Historically, car manufacturers including Ford segmented buyers according to their income and age. Ford used these figures to classify small car buyers into four target groups. •Financially constrained buyers (single men and women without children 250,000 FF) Pros: Manufacturers specialized in certain categories; small car manufacturers focused on low production costs while luxury car manufacturers focused on differentiation through product features and quality. This delineation resulted in less competition.
In addition, regional level marketing was practiced. Cons: Max profits is not exploited because a fleet of cars to service a range of geographic, demographic, psychographic, behavioral and attitudinal segments is unavailable. Which segmentation approach should be used for the Ford Ka? Demographic segmentation was advocated by management due to its historical success and the fact that data was accessible. However, demographic focus group results contradicted management’s view.
The 40-44 year old group comprised a 32% share. Attitudinal segmentation was advocated by the advertising agency. If it is true that the market is fragmented to a greater extent than Ford’s management currently assumes, then the attitudinal segmentation approach has the dual advantage of not alienating traditional market segments, such as the 40-44 year olds that featured highly in addition to encompassing a wider demographic based on lifestyle choices. Attitudinal segmentation had a risk of being expensive and risky.
Overall, the risk of choosing demographic segmentation and potentially experiencing project failure appears greater than the risk of favoring an attitudinal approach that aligns with an evolving market thesis. Favoring this approach is the fact that Choosers who placed the Ka among their top 3 choices also included the Twingo, which spanned demographic segments and aligned with an attitudinal approach. Freedom lovers and attention seekers could potentially convert Sensible Classics over time.