Segmenting the Market for Honda Car

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Date Submitted: 08/25/2011 03:27 AM

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To segment a market you begin by defining the market as a whole. The market as a whole, for Honda, is any person with a driver's license. The next step is to examine the four bases of segmentation (geographic, demographic, psychographic, and behavioural) and decide which are relevant to the particular product, and how they are relevant.

Geographic segmentation

Is geographic segmentation relevant to car buyers? Yes. The first decision Honda's marketers would make is which cars to market in which countries. Europeans, for example, drive much smaller cars than Canadians. Within a country like Canada, Honda might also segment the market into rural and urban areas. People who live in rural areas are more likely to buy a Honda Pilot than a Honda S2000.

Demographic segmentation

What about demographic segmentation? Demographics is a general term for any measurable information about consumers that allows marketers to group them into segments. Age is a relevant demographic for car buyers. The very young and the very old do not drive, and in between, say, from ages 20-70, the choice of car will be partly influenced by the person's age. Take the Honda Civic Si, for example. A 20 year old is more likely to choose this car than a 70 year old. There's more to demographics than simply age, though, such as segmentation by gender. Are women more likely to buy certain Honda models than men? Are men more likely to buy certain Honda models than women? There's also segmentation by income. A person's income level is a major influence on their choice of car. A young man just starting his career, or an older man working in a low-paying job, might desire an Acura NSX, but at $89,000 U.S., neither could afford to buy it. Family status, whether a person is married and whether they have children, is also a demographic factor that influences their choice of car.

Psychographic segmentation

Psychographics divide the market into groups based on lifestyle and personality. Here we have the...