SEGMENTATION OF HONDA

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 heart of the car marketer's segmentation strategy. Look at the Honda Odyssey and describe the type of person who you would expect to see driving it. Now look at the Acura RSX and describe who you would expect to see driving it Behavioural segmentation Behavioural segmentation divides the market according to how they use the product. Some products are purchased according to an occasion, such as turkey at Thanksgiving, or children's clothing in late August and early September. The market for sporting equipment, for example, is segmented according to sport and skill level within that sport. For cars, the market can be segmented behaviourally according to benefits sought. The benefits provided by a Honda Odyssey mini van are very different from the benefits provided by a small car such as the Honda Civic Si.

Describing the segments Market segmentation results in dividing the market into many groups, called segments. Each segment can be described according to its particular characteristics. The segments are then evaluated, and one or more segment is chosen as the target market for the product. For example, applying the four bases of segmentation we can describe the target market for the Honda Odyssey as follows: Male and female, age 30-50, married with at least one young child, household income $60,000+, family-oriented, involved in the community, needs a large vehicle with lots of room to carry perhaps a baby and all its accessories; young children, their friends, and their sporting equipment; a large dog; groceries and other household purchases, etc.