Download - Suzuki Samurai Case Analysis080114
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CASE ANALYSIS :Presented by:ARUNA C K SHARMASRINIVASARAO
SUZUKI SAMURAI
Free Powerpoint TemplatesPage #CONTENTSHistory of SuzukiSuzuki samurai in USAnalysisTarget segmentation of Suzuki SamuraiMarketing plan for ASMCSuzukis Goal, Strategy and its success
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HOW TO POSITION SUZUKI SAMURAI IN USA Free Powerpoint TemplatesPage #SUZUKI IN JAPAN Michio Suzuki started as Suzuki loom works in 1909
It was a loom manufacturing company
Free Powerpoint TemplatesPage #1952 and 19541952 Suzuki introduced first 2-cycle
1954 Suzuki introduced 2nd motorcycle
Popularity of these motor cycles led to change in name as Suzuki motor company, Ltd.
Free Powerpoint TemplatesPage #1959After 7 years of success, Suzuki introduced a first light weight Van
Free Powerpoint TemplatesPage #1961After 9 years of success, Suzuki introduced a first CAR of 2 stroke engine named SUZULIGHT
Free Powerpoint TemplatesPage #1964 1965After 12 years of success in 1964, SUZUKI started exporting motorcycles to USA, quickly established as a Major brand in U.S. motorcycle industry. By 1965, SUZUKI product line had: Motorcycles Automobiles Motorized wheel chairs Outboard motors General purpose engines Generators Water pumps and Prefabricated houses
Free Powerpoint TemplatesPage #In 1979 and By 1984In 1979, SUZUKI automobiles introduced to foreign markets, after 27 years of success
And
By 1984, SUZUKI goes global in over 100 countries and Hawaii
Free Powerpoint TemplatesPage #1983General Motors (GM) buys 5% of Suzuki and helps company develop a subcompact car for the U.S. market
CHEVROLET SPRINT
Free Powerpoint TemplatesPage #DEMAND FOR SPRINT In mid 1984, Sprint was Suzukis first entry into continental U.S. automobile market.
These cars were sold exclusively by Chevrolet dealers.
Voluntary restraint agreement (VRA) limited the shipping number of cars to U.S. by 17,000.
All cars were quickly sold by GM even though its distribution was limited to U.S. west coast dealers.
Free Powerpoint TemplatesPage #EMERGENCE OF ASMCSUZUKI planned to introduce several unique vehicles to U.S. market over a time.
Unknown of GM willingness
SUZUKI DECISION
To form American Suzuki Motor Corporation
Free Powerpoint TemplatesPage #CANADA PLANT Upon success of sprint, Suzuki plans to introduce several unique vehicles to US but VRA quota allows Suzuki to only export sprints.
Consequently, GM and Suzuki negotiate for an Ontario plant to produce 200,000 subcompact cars per year but it was expected to be online by early 1989.
In 1986, Hyundai and Yugo were expected to enter US market .
Market forces and projected new entrants makes Suzuki introduce SJ413 (Upgraded samurai) to U.S. market.*(As a TRUCK)*
Free Powerpoint TemplatesPage #SUZUKI SAMURAI FOR U.S.U.S. Govt. classified SJ413 as a TRUCKTrucks were not subject to Japanese VRA quotasInstead subject to 25% tariff v/s 2.5% tariff on carsSUZUKI management yet found deal worthyOn May 10, 1985, Douglas Mazza was hired.To organize and head new subsidiary, ASMCTo develop Suzuki dealer network to sell SJ413 by Nov 1985To create the marketing plan for Suzuki samurai in U.S.Suzuki planned to market 2 versions of SAMURAI
Convertible version andHard-top version
Free Powerpoint TemplatesPage #FIVE FORCE ANALYSISSubstitutes
Free Powerpoint TemplatesPage #DRAFTED DEALER AGREEMENT BY MAZZA Suzuki goal was to establish itself as a major car company in U.S. Hence, Mazza convinced prospective and limited 50 dealers to provide the following:
Exclusive sales facility for Samurai that includes:ShowroomSales officesCustomer-waiting and accessory-display areaDedicated minimum 2 service stalls and operated by Suzuki trained mechanicsShall display required signs at inside service stalls and outside the sales office3 sales executives2 service techniciansGeneral managerGeneral office clerk
Free Powerpoint TemplatesPage #ASMCS STRATEGY ASMC planned retail price : $ 5,995 and Dealer invoice price would be 7.5% lesser
ASMC wanted to attract dealers such that opportunity match investment requirements. Thus, boost dealers average unit profit, dealers loyalty, greater sales support, higher control over retail market.
Initial dealers limited to 47 nos.ASMC guaranteed supply of minimum 37 units per month than planned 30 unit earlier for 50 dealers.
The target selling of 6000 units in 6 months were raised to 10,500 units, by Mazza.
Introduce Samurai into U.S. largest automobile market : California, Florida and Georgia
Free Powerpoint TemplatesPage #SUZUKI GOALEnter the continental U.S.
Automobile customers were buying imported Japanese cars Industry experts predicted command of 19.2% share of U.S. market in 1985.
Sell 2 version of SamuraiToo limiting
SUCCESSFUL GOAL BUT VERY CONSERVATIVE PROJECTIONS.
Suzuki is entering this market conservatively.This also limits their product.
Free Powerpoint TemplatesPage #WHAT DOES SUZUKI LOOK LIKE?
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This is SJ413 SUZUKI SAMURAI, 1985 US MODELFree Powerpoint TemplatesPage #
SJ413 SUZUKI SAMURAI, 1985 US MODELFree Powerpoint TemplatesPage #
Even this Free Powerpoint TemplatesPage #PRODUCT OVERVIEWPRODUCT BENEFITEMOTIONAL BENEFITPERSONALITYRuggedness Feeling of being strong and roughOutdoorsy, toughEfficient gas mileage, low maintenanceFeeling of austerity and satisfaction Sincerity, honestyLooks Cute and StylishBeing in vogue, pride in being watched and appreciatedHedonisticEasy off road handling, choice of convertibilityComfortable and adaptable to all situationsSpirited, Daring
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QUESTIONHOW DO YOU FEEL SUZUKI SAMURAI SHOULD BE POSITIONED?
Free Powerpoint TemplatesPage #MARKET SEGMENTATIONThe market segmentation of the Suzuki SamuraiCOMPACT SPORT UTILITY VEHICLESMALL PICKUP TRUCKCOMPACT CAR
Free Powerpoint TemplatesPage #COMPACT SPORT UTILITY VEHICLEPROSCONS4x4 drive capabilityLow Market Potential which might not reach target salesBuilt like an SUVLimited Market of SUVs[less than 3% in 1984]Drives well off-roadSome consumers correlate Price and QualityLow PriceSmaller and lighter
Free Powerpoint TemplatesPage #SMALL PICKUP TRUCKPROSCONSRelatively large size of the market 2.5 times that of the SUV marketLosing out on the subcompact car segment which was largerAmericans favor trucks imported from Japan [54% of total sales in 1984]It had a 25% import tariff compared to the 2.5% for carsUsed as truck when purchased without back seat/folded upNarrow target segment
Free Powerpoint TemplatesPage #SUBCOMPACT CAR PROSCONSOpens up the largest of the 3 marketsStiff and less comfortable than even the least expensive subcompact carPriced lower than many other subcompact carsVery good mileage of 28 miles to the gallon
Free Powerpoint TemplatesPage #Free Powerpoint TemplatesPage #Everyday driving
Off road/snow driving
Passenger comfort
Quality/Durability
Styling
Capacity
Gas mileage
CONSUMERS LOOK FOR
Free Powerpoint TemplatesPage #PRIMARY TARGET MARKETSingle male, 18-30 years old
First time car buyer
Students, fresh graduates, young professional
Come from 2-person households that earn an average income annually
Young, unconventional, works hard, often go parties, desires to be rugged, takes pride, likes to be different and who seeks fun.
Free Powerpoint TemplatesPage #SECONDARY TARGET MARKETSingle/Married, Male, >30 years old
Has at least 2 cars
Businessmen and establishedprofessionals
Has children (usually female) who can already drive
Come from households that earn higher than an average annual income
Young at heart, Straight-laced, loves his family, but wants to break free and indulge at times
Free Powerpoint TemplatesPage #CONSUMER INSIGHTSConsumers think that SAMURAI was
A symbol of their independence to do different
Practicality to drive a versatile vehicle
They felt as Cute, Neat and Fun that make them :
stand out goes well with their lifestylesbreak the traditional mould and away from the traditional Sedan.
Free Powerpoint TemplatesPage #CONSUMER PERCEPTION ANALYSIS
Free Powerpoint TemplatesPage #CONSUMER PERCEPTION
CONSUMERS COMPLEX BEHAVIOUR
Free Powerpoint TemplatesPage #CONSUMER ANALYSISCAR can be used for:
City travel (good mileage)Passenger car (accommodations for 5 people)Transportation of material (pick up truck capability)Possibility of a convertible (cool summer car)Off road capabilitiesDesigner looks Price for car
A car with a wide range of capabilities for a good price
Free Powerpoint TemplatesPage #MARKET ANALYSISBased on the five forces analysis:
The Suzuki samurai is the perfect debut vehicle for U.S.
No significant substitutes that matched PriceCapabilitiesAppearance
Get ahead of other Asian companies that would plunge shortly to take advantage of the growing imports industry
Free Powerpoint TemplatesPage #COMPETITIVE ANALYSISKey resources and capabilities
Brand nameGM supportUseable statistics (Gray market)Competitors
They are relatively new entrants (Hyundai and Yugo)
Price remains same for all custom type of vehicles
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HOW TO POSITION SJ413
Free Powerpoint TemplatesPage #POSITIONING STRATEGYITS AN UNPOSITIONING STRATEGY
ANTIDOTE TO TRADITIONAL TRANSPORTATION
Free Powerpoint TemplatesPage #PEARLSTEIN CONCLUSIONANTIDOTE TO TRADITIONAL TRANSPORTATION
MARKETING TAG LINE
The end of DULL. The start of Suzuki
SUZUKI TAG LINE
Its an everything vehicle
Free Powerpoint TemplatesPage #SEGMENTATION CONCLUSIONSUV buyers would like the Samurai because its cheaper.
Small car buyers would like to buy it because its not Dull
Small truck buyers would like to buy because its cheaper than a Subcompact car but more versatile.
Free Powerpoint TemplatesPage #ADVANTAGES OF UNPOSITIONINGAppeals all consumers as ensures higher customer acceptance by offering various needs .
Its prospected as Multi purpose vehicle. Dull breakerIts Fun4x4 wheel driverEconomyHigh qualityMore versatile (than import subcompact cars)
Free Powerpoint TemplatesPage #ADVANTAGES OF UNPOSITIONINGCustomer satisfaction: Customer defines car to his own desire, leads to better congruence between vehicles promise and value delivered.
Ensures larger profit and enables Suzuki establishment stronger in U.S.
Able to attract new customers along with existing customers
Low risk
Free Powerpoint TemplatesPage #DISADVANTAGES OF UNPOSITIONINGSacrifices the possibility of being number one in the niche market in particular segment.
Might loose brand image if customers reject Jeep with different appeals.
Trouble for the sales people
Increased confusion might drop sales but alternative to small -car-boredom.
80/20 rule adopted
Free Powerpoint TemplatesPage #ADVERTISING BUDGETTO ADD / ANSWER QUESTION GIVEN IN CASE IN LAST PAGE
Free Powerpoint TemplatesPage #CUSTOMER RELATIONSHIP Customer relation ship to be strategically planned
After sales servicing Customer satisfactionStrategic alliance with potential companies in U.S.Good relationship b/w dealers
Free Powerpoint TemplatesPage #SUCCESS OF SUZUKI SAMURAIThe SUZUKI SAMURAI became extremely popular.
Buyers liked the light 4 wheel drive because: positioned as the Light 4WDReliable on and Off roads Light weight and compactness gave it an advantage edge (Beginners off road Car)
Free Powerpoint TemplatesPage #END OF SUZUKI SAMURAIAfter 1988, SUZUKI SAMURAI was under scrutiny for being unsafe and prone to rollovers.
This led SUZUKI to modify SAMURAI because of low sales and some safety regulations.
In 1995, the SIDEKICK replaced the SAMURAI.
Free Powerpoint TemplatesPage #END OF SUZUKI SAMURAI
After 1988, SUZUKI SAMURAI was under scrutiny for being unsafe and prone to rollovers.
This led SUZUKI to modify SAMURAI because of low sales and some safety regulations.
In 1995, the SIDEKICK replaced the SAMURAI.
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