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Segmentation for the purpose of identifying the most promising target markets can be a difficult task. Many successful companies are able to develop or modify their products to address a number of market segments, according to the needs of customers with similar lifestyles. A best practices approach to market segmentation starts with identifying the broad product- market. Next, it is important to identify a comprehensive set of customers' needs, usually stemming from how they might use the product, under what conditions and for what purpose. As those needs are identified, submarkets will emerge according to similar needs among a particular group of customers. For each of these submarkets, it is important to figure out the determining dimensions, that is, the features and benefits of the product will actually convince customers to purchase that particular product instead of other brands or choices. From these dimensions, companies can name the possible product markets, perhaps with a model name in the case of a car company. Then, evaluating the behaviors of those market segments can lead to an estimate of the size of each product-market segment.

Honda's passenger car product line includes several different vehicles, all of which offer ultra low-emissions (or ULEV) engines, which produce less pollution, along with Honda's reputation for reliability and excellent service. Honda makes several vehicles in its automotive line, including cars, SUVs and trucks. Here, we'll consider three of their passenger car models to illustrate how Honda has developed products that address different lifestyle market segments.

Traditionally, Honda has offered the Accord, introduced in 1976, and the Civic, which it introduced in the 1972-73 model year. These two vehicles have been the mainstays of the Honda product line in the United States. In 2007, Honda introduced the Fit in the United States which had been marketed overseas since 2001.

The Honda Accord is one of the most popular vehicle models in the United States and is promoted as having luxury options, mostly in the form of new technologies. Available in 2-door and 4-door options, the Accord has a full-size, high-performance-car look and feel, but in a mid-size vehicle. At 22 mpg city and 31 mpg highway, it offers greater fuel economy than many other cars in its class. It has more power than the Civic for high performance, and it offers more room for passengers and cargo. The Accord includes wide opening doors for easy access, interior audio, navigation and hands-free mobile phone options, and dual zone climate control.

The Honda Civic offers slight sport, excellent economy, and options that extend its range of possibilities from simple, no-nonsense, compact sedan to sporty, powerful coupe. The Civic is a mid-size car that seats up to five people comfortably and offers excellent fuel economy with a 36 mpg highway rating in the gasoline-powered model, and up to 45 mpg highway in the hybrid option. Civic has a roomy trunk for a car its size, and the back seat is capable of folding to accommodate oversized items. The car requires little maintenance, and, like most other Hondas, holds its resale value and lasts well into the six-figure mileage range.

The newcomer to the Honda line is the Honda Fit, introduced in the United States in 2007. The model had been available in other parts of the world since 2001 under the names Jazz and City. The Fit is touted as a "Super Metro Champion," with a smaller footprint but with full-size features inside. The Fit is very fuel efficient, at 27 mpg city/33 mpg highway. It is available in fashion colors and offers "edgy" styling. The Fit comes equipped with USB interface so drivers can easily use an mp3 player for entertainment, and ten beverage holders. Honda calls the Fit's back seat the "second row magic seat," which can be adjusted to accommodate passengers, cargo or both. The Fit is the least expensive of Honda's line, starting at $14,900, but it still has the same safety features as the Civic and Accord. The Fit received a five-star rating in crash tests.

1. Honda progressed through the steps of the best practices approach to market segmentation. What is the first step in this process?

a. identify determining deimensions

b. Estimate the size of each product market segment

c. Evaluate product market segment behaviors

d. Select the board product market

e. Form initial homogenous submarkets

2. Based only on its features, the Honda Fit would be aimed at which market segment?

a. soccer moms

b. Generation X

c. Elderly

d. Millennials

3. Which of the following segmenting dimensions will have the least impact on which customers the Honda Fit is marketed towards?

a. Income

b. Needs

c. Benefits sought

d. Occupation

e. Lifestyles

4. Which of the following is NOT a lifestyle-related customer need and want addressed by the features offered by the Honda Fit?

a. Multiple beverage holders

b. "Edgy" styling

c. Fashion colors

d. Safety features

e. USB interface

5. Which of the following customer characteristics represents a qualifying segmentation dimension for Honda?

a. Favorite car appearance

b. Preferred performance results

c. Familiarity with Honda brand

d. Desire safety features

e. Driver's license ownership