Question

1. To clearly demonstrate what market segmentation is the simplest example is the
automobile industry. Divide (segment) the market based on price and product lines. You
should quickly come up with segments such as luxury, SUV or sports utility, crossover,
mid-size, compact, convertible, sedan and economy. Identify two specific brands in three
of the segments mentioned; then do a basic description of the typical driver (target
consumer) in each of the three segment (age, income, gender, lifestyle and others).

2. Compare and contrast the strategies employed by Coors Light beer and Bud Light beer.
Identify the primary target demographically. Then address how each brand appeals to
their respective target. A comparison of Coca-Cola Classic and Pepsi-Cola is another good
option. These brands have different primary targets, so the lifestyle associations are
different.

Answer 1

Segmentation can be defined as dividing the market into specific groups based on certain characteristics and attributes. Automobile industry can be segmented based on price and product lines.

Price : Economy, Sedan and Luxury

Product Lines : Compact, Mid size, Cross over and Sports Utility

Sports Utility : BMW X1, Jeep

Economy : Hyundai Santro, Maruti Alto

Sedan : Hyundai Verna, Volkswagen Vento

Sports Utility : This segment of cars is generally preferred by youth population (age - 30-40 years) males. These are mainly high income population who are highly adventurous and prefer going for high latitude areas as hill stations.

Sedan : Sedans are generally preferred by middle aged people (38-45 years) and especially females. They are mainly high income population and believe in show off and luxury. They are comfort loving people and always like to set standards in the society.

Economy : Economy class cars are preferred by young age population (25-30 years) females. They are not financially sound and purchase cars as a requirement. They dont believe in show off and believe in purchasing cars as a utility item and not as a luxury or status symbol.