1 Ganesh Iyer Ford Ka Wrap-up Week 4 EWMBA 206

2 Ganesh Iyer Key Learning l Products can always be categorized size, performance, colour, features l Categorization by product features is not the same as segmentation »Sometimes categories line-up with segments in the early phase of the evolution of the category. »But not always! l The optimal segmentation of a market can change over time because of two reasons »A new consumer behaviour trend = two-car ownership. »The introduction of a radically new product = Twingo l If there are changes in the market that appear to defy your existing segmentation that’s a signal that it may be obsolete »Check your segmentation regularly

3 Ganesh Iyer Key Learning l There are many ways to segment a market 1.Demographic (Age, Income, Gender). 2.Behaviour-based (former Twingo buyers, Viagra users/nonusers). 3.Psychographic or Attitudinal l You need to understand which approach provides segments where »Homogeneity of consumer needs within »Significant heterogeneity across segments. l Even if you choose non-demographic segmentation, you must be able to describe your segments demographically. Why? »To purchase advertising media. »To do targeted promotions.

4 Ganesh Iyer Key Learning l Successful segmentation requires management of every marketing mix strategy of the firm that has an effect on the customer »Pricing, promotion, advertising. »Your distribution partners need to understand the new approach. »Ford Ka dealers initially did not recognize the change in the consumers who were initially interested in the Ka. »Adopted the old selling tactics which were a misfit for the new segmentation scheme.

5 Ganesh Iyer Key Learning l Attitudinal segments might be good to develop advertising creative but might be costly in terms of media spending. »Because they might not have distinct demographic profiles. l Ford Ka communication had significant impact because it looked very different from other small car advertising l If looking different is your source of impact, change on a regular basis may be important »Time “dates” the look and the positioning »The product line and packaging can also be used to maintain change and novelty. –Convertibles, luxury versions, high performance versions –Distinctive décor packages (e.g. summer escape, city lights)