Assessment

History and trend.

In US the industry began to change in the 1950s when foreign car makers like Toyota, Honda

and Volkswagen offered American consumer’s smaller cars at lower prices which became major

trend and the quality of import cars are far better than US. General Motors seems to be helpless

to sale their cars in front of the competition of import cars. Customers are more focused for value

in the car which they were getting from imported cars. Imports had claimed a 10.1 percent

market share by 1959. This series of events confirmed in some people's minds the suspicion that

U.S. automakers couldn't produce small cars competitively. As smaller cars were widely

believed to represent the future direction of the industry.

Action

At U.S. Saturn decided that it needed to “start from the beginning,” unconventionally

launch this brand, and do so “from the inside out. An internal project to build an

affordable, high-quality, small car to compete with the imports was approved in May

1982

The project had been dubbed "Saturn," a reference to the Saturn rocket that propelled the

American astronauts to the moon during the space race with the Soviet Union.

Operational strategies

Saturn was developed by GM as a separate brand and independent subsidiary in the late

1980s, to deal with the shrinking domestic market share for passenger cars.

Saturn started strong, building a company centered on making a small car of superior

quality and value as efficiently as possible, while combining the most advanced

technology with the newest approaches to management.

The Group of 99 were designated to identify key founding principles for Saturn and to

search the world for the best ideas in all areas. The group consisted of a functional cross-

section of people, including plant managers, superintendents, union committee members,

production workers, and skilled tradesmen, as well as UAW and GM staff from 41 UAW

locals and 55 GM plants.

Marketing strategies

Saturn has tried to uphold its image as "a different kind of company" To do this, it has

concentrated on creating and maintaining a strong relationship with its customers.

Based upon the profile of imported car buyers, the targeted Saturn consumer would be an

average of 38 years old, earning an average of $51,000 annually and mostly baby

boomers. A large percentage would live on the West Coast and 50 percent would be

college graduates.

The Saturn Marketing Planning Team incorporated the ideas of 16 dealers representing

25 manufacturers. The team studied distribution methods of 30 major U.S. corporations

and came up with Saturn's Market Area Approach (MAA), which was announced on May

26, 1987. MAA set up 300 "territories" to be handled by individual franchised dealers.

Saturn dealers were trained in low-pressure sales and were encouraged to pay salaries

rather than commissions.

An important step in defining Saturn's marketing strategy was the selection of an

advertising agency.  The Hal Riney & Partners agency was named as Saturn's

"communications partner" on May 24, 1988. Riney set about creating a "charismatic

brand."

Promotional strategy of Unique, "folksy", "straight-talk", $100M+ consumer ad

campaign, building a focused brand image, using themes such as Saturn employees'

enthusiasm, and dedication to building cars "in a brand new way" with US can-do spirit

Saturn advertising was designed to be emotionally driven, with a focus on the human

element rather than the product.

In the film, team members explained what the project meant to them. In the words of a

Riney executive, "We wanted to get people rooting for Saturn, the company." Advertising

Slogan which was made "A Different Kind of Car Company"

SWOT Analysis of Saturn

Strengths Weaknesses

Marketed itself as a "different kind of car company,"

Too much early success causing a shortage problem due to unwillingness to see the need for revising the strategic market plan

Potential for financial support from GM Potential reluctance of GM to invest more money in the Saturn project

Cost efficiency and concern for employees in the manufacturing plant design

Some labor unrest when attempts were made to increase production resulting in higher defect rates

People oriented philosophy in all operations

Limited product line

Opportunities Threats

Perception by consumers of Saturn as a high quality replacement for imports

Competition from Japanese subcompact imports

Satisfied Saturn buyers moving on to intermediate models or sport utility vehicles

Strong U.S. dollar has made Saturn models more expensive compared with Japanese competition

Sizeable small car market in Japan Market strategy may be easily emulated by Ford, Chrysler, and subcompact importsShift in demand away from compacts to sport utility vehiclesLower fuel prices

Strategic issues

Branding

Sticker Price Comparable to Competition

Saturn buyers' lifestyles, playing up baby boomer themes of utility, value and safety and

Brand focus strengthened by using model numbers not names.

Satisfied value of quality and Best resale value than others car companies.

Positioning- “a different kind of company”

Slogan helps to crystallize the values and culture of the firm

Important part of its brand equity

This position captures the unique way in which Saturn interacts with its customers

It allows a host of specific features and programs to be introduced without confusion.

Centre of gravity for the program

Creating Perceptions by selling the Company and not the Car.

Customer Perceptions are what counts and perceptions do not automatically follow

reality.

The solution was to sell the company-its values and culture, its employees and its

customers –rather than the car

Visual Imagery of the Spring Hill Plant

Distanced Itself from GM because the focus was to be on Saturn

Creating a Relationship between Saturn and the Customer

Eliminated price haggling, dealing, rebates and discounts

Brand Identity: Treat Customers like friends and with respect

Saturn is young at heart, genuine, honest, friendly, down to earth and someone who cares

about individuals and competent and reliable

Patriotism: Spring Hill Plant

Integrated Communication

Consistency Across Media

‘Spring in Spring Hill’ Infomercial

Did a lot of work to ensure that retail effort was on strategy