Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Leonard Agranat, Daniel Cady, Amanda Cohen, Nikhil Kulkarni, Chris Machielse, Linda Yeung
AgendaOriginsCurrent Big PictureAreas for ImprovementRevised Big PictureRecommendationsQ&A                         2
Volkswagen            terminated                                                Origins              project              ...
Current Big Picture                                                execute                                                ...
Current Big Picture                                                execute                                                ...
Business ObjectiveFundamental • Smart Car USA   Entity   Core    • TechnologyCompetence • Engineering            • Undefin...
Marketing ObjectiveAcquisition– Small category: fuel-efficient subcompacts– Recent entry to market (2008)– Small customer ...
Source of VolumeOnly have 0.1% market shareStimulate Demand for subcompacts– Main variable: small size and fuel efficiency...
Who is Smart talking to?                           Marketing Objective                           acquisition retention    ...
Current Big Picture                                                execute                                                ...
SegmentSource: Strategic Business Insights                                                11
How does Smart segment?Address high degree for self-expressionNeed to look “cool”– Regular compact cars are boringSponsors...
Target     Jenna     Age 23     “Urban hipster”                       13
Lives in the city                    14
•Large cars hard to park•Public transportation is tedious                                    15
Cares about the environment                              16
Fashion forward                  17
Smart Car changeswith her style                    18
Positioning“unBig, unCar”Small cars are just as capable as big carsDeemphasize importance of having big carSmall cars are ...
5-Box Positioning Statement When I wantto buy a car, I     Bigger cars are    Driving small    want            not necessa...
Current Picture Diagram                                                 execute                                           ...
ProductHas not changed product line since 2008– Pure coupe– Passion coupe– Passion cabriolet                              ...
Search AttributesPriceMiles per gallonAppearanceSafety                             23
PriceBase price $12,490All models under $20,000– Offer affordable car to young target marketCompetitive with other subcomp...
Miles per Gallon       High fuel economy       – 33 city and 44 highway mpg       Highest mileage, gas-only vehicle in USS...
AppearanceSleek lookSmall enough to fit intight spacesEntirely customizableexterior– Color, design,  pattern, change  pane...
Safety           Highest possible crash test ratings           – Frontal offset           – Side-impact           – Roof s...
Experience AttributesRide quality– Excels in turning radius and parking ease– Stiff suspension– Automatic transmission fee...
Promotion          Buzz around US          launch          Few TV or print ads          Active on social          media   ...
Promotion            30
PlaceSold in Mercedes-Benz dealerships– Share the same showroomsIntimidates potential Smart Car buyers– Loss of sales due ...
The unSales Growth                     32
Rick Perry, General Manager                              34
Revised Big Picture                                                execute                                                ...
Revised Big Picture                                                execute                                                ...
unGoal: 1500 units/month                           37
Revised Big Picture                                                execute                                                ...
Revised Big Picture                                                execute                                                ...
Source of VolumeSteal Share from other cars in categoryClearly not the market leader                                      ...
41
Safety         Size                42
Value        Size               43
Revised Big Picture                                                execute                                                ...
Important Attributes                                                            Importance                       5        ...
Most Important Attributes1. Reliability2. Value3. Safety                                  46
Address ImportanceI don’t think fuel   Smart is not only    I can travel & doeconomy is very      a great value, but   mor...
Perception Problems                                         Perception 5                 4.464.5 43.5 3                   ...
Lowest Ranking Perceptions1. Safety2. Size3. Styling                                  49
Address Perceptions Smart is a great      Smart is a great    Smart is both avalue, but it is too     value, and it    gre...
Discrepancies Between                    Importance and Perceptions 5                             4.46                    ...
Revised Big Picture                                                execute                                                ...
Improve Warranty CoverageIncrease beyond 2 year/24,000 mileMatch Ford Fiesta– 3 year/36,000 mile bumper-to-bumper warranty...
Revised Big Picture                                                execute                                                ...
PlaceMake separatedealership for SmartCarsDifferent targetmarkets hurt potentialsales of Smart Cars                       ...
Price Ranges$200,000                     $160,000$150,000                                                    Min$100,000  ...
Cost of ImplementationAdd 26 dealerships in urban areas withJennas– e.g. Southfield, MI instead of Bloomfield HillsCost pe...
Revised Big Picture                                                execute                                                ...
PromotionImage promotion  need people to realize whatSmart Car can offer for value.– Currently there are poor views of Sm...
60
Example AdSmall is safe.The Smart Fortwo earns the highest possible ratings in roofstrength, frontal offset, and side impa...
Cost of New PromotionCost per 30 second spot:– Modern Family: $250k– America’s Next Top Model: $61k1 exposure per episode–...
Key Takeaways                            Current               Recommended   Cost per 30 second spot:Business Objective – ...
Questions?             64
Works Citedhttp://www.strategicbusinessinsights.com/vals/usframework.jpghttp://www.iihs.org/ratings/ratingsbyseries.aspx?i...
SUPPLEMENTAL SLIDES                      66
Supplemental SlidesCompeting Vehicles Launched Since 2008Dealership Cost CalculationsGRP CalculationsunBig, unCar spotCras...
Must Keep Pace in Increasingly            Competitive SegmentChevy Cruze      Chevy Sonic   Fiat 500Ford Fiesta      Kia F...
Dealership Costs         Currently: 74 dealerships; add 26         Average unit sales for US car dealer: 653         – Sma...
Dealership CostsCost per new dealer = 551k + 265k = $816kTotal Cost (26 new) = 816 * 26 = $21,216,000                     ...
GRP Calculation          Viewers per episode               Modern: 13.5 million               Model: 4 million          Ep...
GRP CalcuationGRPs = ∑ reachi × frequencyi         13.5������               4������GRPs =             ∗ 24 +             ∗...
You’ve finished this document.
Download and read it offline.
Upcoming SlideShare
The Smart Car
Next
Upcoming SlideShare
The Smart Car
Next
Download to read offline and view in fullscreen.

Share

Smart Car Marketing Recommendations

Download to read offline

A presentation that analyzes the current marketing strategy for Smart USA and offers several recommendations. Created for a Marketing 300 project at the University of Michigan's Ross School of Business.

Related Audiobooks

Free with a 30 day trial from Scribd

See all

Smart Car Marketing Recommendations

  1. 1. Leonard Agranat, Daniel Cady, Amanda Cohen, Nikhil Kulkarni, Chris Machielse, Linda Yeung
  2. 2. AgendaOriginsCurrent Big PictureAreas for ImprovementRevised Big PictureRecommendationsQ&A 2
  3. 3. Volkswagen terminated Origins project 1993 Officially launched Assembly Plant opened in the U.S.Idea developed October 27, 1997 2008by Nicholas 2010 sales were onlyHayek, CEO of 5,927 unitsSMH No longer associated with SMH December, 2010Late 1980’s January 1, 1999 March 4, 1994 January, 2009 Joined forces with Waiting list in US is 12 Mercedes-Benz October, 1998 months Smart car sales launched in 9 European CountriesJuly 3, 1991 July 1, 2011 Penske AutomotiveAgreement reached Group rescinds all USwith Volkswagen to distribution rights todevelop new project Mercedes-Benz 3
  4. 4. Current Big Picture execute product service STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 4
  5. 5. Current Big Picture execute product service STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 5
  6. 6. Business ObjectiveFundamental • Smart Car USA Entity Core • TechnologyCompetence • Engineering • Undefined Goal 6
  7. 7. Marketing ObjectiveAcquisition– Small category: fuel-efficient subcompacts– Recent entry to market (2008)– Small customer base– Challenge: Overcome head and heart loyalty 7
  8. 8. Source of VolumeOnly have 0.1% market shareStimulate Demand for subcompacts– Main variable: small size and fuel efficiency– Dynamic variable: price and customizability“SmartCar is unique and has no realcompetition”Raising awareness for subcompact cars 8
  9. 9. Who is Smart talking to? Marketing Objective acquisition retention Pulling buyers Have current stimulate into the owners subcompact purchase more demand category. Smart Cars.Source of Volume Retain current steal Target buyers customers who of competing also own share vehicles. competing vehicles. 9
  10. 10. Current Big Picture execute product service STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 10
  11. 11. SegmentSource: Strategic Business Insights 11
  12. 12. How does Smart segment?Address high degree for self-expressionNeed to look “cool”– Regular compact cars are boringSponsorship at young, urban events 12
  13. 13. Target Jenna Age 23 “Urban hipster” 13
  14. 14. Lives in the city 14
  15. 15. •Large cars hard to park•Public transportation is tedious 15
  16. 16. Cares about the environment 16
  17. 17. Fashion forward 17
  18. 18. Smart Car changeswith her style 18
  19. 19. Positioning“unBig, unCar”Small cars are just as capable as big carsDeemphasize importance of having big carSmall cars are fuel efficient 19
  20. 20. 5-Box Positioning Statement When I wantto buy a car, I Bigger cars are Driving small want not necessarily cars aresomething big better smarter. and strongWhen I look tobuy a car, I will When I look to buy a big car, buy a car, I will or SUV buy a Smart Car. 20
  21. 21. Current Picture Diagram execute product service STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 21
  22. 22. ProductHas not changed product line since 2008– Pure coupe– Passion coupe– Passion cabriolet 22
  23. 23. Search AttributesPriceMiles per gallonAppearanceSafety 23
  24. 24. PriceBase price $12,490All models under $20,000– Offer affordable car to young target marketCompetitive with other subcompact cars2 year, 24,000 mile warranty 24
  25. 25. Miles per Gallon High fuel economy – 33 city and 44 highway mpg Highest mileage, gas-only vehicle in USSource: FuelEconomy.gov 25
  26. 26. AppearanceSleek lookSmall enough to fit intight spacesEntirely customizableexterior– Color, design, pattern, change panels 26
  27. 27. Safety Highest possible crash test ratings – Frontal offset – Side-impact – Roof strengthSource: Insurance Institute for Highway Safety 27
  28. 28. Experience AttributesRide quality– Excels in turning radius and parking ease– Stiff suspension– Automatic transmission feels like manual– Rough riding experience 28
  29. 29. Promotion Buzz around US launch Few TV or print ads Active on social media Lowest brand awareness car in AmericaSource: Young Intelligence 29
  30. 30. Promotion 30
  31. 31. PlaceSold in Mercedes-Benz dealerships– Share the same showroomsIntimidates potential Smart Car buyers– Loss of sales due to this reason 31
  32. 32. The unSales Growth 32
  33. 33. Rick Perry, General Manager 34
  34. 34. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 35
  35. 35. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 36
  36. 36. unGoal: 1500 units/month 37
  37. 37. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 38
  38. 38. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 39
  39. 39. Source of VolumeSteal Share from other cars in categoryClearly not the market leader 40
  40. 40. 41
  41. 41. Safety Size 42
  42. 42. Value Size 43
  43. 43. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 44
  44. 44. Important Attributes Importance 5 4.44 4.5 4.11 3.95 4.02 4 3.85 3.56 3.46 3.5Reported Importance 3 2.5 2 1.5 1 0.5 0 Size Fuel Economy Brand Name Exterior Styling Reliability Value Safety Attribute n=92 45
  45. 45. Most Important Attributes1. Reliability2. Value3. Safety 46
  46. 46. Address ImportanceI don’t think fuel Smart is not only I can travel & doeconomy is very a great value, but more for my gas important. it can save you money with a fuel money on gas too. efficient Smart. I will buy a new When I look to car without buy a car, I willconsidering MPG. buy a Smart Car. 47
  47. 47. Perception Problems Perception 5 4.464.5 43.5 3 2.83 2.82 2.552.5 2.11 1.96 2 1.801.5 10.5 0 Size Fuel Economy Brand Name Exterior Styling Reliability Value Safety 48
  48. 48. Lowest Ranking Perceptions1. Safety2. Size3. Styling 49
  49. 49. Address Perceptions Smart is a great Smart is a great Smart is both avalue, but it is too value, and it great value and a dangerous. performs well in safe vehicle. crash tests. When I look to When I look to buy a car, I will buy a car, I willpurchase a larger buy a Smart Car. vehicle. 50
  50. 50. Discrepancies Between Importance and Perceptions 5 4.46 4.444.5 4.11 3.95 4.02 4 3.85 3.56 3.463.5 3 2.83 2.82 2.552.5 Importance 2.11 Perception 1.96 2 1.801.5 10.5 0 Size Fuel Economy Brand Name Exterior Styling Reliability Value Safety 51
  51. 51. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 52
  52. 52. Improve Warranty CoverageIncrease beyond 2 year/24,000 mileMatch Ford Fiesta– 3 year/36,000 mile bumper-to-bumper warranty– 5 year/60,000 mile powertrain warranty– 5 year/60,000 mile roadside assistance 53
  53. 53. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 54
  54. 54. PlaceMake separatedealership for SmartCarsDifferent targetmarkets hurt potentialsales of Smart Cars 55
  55. 55. Price Ranges$200,000 $160,000$150,000 Min$100,000 Max $38,000 $50,000 $19,000 $12,000 $0 Mercedes-Benz Smart Car 56
  56. 56. Cost of ImplementationAdd 26 dealerships in urban areas withJennas– e.g. Southfield, MI instead of Bloomfield HillsCost per new dealer = $816k– $265k annual salaries– $551k startup costsTotal cost = $21,216,000 57
  57. 57. Revised Big Picture execute product STP segment pricebusiness marketing source ofobjective objective volume target position place promotion 58
  58. 58. PromotionImage promotion  need people to realize whatSmart Car can offer for value.– Currently there are poor views of Smart Car.– More GRP’s– Promote on young, hip shows (Modern Family, America’s Next Top Model, etc.)Promote what matters to consumers– Safety, valueMercedes has allocated $25 million for media 59
  59. 59. 60
  60. 60. Example AdSmall is safe.The Smart Fortwo earns the highest possible ratings in roofstrength, frontal offset, and side impact tests. 61
  61. 61. Cost of New PromotionCost per 30 second spot:– Modern Family: $250k– America’s Next Top Model: $61k1 exposure per episode– 24 episodes for Modern; 10 for Top Model per seasonTotal Cost: $6,610,000Total GRPs: 167 62
  62. 62. Key Takeaways Current Recommended Cost per 30 second spot:Business Objective – Goal -- 1500 units / month – Modern Family: $250kSource of Volume Stimulate Demand Steal Share – America’s Next Top Model: $61kPosition Emphasize Smallness Emphasize Safety, Value 1 exposures per episode –Product 24 episodes for Modern;mi for Top Model per 2 year / 24,000 10 3 year / 36,000 miPlace season In Mercedes Showroom Standalone Dealership Total Cost: $6,610,000Promotion Total GRPs: 167 on Social Media Focus More TV & Print ads 63
  63. 63. Questions? 64
  64. 64. Works Citedhttp://www.strategicbusinessinsights.com/vals/usframework.jpghttp://www.iihs.org/ratings/ratingsbyseries.aspx?id=632http://young-intelligence.com/2011/11/ad-review-smarts-uncar-campaign/Interview with Rick Perry, General Manager of Mercedes-Benz of Bloomfield HillsBusiness Plan Handbook 65
  65. 65. SUPPLEMENTAL SLIDES 66
  66. 66. Supplemental SlidesCompeting Vehicles Launched Since 2008Dealership Cost CalculationsGRP CalculationsunBig, unCar spotCrash test video 67
  67. 67. Must Keep Pace in Increasingly Competitive SegmentChevy Cruze Chevy Sonic Fiat 500Ford Fiesta Kia Forte Kia SoulNissan Cube Nissan Leaf Scion iQ 68
  68. 68. Dealership Costs Currently: 74 dealerships; add 26 Average unit sales for US car dealer: 653 – Smart Car goal: 180 (1500 units/mo. * 12 mo. / 100 dealerships) 27.5% of operation Dealership Startup Costs: $265k Average payroll: $2M/yr. * 27.5% = $551kSource: Business Plans Handbook 69
  69. 69. Dealership CostsCost per new dealer = 551k + 265k = $816kTotal Cost (26 new) = 816 * 26 = $21,216,000 70
  70. 70. GRP Calculation Viewers per episode Modern: 13.5 million Model: 4 million Episodes per season Modern: 24 Model: 10 18+ citizens of America: 217.8 millionSource: TVbytheNumbers.com 71
  71. 71. GRP CalcuationGRPs = ∑ reachi × frequencyi 13.5������ 4������GRPs = ∗ 24 + ∗ 10 = 167.125 217.8������ 217.8������ 72
  • stoicninterpid

    Apr. 25, 2020
  • GeraldineBlanco

    Oct. 17, 2017
  • atere4ever

    Jul. 30, 2017
  • TyVishwakarma

    Dec. 30, 2016
  • GlenWaters

    Jan. 21, 2014

A presentation that analyzes the current marketing strategy for Smart USA and offers several recommendations. Created for a Marketing 300 project at the University of Michigan's Ross School of Business.

Views

Total views

17,712

On Slideshare

0

From embeds

0

Number of embeds

17

Actions

Downloads

331

Shares

0

Comments

0

Likes

5

×