Fiat 500 Excel-Orators: Aleesha Borbely Amandeep Sandher Coline Leman Harman Chungh Harvina Sidhu Matthew Carlson Megan Kalsbeek

Overview Introduction Problem Statement Target Market Key Findings Aman Introduction Problem Statement Target Market Key Findings SWOT Competitive Analysis Three Alternatives Solution Implementation Plan Course Concepts References

Introduction Fiat mission statement Fiat 500 mission statement Aman Fiat mission statement Fiat 500 mission statement Founded in Torino, Italy First Fiat Factory Fiat Zero Manufactured by Chrysler Owns 58.5% of Chrysler Fiat mission statement: "To build cars with attractive styling and exciting engines, cars that are accessible and improve the quality of everyday life." Fiat 500 mission statement: "The association aims to; Promote and keep alive the interest in the Fiat 500, It’s important historical role in Society, It’s design, and to foster the common appreciation and love for the Fiat 500 by promoting friendship and solidarity between people without any discrimination of age, social background, economic status, nationality or race; create, promote and implement initiatives aimed at the conservation and continued use of the Fiat 500 cars on a day to day basis.” Founded in: Torino, Italy At the end of 1800s First Fiat Factory: Opened in 1900 in Carso, Danite First year: produced 24 cars Employed 150 workers Fiat Zero: Debuted in 1912 First mass-produced small engine car Fiat owns: Alfa Romeo, Chrysler, Dodge, Ferrari, Jeep, Lancia, Maserati, and Ram. 1979 Italian cars were at an all time high in US

Problem Statement Aleesha What product strategies could Fiat use in order to increase market share and create brand awareness by the end of 2014?

Target market identification Aleesha No defined target market Our assumptions: Generation Y Generation X Baby boomers Fiat has no definite target market We assume that Fiat is trying to market to Gen X, Y, and baby boomers based on Casey Hurbis’s statement who is the Head of Communications for Fiat in North America: “After being out of the US market for 28 years, the challenge was to introduce the brand to generations X & Y that had little to no awareness of the Fiat brand, and to rekindle the baby boomers who remember Fiat from their youth.” Gen Y: Born between 1977-1994 Increased period of births. AKA “echo-boom” Includes recent to future 21 year olds – the beginning of adult responsibilities and many new consumer activities Exerts influence on music, sports, computers, video games, and especially wireless phones Gen x: 1865-19776 ~15% of Canadian population Known as “baby-lust” era, because number of children born/year declined during this period Consumers are: self-reliant, entrepreneurial, supportive of ethnic diversity and better educated than any previous generation Not prone to extravagance and are likely to pursue lifestyles that are blend of caution, pragmatism, and traditionalism Baby boomers: 1946-1864 Growing older Born last time Fiat was popular in North America Group accounts for the majority of the purchases made in the consumer product and services categories Receptive to anything that looks or makes them feel younger

Fiat 500 Specialty product Megan Specialty product Came to North America for market development Return to market European car of the year 2008 First 500 in North America Fiat 500 is a specialty product: Came to North America for market development Returned to market in July 2006, after 50 years Won European car of the year in 2008 Fiat 500 in N. America Redesigned Boasting a fuel-saving 4.9L/100km ability Greener more affordable small car Production started in Dec 2010

I N C A D a F I A T S A L E s Month Sales 2012 Sales 2013 January 321 328 February 533 411 March 1207 855 April 1211 825 May 810 801 June 839 728 July 765 744 August 750 626 September 693 455 October 474 - November 422 December 449 F I A T S A L E s I N C A D a Megan Total Fiat sales in 2012: 8474 Total Fiat sales in 2013 YTD: 5803 Despite the addition of the 500L five door, September volume of Fiat cut by nearly 1000 cars compared to last year, as 500 sales (despite being 60 units shy of the monthly average in 2013) dropped 40 % year-over year Fiat 500: 2126 units, down 49 $ year-over-year Sept 2013: worst sales in 2013 Trailed model’s 2013 monthly sales by average of ~1100 units 500’s worst monthly result since Jan 2012

Dec 2012 % Change 2012 Year End YTD % Change Fiat 500 449 +58.1 % 8474 +52.2% Megan Sept 2013 % Change Year to Date YTD % Change Fiat 500 455 -34.3 % 5803 -18.6 % FSales in Dec 2012 were 58.1% higher than what they were in Dec 2011 As a whole sales in 2012 were 52.2% greater than the year 2011 Sales in Sept 2013 were 34.3% lower than what they were in Sept 2012 Sales in the year 2013, until Oct, are 18.6% lower than the year 2012

Auto sales in Canada Subcompact car sales Overall new vehicle market Megan Subcompact car sales Overall new vehicle market September 2013 Up 4% from last year Chrysler Canada Inc. Canadian subcompact sales: down 6.8% Overall car sales + overall new vehicle market: up 3.5% Sept 2013: Set new record as market booms breaking last set record in 2002 149,092 vehicles bought Up 4% from 143,143 from a year earlier Chrysler Canada Inc. sales rose 1.5%

Show where Fiat 500 lands in the small car sales in Canada

Market Trends Leasing Fuel economy Gadget full cars Matt Leasing Fuel economy Gadget full cars Changing mid-size cars Gen Y car chase Leasing: Car leasing dropped to less than 10% with the financial crisis in 2008 Over the last couple of years it is slowly beginning to ride 2) Fuel economy: Car companies are serious about dramatically improving the fuel economy in virtually every vehicle they sell 3) Gadget full cars: Cars are loaded with different multimedia features Even budget rides come with navigation system, satellite radio, Bluetooth interface, voice activation and no end of infotainment options including state of the art surround sound. 4) Mid-size cars battle: 4 door family sized cars Newest cars come with boasting sleek and sporty designs wrapped around comfortable packaging for five 5) Gen Y car chase: Gen Y buyers: bunch of demands and no patience for “old” ways Internet savvy; don’t like to haggle dealerships Want good fuel economy in a reliable ride that feels just like an extension of their smart phones

Assumptions Focus on small and sexy car Using a stereotype Good ads that need brushing up Appearance Brand is not well-known Intriguing Coline Advertisements are good, but need to promote more specs (beats, eco-friendly, go-kart handling, safety, Eco:Drive, etc.) Model appearance is not as appealing to North Americans Late entry into the market is the reason their brand isn’t well known They think people will watch their commercials after being intrigued and do their own research about the car after Main focus in ads is the small-car spec They’re only marketing their weakness of how unappealing the car is, hence all the “sexy” ads Using a stereotype: just because its European, its sexy

Fiat 500 SWOT – Internal Strengths Weaknesses Eco-friendly car Megan Eco-friendly car Small car Affordable Safety Multimedia Unstable history Late arrival in North America Exterior aesthetic Strengths: Eco-friendly: (4.9L/100km) Eco:Drive: Free app analyzes your driving style from Fiat 500 to computer/smartphone and suggests ways to adjust your driving for better fuel efficiency and lower emissions For 6th year in a row, Fiat has recorded lowest levels of CO2 emissions of any major European car company Multiair engine: Electronically controlled hydraulic system that regulates engine’s intake values to maximize efficiency with every stroke Result: fuel economy up to 58 MPG on highway Small car: 101hp with 5-speed manual transmission Affordable: Pricing at $13,395+ Safety: Bi-halogen projector headlamps: Focus more light on objects in your path Eye-catching “curve around” styling helps ensure you’re more visible to other drivers 7 airbags: Advanced multistage driver and passenger airbags Driver’s knee bag, side curtain and seat mounted Electronic Stability Control + All Speed Traction Control & Hill Start Assist Advanced systems that apply selective braking and throttle control behind scenes to help you get where you’re going confidently and safely Insurance Institute for Highway Safety (IIHS) named it a 2013 Top Safety Pick Multimedia: Blue&Me Hands-Free: allows control of audio system and bluetooth phone Voice-activated TomTom navigation: hands-off approach “Follow Me Home” Function: headlights stay on when you leave the car; ~3.5 min Beats by Dre- Beats Audio: Premium sound system Crystal clear sound is produced by 7 available premium speakers 6.5 inch dual-voice coil subwoofer and eight-channel amplifier with Beats Audio digitial sound processing algorithm Weaknesses: Unstable history Late Arrival in North America 2010 Exterior aesthetic: Appeal more to European consumer than North America

Fiat 500 SWOT – External Opportunities Threats Booming market Coline Booming market Cooperation with Chrysler Increased gas prices High competition Trend to declined sales Changing commuter habits Opportunities: Booming market? Green Canadian Consumer: People are becoming more eco friendly Increasing gas prices: Threats: High competition: Eco friendly cars are increasing More small cars coming around Changed habits: People are becoming greener, therefore: Making more use of transit Biking Walking

Competitive analysis – Mini Cooper Matt/Harman Strengths Weaknesses Safety Iconic design Made by BMW Expensive Maintenance service Interior Strengths: Safety: Automatic Stability Control + Traction Prevents wheels from spinning Braking: Anti-lock Braking System as standard and Cornering Break Control Ensured by 4 disc brakes Electronic Brakeforce Distribution manages the balance of the braking force between front and rear axle Brake Assist speeds up the process Enables maximum braking pressure therefore minimizes braking distance Dynamic Stability Control: Prevents unstable driving situations by intervening in the engine management Applies braking force to individual wheels at front and rear if necessary Also includes Hill Assist Lighting: Bi-xenon headlights: adapt to direction of the road Runflat tires: Emergency running properties 6 airbags: Driver and passenger airbags protect the head and upper body during head on collision Side and head airbags reduce risk of injury during side impact “Complete all-around protection”: Rigid collapsible steering column acts as a protective shield Providing optimum protection in case of impact from front, rear, side or roll over Iconic design: Classic look Made by BMW: Reputable company Well known Weaknesses: Expensive: Starting at $23,920 Maintenance service: Service needed way before set/approximated kms Parts/supplies take too long to come in/ don’t come in on time Interior: Big speed gauge in the center of the dashboard

Competitive Analysis: Ford Focus electric Matt/Harman Strengths Weaknesses No gas needed Eco-friendly Customization options Reduced maintenance costs Low/mile operating cost Low driving range Charging stations Distribution Charging Expensive Strengths: No gas needed: Saves gas money Eco-friendly: Zero emissions Customization options: Technologically advanced design which provides extensive customization options Reduced maintenance costs over gas engines Very low/mile operating costs Weaknesses: Low driving range: 100 mile driving range/charge Charging stations Very limited Not many Limited distribution Charging: Must be plugged to recharge, unlike hybrid gas/electric vehicles Long charging times Expensive: $33,199

? $ BOSTON MATRIX Stars: Dodge Question Marks: Fiat Cash Cows: Ferrari Relative Market Share (Cash Generation) Harman High Low ? Stars: Dodge Question Marks: Fiat Cash Cows: Ferrari Dogs: Lancia Market Growth Rate (Cash Usage) High $ Low

Alternative 1 - Repositioning Harvina Advantages Disadvantages Defined target market Competitive advantage Distinction/separation from competitors Costly Risky Can cause confusion Repositioning: (Changing a brand's status in comparison to that of the competing brands. Repositioning is effected usually through changing the marketing mix in response to changes in the market place, or due to a failure to reach the brand's marketing objectives. Advantages: Defined target market Competitive advantage Brand position becomes more clear, which allows Fiats target market to identify better with it Can provide clear distinction/separation from competitors Disadvantages: The major challenge of repositioning is that you have invested money and time to build up one image, and now you want to completely undo that effort to change perceptions. The risk with proactive repositioning is that you may move away from a steady position and audience into a new market or position that doesn't work out as you planned. Additionally, repositioning can lead to confusion in the marketplace, especially if you don't make a committed effort to the new position. If you waffle between the old and new, customers will more likely turn to a brand with a clear position.

Alternative 2 – Co-branding Advantages Disadvantages Coline Boosting brand image Benefits from other company Expanding outside the automobile industry Brand image dilution Complex agreements Culture clash Advantages: Boosting brand image while increasing profits Able to reach out to more and new prospects with your new products/services Benefits form other company: Can bring in benefits from partnering company’s loyal customers Expanding outside the automobile industry: Products are introduced through other industries/markets Disadvantages: Brand dilution: Brand isn’t just linked to another brand but it also combines with its values and image Customers can be flustered between both brands If one brand experiences a disaster it reflects on the other brand as well Complex Agreements: Requires a mutually beneficial agreement between two companies that protects legal integrity and systems of both brands Long processes to reach agreement Culture Clash: Each franchise brand comes pre-loaded with a particular corporate or business culture that includes assumptions about best practices. Even in cases where businesses share similar cultures, the businesses should expect a relatively high cost for adapting the two cultures to work in a co-branded franchise. In situations where the companies do not share a consistent set of values, the differing assumptions driving each culture may turn a co-branded franchise project that looks good on the surface into a constant struggle for everyone involved. At the very least, businesses should investigate whether the other company or companies share compatible core values on major operational issues and financial management.

Alternative 3 – Marketing research Advantages Disadvantages Aman Customer involvement Target market Knowledge Unclear information Costly Outdated Research Advantages: Customer is directly involved Research provides an insight to consumer needs and wants Target market: Clearer view over who to target and who not Knowledge: Know before hand if consumers will like the product or any other change or not Disadvantages: Unclear information: Gathered information may not work for many peoples ideas/values Not all the needs/wants of the consumer may be able to be met Extremely Costly when compared to conducting secondary research Outdated research: By the time research is conducted and put to implementing; people’s thoughts/ideas may change

Solution Repositioning Why? Possible target markets: Brand position has become confusing A defined target market Fiat brand is not well known Possible target markets: The suburban commuter The urban consumer The independent student Fiat’s brand position in the market has become confusing, so we believe repositioning it is the best option This allows for a more defined target market Creates brand awareness among consumers The alternative we chose is Repositioning because we think that Fait needs to take the “top of the mind” approach to its promotion and advertising. The more often the consumer is reminded of the brand the more likely they are to think Fiat 500 when it comes to purchasing that new car. Fiat has the competitive advantage on its Interior &  stylistic design also its innovation and fuel economy. It is the most affordable compact car in its class. Repositioning Fiat to promote these advantages will give the 500 the edge it needs to take the lead over its competitors and increase market share and brand awareness. We need to start a “media Blitz” so the consumer need to see Fiat absolutely everywhere. The consumer need to know why they should buy the fiat over its competitors. So rather than simply taking sexy approach. We need to promote what the consumer will  benefit from the car and what makes it unique and valuable. Possible target Markets: Trendsetters- men and women in the public eye who catch consumers’ attention with their unique character. With people developing a sense of trust for them, trendsetters inspire people with their style, attitude, belief and advice 1. The Suburban Commuter lives in the suburbs & commutes to the city Usually younger because they cant afford to live in the city . Want to save money on gas so fuel economy is important spend a lot of time in the vehicle s interior and entertainment ie. sound system are important to them Price conscience likes to car pool, so four seater is appealing Men & Women: Age 20-35 2. The Urban Consumer Small car makes it easier to park and has better mobility around the city Stylish and hip. Features and aesthetics are important to them Enjoy affordable luxury Are eco-friendly and appreciate sustainability   Can be “trend setters” Men and Women Age 20-35 3.  The Independent Student not much disposable income but need a reliable, economical car at an affordable price. like to keep up with new trends responds well to innovation, unique features, and aesthetics   Men & Women: Age 19-30

Marketing mix Product Price Place Promotion Product: (Harvina) Change the look to better appeal to the North American Consumers Change the specs to introduce the Fiat 500 to consumers that like more power in their cars Henry Ford once said “the customer could have any color car, as long it was black” Mass customization is the reverse; it gives every customer the ability to choose any color. Price: (Harvina) Keep selling price of Fiat as is Implementation plan costs? Place: (Harvina) North America could potentially still be a very profitable area for Fiat Get more of their own dealerships, instead of selling through Chrysler At least one/major city More toward city life that have small/tight streets as compared to country siders Promotion: (Aleesha) Promote Fiat as a luxury compact car as more affordable in its class Promote the interior of Fiat as it provides a competitive advantage over competition Promote specs rather than just the look (small and sexy) Talk safety Multimedia Eco-friendly features “Media Blitz” – needs to be everywhere Promote how consumer will benefit buying a Fiat over another car Newspaper ads, radio ads, trade shows, viral marketing (social media), Billboard ads, etc. TV commercials promoting JD Power and Associates awards and reviews No one knows about these Provide loyalty programs for customers

timeline Stage 1: Stage 2: Promotions Stage 3: Trade shows Conducting research Making changes Stage 2: Promotions Nov – April: Viral marketing Dec – April: Newsprint Jan – April: Television commercials Feb – April: Radio, Billboard, Bus ads Stage 3: Trade shows Jan 18-26, 2014 – North American International Auto Show April 18-24. 2014 – New York International Auto Show Stage 1 (complete): Conducting research as to why Fiat isn’t selling as much as they’d like to Make any changes to the Fiat itself Stage 2: Promotions: Nov-April: A full 6 months of Online advertising, social media & viral marketing, Youtube, Flickr, Instagram, Facebook, Twitter, etc. Google social media platforms Dec – April: 5 months of weekly half page, full colour Newsprint ads in national papers. Vancouver Sun, The Province, New York Times, Washington Post, L.A Times, Detroit Press, Toronto Star, etc. Jan – April: Launch frequent Television Commerials (variety of channels) just before attending the trade shows Feb – April: 3 months of Radio, Billboard, and Bus ads Stage 3: Jan 18-26, 2014: Attend the North American International Auto Show (NAIAS) in Detroit April 18-24, 2014: Attend the New York International Auto Show

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Course concepts Classification of consumer goods Target market Market segmentation SWOT analysis Competitive Analysis Positioning Market research Marketing Mix Aman B2C marketing Classification of consumer goods: Specialty good Target market: Fiat has an undefined target market Market segmentation: Segmenting market based on demographic, psychographic, behavioral, and geographical characteristics when defining target market and in plan of action SWOT analysis: Analyzing Fiat’s internal strengths and weaknesses, as well as its external opportunities and threats Competitive analysis: Strengths and weaknesses of Mini Cooper and Ford Focus electric compared to Fiat 500 Positioning: Strategy Marketing research: Alternative strategy Marketing mix: Used in the repositioning strategy where the 4 Ps were altered

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