Fiat “One less worry”

TEAM EH! William Chen, Mike Butterfield, Nicole Whiting, Jacquie Kine, Mike Xu, Ryan Briscoe

INTRODUCTION Powerful company in the global automotive industry Although Fiat is successful in Europe, the Canadian market is different

PROBLEM What product strategies can Fiat use to increase sales in Canada to 12,000 total units per year in the fiscal year of 2014?

AGENDA Introduction Problem Key facts SWOT Competitive analysis Target market Alternatives Solution Implementation plan

KEY FACTS 8464 Fiats sold in 2012 Fiat owns 54% stake in Chrysler Fiats marketing strategy is based on mass marketing in Canada with no specific target Loss of 1.41 million Euros in 2012 Fiat owns 54% stake in Chrysler Chrysler controls distribution of Fiats in Canada Increase car sales in 2012, over 2011 Major ownership in Ferrari, Maserati, and Alfa-Romeo

SWOT Operating at a loss Financially, strong STRENGTHS Financially, strong Technologically advanced in subsidiaries Worldwide distribution WEAKNESSES Operating at a loss No clear marketing in Canada Weak reputation OPPORTUNITIES Trend for more fuel efficient cars Upcoming Global Events Canadian Vehicle market grew 6% in 2012 THREATS Fiat faces a multitude of threats, including rising steel prices Europe in economic crisis Longer Wait to Buy out minority Chrysler Shareholders

COMPETITIVE ANALYSIS CAR PRICE SEATS SAFETY RATING FUEL ECONOMY Jeep Grand Cherokee Overland $55,295 5 8/10 stars 9.8 L/100km city 7 L/100km hwy VW Touareg TDI Clean Diesel Comfortline $53,975 9/10 stars 10.8L/100km city 6.7L/100km/Hwy Ford Escape SE Eco Boost $26,499 31/47 city/hwy mpg 9.1/6.0 city/hwy L/100km Hyundai Santa Fe XL $31,888 7 3.3L Gas 9.9 L/100km

TARGET MARKET

TARGET MARKET MAIN DIMENSIONS VARIABLES TARGET Geographic Segmentation Region Urban Areas British Columbia, Quebec, Ontario, Alberta 81 % of population are “urban dwellers” Demographic Age Gender Birth Era Income Marital Status Family Size 25-54 Female & Male Generation Y in their 25-45 93 700 average yearly income for 2 parent families , blended families with children 64 100 for one person earner Families Married or Living with a Common Law Partner 2-3 Persons Psychological Personality Lifestyle PRIZM C2 “work hard , play hard mentality” Fast track families Blended families Behavioral Value Value consciousness TARGET MARKET

ALTERNATIVES

OPTION 1-Bring the 500e to Canada DISADVANTAGES Electric cost more to manufacture (need research) Dependant on marketing campaign for success (Competing model offers better dashboard technology) Needs charging stations ADVANTAGES Fills the Eco-friendly market Popular in California and New York Will fall in line with Fiat reputation

OPTION 2-Bring Freemont to Canada ADVANTAGES Fills a gap Fiat’s line up Priced equal or less than competitors Use existing Dodge manufacturing facilities DISADVANTAGES Fiat has never done a SUV in Canada Will need new marketing budget (starting from scratch) Crossover/SUV Market extremely competitive

OPTION 3-Reposition & Rebrand 500L ADVANTAGES Guarantee increase in income due to repositioning the branding Minimal product changes necessary Good, cheaper alternative to the Fiat Freemont for potential family cars DISADVANTAGES Dependant on marketing campaign for success Will take a lot more money/time/effort to change people’s mind about the 500L Will need to fully redesign car to be successful

Breadth & Depth

SOLUTION

Fiat Freemont

Bring the Freemont to Canada Option 2, bring the Freemont to Canada Short term solution to increase sales and while building on a long term plan Backup plan: Reposition the 500L (no clear marketing direction)

IMPLEMENTATION

A Quick Primer on the 4 P’s The Freemont is a 7 seat SUV built on the Dodge Journey platform Dodge has manufacturing plants in Canada (Brampton and Windsor Ontario) Price: = $29,999 Australian price = $36,852 New product – high competition. “One Less Worry” campaign

Marketing Budget Revenue 12000 units sold x (average vehicle cost) $22,000 = $260,000,000 Our marketing budget for the full year is $26, 000,000 Divided into two semi-annual periods 13,000 000 for (January 1,2014- June 1,2014)

Step1: Retailer Promotional Allowance Program (January 1, 2014- February 31,2014) What is Chryslers Promotional Allowance Program? Current system gives 1:1 ratio in the first quarter The Plan: offer 2:1 in January and February to motivate dealerships (13% of Semi-annual period budget = $1,000,000)

Step 2: Benefits, Commissions and Share Matching (January 1,2014-June 1,2013) It starts with internal motivation: Two training sessions and information packages Additional 5% commission for sales staff 30% Employee share matching program 35% of first semi-annual period budget= 4,500 000

Step 3: Promotional Hype Campaign (December 20,2013-January 20, 2014) Launch January first – “First to own a Freemont in Canada” Utilize McDonalds corporate alliance Campaign directed toward Fiatcanada.com/bethefirst Url for analytics and tracking 15% of the first semi-annual period budget=2,000,000

Step 4:Debut of Fiat Freemont (January 1st ,2014– March 31st ,2014) TV (primetime) Airing Tuesday, Thursday and Sunday (between 6-9pm 1 commercial per hour) Major news channels to mesh with our demographic (CBC) for Vancouverites Global, CBC, CTV 37% of the first semi-annual period budget ($4,500,000)

Step 4:Debut of Fiat Freemont (January 1st ,2014– March 31st ,2014) Radio (7% radio $900,000) Airing morning commute (7-9am and 4-6pm) Targeting NEWS 1130am, coincides with our target market Online (1% of budget $132,000) SEM $11,000 per month (covers full city)

Step 5: Continue with most effective campaigns (June 1, 2014- July 1, 2014) Scale back numbers for marketing budget Assess which mediums worked in which markets How did consumers respond? Focus remainder of budget on what works: $9,400,000

Step 6: Events promos/ SCR/ co-branding (June 1st ,2014– July 31st,2014) Sponsor local soccer (little league) FIFA Commercial (Events Budget = $3,600,000)

Step 7: Year End Evaluation (December 2014) Review numbers and goals. Did we sell 12,000 units total in 2014 Were they feasible? What needs improving?

Conclusion

References Cain, T. (2013, July 3). Fiat brand sales figures . Retrieved from http://www.goodcarbadcar.net/2013/07/fiat-brand-usa-canada-sales-figures.html Fiat group's world. (2013, September 13). Retrieved from http://fiatgroupworld.com/2013/09/15/fiat-freemont-2012-full-year-analysis Fiat Freemont (2013, June, 28) Retrieved from http://www.fiat.com/com/freemont http://www.carsguide.com.au/news-and-reviews/car-reviews-road-tests/fiat_freemont_review1