Market segmentation for passenger motor vehicles

Essay by inocheatingUniversity, Bachelor'sC-, August 2004

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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:

All those segments are companied with other factors include price, image and the amount of extra accessories. These market segments have different brands competing against each other and Daimler Chrysler's Mercedes-Benz is under the luxury segment of the market, while having competitors such as Jaguar and BMW.

4.2 Relevant domestic variables

o Demographic variables

Age, family size, and income are frequently used to segment passenger motor vehicles buyers. Many brands of cars are designed to appeal to specific age groups or family-size categories. For example, Suzuki Samurai appealed to the young generation while Mercedes-Benz appealed to 30-45 age group people. General Motors also uses age and income as their basis for segmentation for a very long time. The household income ladder was divided into five segments, served by Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac (

o Behavioural variables

Behavioural segmentation is used to divide the market into groups according to occastions when buyers get the idea, make a purchase or used a product (Kotler, et. al 2001, p.167). In Europe, automobile manufacturers introduced "minicars", developed exclusively to commute in cities, (e.g., Renault Twingo, Fiat Cinquecentio). Other behavioral variables have also...