AOF Business in a Global Economy Global Market Entry Strategy Proposal to the Country of Loctoso Prepared for smart car

Why expand to Loctoso? Opportunities  Young, educated population  Stable, growing economy  Dense urban centers  Growing environmental movement Threats  Relatively small market demand  Increasing interest rates

The smart car’s strengths and weaknesses Strengths Greenest car in market Ideal for location Youth market yet to identify with a car brand Weaknesses Fog Micro Car competing for same market Affordable to small percentage of population

Target market Growing group of college-educated urban professionals  Needs: small cars with good gas mileage  Wants: to show style & design sensibility  Values: environmental responsibility

Product Differentiation Recommendations Required  Right-hand steering wheel Optional upgrades to consider  Four-wheel drive, all-weather tires  Sound system

Pricing Strategy Recommendations Provide annual service credits Sell add-on services at discount rates  Tire replacement  Insurance

Distribution Strategy Recommendation Use dealership system already in place for distribution  Local dealerships in longtime existence  Many have credit relationships with banks  Current customers can learn about smart car in comparison to competition at one place

Promotional Strategies Advertise on top websites Promote at college campuses Find an admired spokesperson Cross-promote at dealers, banks, and repair shops

Ethical Considerations Gift-giving etiquette Ethical Tenet to Add: “smart car refuses to provide ‘friendship’ or any other payments to people not directly involved in its business transactions.”

Issues To Explore Before Expanding What other pricing strategies would appeal to the target market? How do firms committed to avoiding “friendship payments” ensure business gets done? What else could smart car do to become a car the target market segment identifies with?