Free Essay

Smartcar

In:

Submitted By Renea13
Words 1518
Pages 7
CASE STUDY 3
CASE 10-2 The Smart Car by B. Renea Kosino

1. What is Smart’s competitive advantage? Its brand image?
The Smart Car, made by DaimlerChrysler, offers a cost focus and focused differentiation. It brand image is very narrowly focused. Smart appeals to single people (or families with no children), who primarily do city driving and want a no frills automobile that is economical and eco-friendly. Some advantages that Smart brings to the table are as follows. First, the vehicle has an exceptional look that appeal to those who want to be unique. Next, this very small, but roomy vehicle makes city driving and tight parking easier. Subsequently, crash testing and safety experts consider Smart as an extremely safe vehicle. Moreover, its models are very fuel efficient at 35 mpg on average. In addition, this automobile’s low exhaust emissions earned an Ultra Low Emission Vehicle (ULEV) classification. These condition were essential in Smart being one of five automakers to receive Greenopia USA’s highest environmental rating (see attach1). Finally, the vehicle is very economical with the most basic vehicle starting at $12,000. 2. Assess the U.S. market potential for the Smart. Do you think the car will be a success? Why or why not? Smart Car is economical, unique, and eco-friendly. Generation Y (Gen Y) is a target market, which should be pursued because Gen Y’s, those born from 1977 to 1994 (1980-1995, depending on who you ask), is demographically too large to ignore. In 2009, the US Millennials made up 25% of the population, which already exceeds the size of the Baby Boomers’ buying power, spending over $200 billion, annually. In addition, from a behavioral sense, the Gen Ys are seen as more frequent purchasers, even for vehicles. This is due to their technical shrewdness and their brand conscious ways.
If Smart continues with their current strategy, they will not be a success in the U.S. market. First, one of the major reasons that DaimlerChrysler moved into the U.S. market was out of desperation, since they were not as successful in the European market as they wanted, being rated in the bottom five in 2006. With all of the bad publicity, Gen Ys were already skeptical of the Smart Car. Next, while Smart differentiated their product some for the U.S. market, it will not be enough for our Gen Ys. From a psychological sense, this product is not what they want. Gen Ys believed they are entitled enjoy life first and work second, due to being raised by the Baby-Boomers, who taught them that could do and be anything. Therefore, anything they buy needs to be an experience or adventure. Moreover, they have the “Have it your way!” expectations. So, making a no frills car (similar to flying Ryan Air), which means one starts with a very basic model and then has to pay for basic amenities, like air-conditioning, stereos…, does not appeal to this generation. Next, while Smart is economical, great for driving in the city, and can drive up to 90 mph, the vehicle rides very rough. This takes away from the Gen Y’s need for adventure and enjoying the moment. Finally, this generation is unique, but there are many similarities in the way they operate. See attachment 2, which graphs the answer that these Eco-Boomers gave when asked what the five most important brand/product characteristics were. While Smart fits the bill for being eco-friendly and unique, it does not come even close to matching the other twelve items listed.

3. Identify other target markets into which you would introduce this car. What sequence of countries would you recommend for introduction? Back in 2007, with the Smart Car being so economical and appropriate for city driving, I would recommend expanding the market in England and introducing it to Japan in that order, rather than going to the US. The two countries are known for their large city populations with big city driving. In 2002, England’s city population was over 30 million people, and Japan was over 50 million. Also, while Smart would have to differential their product to accommodate the countries, they would stay quite similar for both markets have similar vehicle specifications, including the requirement for right-hand drive automobiles. In addition, both market are similar that want small economical vehicles for their crazy city driving. While importing vehicle to England is much simpler, Japan has free trade agreements with the European Union. Finally, they would both take interest in the newly developed electric car, called the Smart EV. Once they are back in their “happy place”, Smart should entertain going to developing countries that require vehicle as they introduce themselves. No frills vehicles are perfect for meeting the expectations of this market. In addition, since the vehicles are so simple to assemble, they would want to entertain the idea of manufacturing them within the country once they are comfortable that the market is sound. If done as a joint venture, it would stimulate economy within the country and assist in “developing” them, but eventually, it would also raise the need/want for more automobiles. Of course there are many factors they would have to be accessed (to include economic and government stability) at the point of the actual decision, but regardless should be at least entertained.

4. Review Case 7-2 on Honda Element and Toyota Scion. Are these models targeting the same consumers as Smart? In view of the Japanese carmakers’ success with these brands, do you think the Smart’s U.S. launch is too late? The Smart did try to hit the same market for uniqueness and economy. However, the Element and Scion had more emphasis on luxury, which is something the Smart was not. The Smart car seemed to compete more with the Mini Cooper, which was introduced in the early 60s without success, but then was revived in the 21st Century as not only an economical and eco-friendly vehicle but also as a sport and luxury item, which appeals to the Gen Ys. Shortly after Mini’s success, Smart started to enter the market in 2002 with teaser introductions, but did not announce coming into the market until 2006. However, with delaying their entry into the market, bad publicity following them from Europe, and only being an economic and environmentally friendly vehicle, they could not compare to vehicles with establish reputations like Element, Scion, and Cooper. Therefore, coming into the market late was a major setback for the U.S. Smart launch.

5. Assess United Auto Group’s marketing strategy for the Smart. Do you think the strategy will be effective in reaching the niche market for minicars? Smart has been very successful. In fact, their overall sales were up 24% in 2010. United Auto Group has a good strategy for marketing to the economical minicars niche. However, based on the data presented, if the product does not evolve to the luxury and high tech need wants of the Gen Ys, they will never be the top of the heap.

Attach 1 Greenopia USA Environmental Rating – Eco-Friendly Green Car Manufacturer Guide http://www.greenopia.com/USA/auto_search.aspx?category=Automobiles&Listpage=0&input=Name%or%product&subcategory=None&sort= as of 7 Jul 2011 Car Manufacturer | | Fleet MPG | | Hybrids | | Rating |

Honda 28 3
Mini 27 0
Smart 36 0 | | | | | | | | | | | | | | | |

Toyota 25.1 3

Volkswagen 24.8 2

Attach 2 Survey of Gen Y and product preferences http://www.marketingprofs.com/charts/2011/4712/gen-y-wants-more-than-cool-brands

Works Cited: http://en.wikipedia.org/wiki/Smart_(automobile) http://www.forbes.com/2006/07/12/unsolicited-advice-advertising-meb_0712smart.html http://usnews.rankingsandreviews.com/cars-trucks/Smart_ForTwo/ http://www.greencar.com/articles/smart-car-offers-drivers-new-high-mpg-option-top-crash-rating.php http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071702945_2.html http://www.businessweek.com/autos/autobeat/archives/2006/03/a_car_called_sm.html http://usnews.rankingsandreviews.com/cars-trucks/rankings/Affordable-Small-Cars/ http://www.greenopia.com/USA/auto_search.aspx?category=Automobiles&Listpage=1&input=Name%or%product&subcategory=None&sort= http://www.usatoday.com/money/autos/2007-11-11-smartcar_N.htm http://www.marketingprofs.com/charts/2011/4712/gen-y-wants-more-than-cool-brands http://www.startupnation.com/business-articles/9011/1/marketing-GenY.htm http://www.marketingprofs.com/charts/2011/4712/gen-y-wants-more-than-cool-brands http://www.businessweek.com/1999/99_07/b3616001.htm http://www.metlife.com/assets/cao/mmi/publications/Profiles/mmi-gen-y-demographic-profile.pdf http://www.msnbc.msn.com/id/17688646/ http://www.ibscdc.org/Case_Studies/Marketing/Marketing%20Strategies/MM0006.htm http://www.mongabay.com/igapo/UK.htm http://www.mongabay.com/igapo/Japan.htm http://www.greencarsite.co.uk/comingsoon/smart-ev.htm http://en.wikipedia.org/wiki/Mini http://www.usatoday.com/money/autos/2006-06-28-smart_x.htm http://www.pscars.com/Penske-posts-profit,-Smart-cars-lag-behind

Similar Documents

Premium Essay

Smartcar

...Consumer Behavior 1. The individual difference variables that influenced my behavior. A product I frequently purchase is Nike's football shoes: The individual variables that influenced my behavior is "motivation". Actually, I may be influenced by an advertisement on television sowing a sports hero using the product. This picture remains in my mind even when I am not thinking about hero. I may want to copy the football star by using the product and so choose it. At other times, I buy products to get the attention of other people. A particular car, for example, might be chosen because I am trying to prove that I am rich, attractive, and exciting. Other purchases are for pleasure rather than need. Tickets to baseball game or to a dock concert are examples of this kind of "motivation" inducement, or reason for buying. Of course, need remains the most important reason for buying something. Food is a real need, but what about the sugarcoated breakfast food advertised on television? It is neither necessary nor nutritious. What causes or motivates me to buy this product? Most likely it is a "motivation" inducement. Marketers are interested in motivation when this motivation relates to purchasing behavior. This behavior relates to the motive for wishing to possess the goods or services in question, and it has been termed ‘goal-related behavior’. For a motive to exist there must be a corresponding need. Motives like hunger, thirst, warmth and shelter are physiological...

Words: 1341 - Pages: 6

Premium Essay

Swot Gm

...Moise Jinior Professor Hamilton SWOT Analysis 8/22/12 General Motors SWOT Analysis Strengths If we look to the strategy analyses General Motors (GM), first of all GM needs to focus on their strengths. The advantage that General Motors had it’s the brand value that they made over these pass decade. Everything started in Michigan; General Motors was created around 1900’s. They always has been made some amazing high quality cars for their customers, and from this remarkable work they were know as one on the best automobile brand worldwide. The products that General Motors provide are safe and they guaranty a long lasting service to their client. In addition GM wanted to be unique compare to the competitor such as Ford whom as been on the automobile market at the same period. GM developed a large different brand such as Cadillac, GMC, Buick and Chevrolet. With These different products line General Motor was able attract a large number of costumers. Another strength, General Motors from been just an US company afterward they became an international company. Even though they had been successful in the worldwide market but not as great as the US markets. General Motor sell they car oversee in 60 countries over the globe. To make this possible GM needs partner such as dealerships over the world to provide they new product and they service to the costumer. GM has one of the most important and biggest...

Words: 820 - Pages: 4

Premium Essay

Fate Of The Furious Research Paper

...killing Dom? Bringing him in? Trying to persuade him to turn good again? The movie never really commits. The plot is essentially: "Dom now bad. We still good. Now hold my beer while I do something ridiculous." You know what? Let's drop the empty-headed Chris Morgan script and focus on the action. After all, that's what sells tickets and puts butts in seats, right? On that front, Gray and Morgan have simply outdone themselves here, as each action sequence is absurd and wildly entertaining. One sequence takes place in Havana involving a broken down jalopy, a soda can pop top as a catalyst for a nitrous booster and a drag race going backwards and forwards. There's the Siberian race across the ice. Cipher and her team hack into IoT-ready smartcars, creating a zombie-like fleet of remotely controlled vehicles, hurtling at breakneck speed from ground and sky, as cars hurtle themselves out of a multi-floor parking garage down to the busy New York City streets below. Yep. This movie is insane. And while those sequences may have you checking your Fandango to see when Fast 9 tickets go on sale, everything that fits in around those moments are rather pointless. At 136 minutes, action sequences only can do so much and there just is not much of any substance here whatsoever. A subplot involving Dom's past, not spoiled here, seemingly exists to try and make us sympathize with a plight that can only exist in a movie where we are dealing with Russians, nuclear codes, people turning bad, people...

Words: 962 - Pages: 4

Premium Essay

Business Review

...Wireless IP Solutions Enhancement Business Plan 2014 September 17 draft Rosemary Thorsen TBS Complex Mobile Solutions Content    Market Problem and Opportunity Market Analysis Market & Product Strategy    Product Requirements Project Schedule Business Advantages    Success Criteria Risk Assessment Implementation & Launch Plans  Financial Data 2 TELUS Confidential 2 Market Problem and Opportunity Wireless IP Solution Portfolio – Problem and Opportunity What was this portfolio designed for? capabilities - Originally designed to support CDMA Architecture 7 years ago - Built to implement 2 to 3 enterprise clients per month - Focused on modem market in the enterprise segment (C BAN Only) - Mostly in ILEC territories with MPLS network (in Canada) Where does this need to evolve to? - Support M2M & Non M2M (Smartphone) growth on LTE network and beyond - >500K+ loads annually and more in coming years - Across ENT, TBS and Partner segments for all devices (Modems, POS, Routers, Smartphones, Tablets, ATMs, Cars) - Across ILEC / Non ILEC territories (TELUS, Non TELUS, Internet) and even international connectivity 4 TELUS Confidential TELUS restricted and confidential– not for distribution 4 Mobile Business Drivers the courage to innovate TBS Segment • Provide controlled real-time access to business applications and systems for mobile workers in the business market Machine-to-Machine • Provide secure...

Words: 5354 - Pages: 22

Premium Essay

Bmw These

...A Company Analysis Department of Business Administration Autumn 2006 Authors: Hiba Larsson and Christian Falkemark Thesis Adviser: Thomas Polesie Master Thesis, 10 points Abstract Master Thesis in Business Administration School of Economics and Commercial Law Gothenburg University Autumn 2006 Authors: Hiba Larsson and Christian Falkemark Thesis Adviser: Thomas Polesie Title: BMW – A Company Analysis Thesis Language: English Background: The automotive industry is distinguished by a highly competitive market. Thus, the actors on the market struggle with increasing cost of production, development and mature markets. With the aim to increase profit margins and reduce costs, Volkswagen, GM and Ford are some companies, which use the same components in different car models and car brands. These companies have in other words succeeded in synergising research and development effects within the company despite car model and business area. By a contrast, BMW, an individual actor, has yearly shown strong financial results and has retained its market shares. This becomes of interest to study more profoundly, in order to find the factors behind a successful company and a strong brand. Purpose: The purpose of this thesis is to analyse the development of BMW during the past five years. Not only are the financial statements taken into consideration. In addition, a comparison to competitors and the market situation is also made. Delimitation and assumptions: This thesis is delimited to...

Words: 18022 - Pages: 73