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

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Annexure 1
 Sample LDT Clusters
For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com

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. 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. 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. 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. Thank You..
For any queries pl contact: raman.pgpex12@iimshillong.in , dhiman109@gmail.com