The New Beetle: Market Segmentation and Potential Market

1. How would you segment the market (remember that a segmentation scheme must consist of mutually exclusive categories, and that the set of categories must be exhaustive)? A market can be segmented based on demographic (age, income, generation, education), geographic (region, city size), psychographic (activities, hobbies, interests), or behavioristic (brand loyalty, price sensitivity) variables. The data from the Arnolds Communication research can be helpful in segmenting the market for the New Beetle case. This research shows that Volkswagen consumers are typically young, slightly more affluent, more educated than the average car purchaser, and typically enjoy a more active role in driving. It seems that in this case we should segment our market based on households; specifically, those that are in the market for a small vehicle and those that are not. This market should further be segmented into households that are price sensitive and those that are not. It is likely that the baby boomers will fall into the non-price sensitive category. Furthermore, the more affluent younger generation is likely to be less price sensitive than most other households their age. 2. Who would you target? Why them? The New Beetle target market should be younger (18-34), slightly more affluent, and more educated than the average car purchaser. They should also have unique lifestyles, and exhibit qualities such as confidence, individualism, and a love for driving. Although the New Beetle also attracts baby boomers, due to their cherished memories of the original Beetle, this is likely not the New Beetle’s target audience. This is because the baby boomers typically have a preference for larger cars, as their lifestyle now necessitates. Although they may feel a connection to the New Beetle it is likely that most of the baby boomers have families and a small car is not a practical choice. Furthermore, VW has a goal of bringing the Beetle back into the mainstream and