Market
segmentation is breaking down the market into smaller categories grouping
together customers with common characteristics and who respond to given product
types alike. Therefore, a market segment constitutes a group of people who have
resemblance in values and traditions because of the effects of being together. Markets
are broken down into segments because it is not possible to appeal to all
customers with a similar approach (Kotler And Armstrong, 1989). When
homogeneity exists in a segment, segmentation would be wholly successful.
From the definition of segmentation,
markets are broken down into segments for useful gains. BMW has divided its
markets into several segments with the first one being geographical
segmentation. On a close observation of the markets supplied by BMW, the
biggest markets in terms of geographical locations served by this company is
United States of America and Western Europe which account to almost 67% percent
of the buyers of its cars. It is logical to conclude that developed Western
Nations is the biggest market of BMW cars and a lot of effort should be made to
maintain and sustain them. However, as they strive to maintain these markets,
they should not neglect other markets.
According to Jobber (2004), the other
criterion they have used is income segmentation where they have classified the
market according to income levels. Their products range from close to twenty
five thousand Euros to one hundred and thirteen Euros. It is clear that BMW
targets the high income level market. The above market segmentation is very
broad and cannot be solely used to generalize the market (Giardina, 2002). BMW
further uses multilevel segmentation where several other factors are considered
in a market in order to identify the desires of customers.
From
the discussion, it can be concluded that BMW’s biggest market target is the
premium car market. BMW serves a market that requires premium cars. The car
maker goes further and serves high income people within its market segments
which are their effort to satisfy them.
