Continental Tire the Americas, LLC is the Automotive Group of Continental AG- Innovations for the future of mobile automotive. Continental is one of the world’s leading automotive suppliers. As a provider of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires, and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also an expert partner in networked automobile communication (Continental AG, 2014). Paper will outline how Continental Tires is segmented in the industry, its target markets, and the selection process for the target market. “Approaches to subdivision of a market or population into segments with defined similar characteristics. Five major segmentation strategies are (1) behavior segmentation, (2) benefit segmentation, (3) demographic segmentation, (4) geographic segmentation, and (5) psychographic segmentation” (“segmentation strategies,” 2014).
Market segmentation within the industry
Through its long-term marketing approach, Continental has become well-known as one of the leading sponsors in specialized football. One of its marketing strategy began in 1995, sponsorship of UFFA Champions League and UEFA EURO 2016. Growth in awareness of premium tire brand. As a partner to the automotive and commercial vehicle industry, it develops and produces innovative products and systems for a modern automotive future in which cars provide individual mobility and driving pleasure consistent with driving safety, environmental responsibility, and cost-efficiency (Continental AG, 2014). Continental is a fast growing automotive industry, and its brand is to make sure customers feel safe using their services and products. Continental watches competition around the world from other automobile chains; it must continually to change and adapt. Once the customer base is understood, communication is better used. Communication will translates into the market and to the customer base in the most effective way possible (Continental AG, 2014).
Target market selection process
Continental Tires segmented its products by demographic, psychographic, geographic, and behavioral characteristics. Their products are targeted at men, families, and automobile dealers businesses with spirit of optimism, inventive spirit, racing success, internationalization, and automobile supplier. The growth rate projections come into play as these segments will generate massive profit margins as well as it will generate massive profit margins. “A target market is a group of customers towards which a business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy” (“Target market,” 2001-2014). Market segmentation is the division of one market into smaller market segments. The reason this is done is to make it easier to address the desires of smaller groups of customers. In turn allows Continental Tires to sell different products, according to each groups vehicle needs.
Continental has no set target area, and it is a nationwide business and it expanded to the Internet and locations near business and residents. Corporation is located in Germany and has headquarters in North Carolina serving both domestic and international consumers. The total targeted population is based on 49 countries and 300 locations and has five strong regions. Sales by market in 2013 were: 5% other countries, 19% in Asia, 22% in NAFTA, 24% in Germany, and 30% Europe (excluding Germany) (Continental AG, 2014).
Psychographic and behavior characteristics
According to “Education Portal” (2003-2014), “Psychographic segmentation is segmenting the market based on personality, motives and lifestyles” (Psychographic Segmentation). Continental Tires identifies their target market psychographic traits as consumer with automobile needs and responsibilities towards family security and in nature. Similar to psychographic characteristics consumers lifestyles will determine what will be consumers next purchase, and according to “Business Dictonary.com” (2014), A more focused form of market segmentation that groups consumers based on specific behavioral patterns they display when making purchasing decisions enabling producers to adapt their marketing approach to specific groups. Grouping patterns may include such behaviors as spending, consumption, lifestyle, usage, and desired benefits” (behavioral segmentation).
There is no age or gender range, 11% of users purchase Conti Tech, 19% of consumer’s purchase Powertrain, 20% of consumers purchase Interior, 22% of consumer’s purchase Chassis and safety, and 28% of consumers purchase Tires. Typical buyer is those who own any type of moving transportation from a bicycle to a motorhome. With sales of around €33.3 billion in 2013, Continental is one of the world’s leading automotive suppliers. As a provider of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires, and technical elastomers (Continental AG, 2014). The Chassis & Safety division develops and produces electronic and hydraulic brake and chassis control systems, sensors, driver assistance systems, airbag electronics and sensors, washer systems, and electronic air suspension systems. Its core competence is the integration of active and passive driving safety into ContiGuard (Continental AG, 2014).
The Powertrain division integrates innovative and efficient system solutions for vehicle powertrains. The comprehensive range of products includes gasoline and diesel injection systems, engine management and transmission control, including sensors and actuators, as well as fuel supply systems, and components and systems for hybrid and electric drives (Continental AG, 2014). Information management is at the very heart of the Interior division, which provides a range of products that includes instrument clusters and multifunctional displays, control units, electronic car-entry systems, tire-monitoring systems, radios, multimedia and navigation systems, climate control systems, telematics solutions and cockpits (Continental AG, 2014)
The Tire Division of Continental AG can already look back on almost 18 successful years of using football sponsorship as a strategic communications platform. The Division’s long-term marketing strategy for its premium tire brand Continental was launched back in 1995 with sponsorship of the UEFA Champions League. According to Continental Ag (2014), “As by far the world’s most popular sport, professional football has proved an outstanding central communications platform for us,” says Nikolai Setzer, Continental Executive Board member responsible for the Tire Division. “Since 1995 we have recorded a steady increase in brand awareness for our premium Continental brand and fired up the brand image with the powerful emotions from football stadiums around the world.”(Para. Marketing strategy). This division also provides electronic products, systems, and services for commercial and special vehicles; products for specialized workshops; spare parts for the independent aftermarket; and original equipment services under the brand names of Continental, VDO, ATE, and Barum.
Its Tires division develops and manufactures tires for passenger cars, trucks, buses, construction site vehicles, special vehicles, motorcycles, and bicycles under the brand names of Continental, Uniroyal, Semperit, General Tire, Viking, Gislaved, Euzkadi, Sime Tyres, Barum, Mabor, and Matador brand names. The company’s ContiTech division develops and produces air spring systems, surface materials, rubber compounds and sheets, conveyor belts, elastomer coatings, power transmission, fluid technologies, and vibration controls for passenger car and commercial vehicle, mining and printing, machinery and plant construction, aviation and aerospace, and railway engineering industries” (Continental AG, 2014). These divisions are among many successful marketing strategies, thus, in June of 2014 Continental expanded its plant capacity in Kaluga adding new production facility with engine control units, fuel supply and component for injection systems. Continental has invested 24 million euros in the state of the art production facilities, where a total of 100 new jobs will be created for 2016 (Continental AG, 2014).
According to Continental Ag (2014), “With the new plant, we have increased our production capacity in Russia, and that will enable us to serve customers in Russia on a long-term basis with products manufactured in Russia. This is a further strategic step to positioning ourselves in the rapidly growing Russian automotive market as one of the world’s leading supplier of electronics,” said José Avila, Member of the Executive Board of Continental and President of the Powertrain Division” (Press Portal). In conclusion the process of essential and dividing a large market into clearly perceptible segments and having a strong marketing strategy with similar needs, wants, or demand characteristics.
The impartial is to design a marketing mix that exactly balances with the outlooks of consumers in the targeted segment. The Continental Ag (2014) website, capturing needs for an entire market will help sustain the business, and corporate social responsibility are among Continental’s fundamental values. Both support the culture of unity while concurrently contributing to forward-looking and values-based corporate management. As Continental continues with its market segmentation and its process to the target market, it will continue to grow sustainable and continue to expand further and continue to have successful marketing strategies.
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