Introduction Fiat is an Italian car company headquartered in Turin, Italy. The parent company, Fiat SpA, owns many reputable car brands in the world including Alfa Romeo, Chrysler, Dodge, Ferrari, Jeep and Maserati (fiatspa. com). The company re-entered the US market in 2011 by purchasing a 20% stake in Chrysler. As of January, 2014, Fiat owns 100% of Chrysler (Sloan, 2014). It sells the Fiat 500 line in the US (fiatusa. com). The purpose of this paper is to look at the Fiat customer experience in the US, identify any unmet needs observed and provide a new marketing plan to meet those needs. Part I: Primary Research
The current car shopping experience at Fiat is boring and lacks the “trendy” and “the new thing” image that its commercials try to portray. We visited the Sierra Fiat of Duarte in Duarte, CA on a Thursday at 3 PM. The first problem we noticed was the close proximity of the dealership to Carmax and a Ford dealership. The size of the building and the lot was also relatively smaller making it harder to find and confusing the place as being part of the nearby Carmax. Display of used cars (other brands such as Ford and Lincoln) mixed with Fiat cars at the beginning of the parking lot also seem to contribute to the confusion.
Many people visiting the area seem to have this problem as proven by the salesman who greeted us with the question “Are you looking for Carmax? ” To fight the confusion, the dealership had put a large hot air balloon with the word “Sale” on top of the building. However, this was a very generic American flag themed balloon and did not really help identify the place as Fiat. The total absence of customers during our 30 minute visit was the most surprising finding. This blocked us from observing other customers’ experience and interactions.
However, the salesman helping us mentioned that weekends are usually busy but February was one of their slowest months. This also made us think deeper about the target market of Fiat and the loss of potential customers on weekdays. In other words, why weren’t customers going to Fiat on weekdays? Part II: Secondary Research With 13 auto manufactures, the United States is one of the largest automotive markets in the world (commerce. gov). The economic crisis of 2008 caused a turmoil in the US economy and the auto industry took a big hit (Henning, 2008).
This combined with rising gas prices forced a shift in U. S. consumer demand and preferences from big cars such as SUVs to smaller, more fuel-efficient cars. According to Mary Barra, senior vice-president at General Motors, this shift will not “bounce back” and will be “a permanent change” (Wright, 2012). According to Zacks Equity Research, “the automobile industry has completely recovered from the impact of the recession in 2013”. Auto sales in the U. S. increased 8% year over year to 15. 6 million units during the year. What’s more, light (small) cars have an increasing trend over the year.
According to Auto Industry Data (2013), small and medium cars increased sales 22% while large car sales decreased by 0. 5%. For the local California market, California Zero Emission Vehicle standard require a certain percentage of an auto maker’s California sales to be zero-tailpipe-emission vehicles and this requirement is expected to ramp up to 16% of sales in 2015. These sales can be either electric vehicles or some other eco-friendly technology. According to Ted Reed (2012), California accounts for a third of all electric vehicles and a quarter of all hybrid vehicles which were sold in the U.
S. Scarborough Consumer Statistics reveal 35% of U. S. adults own or lease an SUV. Trucks own the second spot at 30%. Mid-size vehicle is close at 23%. Hybrid Vehicles only accounts 2%. Bigger size cars still play a dominant role for consumers. According to Car Shopping Trends report, 63% of shoppers pay more attention to editorial reviews and 49% of shoppers will look more at the price. The average age of a new car buyer is 6. 5 years older than the average age of a used car buyer. People are also more likely to lease a car rather than buying a car as leasing is a more a?
ordable option. The most popular options and upgrades that consumers look for in purchasing a new car are floor mats, wheels, navigation system, audio and cargo space. Choosing color is also an important shopping behavior in buying a car. The share of white cars increased 21% from 2008 to 2012, but black is still the most popular color. After analyzing these data, it can be seen that demand for smaller and more efficient cars are on the rise. With growing urbanization and jam-packed roads, smaller cars are a better preference for daily use in big cities.
From a manufacturer’s perspective, tougher environmental laws and demand for fuel-efficient cars have pushed for more production of lighter and smaller cars fueling that demand. Part III: Marketing Plan The target market for Fiat 500 here in the U. S. is working adults. More specifically, it is working adults who work in big cities. They have an 8-5 Monday through Friday work routine and save the weekends for leisure. The cities they work in have public transportation but is not convenient. The focus here will be on the limited availability of time of the working adults.
They do not have time during weekdays as they are busy at work and during weekends they want to relax and spend time with family and friends. During our visit to the Fiat dealership, we saw no customers walk by as they were all at work which further supports the reason behind lack of time for the target customers. By respecting and taking into consideration the value of their limited time, we can gain trust. This will help in improving and modifying their shopping experience. We value and acknowledge the time of the hard-working adults who help drive this economy.
This is very fundamental as there is need and demand but no existing proper way to “deliver” this idea. The limited parking spaces, jam-packed roads and the extra fuel cost added all increase that want and need for an alternative more efficient car only to be stopped (restricted) by lack of time to go shopping for that car. 4Ps The product offered will not be changed. The Fiat 500 is a small car built for navigating the big cities. A standard model with 31 MPG in city and 101 horsepower is very good and comparable to its top competitors.
Where Fiat shines the most is in cargo space. Compared to a Mini Cooper (24 cu ft. ) and a Smart Fortwo (8 cu ft. ), Fiat offers a bigger cargo space of 30 cu ft. For working adults in big cities, these data are very important as it shows that the car is very efficient with ample horsepower and cargo capacity to navigate the roads. The price of the cars will not be changed. The standard 500 model is currently priced at $16,000.
Compared to its two top competitors, Fiat is much cheaper than a standard Mini Cooper ($19,700) and has options such as Bluetooth standard versus being optional in a Mini Cooper. On the other hand, the Smart Fortwo is much cheaper ($12,490) but only seats 2 versus the Fiat which has capacity for 4. Since the target market has limited availability, the new idea is to take the dealership to the customer instead of waiting for the customers to come to the dealership. By reserving online or on the phone, customers will be able to request test drives at their work place (eg. During lunch time). They can even take the car to go out for lunch.
By giving them the opportunity to test drive the car in their real working scenario, they will see the potential and advantage of driving a small yet efficient and good looking car in a packed city. This will also help attract other potential customers at that workplace as they will be able to see the car in action. This idea will be promoted using social media and modifying the existing commercials. These modified commercials will end with the words “We know you’re busy. So let US come to YOU! ” This strategy involves having cars at the dealership on standby for test drives.
Since the idea is “to take the dealership to the customer”, brochures and other materials that help show customers the options they can get should be taken along with the car. Another way of doing this is to partner with companies with similar target markets like Zipcar. By doing so, the presence of the Fiat brand will be felt more in the cities. This will also help reduce cost of taking cars for test drives from the dealership. The actual dealership will also be modified to reflect what Fiat represents. This will help improve the shopping experience for customers that do go to the dealership.
Being trendy and fashionable is what the commercials depict and the place they are sold at should show the same. The current dealerships lack the “wow” factor and is simply dull. Redesigning the look will help Fiat stand out among the big crowds. References Berman, B. (2011) Hybrid Car Tax Credits: Incentives Fade into Memory. Retrieved from http://www. hybridcars. com/federal-incentives/ Bunkley, N. (2011, September 2). Fiat’s retro return. Retrieved from http://www. nytimes. com/2011/09/03/business/the-fiat-500-hopes-for-a-rebirth-in-the-us-market. html?
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