Research on Segmentation of automobile industry and positioning of the Beatle

Research on Segmentation of automobile industry and positioning of the Beatle

Ⅰ. Introduction

Car has gone through more than 100 years since its birth of the last century. SinceCarl. Benz made the first threewheeled vehicle with the speed of 18 kilometers per hour，now we’ve already have the super roadster that only needs little more than three seconds accelerating from zero speed to 100 km/h. The speed of the motor vehicle development is so amazing during these 100 years. At the same time， a number of giants appear in this industry， and they created the well-known companies such as GM， Ford， Toyota，and Honda that make pivotal influence to their national economy. The main reason these companies are successful is that they make the specific segmentation of the automobile industry and proper market positioning of their brand. Now，I will take the car industry segmentation and Beatle market positioning for example.

Ⅱ. Segmentation of automobile industry

Segmentation， targeting and positioning are the essence of strategic marketing （Kotler， 1997）. With the rapid development of car industry， there are various automobile brands and models in car market nowadays. The previous segmentation that divided car models into A （small-sized car）， B （medium grade car）， C （premium car）， D （luxury car） can not meet the requirements of automobile market nowadays. Therefore， we can segment the car market from three different angles as follows.

A. Segmentation based on price

Chinese car market has shifted from development period to maturity period； therefore， cars have become the common means of transportation in ordinary families. To meet the needs of consumers that have different purchasing powers， cars can be divided into ten categories according to their prices.

B. Segmentation based on car models

We can divide cars into ten categories， namely， minicar， small-sized car， By vehicle wheelbase size and engine displacement can be divided into mini-cars， small cars，compact cars， medium-sized cars， premium cars， luxurycars， MPV，SUV， sports cars， and new energy cars， according to the size of wheelbase and engine displacement. The model of MPV appears because of the market demand. MPV is a generalpurpose car evolved from camper van with ample space， which can be both used as family cars and business cars.

C. Segmentation based on customer behaviors

With constantly growing of auto market， consumers may have different purchasing motivations. Thus， we can specify different market segmentation according to different purchasing requirements of customers.

1. Inexpensive cars with lower prices

2. Fuel-efficient cars with less fuel consumption

3. Premium cars highlighting the social status

4. Cars with special appearance

The success of an automobile enterprise can not only rely on its product technology and innovation，but the proper market positioning to different car models as well. Customers nowadays purchase cars for various reasons instead of simply buying a transport. For example， men choose cars that have simple design and comfortable ride， while ladies prefer the cars that own gorgeous or pretty appearance. However， there are some types of automobile that are quite populated among almost all stages of people， such as the Beatle of FAWVolkswagen Company. We are likely to understand the importance of market positioning through the positioning of the Beatle.

Ⅲ. Positioning of the Beatle

Market positioning is not what you do to a product itself， but what image you build in the minds of potential consumers. Thus， the nature of the market positioning is to clearly distinguish our enterprise from others， so as to make customers obviously recognize the difference and establish a unique image to customers. Additionally， company is able to make clear of its position in the target market compared with competitors through market positioning，namely， designing the products and building image. When making market positioning， company should consider repeatedly finding the most reasonable breakthrough， while avoid confusion positioning， excessive positioning，width and narrow positioning. Once an ideal position has been established，all the staff in the company must maintain this position with consistent performance and communication，as well as regular supervision in order to adapt to the change of target customers and competitors’strategies.

Market positioning can be divided into the repositioning of existed products and pre-positioning of potential products. In terms of the content， market positioning can be divided into product positioning，enterprise positioning， competitive positioning and consumer positioning. There is another classification is the product positioning， target market positioning and competitive positioning（Karl Moore， 2006）.

Enterprises often operate the diverse products so that they always face to distinct customers and live in different competitive environment， which incur that their market positioning principles are also different. In General， the principles of market positioning are as follows: 1. positioning according to characteristics of specific product 2. positioning depending on the specific usage environment and function 3. positioning according to the customers’ benefit . The market positioning must be multidimensional as we want to reflect the image of enterprises and their products.

The Beatle made in China are produced by FAW-Volkswagen Company. FAW-Volkswagen Co. Ltd was a joint venture manufacturer of big cars by China FAW Group Corporation and Germany Volkswagen AG， Audi AG and Volkswagen （China）Investment Corporation. It is the first modern car industrial base in China constructed based on economic scale. The outside environment in China is quite good so that the car manufacturers have relative broad market development space. Especially for large and medium sized cities， they own the strong production capacity，advanced production viewpoint and high-quality production groups，which are the most attractive auto market to luxury cars. In these cities，the success rate of auto market is high， as well as extremely high rate of return. However， compared with other Beatle manufacturers， Beatle in Faw-VW face relatively larger external threats.

A. Analysis of car market

a. Analysis of market environment

1. Restrictive factors in the marketing environment of enterprises in the automobile market

The three years from 2009 to 2011 have been quite crucial to automobile market. These three years have gone through the process from the low ebb to steady development. We can conclude this basic judgment according to four main reasons. Firstly， global financial crisis incurred deterioration on international economic environment， which caused greater periodical adjustment pressure on China； Secondly， according to business cycle， economy may fall continuously； thirdly， from longterm growth ability of economy， it was unlikely to fall significantly；finally， government would increase macroeconomic regulations and control to ensure economic growth.

The economic growth trend in China that basically relies on Industrialization and urbanization has not changed. Auto industry can push forward the development of more than 150 relevant industries. Therefore， thedevelopment of auto industry can not only meet the simple requirements of people， but promote the social development and civilization progress as well. Facing the external financial crisis， automobile industry in China should persist in expanding domestic demand and maintaining confidence.

2. Restrictive factors in the automotive market environment

（1） Relationships between vendor and business

The economic globalization makes significant influence to economy in every country. Automobile industry is one of the world's most globalized industries. Since FAW-Volkswagen Company established， it has carried out a dozen years of global sourcing practice. These practices can be divided into the global sourcing of auto sparepart and other general materials. Adopting such policies may allow competition among venders so that the enterprise may obtain low prices. Only by allowing suppliers to involve into the initial developing period， companies may establish a long-term relationship with venders to ensure the sustainable development of it. Nowadays， the spareparts of FAWVolkswagen have been implemented on time， which may largely reduce the inventory and operating costs of supply chain. Furthermore， it can promote the cooperation between domestic and foreign countries， as well as improve the performance to price ratio.

b. Product marketing

Faw-VW takes method of direct sales through 4S shop. 4S shop is automobile services， including car sales （sale）， spare parts sales （spare part）， follow-up service （service），and feedback （survey）. It has obvious merits.

1. Prestige aspect

4S shop has a range of systems of customer complaints， customer comments and claims. Also， it carries out the repair system， which provides the convenient and qualified service to car owners.

2. Professional aspect

As a 4S shop focuses on all series of a brand， all the staff there receives the professional training and technique support. Therefore， they are quite familiar to performance，technical parameters and maintenance of vehicles. Regards to modifications and other after-sales service of the product， 4S shops own distinct advantages.

3. After-sale service aspect

With the increasing competition，4S shops have paid much more attention to brand building. Combining with the support by auto manufacturers， 4S shops can ensure the quality of after-sales service.

B. Analysis of consumers

1. Overall consuming trends

Chinese consumers always pay much attention to car emissions， the vehicle size and their attachment. As luxury cars are constantly becoming“large and all-inclusive”， large amount of world's luxury cars， such as Mercedes-Benz， BMW， look quite large. It is easy for people to associate these cars with decent and imposing，which also represent the identity of car owners. Comprehensive car attachment is another attractive factor to Chinese consumers； even several small attachments are probably appealing to consumers.

2. Analysis of the existed consumers

（1） Composition of the consumers

The historical customers include the young ladies and the elderly. As the Beatle have relatively small body，it is easy for rusty drivers to operate. Also， there are large amounts of other factors that attract these consumers.

（2） Analysis of consumer behavior

The main customers of the Beatle are those who have stable incomes and pursue the delicate life style. Probably，they prefer the fashionable and exquisite things. It is obvious that the characteristics of the Beatle meet the requirement of those customer groups.

（3） Attitudes of existed consumer

Consumers of the Beatle are mainly attracted by its appearance. Also， they are likely to be interested in its comfortable ride and pretty interior decorations. Some consumers may have the preference to this brand，which represent kind of the fashion and delicate lifestyle.

Ⅳ.Conclusion

Thus， FAW-Volkswagen Company should pay more attention to promotion method and also expand the positioning for ladies of the Beatle on the basis of keeping the fashionable character positioning.

Reference：

1.Karl Moore.Niketh Pareek. Marketing: the basics ［M］.New York: Taylor & Francis， 2006.

2.Gary Armstrong.Michael Harker. Philip Kotler.Ross Brennan. Marketing: An Introduction［M］. New Jersey: Pearson Education， 2009.

3.Geoffrey Lancaster.Lester Massingham. Essentials of Marketing Management［M］. New York: Taylor & Francis， 2010.

4.Greg W. Marshall.Mark W Johnston. Essentials of Marketing Management［M］. New York:McGraw-Hill Higher Education， 2010.

5.Del I. Hawkins. Consumer Behavior: Building Marketing Strategy［M］. Academic Internet Publishers，2006.

6.Erik Eckermann. World history of the automobile［M］. Warrendale: SAE，2001.

7.Geoff Davies. Materials for automobile bodies［M］. Oxford: Butterworth-Heinemann， 2003.

8.http://www.faw-vw.com/en/ index.php http://www.google.com.hk/ search？hl=zh-CN&tbo=p&tbm=bks&q =bibliogroup:%22Cram101+Textbook +Outlines%22&source=gbs_metadata_ r&cad=5

◎Xue chen zhe

（作者單位 ：Wuxi Institute of Technology）