 Consumers

 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.