CHAPTER 20

Segmentation and
Targeting: The Case of
Indian Passenger Car
Market
© Macmillan Publishers India
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
At the end of this chapter, you should be able to:

⮚ Understand the Lessons on Segmentation and Targeting,

using the Indian Passenger Car Market as an Illustration
⮚ Identify the Two Main Bases on which the Players Segmented
the Car Buyers
• Segmentation Based on the Buyers’ Preferred Price Slot
• Segmentation Based on the Benefits the Buyers Sought from the Cars

⮚ Comprehend How the Players Evaluated Each Segment

⮚ Grasp How the Players Picked Up Segments that Suited them
⮚ Identify How they Brought in Appropriate Offers in the
chosen segments
⮚ Appreciate How the Segmentation Endeavours Went Still Deeper
⮚ Grasp How the Car Firms introduced Lifestyle Segmentation
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in due course
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Passenger Car Market Serves as an Apt Illustration on
Segmentation
⮚ Car buyers had come to form a diverse group
⮚ Competition necessitated deep segmentation
⮚ Deep segmentation had also become feasible
• The kaleidoscopic variety among car buyers in India

Exhibit 20.1 Car Buyers in India Display Infinite Variation in their

Approach (Page 341)

The Two Main Bases on which the Players Segmented the

Car Buyers
■ Segmentation Based on the Buyers’ Preferred Price Slot
■ Segmentation Based on the Benefits the Buyers Sought
from the Cars
⮚ The Two Routes were Employed not Mutually Exclusively
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Segmentation Based on Preferred Price Slot
• A/Entry Level/ Budget Segment
• B/Compact Segment
• C/Family/ Mid Segment
• D/Premium/ Executive Sedan Segment
• E/Super Luxury Segment

The Players Evaluate Each Segment

■ Evaluation of ‘A’ Segment
⮚ A sizeable segment currently
⮚ There will be growth in numbers, but not in its share of the total market
⮚ Attractive, but only to Maruti, due to historical competitive advantage
⮚ A single-player segment – monopoly by Maruti
⮚ Future not bright, the segment may vanish
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Evaluation of Segments (…contd)
■ Re-evaluation of ‘A’ Segment in More Recent Times
■ The pundits were proved wrong; the ‘A’ segment did not vanish
⮚ There were reasons why the segment survived
⮚ The ‘Nano’ redefines the ‘A’ segment and gives it a new lease of life
Exhibit 20.6 The Nano
■ Evaluation of ‘B’ Segment Revolution (Page 353)
⮚ Largest segment
⮚ Competition intense; difficult to enter; and hence less attractive
■ Re-evaluation of the ‘B’ Segment, with the Unveiling of the Nano

■ Evaluation of ‘C’ Segment

⮚ Competition intense, yet profitable, not too difficult to enter, future
fairly bright
■ Evaluation of ‘D’ Segment
■ Evaluation of ‘E’ Segment
■ Relative Shares of the Segments
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Players Picked Up Segments that Suited Them

■ Maruti Selects ‘A’ and ‘B’ for Leadership, and Other Segments for
Presence
⮚ Maruti picks up the other segments too for maximising presence
▪ Example of Baleno

■ Tata Motors Selects ‘B’ for Volume and Higher Segments for Multi-
Segment Presence
⮚ Was particular to be a player in the ‘C’ segment
⮚ Selects the ‘A’ segment too with the Nano

■ Hyundai Selects ‘B’, ‘C’, and ‘D’, Seeking Leadership Across the Board
■ Many Players Added the Higher Segments, Partly for Retaining the
Up-graders within Their Fold
■ Honda Selects ‘C’ and ‘D’ Segments
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 Chapter 20: Segmentation and Targeting: The Case of
Segmentation Based on the Benefits Sought by the BuyersCars

■ ‘Benefit’ Offered Maximum Scope for Segmenting

Exhibit 20.2 Benefits Buyers Sought in Cars (Page 347)
■ Engine Power
▪ Chevrolet Optra
▪ Sonata Embera
■ Technology Benefit
▪ Santro Xing eRLX
■ Fuel Economy (Mileage)
■ Fuel Economy – (Preferred Fuel)
• Petrol votaries, diesel fans, and gas lovers made three distinct segments
■ Low Overall Operational Costs
■ Low Maintenance Costs
■ Benefit of Space
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Exhibit 20.3 Space Benefit as Segmenting Base (Page 349)
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Benefit Segmentation (…contd)
■ Driving Comfort/ Driver-Friendly Facilities
■ Safety
■ Styling and Beauty
■ Distinctiveness
▪ Special editions to suit sub-groups seeking distinction

Exhibit 20.4 Special Editions for Specific Sub-Groups – Maruti (Page 351)

■ Luxury, Status, and Image

• Ford targets the luxury seekers with its Mondeo
■ Brand Name
▪ Example of Mercedes
▪ The opposite example of Baleno
■ Lifestyle

■ Buyers Sought Not Just One Benefit, But a Mix of Many Benefits
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 Chapter 20: Segmentation and Targeting: The Case of
Cars
Players Bring in Appropriate Offers in the Chosen Segments
■ A Plethora of Offers
Exhibit 20.5 (Page 352), 20.7 (Page 355),20.8(Page 357),20.9
(Page 361),20.10 (Page 363),20.11 (Page 365)
■ Offers in the ‘A’/Budget/Entry Level Segment
▪ M 800
▪ Omni
▪ M 800 MPFI
▪ Alto LX
■ The Nano Revolution Sweeps the ‘A’ Segment

Exhibit 20.6 The Nano Revolution (Page 353 - 354)

■ Offers in the ‘B’/Compact Segment

▪ The Zen
▪ The ‘more car per car’ – Indica Exhibit 20.7 Offers in the
▪ The ‘tall boy’ Santro B Segment (Page 355)
▪ Maruti comes up with the WagonR
⮚ All four above are cases of segmentation directly leading to the
product to©be
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 Chapter 20: Segmentation and Targeting: The Case of
Players Bring in Appropriate Offers (…contd) Cars

⮚ More, Advanced Offers in the ‘B’ Segment

▪ The improved Santro Xing – the sunshine car
▪ The Alto VX
▪ The Getz
▪ The Swift
▪ Maruti adapts the Swift for India
▪ GM Chevrolet Spark
▪ Hyundai i10
■ Offers in the ‘C’/Family/Mid-Segment
Exhibit 20.8 Offers in the C Segment (Page 357)
• Maruti Esteem • GM Chevrolet Aveo • Tata Indigo CS
• Maruti Baleno U-VA • Hyundai Accent
• Maruti SX4 • Ford Escort and • Honda City
• GM Opel Corsa Escort Zetec • Mahindra-
• GM Opel Swing • Ford Ikon Flair Bolero,
• GM Chevrolet Optra • Ford Fusion Scorpio, Logan
• Optra CNG • Ford Fiesta Pace • Ambassador
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Toyota Qualis,
Innova
India Grand
• Skoda Fabia
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 Chapter 20: Segmentation and Targeting: The Case of
Players Bring in Appropriate Offers (…contd) Cars

■ Offers in the D/Premium/Executive Sedan Segment

Exhibit 20.9 Offers in the ‘D’ Segment (Page 361)

▪ Honda Accord
▪ Skoda Octavia
▪ Hyundai Sonata V- 6
▪ Toyota Corolla
▪ GM Opel Vectra
▪ Ford Mondeo
▪ Toyota Camry

■ ‘E’/Super Luxury Segment

▪ BMW
▪ The ‘Gallardo’ from Lamborghini

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 Chapter 20: Segmentation and Targeting: The Case of
The Segmentation Endeavours Get Still Deeper Cars

⮚ Quest for deep differentiation leads to deep segmentation

⮚ Deep segmentation leads to proliferation of offers
⮚ New offers for new segments
⮚ Improved offers for existing segments
⮚ Segments within segments; offers within offers
Exhibit 20.10 Each Vehicle Came in Several Models (Page 363)

⮚ The Downside of Deep Segmentation

▪ Cannibalisation among one’s own offers
▪ Price slots in a narrow range blur distinction between segments/offers
▪ Lowering of EMI accentuates the blurring
⮚ On the whole, deeper segmentation brought benefits
⮚ Enabled filling market/product line gaps
▪ Ford Fiesta
▪ Hyundai Sonata and Grandeur
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 Chapter 20: Segmentation and Targeting: The Case of
Segmentation Based on Lifestyle Cars

⮚ Traces of lifestyle-oriented car buying in ‘C’ and ‘B’ segments

Exhibit 20.11 Traces of Lifestyle-Oriented Car Buying (Page 365)

⮚ Advent of two totally lifestyle-based segments: SUV and Lifestyle

■ The SUV Segment
▪ For India, it was a new segment
▪ Players swiftly embraced the segment and came up with relevant offers
▪ Examples of how the SUVs were Positioned on Lifestyle

Exhibit 20.12 Offers in SUV Segment (Page 366)

■ The Station Wagon Segment

▪ This too was a new segment for India

Exhibit 20.13 Offers in the Station Wagon Segment (Page 369)

■ It will not be inapt to exclaim, ‘You ain’t seen nothin’ yet, baby, in the
Indian passenger car market!’
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