Introduction
Nowadays, in the repeatedly changing world, hardly anything stays as it is without any alteration. According to Gao, Kaas, Mohr, and Wee (2016), this constant modernization is “triggered by development in emerging markets, the accelerated rise of new technologies, sustainability policies, and changing consumer preferences around ownership” (p. 3). A vast majority of industries are influenced by a remarkable technological process. It is impossible to deny that technology, such as domestic appliances, smartphones, the Internet, and so on, made an essential breakthrough during the last decade.
Because of that, other sectors have to catch up and adapt novelties, simultaneously facing a necessity to create and develop contemporary, achievement-oriented, and competitive ideas. Researchers agree that a vehicle of the future will probably be “electrified, autonomous, shared, connected and yearly updated” (Kuhnert, Sturmer, & Koste, 2018, p. 6). To contribute to these demands, auto companies must be on the alert, react promptly to any move of the market, study the situation thoroughly, and, undoubtedly, pay attention to various market segments. This paper will focus on observing market segments that may be potential in terms of a traditional auto company’s development and modernization.
Market Segments
Disabled People
One should note that one of the most promising section is disabled people. First and foremost, the future looks especially promising for this segment since technological progress means more abilities and their growing diversity. It is assumed that an auto company that this paper represents is large and traditional. Besides, it seems possible to conceive that its product is being sold in New York, USA. Therefore, as for geographic characteristics, this city may be taken as the target location. According to Erickson and Schrader (2016), the overall percentage of disabled individuals in New York was 11.3% (2,222,100 people); 9.0% (1,055,800) of New Yorkers aged 21-64 and 22.7% (372,600) aged around 70 had a disability.
Among these people, the median annual salary can be estimated at $42,100 (Erickson & Schrader, 2016). As a result, it is possible to note that, in terms of demographic and geographic characteristics, disabled people can be treated as a potential target segment. In addition, a majority of disabled people need specialized transportation provided with some necessary equipment, which can also contribute to the disabled people’s being a potential market segment in terms of psychological and behavioral characteristics.
As for targeting evaluation, the amount of disabled people is noticeable, and, in the future, it is unlikely to decline or grow, according to statistics. The size of the segment can be defined as 2,222,100 people, which is unlikely to grow. The situation with the competition is as follows: some companies produce vehicles and equipment for disabled people, although no latest technology has been implemented into this manufacturing yet. Therefore, it is safe to predict that innovations are not likely to appear in the near future from any competitors. As for the cost to reach, this group needs special transport equipment which makes disabled people highly interested in buying useful products, especially modern ones.
Providing the company aims at following the technical progress, producing these special vehicles and equipment may fulfill this target and, in addition, be supported by consumers of this market segment, which leads to the payback. Last but not least, the sector is highly compatible in terms of the company’s goals. It gives the company an ability to make a breakthrough in this type of specialized technology and apply the progress to the company’s already existing production.
Wealthy People
New York is widely known as a city for tremendously rich people. According to statistics from the business magazine “Forbes”, 79 billionaires are living in New York along with 529,303 millionaire households in 2016, holding around $364.6 billion on the whole (Savchuk, 2016, para. 1). It is impossible to deny that wealthy people mostly try to follow trends and progress and to surround themselves with as many conveniences as they can.
As for demographic characteristics, most of the rich people are men from 35 to 79 years, and, according to statistics, geographic feature notes that a majority of them live in the USA. There is no doubt that these people are motivated to buy and consume products of excellent quality without special notice of price. Therefore, psychological and behavioral characteristics may be represented by these facts, and, as a result, it is possible to treat this section as a potential market segment.
As for targeting evaluation, the size of the segment is remarkable (565 billionaires living in the USA, 79 out of which live in New York) and grows on a yearly basis. Analyzing competition, there the situation is not so promising as with disabled people.
However, the company can try to invent a vehicle that would be a perfect mixture of convenience and price. It will take much time and research, but in the case of success, the company will be unbeatable on the market. As for the cost to reach, the company is likely to get a considerable payback if it manages to create a product that would correspond to the demands stated. What is more, rich people are likely to use modern technology in order to keep up with the progress and make their life more convenient, which makes this segment also compatible. The company is vast and, therefore, able to redirect resources, so as to produce vehicles of the upper class, along with implementing new techniques and methods of manufacturing.
Recommendation
Objectives
Disabled people and the rich were selected as the company’s target segments. The main goals can be seen as identifying more particular needs of these segments and closer further research. In order to start to produce new types of product, the company needs to optimize the resources and their usage. Last but not least, the technology, equipment, and methodology of manufacturing must be reconsidered, and some further steps towards new changes are to be decided and made.
Values
The company should also reexamine its values in accordance with new objectives and target segments. For both sections, the quality of the product must be regarded as a primary value. Therefore, it can be significant to reevaluate the company’s suppliers and the number and type of materials that are being ordered. Consequently, it also seems to be essential to reconsider the company’s workforce, working conditions, and salary policy. More research and studying are needed in order to distinguish further values.
Conclusion
To sum everything that was mentioned above up, it is significant to note that the research on automotive progress and modern market segments was conducted, and the results can be drawn as follows. Two market segments that are suitable for further consideration and can be regarded as potential sections are the disabled people and the rich. It can be seen from this paper that these groups may be new targets, according to demographical, geographical, psychological, and behavioral characteristics. Statistics data and previous studying also contributed to this. What is more, approximate objectives and paths of future development were established, proved to be reachable, and they were also listed.
On their basis future, more global and significant aims are to be distinguished, and ways of reaching them are to be decided. Last but not least, further consideration and inner discussion between various departments of the company are essential.
References
Gao, P., Kaas, H. W., Mohr, D., & Wee, D. (2016). Automotive revolution–perspective towards 2030: How the convergence of disruptive technology-driven trends could transform the auto industry. Web.
Kuhnert, F., Sturmer, K., & Koste, A. (2018). Five trends transforming the automotive industry. Web.
New York Disability Statistics: The Prevalence and Impact. (2015). Web.
Savchuk, K. (2016). New York is the city with the most billionaires, not Beijing. Web.