Bases of Segmentation:
The following diagram shows few bases of segmentation.
Personal
Characterist
ics
Situational
Factors
Demographi
cs
Bases for
segmentati
on
Purchasing
Approaches
Operating
Characterist
ics
From the diagram, it can be seen that the market can be divided into
different segments based on the mentioned bases and each basis can help
the company divide the entire market into segments as per some
parameters. And parameters on which we can segment the market is given
in the next figure.
The following figure gives us typical parameters based on which the market
can be segmented into.
Nation
State
Regions
Geographic
Demographi
c
Psychograp
hic
Social Class
Lifestyle
Personality
Age
Gender
Famly
Occasions
Behavious]r on
Specific
occasions
company had tried to enter the Indian market, it was able to get a strong
foothold, thanks to its powerful positioning.
In 1965, when the Indian government looked for a motorcycle suitable to use
as a patrolling vehicle by the police at the countrys border, it zeroed in on
the Bullet and had placed a bulk order of 800 units of the 350-cc models of
the Bullet. What we can infer from this is that Royal Enfields clarity in target
and the right positioning was instrumental in getting such orders.
It was observed that Royal Enfield has been positioning its products in such a
way that they are associated with the pleasure of biking. But when it tried to
focus on expanding into a market for mass production, it failed. This was
because its characteristics were not different from a bike which could not
take in rough handling, and thus requiring a lot of care and attention from its
owners. The lack of proper care resulted in the bikes decrease in
performance & efficiency and increase in lots of problems.
Enfield bikes had also created a lot of psychological barriers for their
potential owners. For example, the massive size and weight of the bike
discouraged skinny riders from buying it, because handling would prove to
be difficult and importantly, the bike would require powerful legs for the kickstarting it. The positions of the gear and the brakes also scared off a few
more prospective customers.
Seeing that the nature of its products did not allow them to cater to all
segments, Enfield made a correction in the course quickly. Soon, it started
positioning itself as a lifestyle bike not for the ordinary but for the
aficionados among the countrys population, the people who are passionate
about engines and powerful machines. This strategy connected with the
pleasure of biking and also tagged along with it the masculine persona.
The campaign also clearly communicated the stature of the brand with
respect to other brands. The tagline, EVERYBODY MAKES WAY FOR A
BULLET, added fuel to the fire, raising the brand value and the sales value
of the Bullet soared off.
Thus we understand from this example how important it is to understand the
market and identify its proper segments.
Royal Enfield has identified its segment as a middle-class people that wants
a bike that is stylish and, at the same time, also powerful, coupled with the
feeling of adventure and independence.
The market can be divided into various segments as per age, sex, location,
job description, personal interests and hobbies, preferences, financial
strength, etc.
Considering such parameters, Royal Enfield has identified some segments as
mentioned below:
Middle income group
Royal Enfields pricing helps it target the middle class.
Defence and police
Since its inception it has always identified itself with the defence sector, due
to its involvement in World Wars I and II, and it has proven its utility. Also it
has associated with Indian army and police since 1965.
Adventure Lovers
It has positioned itself as bike for the adventure lovers with its ad campaigns
like leave home, and only few live free. This shows us that Royal Enfield
looks up at this segment as a very influential and important segment.
Young Bikers
With its ad campaigns targeting the adventure lovers, like the ones stated
before, Enfield also started to focus on the segment of young bikers, who are
in the age range of 18-35, who connect to the sense of independence as
their identity.
Now Enfield is giving focus, more than ever before, on features and try to
pass on the same to the general public. After the introduction of the Classic
model, people passionate about vintage looks with big engines have started
to go after Enfield bikes, making it one of the most sought after models of
bikes.
Now they focus more on feature and try to give pass on the same to
audience. Perhaps they dont segment the market but the market segments
for them. The people passionate about engines and vintage look prefer royal
Enfield bikes.
To validate the segmentation we conducted a survey on various parameters
and captured the data of 100 respondents. The details of the respondents is
given below.
Demographic Statistics
Age Distribution
45
40
35
30
25
20
15
10
5
0
14
45
<21
21-25
25-30
Geographic Statistics
30-35
>35
0-3
26
3-8
>8
Part of India
Locality Type
35
30
13
25
19
20
32
15
22
10
5
0
East
North
South
West
Metro
Central
City
Town
Village
Psychographic Statistics
Travelling Habits KM/Month
Parameter Preference
70
30
60
25Very Important
50
20
40
Important
Neutral
15
30
10
Less Important
5
20
10
Not Important
<100
100-300 300-600
>600
Price
Brand
Brand Preference
2
Avenger
Harley Davidson
35
20
KTM
Royal Enfield
Triumph
12
17
Targeting
To successfully position the product into the market, we need to analyze the
different segments and find out which segments are to be targeted and how viable
such targeting would turn out to be.
Segmentation of markets is followed by the evaluation of attractiveness of each
segment and selecting one or more segment to target.
Evaluating market segments
A market segment needs to be evaluated to ensure sustainable and profitable
business while keeping in mind the objectives of the company and resource
availability.
Sales Forecasting
Expected Growth Rate
Expected Profitability
Competition Analysis
Threat of substitute products
Power of Buyers and Sellers
Competition
Viability
Segment
Price
sensitive
higher
income bike
enthusiasts
Price
sensitive
long
distances
travellers
Segment
Analysis
-
Possibility of
growing
Largest
segment
present
Competition
Viability
Expensive foreign
brands
Not profitable
enough to
pursue
Most
of
the
middle
range
bikes with good
mileage
Public transport
Not a viable
segment
at
-
Urban Living
and aged
greater than
35 years
Price
insensitive
middle
income bike
enthusiasts
Adventure
seekers/trav
ellers
Royal Enfield
loyalists
Mostly people
with families
Prefer safety
and security
Fastest
growing
segment
Variety
of
choices
for
different
needs
Thrill seekers
Road
trip
travellers
Smallest
segment
Cars
Public transport
Not with
scope
Middle range to
high range bikes
Segment to be
given
maximum
focus
Bikes with
power
comfort
None
Ideal
customer
base
Important
customer
base
Efforts
required
retention
high
and
in
for