segmentation & indian automobile industry

23
PRESENTATION ON SEGMENTATION & THE INDIAN AUTOMOBILE INDUSTRY

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Page 1: segmentation & indian automobile industry

PRESENTATION ON

SEGMENTATION & THE INDIAN AUTOMOBILE

INDUSTRY

Page 2: segmentation & indian automobile industry

IntroductionEver since the pioneering article on segmentation, by Wendell Smith in 1956, marketers the

world over are in agreement with regards to the heterogeneity of the global market.

With an increase in the number of manufacturers and suppliers, consumers have more variety in

the various product classes. Therefore, there are differences in consumer preferences.

Consumers have begun to react differently to the marketing actions of firms based on the

product class, benefits sought, brand image, alternatives, so on and so for.th. As a result, it

has become difficult to predict consumer behavior.

As a result, company marketers have tried to find a solution to this problem by the grouping of

consumers. Companies have begun to offer a multitude of products and brands, to the

various groups of consumers. They have thus moved away from mass

Marketing, and have become more focused in their marketing endeavors. This focused

marketing based on identified groups, is called segmentation.

Page 3: segmentation & indian automobile industry

“The identification of target customer groups (a homogeneous group of people with

similar type of needs/wants) is called “market segmentation”, where customers

with similar requirements (expectations) and buying characteristics are aggregated

into the same group.”

Marketers and researchers are therefore constantly searching for new ways of

segmenting the market. As a result, several techniques for segmenting the market

have developed over time, each using different variables depending on which

variables the researching author considered to have the most impact on consumer

decisions.

Page 4: segmentation & indian automobile industry

objectiveThe aim of this study is to investigate the concept of segmentation, in the Indian

automobile industry. A review of the existing literature has been done in the

following chapter so as to come to grips with the existing segmentation techniques

and the various considerations that must be taken into account. The questions that

this work attempts to answer are concerning the available segmentation

techniques available in literature, the current method of segmentation as practiced

by the existing companies in the industry and the thought process of consumers

with regards to automobiles (the motivation behind purchasing what they

purchase). Following this, the answers thus attained, will be looked through as a

whole so as to try suggesting better means of segmentation and to try and improve

currently employed techniques.

Page 5: segmentation & indian automobile industry

Q 1- Which age bracket do you fit into? a) 20 – 30 years c) 40 – 50 years b) 30 – 40 years d) Above 50 years

20-30 years29%

30-40 years46%

40-50 years23%

above 50 years1%

Age

Page 6: segmentation & indian automobile industry

Q2- What is your approximate annual income ?a)Male b) Female 1- More than 3 lakh 1-More than 3 lakh2-Less than 3 lakh 2-Less than 3 lakh

more than 3 lakh70%

less than 3 lakh30%

Male

more than 3 lakh60%

less than 3 lakh40%

Female

Page 7: segmentation & indian automobile industry

Q3-What is your occupation?a)Student c)Business

b)Service d)Other

Student35%

Service25%

Business30%

Other10%

Occupation

Page 8: segmentation & indian automobile industry

Q4-Do your family members affect your purchase decisions in automobiles?

a)Completely c) Very little b)To a large extent d) Not at all

Completely38%

To a large extent

44%

Very little16%

Not at all1%

Purchase

Page 9: segmentation & indian automobile industry

Q5-When you buy a vehicle, how important is the price?

a) Extremely important c) Not very important b) Important d) Not at all important

Extremely important

43%Important

52%

Not very important3%

not important2%

Price

Page 10: segmentation & indian automobile industry

Q6-When you buy a vehicle, how important is the brand (price is of no consequence)?

a) Extremely important c) Not very important b) Important d) Not at all important

Ex-tremely impor-

tant21%

Important42%

Less important36%

Not at all1%

Page 11: segmentation & indian automobile industry

Q7-What kind of a vehicle would you like? a) A very good brand (Looks and style do not matter) b) A good brand (Looks and style matter a little) c) A good looking car (Brand matters a little) d) A very good looking car (Brand does not matter)

Very good brand14%

Good brand57%

Good looking19%

very good looking10%

Page 12: segmentation & indian automobile industry

Q8- How important is culture and tradition to you? a) Very important c) Not very important b) Important d) Not at all important

Very important66%

Important20%

Not very11%

Not at all3%

Page 13: segmentation & indian automobile industry

Q9-Do you like it and want, when other people notice your car positively?

a) Very much c) A little b) Yes d) Not at all

Very much34%

Yes44%

A little17%

Not at all5%

Page 14: segmentation & indian automobile industry

Q10- Please rate yourself in a social context: a) Very outgoing b) Outgoingc) Not very outgoing

Very outgoing31%

Outgoing49%

Not very outgoing20%

Page 15: segmentation & indian automobile industry

Q11-To what extent do you value product

performance and characteristics over brand value? a) Product performance and characteristics only b) Mostly product performance and characteristics c) Less of product performance and characteristics more brand d) Brand only

Product per-formance

27%

Mostly per-formance

27%

Less per-formance

44%

Brand only1%

Page 16: segmentation & indian automobile industry

Q12-Are you willing to try new brands or stay with an already used brand?

a) Always willing to try new brands b) Sometimes willing to try new brands c) Like staying with a used brand

Always wiling25%

Sometimes will-ing

30%

Like staying45%

Page 17: segmentation & indian automobile industry

Q13-Do you find out all the details of the product or do you just trust the brand?

a) Find out all the details even if good brand b) Trust the brand

All details62%

Trust on brand38%

Page 18: segmentation & indian automobile industry

Q14-Do the geographic aspects (climate, terrain etc) of the place of residence or place of usage affect your choice of vehicles?

a) Definitely c) A little b) To a certain extent d) Not at all

Definitely62%

Certain extent21%

A little16%

Not at all1%

Page 19: segmentation & indian automobile industry

Q15- Do you tend to form opinions about brands based on your earlier experiences?

a) Yes b) No

Yes85%

No15%

Page 20: segmentation & indian automobile industry

Conclusion & Findings

If we actually begin exploring in detail, the various methods in which a market can be

segmented, the list may never end.

segmentation is a question of perceptions, people perceive the world in different ways.

While it is possible that some perceptions may be similar between different people,

it is very improbable that all perceptions be the same.

It is on this small possibility of similarities, that marketing’s most inherent concept is

based. Every person is different, and segmentation tries to find commonalities in

this world of differences.

The Indian automobile industry is as yet at an evolutionary stage. While there is most

certainly potential in the industry, it has not yet been understood well enough.

Page 21: segmentation & indian automobile industry

In this industry at the infancy stage, marketers must be patient and observe if they are to

succeed in segmenting it in some way. This section, we will briefly go over the findings,

highlight certain limitations of this study and, make certain recommendations for future

research.

The questionnaires showed that at the beginning of the segmentation process in the Indian

automobile industry, geographic segmentation could be used to segregate the rural

sector from the urban sector.

The rural sector showed a very high level of price sensitivity where a vehicle purchases meant

a very significant investment by rural standards.

While the urban sector showed similar price sensitivities to the rural sector, these were not as

acute, and the segmentation process was more complicated as a number of other variables

affected the purchase behavior of consumers.

Page 22: segmentation & indian automobile industry

Aside from this, the findings showed that the family structure played an important role

in the decision making process

Age was identified as another factor for segmentation, where younger people

between the ages 20 – 30 years, preferred fast, good looking and involving cars.

There were significant differences found between extroverted and introverted

consumers. Also, this aspect helped explain brand preference to a certain extent.

It also showed that demographic segmentation was still a popular choice among

manufacturers due to the ease of implementation and a false feeling of having

understood the market. While other methods of segmentation are being followed,

they are not being pursued with the required commitment.

Page 23: segmentation & indian automobile industry

THANKYOU

Raghav Aggarwal

Sanjay Verma

Parveen Mehta

Shagun Sharma

Sunil Mehta