By Mary Anne Winslow Market segmentation is definitely one of the most significant parts of the marketing process. In this article I will examine the car industry in the UK. We will mostly concentrate on the psychographic method of the segmentation. The weaknesses and strengths of the method will be discussed here. I will also look at several other market segmentation methods in the car industry. Market segmentation is an essential part of the marketing process. It
allows firms to allocate their market into groups that have the same
similarities which are relevant for decision making in the marketing
strategy. Then firms can target their market to serve
it effectively, they can differentiate the market, define the
opportunities and threats and tailor the marketing mix. To be useful, segments selected should
be measurable, substantial, accessible, differentiable and actionable.
The market can be segmented in different ways; the
three most popular techniques used are: behavioural segmentation which
analyse benefit sought, purchase occasion, purchase behaviour, usage
and perception and beliefs; the second is psychographic segmentation
which analyse the lifestyle and the personality of consumers and the
third is profile segmentation which base its researches on
demographic, socio-economic and geographic variables. Researches show that there is no exact definition for psychographics
The basic basis of psychographic research is that the
more firms know and understand about their customers the more
effectively they can communicate to them.
Psychographic research can identify similar values, attitude, and
lifestyle or personality groups, but the two main variables used in
psychographic segmentation are the lifestyle and the personality of
the customer: Personality is an individual's pattern of character that
influences behavioural responses such as self-confidence, dominance,
sociability. This variable is important to be understood because
people tend to see themselves in a way and purchase products to
satisfy their self-concept so people see them in the way they want.
Lifestyle is a person's pattern of living as expressed in this or her
interests, opinions and activities. It is considered to be a rich
descriptor of people buying patterns. Often, people buy brands because
those brands relate to their way of living.
For example a successful businessman in his late thirties will buy a
BMW because the image the brand shows in its advertisement is power,
success and high standard of living. Psychographics are necessary to
firms because they can investigate into specific product category and
brand decisions by consumers and can be used to paint the big picture
of consumer lifestyle. Psychographics has proven to be a very useful tool for organisations
in their marketing research. It identifies target markets that could
not be isolated using only demographic variables.
Psychographics are designed to measure the consumer's
predisposition to buy a product, the influences that stimulate buying
behaviour, and the relationship between the consumer's perception of
the product benefits and his/her lifestyle, interests and opinions.
Often researchers have turned to psychographics
because of the limitation encountered in demographics. An advantage of
psychographics is that it describes segments in terms directly
relevant to advertisement campaign and market planning decisions of
organisations. It has also appealed marketers
for its power to combine the richness of "motivational research" with
the statistical sophistication of computer analyses and, provide
corporate strategists with rich descriptive details for developing
marketing strategy; it has the ability to give
marketers a big image of the consumer's lifestyle. There is also the
appealing advantage that psychographic segments which are developed
for markets in one geographic location are generalizable to market in
other geographic locations. Psychographics are
essential for discovering both the explicit and the hidden
psycho-social motives that so often spell the difference between
acceptance or rejection of the brand. But psychographics have limitations. Researchers have found
reliability problems: first there are no standardized methods to
evaluate the stability of results of psychographic techniques and
incertitude in this area weakens predictive power. Therefore it will
throw doubts in whether the segment and market targeted are reliable
or not. The main problem is that psychographics attempt to measure
intangible and diffuse concepts, values and attitudes are not easy to
measure as every single person has a different personality and
consequently have different opinions and interests. It has also been
point out by that there is little cross-study
evidence on reliability so findings cannot be compared and improved. The car industry in the United Kingdom is very large but is resumed by
two monopolies: the first one is a monopoly in favour of Ford which
owns most of the leading brands. The second is another monopoly which
is described as a "complex monopoly situation arising from the
selective and exclusive distribution system used by most car suppliers
in the United Kingdom." by the United Kingdom Parliament. The UK has the biggest used car market in Europe: of the 26 million
cars on the British road only 2 million have been bought new in the
past twelve months (United Kingdom Parliament (1998) Jaguar creates cars for customers that are seeking distinctive saloons
and sports cars which deliver "stimulating performance and captivating
style". They have built an image for their cars which
corresponds to what their potential buyers want to identify themselves
with. The company is seeking to reflect the individuality of its
consumers. Its image is one of luxury, sport and freedom to inspire
people. Jaguar uses psychographics since a big part of the customer's
purchase decision process is based on values, self-concept and
attitudes. Jaguar need to know its customers, their personality and
their self-concept to create a car up to their expectation and reflect
the lifestyle they have. Volvo is another brand of car that has a very different target market.
Volvo uses psychographics to segment their market. They create cars
aiming mainly at "modern families". They analyse
what are the attitude and values of families towards cars, what are
the lifestyle of today's families: research showed that families were
going away for holidays and needed big cars that are able to be
reliable and provide comfort for the whole family. It has been found
that today, families go to the beach but also to the mountain. So
Volvo created cars that allowed families to purchase car to suit their
lifestyle. They also had to analyse the personality and the
self-concept of those families. A family that want freedom, that is
adventurous. And this is reflected in Volvo's advertising campaign. So
when people watch those advertisements they can rely on it and
identify themselves with the image they are giving out. Other methods of segmentation are used in the UK car industry such as
demographics or geographic. But often those methods, particularly in
the car industry, need to be supplemented with other data, even if
some researchers such as Ziff affirmed that "as demographic is
based on the ground that demographic groups are relatively homogenous,
it does not need psychographics to distinct customer's behaviour."
Demographics can turn up objective facts
such as tell that the target customer owns a car but it will not be
able to tell why the person bought the car; this "why" is told by
psychographics. In order to be successful, the car industry must know
its consumers: their age, their sex, their marital status, their
income, their purchase behaviour such as if they are brand loyal or if
they are innovators. Jaguar keep record of every single client and
follow them for up to four years to know everything about their
satisfaction, their complaint, so they are able to measure the number
of clients that are brand loyal. Both Volvo and
Jaguar saw a new target market in women and developed design to satisfy
their wants. In order to serve this new and growing market, identified
through demographics, those firms will need to use psychographics
because women have different attitudes, values, personalities and
lifestyle than men. They will also need to know what their
expectations are and what issues they think are most important when
they buy a car. For example, women may be more focused on safety and
design while men may be more careful about their image and the
performance of the car. Mary Anne Winslow is a member of Essay Writing Servicecounselling department team and a dissertation writing consultant. Contact her to get free counselling on custom essay writing. Article Source: http://EzineArticles.com/?expert=Mary_Anne_Winslow http://EzineArticles.com/?Market-Segmentation---Psychographic-Method&id=315742 phentermine no prescription usa
order phentermine 37.5
somewhere that sells phentermine diet pills
order phentermine diet pills
