“I’d trade in my Corvette convertible in a minute to buy this car”, exclaimed an excited observer at an advance showing of the then Chrysler Motors Corporation’s (now Daimler Chrysler, www.daimerchrysler.com) design ideas for the 1990s. Since battling back from the brink of bankruptcy in the late 1970s, Chrysler continued to run a distant third to GM and Ford in the American automobile market, and even that position was challenged by Honda in 1990 (see Table 1).
Chrysler dramatically rebounded in the early 1980s and gained almost two percentage points over the first five years of the 1980s by adding more economical, middle-class cars to its line of luxury sedans.
However, increased competition from Japanese imports, poor product quality, and unimaginative design led to falling market share in the latter half of the decade.
Chrysler did, however, succeed with its minivan. Because of their triumph with the minivan, Chrysler was even more determined to succeed in the car market, so engineers and managers tried to design automobiles that fit the stylish, high-quality image Chrysler needed.
Chrysler continued to maintain its business strategy of focusing on profit instead o market share, avoiding global alliances, and thriving on a shortage of capital. In 1989, Chrysler held an advance showing of concept cars for the 1990s that included a V-10 engine for both trucks and cars. Two stylish, yet pragmatic concepts were released, including the Chrysler Millennium and the tiny Plymouth Speedster.
Both cars featured eye-catching design but failed to deliver performance because underneath they were based on the traditional Chrysler platform and power train. The reviewers, however, did take note of the rear-drive two-seat sports car, made available in 1992, which incorporated the V-10 engine. Code- named the Dodge TBD (To Be Determined) and later named the Dodge Viper, it looked like a Chevrolet Corvette – but carried a price tag of $55,000. Since the introduction of the Viper (www.dodge.com/viper), Chrysler raised the starting price several times.
At the beginning of 2002, Chrysler added a four-figure price hike bringing the price to a starting value of $75,500 for the RT/10 Roadster model and $76,000 for the GTS Coupe model. The Viper was positioned to restore Chrysler’s reputation for designing exciting cars.
TABLE 1 U.S. Automobile Market Shares (%) YEARCHRYSLERFORDG.M.HONDAOTHER 198010.716.646.84.321.6 198512.518.842.55.021.2 19909.323.935.59.421.9 199315.026.034.05.020.0 199615.918.104.22.1681.4 200112.827.128.57.024.6
Even though some call the Dodge Viper the “sexiest yet silliest” car around, it appears that the introduction of the Dodge Viper was a success. Recently, Chrysler Corporation President John Lutz stated that the company will keep Viper production lower than the number of Vipers that are demanded, estimated as approximately 2000 cars per year. Chrysler also revealed that it would offer the Viper in two new colours, emerald green and yellow.
Previously, the first 250 cars were red, and the rest were painted black. Improvements are also planned for the interior of the Viper. Chrysler also introduced a coupe version of the Viper, the Viper GTS, which featured a roof instead of a soft convertible top.
In April 2002, Dodge planned to end the production of the GTS coupe with a limited Final Edition production run. The Final Edition GTS will be painted an eye – catching red and have white racing stripes. It will feature other unique touches such as a black leather steering wheel and shift knob embellished with red stitching. Only 360 of the Final Edition GTS models will be produced. In May 2002, Dodge planned to begin production on the 2003 Dodge Viper SRT-10, which will be available exclusively in convertible form.
For continued success the Viper must attract the yuppie crowd – the highly educated, affluent baby boomers- that tend to prefer imported vehicles. Because this group would be the prime target group for such a high-performance car, Chrysler needed to ensure that it could complete in a market traditionally dominated by Corvette, Mazda Miata, Porsche Boxster, Porsche 911/96, and Mitsubishi 3000 GT.
Primary concerns for Chrysler were overcoming its boxcar image with this group, determining if they should offer incentives on the Dodge Viper, the importance of styling and prestige when promoting to this market, and how to exploit its merger with Daimler –Benz to the advantage of Viper.
To address these concerns, 30 statements were constructed to measure attitudes towards these factors and to classify the respondents. The respondents used a nine-point Likert scale (1 = definitely disagree, 9 = definitely agree). The respondents were obtained from the mailing lists of Car and Driver, Business Week, and Inc. magazines and they were telephoned at their homes by an independent surveying company. The statements used in the survey of 400 respondents are listed below : 1.I am in very good physical condition.
2.When I must choose between the two, I usually dress for fashion, not comfort. 3.I have more stylish clothes than most of my friends. 4.I want to look a little different from others. 5.Life is too short not to take some gambles. 6.I am not concerned about the ozone layer. 7.I think the government is doing too much to control pollution. 8.Basically, society today is fine. 9.I don’t have time to volunteer for charities. 10.Our family is not too heavily in debt today. 11.I like to pay cash for everything I buy. 12.I pretty much spend for today and let tomorrow bring what it will. 13.I use credit cards because I can pay the bill of slowly. 14.I seldom use coupons when I shop. 15.Interest rates are low enough to allow me to buy what I want. 16.I have more self-confidence than most of my friends. 17.I like to be considered a leader. 18.Others often ask me to help them out of a jam. 19.Children are the most important thing in a marriage. 20.I would rather spend a quiet evening at home than go out to a party. 21.American – made cars can’t compare with foreign – made cars. 22.The government should restrict imports of products from Japan. 23.Americans should always try to buy American products.
24.I would like to take a trip around the world. 25.I wish I could leave my present life and do something entirely different. 26.I am usually among the first to try new products. 27.I like to work hard and play hard. 28.Skeptical predictions are usually wrong. 29.I can do anything I set my mind to. 30.Five years from now, my income will be a lot higher than it is now. In addition, the criterion variable, attitude towards Dodge Viper, was measured by asking each person to respond to the statement, “I would consider buying the Dodge Viper made by Daimler Chrysler.” This statement was measured on the same nine-point scale as the 30 predictor statements.
Questions: The director of marketing for Chrysler is interested in knowing the psychological characteristics of the yuppies to configure the Dodge Viper program. You have been presented with the responses from the survey outlined above. Analyze the data according to the following guidelines: 1.Frequency distribution: Ensure that each variable is appropriate for analysis by running a frequency distribution for each variable. 2.Regression: Using a stepwise regression analysis, locate those variables that best explain the criterion variable.
Evaluate the strength of the model and assess the impact of each variable included on the criterion variable. 3.Factor analysis: Determine the underlying psychological factors that characterize the respondents by means of factor analysis of all 30 independent variables. Use principle component extraction with varimax rotation for ease of interpretation. Save the factor scores and then regress them on the criterion variable, forcing all predictor variables to be included in the analysis. Evaluate the strength of this model and compare it with the initial regression.
Use the factor scores to cluster the respondents into three groups. Discuss the significance of the groups based on the underlying factors. Repeat this cluster analysis for four groups. 4.Cluster analysis: Cluster the respondents on the original variables into three and four clusters. Which is a better model? Compare these cluster results with the cluster results on the factor scores?
Which is easier to interpret, and which explain the data better. Based on the analysis, prepare a report to management explaining the yuppie Consumer and offering recommendation on the design of the Dodge Viper. Your recommendations should aid Daimler Chrysler in achieving what they seek a new image for the Viper that is attractive to the yuppie market and that helps them outperform the competition in the performance car market.