Fiat“ONE LESS WORRY”

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

TEAM EH!

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?

AGENDA1. Introduction

2. Problem

3. Key facts

4. SWOT

5. Competitive analysis

6. Target market

7. Alternatives

8. Solution

9. Implementation plan

KEY FACTSFiat 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

8464 Fiats sold in 2012

Fiats marketing strategy is based on mass marketing in Canada with no specific target

Loss of 1.41 million Euros in 2012

SWOTSTRENGTHS

Financially, strong Technologically advanced in

subsidiaries Worldwide distribution

WEAKNESSES

Operating at a loss No clear marketing in Canada

Weak reputation

OPPORTUNITIES

Canadian Vehicle market grew 6% in 2012

Upcoming Global Events Trend for more fuel efficient cars

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 city7 L/100km hwy

VW Touareg TDI Clean Diesel Comfortline

$53,975 5 9/10 stars 10.8L/100km city6.7L/100km/Hwy

Ford Escape SE Eco Boost

$26,499 5 8/10 stars 31/47 city/hwy mpg9.1/6.0 city/hwy L/100km

Hyundai Santa Fe XL

$31,888 7 9/10 stars 3.3L Gas9.9 L/100km

TARGET MARKET

TARGET MARKET

MAIN DIMENSIONS VARIABLES TARGETGeographicSegmentation

RegionUrban Areas

British Columbia, Quebec, Ontario, Alberta81 % of population are “urban dwellers”

DemographicSegmentation

AgeGenderBirth Era

Income

Marital Status

Family Size

25-54 Female & MaleGeneration Y in their 25-4593 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 Partner2-3 Persons

PsychologicalSegmentation

PersonalityLifestyle PRIZM C2

“work hard , play hard mentality”Fast track familiesBlended families

BehavioralSegmentation

Value Value consciousness

ALTERNATIVES

OPTION 1-Bring the 500e to Canada

ADVANTAGES

Fills the Eco-friendly market

Popular in California and New York

Will fall in line with Fiat reputation

DISADVANTAGES

Electric cost more to manufacture (need research)

Dependant on marketing campaign for success (Competing model offers better dashboard technology)

Needs charging stations

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

Depth

Fiat 500L Fiat 500E

Freemont

Breadth

Fiat Freemont Fiat 500E Fiat 500L

Depth

Breadth

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’sThe 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