Segmentation – a few cases

Titan identified three distinct market segments for its watches after carrying out an in-depth market study at the time of introduction of their watches into the Indian markets dominated by HMT.

The segments were arrived at using essentially, benefit and income level as the bases:

The first consisted of the high income/elite consumers who were buying a watch as a fashion accessory and not as a mere instrument showing time. They were also willing to buy a watch on impulse. The price tag did not matter much of this segment.

The next consisted of consumers who preferred some fashion in their watches but to them price did matter. While they had the capacity to pay the price required from a good watch, they would not purchase a watch without comparing the various offers in the market.

The third segment consisted of the lower-income consumers who saw a watch mainly as a time keeping device and bought mainly on the basis of price.

For the first segment, Titan offered Aurum and Royale in the gold / jewelry watch range. They were stylish dress watches all gold and precious metals. The prices ranged between Rs 20,000 and Rs 1 lakh.

For the middle segment, Titan offered the Exacta range in stainless steel, aimed at withstanding the rigors of daily life. There were 100 different models in the range. The price range was Rs 500-700. Titan also offered the ‘Raga” range for women in this segment.

And, for the third segment, Titan first offered the Timex watches and later, when the arrangement with Timex was terminated, the Sonatta range of timex watches was Rs 350-500. It was offered in 200 different models. The Sonatta range too was low priced. Titan also offered the ‘Dashi’ range for children.

In-depth segmentation helped Titan launch segment-specific products.

In buyer behavior-based segmentation too, several sub-factors can be tried as bases. For example purchase occasion can be one base; buyers can be segmented on the basis of whether they are regular buyers, or special occasion buyers; and the latter category can be divided further based on the particular occasion on which they buy the product. Degree of use can be another base; buyers can be segmented for instance, on the basis of whether they are light or medium, or heavy users of the product. Buyers’ attitude towards the product can be yet another or indifferent for negative in their attitude to the product.

Benefit Segmentation:

Benefit too can form a base for segmentation. Since buyers are very heterogeneous in the benefits they prefer in a product, benefit serves as an effective base for segmentation. As mentioned in the previous paragraph buyer behavior segmentation too relies on benefits. In fact, it will be appropriate to consider buyer behavior segmentation as a close cousin of benefit segmentation. After completing segmentation with the various other bases marketers may want to probe further and find out whether the segments can be broken into even more homogeneous sub segments. Usually, such a probe leads to ‘segmentation by benefit’ through benefit segmentation. One often gains an opening for a further disaggregation of the consumers.

Segmentation Based on Benefit plus Income Level – Titan Watches:

Earlier, we saw the example of Titan Watches adopting lifestyle based segmentation of watch buyers and creating a sub-band, Titan fast track.

Segmentation Based on buying Behavior /Benefit/ Use Pattern – Ambassador Car:

We saw earlier how car manufacturers in India segmented the market using the demographic factor of purchasing capacity / price reference, and the psychographic characteristics of lifestyle as the bases, Continuing with the example of passenger car, we shall now see how one of the car manufacturers, Hindustan Motors (HM), segmented the market on the basis of buyer’s buying behavior / use pattern.

The 1990s was a time when many new trends were emerging in the buying behavior of car buyers in India. The availability led buying behavior that prevailed prior to 1990 was giving way to a use pattern led buying behavior. And, it was in this context that HM opted to segment the market based on use pattern and offer specific products / models to specific segments, meeting their specific use pattern.