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The launching team of Ford Ka is facing a changing marketplace for innovative and fresh approaches to segmenting the small car market with attributes that could resonate with the evolving markets. It is recommended that the team should segment their market based on life style and behaviors (i.e. psychographic) to target Freedom Lovers and Attention Seekers then later stage Sensible Classics as below: Stylish and modern urban and suburban individual with acceptable income levels; this group contains men and women, who are young and consider themselves to be bubbly, spirited and trend leading; and who are older but consider themselves young at the heart and having a positive life attitude. The most critical selection criterion for market segmentation is to consider the methodology’s effectiveness in identifying distinctly groups of customers with a preference for Ford Ka. The psychographic segmentation would satisfy this criterion by clearly gauging the customer preference. The selection of the segmentation is backed by the customer surveys conducted by Ford to find the homogeneity of customers’ needs within. As the market is confronted by new consumer behavior trend and the introduction of a radically new product (Renault Twingo), traditional segmentation methods do not appear to be adequate.
For instance, buyers needs are not always dependent on physical characteristics and prices of cars; the segmentation using demographics may potentially miss entire groups of Ka buyers. In addition, the market research results have shown that Ford Ka’s main attributes do not fit the demographic segments. The psychographic segmentation, on the other hand, clearly defines the buyer groups that aligns with Ka’s features. Whilst the psychographic segmentation seems to be the most appropriate method to define customer groups and to develop advertising creativity (by Ogilcy and Mather); the cost of media spending could be high as this segmentation does not have distinct demographic profiles. A sub-segmentation to define demographic features within the psychographic segmentations may be required in order to carry out targeted marketing. Furthermore, Ford’s stakeholders such as dealership partners, the old selling tactics may be misfit to the new segmentation scheme; dealerships and salespeople will need to understand this new approach and adopt new selling tactics to target this new groups of customers.