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Identify the Problem

Identify the Problem. Not enough North Americans are buying the Fiat 500 Fiat has a rather small market share over in North America Fiat has not built a strong enough brand image in this new market. Causes of Problem.

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Identify the Problem

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  1. Identify the Problem • Not enough North Americans are buying the Fiat 500 • Fiat has a rather small market share over in North America • Fiat has not built a strong enough brand image in this new market

  2. Causes of Problem • Fiat brand vehicles have a reputation for being poor quality (Fix It Again Tony) • Bad reputation from the 1970’s • Economic Recession fears and the US economic slump • New Generations are not familiar with brand name

  3. Problem Statement • Which product strategies can Fiat use to increase their market share in North America by 50% by the end of 2014?

  4. About Fiat S.p.A • Founded in Turin, Italy in 1899 • Is the largest car manufacturer in Italy since 1910 • Inspired vehicles compete well in Europe • Unsuccessfully entered the US market twice • Acquisition of Chrysler signified a third attempt • Fiat released the Fiat 500 in North America last year

  5. About the Fiat 500 • Successful in Europe, especially in Italy, France and the UK • Many awards including European Car of the Year • Above average reliability index according to consumers • Not selling well in North America • Did not meet the sales goals last year • Sales rising steadily • Fiat hasn’t shed the reputation it has earned in America

  6. SWOT AnalysisStrengths • Above average reliability • Potential for widespread distribution through Chrysler • Biggest car manufacturer in Italy • Aligned with Ferrari and Maserati • Strategic management (Sergio Marchionne) • Lowest CO2 emissions of any car manufacturer • Fiat brand reputation for style

  7. SWOT AnalysisWeakness • Small Product line • Many product recalls 2011-2012 • Bad reputation in North America (Fix it again Tony) • New Brand • Lack of Scale • Only makes a 1/3 of the revenue than competitors. • 170 dealerships in US

  8. SWOT AnalysisOpportunities • Positive outlook for hybrid and electric vehicles • Gradual fade away of market for SMART Cars (SMART Fortwo) • Fast growing market for subcompacts • Increasing gas prices

  9. SWOT AnalysisThreats • Stiff competition • Mini • Green Cars • Labour strikes impacting production • Increases in prices of raw materials • Global economy is still in recession

  10. Competitive Analysis

  11. Perceptual Map Classy (Expensive) Mini Cooper Volkswagen Beetle Conservative Sporty/ trendy Ford Fiesta Honda Fit Fiat 500 Scion iQ Smart Fortwo Toyota Yaris Practical (Affordable)

  12. Market Size

  13. Market Segments Demographic Geographic Age 16 through 65 Gender Male and Female Family Size/Martial Status Single or Married With or without children Empty nest Income Under 10k through 45k Occupation Student Career Beginning Retired Self employed Education High School College Degree Region America Canada Mexico Density Urban Suburban Metropolitan

  14. Market Segments Behavioural Psychographic Benefits Sought Mid-quality Low price Style/flavour Safety Usage Rate Light to Medium User Status Prospect Non-user First-time Loyalty Status Medium to Strong Liberal Urban lifestyle Environmentally conscious Strong emphasis on style Basic transportation needs

  15. 1st SegmentStudents • Young (Generation Y) • Low income • Urban and Suburban dwelling • Basic Transportation Needs (point A-B) • Parents purchase • Emphasis on safety, style, and practicality

  16. 2nd SegmentYoung Urban Professionals • Middle aged (Generation Y and X) • Finished school • Starting their career • First or second time purchasers • Single or starting a family • Emphasis on style

  17. 3rd SegmentBaby Boomers • Ages 45 - 65 • Established family looking for a secondary vehicle • Empty Nesters or Retired with only basic transportation needs • Larger disposable income (up sell on accessories) • Emphasis on style and practicality

  18. Position Statement For urban dwelling eco-conscious individuals who desire a smaller, stylish car with excellent performance capabilities, and a reasonable price.

  19. Alternative 1Improve Product Quality • Increasing safety features • Changing problematic areas or components • Increasing passenger comfort • Increasing engine size and horsepower • Increase/extending product warranty

  20. Improve Product QualityAdvantages and Disadvantages Advantages Disadvantages Improves brand reputation in North America Increases consumer confidence in the Fiat brand Improve customer relationship management High labor and capital costs for remodeling product components and extending warranty Product changes may affect other features (e.g. fuel consumption, size and shape) May increase the overall pricing of the product

  21. Alternative 2Establish brand image and equity • Change the positioning of product through emphasis on style • Promoting traditional Italian Style • Aligning the brand with Ferarri and Maserati • Collaborate with designer brands • Louis Vuitton • Prada • Armani • (add brands images)

  22. Establish brand image and equityAdvantages and Disadvantages Advantages Disadvantages Solidifies mental model Makes the product recognizable Differentiates the product from competitors Costs time and capital to develop May alienate consumers who are averse to certain brands Dilutes focus of other aspects of the product

  23. Alternative 3Expanding Product Line • Currently 5 models: • POP • Lounge • Sport • Convertible • Turbo (Abarth) • Introducing more models of the current product • Hybrid • Electric • All-Wheel Drive • Larger • Luxury Sport

  24. Expanding Product LineAdvantages and Disadvantages Advantages Disadvantages Able to reach more market segments Caters to specific needs of market segments Reinforces Fiat’s customizable brand image High cost for product development May dilute mental image held by market Logistics of distribution are complex

  25. Implementation • Obtaining resources • Borrowing capital for R&D may be more expensive • Utilize more Chrysler plants to increase production space • Designing a marketing organization • Use Product Development teams already in place • Marketing for North America will be handled by Laura Soave • Developing a schedule • Ensure the Product line is available by next fall • Timing allows proper preparation for promotion • North American International Auto Show • Super Bowl • New York Fashion Week

  26. Course Concepts • Developing marketing • Market-Product Strategies • Goal Setting • Market Segmentation, Targeting and Positioning • Situational (SWOT) Analysis • Competitive Analysis • Managing the product lifestyle • Modifying the product, Modifying the market, Repositioning the product, Brand Management, Multibranding, Creating perceptual benefits • Strategic Marketing Process

  27. Bibliography • Best Affordable Small Car Rankings. (2012, October 19). Retrieved from U.S. News & World Report. U.S. News & Report LP, n.d. • Fiat 500 (2007). (2012, October 19). Retrieved from Wikipedia The Free Encyclopedia. Wikipedia®: http://en.wikipedia.org/wiki/Fiat_500_%282007%29 • Fiat History. (2012, October 19). Retrieved from Official Web Site of Fiat Canada. • Wall Street Journal. (2012, October 02). Retrieved from Auto Sales - Markets Data Center: http://online.wsj.com/mdc/public/page/2_3022-autosales.html • Snavely, B. (2012, March 23rd). At last, Fiat gaining a foothold in U.S. car market. Retrieved from DRIVEON USA TODAY: http://content.usatoday.com/communities/driveon/post/2012/03/at-last-fiat-gaining-a-foothold-in-us-car-market/1#.UIa7SYKKImd • Trudell, T. E. (2012, March 12). Fiat Tries Again in the U.S. Retrieved from Business Week: http://www.businessweek.com/articles/2012-03-08/fiat-tries-again-in-the-u-dot-s-dot • Wunker, S. (2012, February 1st). Fiat's Smart U.S. Launch Strategy — Really. Retrieved from Harvard Business Review: http://blogs.hbr.org/cs/2012/02/fiats_smart_us_launch_strategy_really.html

  28. Team Seven Cents FMGT Set C Group 1 • Miguel Canizares • A00788549 • YuliaGrineva • A00854360 • KasunKotteduwa • A00843930 • Fiona Lee • A00860033 • Jason Quan • A00831138 • Cam Staffen • A00859895

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