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The StratSim Case Solution

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1198 620 Words (3 Pages)
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Cool Cars chose two segments to cater to, Family and Luxury. The company uses Cafav and Camini to target the Family segment and uses Climax for targeting consumers who prefer luxurious cars. Cafav has 13% market share under the Family vehicle class, 41% under Luxury segment cars, and 100% market share under Minivan vehicle class. In order to understand what Family and High Income or Luxury segment, it is important to define these segments.

Families demand cars that fulfill their basic and elastic transportation needs. The car must be comfortable enough for long routes, and it should be spacious enough for carrying a small volume of cargo. Both these needs must be fulfilled in case a company wants to cater this market. This segment is price sensitive as they have less disposable income than others. However, apart from the cargo and people carrying needs, this segment also demands a fair price, safety, and quality. This segment mostly buys economy (price-sensitive), family (safety, quality), and minivan (people and cargo-carrying needs) vehicle classes.

Following questions are answered in this case study solution

  1. What consumer segment did Cool Cars decide to pursue? What was the rationale behind your decision?

Case Analysis for The StratSim Case Solution

People with income that is higher than normal have “elaborate” needs for their transportation. This segment cannot be narrowed down to a limited group of people as this segment covers families, retirees, and professionals. Most young professionals and retirees have fewer people who are dependent on them; that is why they have a high level of disposable income. This segment demands extra features from their cars as they have the ability to pay for more features and high performance. The vehicle class of luxury and family is mostly preferred by this segment.

In order to gain a deeper understanding of the targeted market, it is important to combine the two bases of segmentation, vehicle class, and consumer segments. The points where these two merges are tagged as “customers”. For instance, 2F would represent the families that prefer family cars (excluding minivans).

Rationale

Families and Singles have three customers i.e. families have 2E, 2M, and 2F customers. On the other hand, Singles have 3S, 3U, and 3T. Only these two segments have the highest numbers or types of customers. Families are responsible for 38.8% of the total market composition, whereas singles contribute 19.8% of the total market. These two are the biggest segments by size. So, the company has targeted the biggest segment in the market i.e. families. The company has a choice to depend on volume-based sales or margin-based sales because families with low income are price sensitive, whereas families with high income prefer luxurious cars. Under the family segment, the company’s Cafav has 13% of the market share i.e. 4th highest. The minivan has a total of 4% market share (under vehicle class segmentation), and Cool Cars in the sole dominant leader in this segment as the company’s Camini holds 100% of the share. The company sells Camini at $24144 and sells its Cafav at $31361.

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