Term Project Report
Date : 29th November 2012
1. Market Segmentation
1.1 Main parameters
A market is simply a group of users with similar needs. It follows from this that a market consists of subgroups, or segments containing users with slightly different needs to those of other segments. So market segmentation “is about dividing a mass market into identifiable and distinct groups or segments, each one of the having common characteristics and needs displaying the similar responses to marketing actions.” For example, a segment can be subdivided further into enthusiasts, once-in-a-lifetime buyers, gift purchasers, and so on. Whilst they may not be immediately apparent, every market is made up of a myriad of such segments. For this, the segmentation of a market is generally based on the data gathered relating to main customer-, product-, or situation-based variables. These segmentation fundamentals imply profile patterns, behavioral patterns and psychological patterns. Market segmentation includes the usage of information bear on distinctive client, consumer, organizational and market characteristics. For instance these vary for Business-to-Consumer and Business-to-Business markets. In the following the investigation’s focus will lie on the B2C market of the Volkswagen Group. The German Volkswagen Group consists of two divisions: the Automotive Division and the Financial Services Division. Nevertheless, in this analysis the Financial Services will remain out of consideration. The purpose of market segmentation is to cope with the economic reality of scarcity of resources. As companies have limited resources, they cannot produce all possible products or services to all people, all of the time. Thus, in order to be efficient and effective, they need to make selected offerings to selected segments, most of the time. In the same vein, companies will ensure that the elements of the marketing mix are designed and manipulated to meet the needs and wants of the specific groups of customers. Marketing deals with analyzing and satisfying customer requirements. The process of market segmentation thus brings a much increased understanding of users’ needs, their decision criteria and approach, and therefore gives a much clearer direction to the management of current products. This increased understanding also brings a clearer focus and return on pricing, distribution, and advertising decisions. Habiyaremye, Jean d’Amour (2011): Market Segmentation and 4Ps, 1st edition, Germany. Croft, Micheal J. (1994): Marketing for Managers – Market Segmentation, 1st edition, London. http://de.scribd.com/doc/18637694/Lesson-1-Introduction-to-Consumer-Behaviour
1.2.1 Main product
The Volkswagen Group consists of ten different brands from seven different European countries: Volkswagen, Audi, SEAT, Škoda, Bentley, Bugatti, Lamborghini, Volkswagen Commercial Vehicles, Scania and MAN. Every brand has its own character and operates independently in the market. In the business field Automotive Service the activities are focused on the development of vehicles and engines, the production and sale of passenger cars, commercial vehicles, trucks and buses, and business comprising genuine parts, large-bore diesel engines, turbo-machinery, special gear units, propulsion components and testing systems. This analysis investigates the model Golf of the Volkswagen Brand, which is in the sector passenger cars.
1.2.2 Main customer
The customers of Volkswagen are major customers, commercial customers, private customers, special customers and people with disabilities. For the analysis the private customers are considered, because they are the biggest target group for the Golf model.
1.2.3 Main geographical area
Volkswagen Group has 99 production plants in 18 European countries and in nine countries in America, Asia and Africa. For instance...