Q1) How did Tata Motors segment the market for commercial vehicles ? Which variables were used to segment the market? Remember that while segmenting the entire market has to be segmented.
Indian commercial vehicle market sector includes three and four wheels, two wheelers as well as passenger cars and SUVs generally used for commercial goods transportation. Non motorized undocumented sectors like bullock cart, horse drawn carriages, bicycle rickshaws & manual pull carts was also serving for commercial transportation. The commercial vehicle market segmentation was as follows –

Tata Motors segmented the market for commercial vehicles based on the functional needs of the different customers as 1) R&C – Ricks & Carts Vehicle carrying less than 175KL and less than 5 KM travelling distance 1) S3W – Small three wheelers – Vehicle transporting load between 175KG to 1000KG travelling between 0-225KM. 3) L3W – Large three wheelers Load carrying capacity less than 2250KG and travelling distance between 0-250KM 4) PU – Pick Up Load capacity upto 2500KG and travelling distance 0-300KM.
Based on this target market as well as the opportunity to grow the total market pie, the team estimated that 45% of the Ace customer base would come from people planning to buy 3 wheelers, 15% from potential pick-up and LCV buyer and balance (40% ) from first time commercial vehicle purchasers.
Each of the functional market segmate further segmented into four groups – 1) Performance Sensitive customers – Those interested in status, brand image and speed. 2) Balanced Perspective Customers – These customers are typically interested in ROI along with comfort and convenience to improve quality of life 3) ROI sensitive customer – These customers possess strong belief on lowest running cost. 4) Acquisition Price constrained