Market segmentation for passenger motor vehicles

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4. Market segmentation strategies

4.1 Market segments of passenger motor vehicles

Passenger Motor Vehicles can be segmented in various ways according to five major segmentation variables including geographical, demographical, psychological, benefit and behaviourial. The traditional way of segment the car industry is shown below:

Mini (e.g. Nissan Micra, Seat Marbella)

Small (e.g. Fiat Uno, Opel Corsa, VW Polo, Rover Metro)

Medium (e.g. Fiat Tipo, VW Golf, Rover 200)

Large (e.g. BMW 3 series, VW Passat, Honda Accord, Rover 400)

Executive (e.g. BMW 5 series, Opel Omega, Audi 100, Rover 800)

Luxury (e.g. BMW 7 series, Mercedes-Benz S Class, Jaguar)

Multi purpose/sports (e.g. Land Rover, Porsche)

(Figure 1 source: www.europa.eu.int/)
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Mass-producers provides wide range of products from mini to luxury car example include brands like Austin-Rover, Great-Britain; Renault and PSA Peugeot-Citroen, France; Volkswagen-Audi, Germany; Fiat, Ital. Niche-producers have smaller and more focused product range and example of brands include BMW, Daimler Chrysler, Volvo, Porsche, Ferrari, Alfa-Romeo.

Daimler Chrysler has chosen a market segment where buyers have distinctive preferences, special requirements and unique needs. Although they only share a small market of the total motor vehicles market, they have served their target market better than these rivals do.

4.4 Differentiation between each segment

There are as shown in figure 1, seven major segments in the car industry. The mini segment is based heavily on demographic and benefit variables; it provides convenience for those buyers with the need to drive around in the city or just from point A to point B as well as affordable in price. However, this segment has very small share of the total market and people usually think that the car is too small for general uses.

The small segment is one of the two largest segments, many first-time car buyers tend to go for this segment and cars in this segment has variety of choices as well. It holds high market share especially in the European countries such as Germany and France.

The medium market has a large share of the total car market as well. However, it is very
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