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Market Segmentation Approach for
Automotive Sector_Light Duty
Trucks_India

Research done by: Raman Dhiman
For further det...
For academic purpose only. Not for commercial use.

 Contents





Approach
Definitions
Segmentation – LCV – Light Co...
For academic purpose only. Not for commercial use.

To better understand customer needs and develop products precisely
mat...
For academic purpose only. Not for commercial use.

To better understand customer needs and develop products precisely
mat...
For academic purpose only. Not for commercial use.

 Definitions
Usage Characteristics

User Characteristics

Extent of
l...
For academic purpose only. Not for commercial use.

• Approach for Segmentation
Bivariate Plot of Product related
KBFs
Cus...
For academic purpose only. Not for commercial use.

To better understand customer needs and develop products precisely
mat...
For academic purpose only. Not for commercial use.

Clusters of LCV segments

SPSS
Cluster
ID

SPSS 1

SPSS 2

SPSS 3

SPS...
For academic purpose only. Not for commercial use.

 Bivariate Plot of Product Related KBFs through Multidimensional Scal...
For academic purpose only. Not for commercial use.

 Customer Segments - LCV
Segment Characteristics

Segment
Economy
Str...
For academic purpose only. Not for commercial use.

 Customer Segments - LCV
Popular Models

Segment
Economy
Strider Pric...
For academic purpose only. Not for commercial use.

To better understand customer needs and develop products precisely
mat...
For academic purpose only. Not for commercial use.

Clusters of ICV segments

SPSS
Cluster
ID

Averag
One way One way
Aver...
For academic purpose only. Not for commercial use.

 Bivariate Plot of Product Related KBFs through Multidimensional Scal...
For academic purpose only. Not for commercial use.

 Customer Segments - ICV
Segment Characteristics

Segment
Economy
Str...
For academic purpose only. Not for commercial use.

 Customer Segments - ICV
Economy
Strider Price
Minimiser

LPT 909

Ra...
For academic purpose only. Not for commercial use.

 Consolidated breakup of Segments: LDT

For any queries pl contact: r...
For academic purpose only. Not for commercial use.

 Targeting – Customer Segments
Key Buying Factors

Economy

Work Hors...
Annexure 1

 Sample LDT Clusters

For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
For academic purpose only. Not for commercial use.

Annexure 1

 Details of Cluster 1

For any queries pl contact: raman....
For academic purpose only. Not for commercial use.

Annexure 1

 Details of Cluster 2

For any queries pl contact: raman....
For academic purpose only. Not for commercial use.

Annexure 1

 Details of Cluster 3

For any queries pl contact: raman....
For academic purpose only. Not for commercial use.

Annexure 1

 Details of Cluster 4

For any queries pl contact: raman....
Thank You..

For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
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Market Segmentation Approach for Automotive Sector - Light Duty Trucks in India (Research Approach also applicable for Cars / Two Wheelers)

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An overview of the Market Segmentation Approach developed by me.
I have used SPSS Clustering & Bivariate plot apprach to arrive at the procees. But the most important input that has gone into the devleopment of this is the right Thought Process, which we normally miss in solving issues at hand.

For any further details and quereis pl contact me on raman.pgpex12@iimshillong.in, dhiman109@gmail.com

Published in: Business, Technology
  • I am interested if my research approach for segmentation can be of use to somebody, and in case you have developed a better approach, pl share it with me...
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Market Segmentation Approach for Automotive Sector - Light Duty Trucks in India (Research Approach also applicable for Cars / Two Wheelers)

  1. 1. Market Segmentation Approach for Automotive Sector_Light Duty Trucks_India Research done by: Raman Dhiman For further details and any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com For academic purpose only. Not for commercial use.
  2. 2. For academic purpose only. Not for commercial use.  Contents     Approach Definitions Segmentation – LCV – Light Commercial Vehicles – (3.5T to 7.5T GVW) Segmentation – ICV – Intermediate Commercial Vehicles – (7.5 to 16 T GVW) For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  3. 3. For academic purpose only. Not for commercial use. To better understand customer needs and develop products precisely matching their needs. A comprehensive segmentation of customers by Objective dividing them based on similarities is necessary • This report provides an overview of the segmentation process • Segmentation of LCV customers based on important usage parameters • Segmentation of ICV customers based on important usage parameters LCV: Light Commercial Vehicles – 3.5T to 7.5 T GVW ICV: Intermediate Commercial Vehicle - >7.5 T to <16 T GVW LDT: Light Duty Trucks = LCV+ICV For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  4. 4. For academic purpose only. Not for commercial use. To better understand customer needs and develop products precisely matching their needs. A comprehensive segmentation of customers by Content dividing them based on similarities is necessary • An overview of the segmentation process • Segmentation of LCV customers based on important usage parameters • Segmentation of ICV customers based on important usage parameters For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  5. 5. For academic purpose only. Not for commercial use.  Definitions Usage Characteristics User Characteristics Extent of loading Rated Load (= GVW) Moderate Overload (upto 30% of GVW) High Overload (upto 60% of GVW) Extreme Overload (> 60% of GVW) Haulage Distance (One way) Very Short (upto 100 km) Short (100250 km) Medium (250 - 700 km) Long (> 700 km) Driving Speed Low Speed (upto 40 kmph) Medium Speed (4060 kmph) High Speed (>60 kmph) Fleet Size OD (1 vehicle) OND (2-4 vehicles) SFO (510 vehicles) Business Sourcing Market Load Contract MFO (11-25 vehicles) and LFO (> 25 vehicles) Captive KBF – Key Buying Factors Captive = Owns vehicle and transportation is means for doing primary business Market Load = Stands in the market / stand / yard / Transport Nagar to get business (directly from single customer), transportation is primary business Contract = Transportation provided through long term service agreement, transportation primary business For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  6. 6. For academic purpose only. Not for commercial use. • Approach for Segmentation Bivariate Plot of Product related KBFs Customer Need (KBF) 32 KBFs • Running Cost • Reliability • Resale Value • Durability • Turnaround time • Etc. 4 Customer Segments Economy Distance Travelled, Km Speed, Kmph Payload Carried, Kg Performance Progressive LCV - 4 Customer Segments 4 Clusters - LCV Usage Characteristics • • • Work Horse • • • • Clustering (Using SPSS) 5 Clusters - ICV Around 4000 Combinations ICV - 4 Customer Segments User Characteristics Fleet Size • OD • OND • SFO • MFO • LFO Economy Work Horse Performance Progressive Further Refinement of Clusters with team assessment • • • • Economy Work Horse Performance Progressive Customer Segment names are for reference only For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  7. 7. For academic purpose only. Not for commercial use. To better understand customer needs and develop products precisely matching their needs. A comprehensive segmentation of customers by Content dividing them based on similarities is necessary • An overview of the segmentation process • Segmentation of LCV customers based on important usage parameters • Segmentation of ICV customers based on important usage parameters For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  8. 8. For academic purpose only. Not for commercial use. Clusters of LCV segments SPSS Cluster ID SPSS 1 SPSS 2 SPSS 3 SPSS 4 Averag One way One way Average Fleet Fleet e Haulage Haulage Payload 1 Payload 2 Driving Type 1 Type 2 Driving Distance 1 Distance 2 Speed 1 Speed 2 OD, OND, SFO OD, OND, SFO MFO MFO Moderate Short Haul Long Haul Rated Overload (21) (3) Load (15) (9) Moderate High Medium Short Haul Overload Overload Haul (24) (5) (24) (5) OD, SFO Medium Haul (36) OND Medium Haul MFO Long Haul Rated (2) Load Medium Speed (44 kmph) Medium Speed (49 kmph) Medium High Speed (43 Speed kmph) High / Medium Rated Extreme Speed (48 Load (17) overload kmph) (36) % % Load % Size 1 1 Load 2 n Size 2 17% 24 10% 6% 5208 3125 20% 29 17% 3% 8333 1736 26% 38 26% 13194 0 37% 53 12% 5903 12500 25% For Cluster Details: Pl refer annexure 1 For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  9. 9. For academic purpose only. Not for commercial use.  Bivariate Plot of Product Related KBFs through Multidimensional Scaling For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  10. 10. For academic purpose only. Not for commercial use.  Customer Segments - LCV Segment Characteristics Segment Economy Strider Price Minimiser Rated Load 50% Performance Seeker Zipper Progressive Industry Size: 45000 (CY 2011) Economy Strider Price Minimiser Over Load 50% Rated Load Overload Performance Seeker Zipper Work Horse Striver Load Maximiser (42%) KBF's Low Acquisition Price More Fuel Economy Customer Source of Usage Type Business Medium Speed Market Load OD,OND, Short, Medium Haul SFO,MFO Captive Customer Source of Usage Type Business Medium, High Turn around Time Speed Contract , Pick Up & Acceleration Medium, Long Haul MFO, LFO Captive Ease of Driving KBF's (6%) Customer Source of Type Business MFO, LFO Contract Captive KBF's Safety & Comfort Style Usage Medium Speed Medium Haul (18%) KBF's Low Acquisition Price More Fuel Economy Customer Source of Usage Type Business Medium Speed Market Load OD,OND, Short, Medium Haul SFO,MFO Captive (2%) Customer Source of Usage Type Business Medium, High Turn around Time Speed Contract , Pick Up & Acceleration Medium, Long Haul MFO, LFO Captive Ease of Driving (2%) Future Outlook 2016 2020 2025 (42%) (40%) (35%) (8%) (15%) (25%) (4%) (6%) (12%) 54% 61% 72% (17%) (12%) (7%) (3%) (4%) (6%) (26%) (23%) (15%) 46% 39% 28% KBF's (30%) Upto 10% of Overload on GVW is not considered in Moderate Overload KBF's Overload Capacity Sturdiness Reliability Strong Engine (HP) Customer Source of Usage Type Business Medium Speed OD,OND, Short, Medium Haul SFO,MFO Market Load For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  11. 11. For academic purpose only. Not for commercial use.  Customer Segments - LCV Popular Models Segment Economy Strider Price Minimiser Rated Load 50% Performance Seeker Zipper SFC 407 10.50 SFC 709 10.59 LPT 709 10.59 SFC 709 10.50 (42%) (6%) Rated Load Overload SFC 407 10.50 SFC 709 10.59 Strengths – Weaknesses – No special product for this segment 10.59 SFC 709 10.50 Strengths – Weaknesses – No special product for this segment SFC 407 (18%) 10.50 10.50 LPT 709 (2%) Economy Strider Price Minimiser 50% 10.59 LPT 709 LPT 709 Progressive Over Load Performance Seeker Zipper Work Horse Striver Load Maximiser Strengths – Fuel Economy / Low Price Weaknesses – Strengths – Weaknesses – No special product for this segment LPT 407 Industry Size: 45000 (CY 2011) Needs Fulfilled / Unfulfilled (2%) (30%) Upto 10% of Overload on GVW is not considered in Moderate Overload Strengths – Cabin strength as per AIS 029 Weaknesses – Not Stylish Cabins, No special Product for this segment Strengths – Strong chassis Weaknesses – No special product for this segment For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  12. 12. For academic purpose only. Not for commercial use. To better understand customer needs and develop products precisely matching their needs. A comprehensive segmentation of customers by Content dividing them based on similarities is necessary • An overview of the segmentation process • Segmentation of LCV customers based on important usage parameters • Segmentation of ICV customers based on important usage parameters For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  13. 13. For academic purpose only. Not for commercial use. Clusters of ICV segments SPSS Cluster ID Averag One way One way Average Fleet Fleet e Haulage Haulage Payload 1 Payload 2 Driving Type 1 Type 2 Driving Distance 1 Distance 2 Speed 1 Speed 2 SPSS OD 1 MFO Medium Haul OD, MFO, Long SPSS OND, 2 LFO Haul SFO OD, SPSS OND, 3 MFO, Medium LFO Haul SPSS SFO 4 LFO SFO Medium Haul Medium Speed (50 kmph) Moderat Medium Rated e Speed Load (26) Overload (50 (7) kmph) Medium Moderat Speed e (49 Overload kmph) Medium High Rated Speed Overload Load (36) (54 (2) kmph) Rated Load Short Haul % % Load % Size 1 1 Load 2 n 23% High Speed (60 kmph) 39 23% 19% 33 15% 22% 38 22% 38 Size 2 14912 0 9941 2676 22% 14529 0 21% 1% 13765 765 4% For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  14. 14. For academic purpose only. Not for commercial use.  Bivariate Plot of Product Related KBFs through Multidimensional Scaling For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  15. 15. For academic purpose only. Not for commercial use.  Customer Segments - ICV Segment Characteristics Segment Economy Strider Price Minimiser Rated Load 60% Performance Seeker Zipper Progressive Economy Strider Price Minimiser Over Load 40% Rated Load (15%) Customer Source of KBF's Usage Type Business Turn around Time High Speed Pick Up & Acceleration Medium, Long Haul MFO, LFO Contract, Ease of Driving Captive (5%) KBF's Safety & Comfort Overload Performance Seeker Zipper Work Horse Striver Load Maximiser (10%) (2%) (28%) Upto 10% of Overload on GVW is not considered in Moderate Overload Usage Medium Speed Customer Type MFO,LFO Source of Business Contract Captive Medium, Long Haul Customer Source of KBF's Usage Type Business Low Acquisition Price Medium Speed Market Load OD,OND, More Fuel Economy Medium, Long Haul SFO,MFO Contract Customer Source of KBF's Usage Type Business Turn around Time High Speed Pick Up & Acceleration Medium, Long Haul MFO, LFO Contract, Ease of Driving Captive KBF's Overload Capacity Sturdiness Reliability Strong Engine (HP) Usage Medium Speed Medium Haul Customer Source of Type Business OD,OND, SFO,MFO Market Load 2016 2020 2025 (40%) (37%) (32%) (17%) (22%) (28%) (7%) (11%) (20%) 62% (40%) Customer Source of KBF's Usage Type Business Low Acquisition Price Medium Speed Market Load OD,OND, More Fuel Economy Medium, Long Haul SFO,MFO Contract Style Industry Size: 65000 (CY 2011) Future Outlook 70% 80% (8%) (5%) (3%) (4%) (5%) (6%) (26%) (20%) (11%) 38% 30% 20% For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  16. 16. For academic purpose only. Not for commercial use.  Customer Segments - ICV Economy Strider Price Minimiser LPT 909 Rated Load 60% Progressive Economy Strider Price Minimiser Over Load 40% Rated Load Overload AL 1212 Strengths – Cabin strength as per AIS 029, Specific products for this segment, Higher HP Products are available Weaknesses – LPT 909 11.10 SML Super Strengths – Weaknesses – (10%) 11.10 AL 1212 Strengths – Higher HP products are available Weaknesses – (2%) (28%) Upto 10% of Overload on GVW is not considered in Moderate Overload BB 914 BB 914 (5%) LPT 1109 Work Horse Striver Load Maximiser 11.10 Strengths – Fuel Economy / Low Price Weaknesses – Strengths – Higher HP products are available Weaknesses – LPT 909 Performance Seeker Zipper SML Super (15%) TATA Y1 Industry Size: 65000 (CY 2011) 11.10 (40%) LPT 909 Performance Seeker Zipper Needs Fulfilled / Unfilled Popular Models Segment 10.95 AL 1212 Strengths – Strong chassis Weaknesses – No special product for this segment For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  17. 17. For academic purpose only. Not for commercial use.  Consolidated breakup of Segments: LDT For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  18. 18. For academic purpose only. Not for commercial use.  Targeting – Customer Segments Key Buying Factors Economy Work Horse Performance Progressive Low Acqisition Price High Medium Low Low More Fuel Economy High Medium Medium Medium Overload Capacity Low High Low Low Sturdiness Low High Low Low Reliability Medium High Medium Medium Strong Engine (HP) Low High High High Turnaround Time Low Low High High Pick Up & Acceleration Low Medium High High Ease of Driving Low Low High High Safety & Comfort Low Low Medium High Style Low Low Medium High LCV - Year 2020 52% 23% 19% 6% ICV - Year 2020 42% 20% 27% 11% Key Requirements • No Frill Vehicle • Low Kerb Weight • Low Power Engine High Priority Medium Priority Key Requirements • No Frill Vehicle • Sturdy Vehicle • Strong Engine (HP) Key Requirements • All Frill Vehicle • Low Kerb Weight • Strong Engine (HP) Key Requirements • All Frill Vehicle • Low Kerb Weight • Strong Engine (HP) • Safety Comfort & Style Low Priority For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  19. 19. Annexure 1  Sample LDT Clusters For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  20. 20. For academic purpose only. Not for commercial use. Annexure 1  Details of Cluster 1 For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  21. 21. For academic purpose only. Not for commercial use. Annexure 1  Details of Cluster 2 For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  22. 22. For academic purpose only. Not for commercial use. Annexure 1  Details of Cluster 3 For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  23. 23. For academic purpose only. Not for commercial use. Annexure 1  Details of Cluster 4 For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com
  24. 24. Thank You.. For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com

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