wants. The people in each subgroup are expected to react in similar way towards a product or service (Kumar & Sharma, 1998). A product can be divided into two types; consumer product and industrial product. Market segmentation of consumer products is done on the basis of age, sex, education, income etc. Where, segmentation for industrial products is based on size of the business, location, procedure and purchasing etc. (Bose, 2006). According to Bose (2006) market segmentation is effective when company can reach segments for promotion and distribution, the segment is large enough to generate sufficient profits, buying power of the targeted segment is measurable and there is a noticeable variation in the nature of demand.

The automotive industry is a highly competitive market where brand loyalty is only as strong as the latest gizmo and horsepower upgrade. The automotive assembly process, perfected by Henry Ford, was based on the simple principle that “customers can order a Model T in any color they wanted as long as it was black.” After the 1920’s the market witnessed new entrants with unheard of automobile features that ended Ford’s golden age. New automakers such as Buick, Chrysler, and Oldsmobile offered customers varying colors and styles that propelled sales. The automotive industry has grown in the United States from 4192 automobiles on the road in 1900 to 204 million in 2003. In an effort to regain brand loyalty Ford has embarked on an ambitious

Today, automobiles have gained a reputation of refined high-tech product rather than just a means of transport. It has become a moving living quarters, defining the social status of what people aspire to have when it comes to the type of life those people want. In today's automobile business operations, companies should pay more attention to developing the customer’s experience. The experience is an important part of customer value; great customer service is the advantage needed to measure the worth of goods or services. Therefore, only those great idea and marketing strategies can destroy the competition. This means, it is very important for companies to target the right market, set up compelling marketing strategies and make

Write a white paper on a company of your choice and discuss the market segmentation within that industry along with the target market for the company and the selection process for that target market.

The technical design department of MRM uses state-of-the-art design development and visualization technologies that allow customers to view products virtually as if they were actually sitting in the vehicle. During this immersive event, Color and material harmony, which can sometimes be synonymous with a brand’s identity, can be applied in a virtual sense and reviewed. It’s important to note that craftsmanship is an important deliverable to perceived quality in all vehicle segments.

Market segmentation is a strategy that involves breaking down a business’s current target market into smaller subsets in order to establish a more defined set of market categories. It is important to first look at the tools available to assist with segmenting the market prior to beginning your segmentation. These tools include the following:

An organization cannot satisfy all the needs and wants of all the consumers. Therefore, Market is divided into different segments so an organization can focus on the needs and wants of the specific consumers who share similar needs and demonstrate similar buyer behavior. In the world, there are different types of buyers with their own needs and behavior. Segmentation is the process to match groups of the purchasers with same needs and wants.

I always assumed that marketing was those pesky sales people who were trying to get you to buy their brand of merchandise or services because they “supposedly” offer the best deal. Those ads you see that insist their product is the most recent revelation in break through products. I now know that marketing is more than that. Marketing is not just the selling but also the advertisement, research, accounting and production of products or services. Marketing is “communication the value of a product, service or brand to customers, for the purpose of promoting or selling that product, service, or brand.”

What did we learn from BMW? The automobile market is divided into a number of “groups” or “segments.” Sub-Compact; Compact; Full-Size; Luxury, etc. These divisions are however, product based, not customer based. However, customers have, over time, “adopted” this segmentation scheme BMW in the luxury / performance segment. But wants to segment further based on “usage experience.” The Better Driver. Not product based, but customer / market based. Usage experience + “Value pricing” for the segment key to differentiating the product offering from Mercedes, Lexus & Infiniti Along with appropriate product and

There are ten basic steps in finding unique segments in your customer base. Segmentation can be created by looking at factors such as purchase history, industry, need, and behaviour. B2B International shares their segmentation methodology in this white paper.