QUESTION THREE A.). As the marketing manager for an automobile company, you have been asked by the director to devise a consumer market segmentation strategy for a new small car to be launched soon. What major segmentation variables would you consider for this purpose? Justify your answer using appropriate rationale. (10 Marks)

In the field of marketing, market segmentation is the process of dividing a market of potential customers into distinct groups, or segments, based on different characteristics. The segments created are composed of consumers who have, or are perceived to have, similar product needs and desires. When it comes to consumer market segmentation, several variables can be considered, including demographic, geographic, psychographic, and behavioral variables. <br /><br />1. Demographic: This is one of the most common forms of segmentation. It involves dividing the market into groups based on variables such as age, gender, income, occupation, and education. For an automobile company launching a new small car, demographic variables like age (young professionals, families, retirees) and income (middle-income group, high-income group) would be crucial. <br /><br />2. Geographic: This variable involves segmenting the market based on different geographical units such as nations, states, regions, cities, or neighborhoods. The preferences and needs of consumers can vary greatly depending on where they live. For instance, urban consumers might prioritize fuel efficiency due to higher traffic density, while rural consumers might value larger cargo space.<br /><br />3. Psychographic: This involves dividing the market based on social class, lifestyle, or personality characteristics. Psychographic segmentation can help the company understand the motivations and attitudes of different consumer groups, which can inform targeted marketing strategies.<br /><br />4. Behavioral: This variable involves segmenting the market based on consumer behavior, including usage rate, loyalty status, and benefits sought. For example, the company could identify heavy users, occasional users, and non-users of small cars, and tailor its marketing strategies accordingly.<br /><br />In conclusion, as the marketing manager, I would consider all these variables - demographic, geographic, psychographic, and behavioral - to devise an effective consumer market segmentation strategy for the new small car. Each variable provides valuable insights into different aspects of consumer behavior and preferences, which can help guide the development and marketing of the new product.