Market Segmentations of GM Company

Market

segmentation

is

business

strategy

that

divides

heterogeneous market into groups of individuals who share commonality,

similarity, or kinship in needs and preferences towards goods and products.
Various factors must be considered before the segmentation is done, such as
culture, economic status, population density and geographic differences. This
is to prevent the customers who do not share the same interest from being
categorized into the same segment as different segments may have different
marketing mix which will against their interests. In our research, we found
that GM Company has its focus on few market segments which are important
to

market

worldwide,

namely

geographic,

price

and

demographic

segmentation as well.
Geographic segmentation in marketing is just important especially for
those multinational businesses with global brands like GM Company. The
target markets in this segmentation are divided based on different
geographic areas, usually by city, country or international region. In our
study, we examined that GM Company is mainly marketing their products in
six international regions globally. There are North America, South America,
Europe, Asia, Africa as well as Oceania. Generally, this company which is
originated from America expanded its business to other countries or even
other international regions due to the rising business or market opportunities.
This is because people from different countries have their own and different
demands as well as preferences towards automotive products. Likewise, it
also creates multiple car choices for the customers in countries with high
population density.
From the findings, we also found that GM practiced price segmentation.
Variation of income actually creates an opportunity to GM for segmenting
some markets along a price dimension. Price segmentation proliferates at
large enterprises like GM. Instead of having one product with one market, GM
sells products at different prices from $ 20,000 up to $120,000. GM offered
automotive brands with different range of cost which included cheap
products, medium price products and expensive products, thus customers

from different status can afford to buy their own car according to their
abilities. For example, GM segments its products into different brands namely
Chevrolet, Buick, Hummer, Cadillac that are aimed at different socioeconomic
groups. Cadillac is a brand of luxury vehicles owned by GM which can
compete directly with BMW and Mercedes Benz while Chevrolet is the
Americas No.1 selling brand which competes with Ford, Toyota, Nissan and
Dodge. Besides that, we can prove this because GM plans to enter Europes
entry-level car market with a line of low-cost models in order to return to
profitability in Europe. We know that GM is planning on using the new-cost
line to replace the gap left by the costly decision to withdraw its Chevrolet
marquee from Europe.
Demographic segmentation such as gender, age, income, household
composition, educational levels and marital status are common variables
which a company would take into consideration to gain a competitive
advantage

within

the

segment.

In

General

Motors,

demographic

segmentation that are of their concern are marital status, age and household
composition. Some of the GM brands that show robust sales are Cadillac,
Chevrolet, Buick and GMC. According to the latest total sales in February
2015, Chevrolet Colorado is now the industrys fastest-selling pickup truck.
Chevrolet Colorado is a mid size truck to reinvent the small truck. The
Director of Chevrolet Marketing, Sandor Piszar, recognizes that appealing to
crossover buyers and younger demographics will require a different
marketing strategy than that taken with full-size pickups. Hence, touting
standard technologies like OnStars 4G LTE Wi Fi hotspot and the rear-vision
camera will be a large part of the Colorados marketing campaign to attract
younger and digitally savvy buyers. Whats true for Chevrolet is also true for
GMC. Canyon marketing teams was appealing to existing mid-size truck
owners. GMC Canyons even more upscale interior will attract buyers who
may be coming off a well-equipped SUV. Canyons more grown-up looks and
soft-touch interior has make it the truck of choice for families, while Colorado
could appeal to the aforementioned younger demographic. Cadillac Escalade,
the brands large, luxurious, and powerful SUV. The attention to detail is
evident in the stitched upholstery, jewel-like headlamps, sophisticated sheet-

metal sculpture, and high tech safety and inforainment features appeals to a
slightly older and slightly less affluent customer. The Escalade, a heavier
vehicle with more towing capacity will be the choice for anyone pulling a boat
or a horse trailer.
In a nutshell, market segmentation strategy is a well-accepted
component of marketing strategy and a fundamental concept of modern
marketing. When firms use segmentation strategy to compete on a segmentby-segment basis, the resulting competition prompts both proactive and
reactive innovations.

References
Driving Global Innovation. http://careers.gm.com/worldwide-locations.html.
Retrieved on 18 March 2015.

Geographic Segmentation. http://www.buzzle.com/articles/geographicsegmentation.html. Retrieved on 18 March 2015.

Doron L. 2014. Cadillac Escalade nipping at Mercedes GLs heels, on prestige

scale. Retrieved from http://fortune.com/2014/04/11/cadillac-escaladenipping-at-mercedes-gls-heels-on-prestige-scale/ on 18 th March 2015.
Foy, H., 2014. GM plans budget car range for
Europe.http://www.ft.com/intl/cms/s/0/e1787e38-0e9b-11e4-a1ae00144feabdc0.html#axzz3UjqOsIQT. Retrieved on 18 March 2015.

Gillikin, J., t.th. What is Product Segmentation?

http://smallbusiness.chron.com/product-segmentation-22881.html.
Retrieved on 18 March 2015.

GM.com. 2015. Investors: Sales. Retrieved from

http://www.gm.com/content/gmcom/home/company/investors/salesproduction.content_pages_news_us_en_2015_mar_gmsales.~content~
gmcom~home~company~investors~sales-production.html# on 18 th
March 2015.

Jerry, W.T. 2007. Market Segmentation. Retrieved from

http://www.decisionanalyst.com/publ_art/marketsegmentation.dai on
18th March 2015.

More, R. 2009. How General Motors Lost Its Focus-and Its Way.
http://iveybusinessjournal.com/publication/how-general-motors-lost-itsfocus-and-its-way/. Retrieved on 18 March 2015.

Sam M. 2014. Chevrolet Colorado and GMC Canyon Target Younger Buyers
and Crossover Owners, Marketing Team Says. Retrieved from
http://gmauthority.com/blog/2014/10/chevrolet-colorado-and-gmccanyon-targets-younger-buyers-and-crossover-owners-marketing-teamsays/ on 18th March 2015.

Shelby, D.H. & Dennis, B.A. 2004. Market Segmentation Strategy, Competitive
Advantage, and Public Privacy: Grounding Segmentation Strategy in
Resource-Advantage Theory. Australasian Marketing Journal 12(1): 21.

Thomas, J.W. Market Segmentation.

http://www.decisionanalyst.com/publ_art/marketsegmentation.dai.
Retrieved on 18 March 2015.