The document discusses market segmentation in India's automotive industry. It finds that car ownership rates are still low overall, with only 9.4% of urban households and 2-3% of rural households owning a car. While the highest-income SEC A group has a 29% ownership rate, rates are still single digits for lower-income groups. The key factors driving car demand growth are rising incomes, steady prices due to competition, and easier access to financing. Market segmentation involves identifying distinct customer subgroups, evaluating them, selecting target segments, and developing customized marketing strategies for each.
The document discusses market segmentation in India's automotive industry. It finds that car ownership rates are still low overall, with only 9.4% of urban households and 2-3% of rural households owning a car. While the highest-income SEC A group has a 29% ownership rate, rates are still single digits for lower-income groups. The key factors driving car demand growth are rising incomes, steady prices due to competition, and easier access to financing. Market segmentation involves identifying distinct customer subgroups, evaluating them, selecting target segments, and developing customized marketing strategies for each.
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The document discusses market segmentation in India's automotive industry. It finds that car ownership rates are still low overall, with only 9.4% of urban households and 2-3% of rural households owning a car. While the highest-income SEC A group has a 29% ownership rate, rates are still single digits for lower-income groups. The key factors driving car demand growth are rising incomes, steady prices due to competition, and easier access to financing. Market segmentation involves identifying distinct customer subgroups, evaluating them, selecting target segments, and developing customized marketing strategies for each.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
As many as 29% of SEC A households own a passenger car, However,
in the segments SEC C, D and E, the penetration rates are still in single digits. SEC B has reached double digit penetration. The total penetration of cars in urban households is only 9.4%, which means less than 10% of the households in urban India own a car (rural penetration is about 2-3%). Even with growth forecast, the total penetration of cars is likely to remain below 25% for urban India and in single digits for rural India by 2020, which implies that the Indian car market is not going to saturate for at least another 25-30 years. The key markets where cars are selling in large volumes are depicted in the figure on the bottom. There are no centre-wise sales. The data pertains to financed cars by individual buyers only. Many cars are procured without financing and many are purchased by institutional buyers (companies, government, etc). However, the figures are fairly representative of the spread. What is driving the demand? Income: Rising income has enhanced the purchasing power and more and more people are able to afford a car. Steady prices: Competition in the car industry has ensured that price points have not changed during the past 10-15 years. In other words, in inflation adjusted terms, cars have become considerably cheaper. Easy availability of financing: With the rise of easy credit and low rates, accessing of finance has become easier prompting purchase decisions.
In segmentation, targeting and positioning, a company must identify
distinct subsets of customers in the total market for a product where any subset might eventually be selected as a market target, and for which a distinctive marketing mix will be developed. The following represents the sequential steps in conducting a segmentation, targeting and positioning exercise for any given product market.
1. Select base(s) for segmentation and identify appropriate market
segments. 2. Evaluate and appraise the market segments resulting from the first step. 3. Select an overall market targeting strategy. 4. Select specific target segments. 5. Develop a product positioning strategy for each target segment. 6. Develop an appropriate marketing mix for each chosen target segment in order to support the product positioning strategy.
4 Segmentation bases in consumer product markets
Geographic segmentation consists of dividing a country into regions
that normally represent an individual sales person’s territory. In bigger companies, these larger regions are then broken down into areas with individual regional manager controlling salespeople in distinct areas. In international marketing, different countries may be deemed to constitute different market segments.
Demographic segmentation consists of a wide variety of bases for
subdividing markets, and each of these is now discussed:
Age is a good segmentation variable for such items as clothes
where the fashion-conscious young are more susceptible to regular changes in style and older segments are perhaps more concerned with such factors as quality and comfort. Sex is a strong segment in terms of goods that are specifically targeted towards males or females and again an obvious example is clothing. Here, fashion is a powerful element when purchasing, and a whole industry surrounds this criterion. Income as a segmentation base is more popular in certain countries like the USA than others who regard such matters very privately. Social class is possibly the single most used variable for research purposes. It is universally used. The National Readership Survey divides everybody into the following categories as shown in Figure 1:
1. Upper middle class (higher managerial, administrative or
professional) which comprises about 3 per cent of the population 2. Middle class (intermediate managerial, administrative or professional) which comprises approximately 10 per cent of the population 3. 1. Lower middle class (supervisory, clerical, junior administrative or professional) containing around 25 per cent of the population 2. Skilled working clsass (skilled manual workers) who comprise around 30 per cent of the population. 4. Working class (semi- and unskilled manual workers) or around 27 per cent of the population
1. Lowest levels of subsistence (state pensioners with no other
income, widows, casual and lowest grade earners) who form the rSelect base(s) for segmentation and identify appropriate market segments. 2. Evaluate and appraise the market segments resulting from the first step. 3. Select an overall market targeting strategy. 4. Select specific target segments. 5. Develop a product positioning strategy for each target segment. 6. Develop an appropriate marketing mix for each chosen target segment in order to support the product positioning strategy
5. emaining 5 per cent, or thereabouts, of the population.