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Marketing Management Project

Marketing Segmentation strategies of Auto dealers in Nashik

Submitted by Shreyas Divase 023 Atul Chandra 037 SanketKatole 043 Shantanu 073 Ashok Patel 070 Vaibhav 065

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The car industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 11 million cars every year.India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 2.6 million units in 2009. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea and Thailand. As of 2009, India is home to 40 million passenger vehicles and more than 2.6 million cars were sold in India in 2009 (an increase of 26%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.A combination of key reasons such as technical expertise, low costs, stable economy, and government policies favoring cars, large and integrated supplier base, and competence in diesel power train manufacturing will propel India as a major car manufacturer. This car segment has grown by 15% over last 5 yrs. In last two years, India witnessed a boom in growth of the car segment withmajor car makers making their foray in India and India will have cars from General Motors, VW, Fiat, Ford,Toyota, Honda, etc. Production statistics
Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Car Production 2,166,238 1,846,051 1,713,479 1,473,000 1,264,000 1,178,354 907,968 703,948 654,557 517,957 533,149

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Literature Review
SEGMENTATION Process of defining and sub-dividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the , targeted segment. Few firms are big enough to supply the needs of an entire marketmost must breakdown the total demand into segments and choose the one or few the firm is best equipped to handle. Four basic factors that affect market segmentation are (1) clear identification of the segment (2) measurability of its effective size (3) its accessibility through promotional efforts (4) its appropriateness to the policies and resources of the firm. The four basic market segmentation-strategies are based on.

Geographic Segmentation
Region: The major regions for car market in Nashik are urban, rural, and industrial. Since more than 60% of the total population is living in interiors, it becomes all the more important to cater to this segment. However, so far, the marketers have laid more focus on Urban/semiurban market and their products are primarily catering to the needs of the urban segment. But with therecent market hits, the companies are trying to pay more attention the rural market segment to gainprofits. So marketers need to identify when to market a product according to the region in which the consumer lies.

Demographic Segmentation
1) Age & life cycle stage: Student, Young Married, Single working.

The average age profile of a car buyer is 25-46 years. Although the percentage of people buying carsbetween 31 and 40 years of age has remained stagnant at 31 per cent (1999-03), there has been a 9percentage point increase in the number of car buyers in the 25-30 age groups. The number of olderpeople (51 to 60 plus) buying cars has gone down. 2) Family Size: Average Indian household size is 5 people. Hence Small cars are the most obvious andaffordable choice available for the Indian middle class. 3) Income: Higher income households tend to be less price-sensitive, placing a higher value on buyinghigher-quality merchandise. Because of the growth in dual-income households, there has been a dramaticgrowth in the proportion of total spending in the economy coming from such households, implying thatthe market for high-end products and services should increase substantially. Thanks to the easyavailability of cheap financing options, there has been an increase in the number of younger peoplebuying cars in India during 1999-2003EMI: a factor affecting the most of the buyers. 3 out of the 4 carssold in the country are funded by a loan.
4) Occupation: Occupation of the consumer affects the buying power. For ex: A Regular salaried employee will easily get finance done for buying a car , whereas a selfemployed

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consumer will opt for full down payment option. This explains the reason for high contribution from salaried and self employed people in buying small cars Behavioral Segmentation 1) Decision Roles: When it comes to car, where huge investment is involved, people generally tend to take reference from other users. They go for test rides, get it checked from some experienced people who are much more comfortable about cars. 2) Occasions: In India, people do buy cars in the festival season, and during the marriage seasons. 3) Benefits: Consumer looks for the following benefits from a car. Power, Technology, Fuel Economy, Preferred Fuel, Low operational cost Space and comfort, Safety, Styling 4) User Status: The kind of buyer can be classified into non-buyer, first time buyers, and repeat buyers. The major of the buyers in the small car are a first time buyer, thats why this market is often referred as entry level car market. While going for car replacement, 50 percent of small car owners in India are again going for small cars and are reluctant to experiment with luxury cars. Psychographic Segmentation 1) Social Class Social class plays a major role in segmentation for the automobile industry. With more than 40% of the population of Indian lying in the middle class bracket, it becomes all the more important segment for the marketers to consider. Working class and upper lowers constitute the other prime target in the small car manufacturers. 2) Life-style life style is an important psychographic segmentation composed of a combination of factors such as activities, interest and opinions. Ex: As part of its rebranding exercise, Fiat India is rolling out a number of products to cater to the lifestyle segment in the auto market. 3) Personality The customers are further segmented on their personality traits like sports oriented person, easy going. People are also segmented on their value system.

The project is primarily meant to know about marketing segmentation strategies adopted by the car dealers of Nashik. The scope of the research project covers the following main points: y To get to know the how car dealers segment population in Nashik. y To get to know market growth of cars in Nashik. y To get to know market share of different cars in Nashik. The research was conducted through Primary collection of Data. A Questionnaire consisting of fifteen questions was used to collect the data. Our group member personally visited the car dealer showroom and contacted the concerned person to collect the data.

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Shaan Cars Pvt. Ltd.

Opened in 2008 Location-Satpur Car sold till 31 jan 2011 1980 Growth of car sales this year Shaan car pvt. Ltd.- 45% Automotive - 23% Seva - 32% Asst. Sales Manager- Mr. Pravin Nikam Age range of customers - 25 40 yrs Maximum sales is done in months of March due to Gudipadva and in September and November due to Dusshera and Diwali Monthly cars sales in Nashik (overall including all car dealers) 1200 Monthly cars sales of Maruti in Nashik 700 Market share of Maruti in Nashik 55% - 60% Alto, WagonR, Omni accounts for 85% - 90% sales of Maruti Cars available in showroom
Car Models Maruti 800 Alto A-Star WagonR Ritz Swift Dzire Ritz (Diesel) Swift (Diesel) Dzire (Diesel) SX4 Grand Vitara Omni Ecco Engine 800 cc 800 cc 1000 cc 1000 cc 1200 cc 1200 cc 1200 cc 1200 cc 1200 cc 1200 cc 1600 cc 2400 cc 800 cc 1200 cc Technology MPFI MPFI K-Series K-Series K-Series K-Series K-Series DDIS DDIS DDIS VVT VVT MPFI K-Series

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Segmentation Most important factors for segmentation are Length of the cars
Segment A1 A2 A3 A4 B Segment Length 3400 - 3700 mm 3700 - 4000 mm 4000 - 4500 mm 4500 - 4700 mm 4500 - 4700 mm Car Maruti 800 Alto, Swift, A-Star, Ritz, Swift, Estilo, WagonR Dzire, SX4 Kazaki Grand Vitara

Region Rural- Maruti 800,Alto, Omni, Eeco Urban-Swift, A-Star, Ritz, Swift, Estilo, WagonR, Dzire, SX4, Kazaki, Grand Vitara Family size
4 seater-Maruti 800,Alto, A-Star, Ritz, Swift, Estilo, WagonR, Dzire, SX4, Kazaki 7 seater-Omni, Eeco, Grand Vitara

10k 15k-Maruti 800,Omni, Eeco 15k 25k-Alto, A-Star, Ritz, Estilo, WagonR 25k 50k- Dzire, SX4, 50k+ - Kazaki

Commercial-Omni, Eeco Personal-Maruti 800,Alto, A-Star, Ritz, Swift, Estilo, WagonR, Dzire, SX4, Kazaki

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Opened in 2003 Location- Bombay Agra road, near sai palace hotel, nashik Asst. Sales Manager- Mr. R. J. Kulkarni Age range of customers - 30 55 yrs Maximum sales is done in months of March and from august to December Cars available
Car Models Mitsubshi outlander pajero montero lancer cedia Lancer evolution X Engine 2400cc 2800 cc 3000 cc 1000 cc 1200 cc 1200 cc Technology DOHC MPI MIVEC SOHC turbo charge DOHC intercooled K-Series K-Series K-Series

Segmentation Most important factors for segmentation are Socio-economic class: SEC A+SEC B: Lancer, Cedia, Outlander, Montero, Pajero SEC C: None Family size
4 seater- Lancer, Cedia 7 seater- Pajero, Outlander, Montero.
(NOTE:-Mitsubishi segments their cars on the basis of family cars, business class cars, rally cars and specially targeted segment for politicians.)

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Opened in 2003 Location- near pathardi phata, Bombay road ,Nashik Asst. Sales Manager- Mihir Mohadikar. Age range of customers - 30 55 yrs Maximum sales is done in months of March and from august to December. Cars available
Car Models jazz City civic accord CRV Engine 2400cc 2800 cc 3000 cc 1000 cc 1200 cc Technology DOHC MPI MIVEC SOHC turbo charge DOHC intercooled K-Series K-Series

Segmentation Most important factors for segmentation are Socio-economic class SEC A Honda accord , Honda CRV,Honda civic SEC B - Honda city, Honda jazz SEC C NONE
Family size 4 seater city, civic, accord 5 seater - honda jazz, 7 seater honda CRV Car model design Hatchback honda jazz Premium Sedan city , civic Luxury sedan accord Sport utility vehicle( SUV) - honda CRV.

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Moharir Motors Pvt. Ltd

Opened in april 2007 Location- near pathardi phata, Bombay road ,nashik Asst. Sales Manager- Mr. Rupesh Naik. Age range of customers - 25 60yrs Maximum sales is done in months of March to may and from august to December. Cars available
Car Models figo Engine 1196cc Technology 1.2 Duratec , 1.2L 71bhp Duratec DOHC 4 (cylinder) 4 (valve SOHC (4cylinder) 2 (valve) DOHC 4 (cylinder) 4 (valve)


2800 cc




2499 cc

Segmentation Most important factors for segmentation are Family size

4 seater- Figo, Ikon, Fiesta 7 seater- Endeavour

Age group 25 35 yrs Figo, Fiesta 35 yrs + - Ikon , Endeavour Socio-economic class SEC A - Endeavour SEC B - Ikon , Fiesta, Figo SEC C - NONE Model design Hatchback: figo Mid size : ikon Sedan: fiesta SUV: endeavour

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Conclusion and learnings

As per our study we found that the market growth rate of cars in Nashik city is 15% 20% per annum. Below are different market segmentation strategies followed by various car dealers in Nashik Maruti Maruti segments its customers on the basis of Income group and usage. Honda Honda segments its customers on the basis of socio-economic class and car design. Ford Ford motors segments its customers on the basis of socio-economic class and Age. Mitsubshi Ford motors segments its customers on the basis of usage and family size.

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1) Philip Kotler, Marketing Management A South Asian Perspective 13th Edition (2009) 2) Automotive industry in India, Wikipedia(2011)

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