The document discusses market segmentation in the Indian automobile industry. It begins by introducing market segmentation and explaining how consumers have varying preferences that make predicting consumer behavior difficult. This has led companies to segment consumers into groups with similar needs and characteristics. The objective of the study is to investigate segmentation techniques used in the Indian automobile industry by reviewing literature and examining current company practices and consumer purchase motivations. Questionnaires identify some initial segmentation approaches, finding geography and family structure influence purchases. Younger consumers prefer fast, stylish vehicles while extroversion impacts brands. While demographics remain popular, other techniques require more commitment.

1. SEGMENTATION & THE
INDIAN AUTOMOBILE
INDUSTRY

2. Introduction
Ever 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.

3. “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.

4. objective
The 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.

5. Q 1- Which age bracket do you fit into?
a) 20 – 30 years
b) 30 – 40 years
c) 40 – 50 years
d) Above 50 years
above 50 years
1%
40-50 years
23%
30-40 years
47%
Age
20-30 years
29%

6. Q2- What is your approximate annual income ?
a)Male
b) Female
1- More than 3 lakh
2-Less than 3 lakh
less
than 3
lakh
30%
1-More than 3 lakh
2-Less than 3 lakh
Male
Female
less
than 3
lakh
40%
more
than 3
lakh
70%
more
than 3
lakh
60%

7. Q3-What is your occupation?
a)Student
b)Service
c)Business
d)Other
Occupation
Other
10%
Student
35%
Business
30%
Service
25%

8. Q4-Do your family members affect your purchase
decisions in automobiles?
a)Completely
b)To a large extent
c) Very little
d) Not at all
Not at all
1%
Purchase
Very little
17%
Completely
38%
To a large
extent
44%

9. Q5-When you buy a vehicle, how important is the
price?
a) Extremely important
b) Important
c) Not very important
d) Not at all important
Not very
important
3%
Price
not
important
2%
Extremely
important
43%
Important
52%

10. Q6-When you buy a vehicle, how important is the
brand (price is of no consequence)?
a) Extremely important
b) Important
c) Not very important
d) Not at all important
Not at all
1%
Less important
36%
Extremely
important
21%
Important
42%

11. 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 looking
10%
Very good brand
14%
Good
looking
19%
Good brand
57%

12. Q8- How important is culture and tradition to you?
a) Very important
b) Important
c) Not very important
d) Not at all important
Not at all
3%
Not very
11%
Important
20%
Very important
66%

13. Q9-Do you like it and want, when other people
notice your car positively?
a) Very much
b) Yes
c) A little
d) Not at all
Not at all
5%
A little
17%
Very much
34%
Yes
44%

14. Q10- Please rate yourself in a social context:
a) Very outgoing
b) Outgoing
c) Not very outgoing
Not very
outgoing
20%
Very outgoing
31%
Outgoing
49%

15. 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
Brand only
1%
Product
performance
28%
Less performance
44%
Mostly
performance
27%

16. 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
Like staying
45%
Always wiling
25%
Sometimes
willing
30%

17. 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
Trust on brand
38%
All details
62%

18. Q14-Do the geographic aspects (climate, terrain
etc) of the place of residence or place of usage
affect your choice of vehicles?
a) Definitely
b) To a certain extent
c) A little
d) Not at all
A little
16%
Certain
extent
21%
Not at
all
1%
Definitely
62%

19. Q15- Do you tend to form opinions about brands
based on your earlier experiences?
a) Yes
b) No
No
15%
Yes
85%

20. 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.

21. 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.

22. 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.

23. Raghav Aggarwal
Sanjay Verma
Parveen Mehta
Shagun Sharma
Sunil Mehta