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CASE ANALYSIS :
Presented by:ARUNA
C K SHARMA
SRINIVASARAO
SUZUKI SAMURAI
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CONTENTS
History of Suzuki
Suzuki samurai in US
Analysis
Target segmentation of Suzuki Samurai
Marketing plan for ASMC
Suzuki’s Goal, Strategy and its success
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HOW TO POSITION SUZUKI SAMURAI IN USA
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SUZUKI IN JAPAN
• Michio Suzuki started as “Suzuki loom works” in 1909
• It was a loom manufacturing company
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1952 and 1954• 1952 Suzuki introduced first 2-cycle
• 1954 Suzuki introduced 2nd motorcycle
Popularity of these motor cycles led to change in name as “Suzuki motor company, Ltd.”
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1959
• After 7 years of success, Suzuki introduced a first light weight Van
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1961
• After 9 years of success, Suzuki introduced a first CAR of 2 stroke engine named “SUZULIGHT”
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1964 – 1965
After 12 years of success in 1964, SUZUKI started exporting motorcycles to USA, quickly established as a
Major brand in U.S. motorcycle industry.
By 1965, SUZUKI product line had: Motorcycles Automobiles Motorized wheel chairs Outboard motors General purpose engines Generators Water pumps and Prefabricated houses
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In 1979 and By 1984
In 1979, SUZUKI automobiles introduced to foreign markets, after 27 years of success
And
By 1984, SUZUKI goes global in over 100 countries and Hawaii
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1983General Motors (GM) buys 5% of Suzuki and helps
company develop a subcompact car for the U.S. market
CHEVROLET SPRINT
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DEMAND FOR SPRINT
In mid 1984, Sprint was Suzuki’s first entry into continental U.S. automobile market.
These cars were sold exclusively by Chevrolet dealers.
Voluntary restraint agreement (VRA) limited the shipping number of cars to U.S. by 17,000.
All cars were quickly sold by GM even though it’s distribution was limited to U.S. west coast dealers.
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EMERGENCE OF ASMC
• SUZUKI planned to introduce several unique vehicles to U.S. market over a time.
• Unknown of GM willingness
• SUZUKI DECISION
• To form American Suzuki Motor Corporation
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SUZUKI ACTION
• Success of Sprint gave confidence, but VRA was hurdle
• Planned to Manufacture cars in Ontario, plant ready by 1989
• In 1986, Hyundai and Yugo were expected to enter US market .
• Industry experts predicted Japanese imports command of 19.2% share of U.S. market in 1985.
• Market forces and projected new entrants makes Suzuki change their plans
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SUZUKI CHANGE IN ACTION
• Introduce SJ413 (Upgraded samurai) to U.S. market.
*As a TRUCK or CAR*
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SUZUKI SAMURAI FOR U.S.
• If classified SJ413 as a truck, out of VRA quotas
• But 25% tariff v/s. 2.5% tariff on cars
• SUZUKI management yet found deal worthy
Suzuki planned to market 2 versions of SAMURAI
- Convertible version and- Hard-top version
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FIVE FORCE ANALYSIS
Industry Rivalry
Nutshell: Import market is growing.
Ex. Hyundai and Yugo pressurized the release of
samurai. Industry experts predicted
19.2% share of U.S. market.
Barriers to Entry a. medium difficulty
b. Huge capital requirements
c. Govt. policy and regulations (VRA)
d. advertising and other costs
Supplier powerMedium to little power
a. Several car components have multiple substitutesb. Each car component
manufacturer has multiple substitutes.
Thus, suppliers have little powers in forcing car
manufacturers to submit to their choices.
C. Some companies such as Suzuki exhibited vertical
integration.
a. Chevrolet Jimmy (AMC)b. Tercel (Toyota)
c. Sentra (Nissan) etc.
Buyer Power a. Consumer – most powerb. Supplier (Dealerships) –
very little power c. ASMC wants good dealers who are able to invest both monetarily and emotionally
d. Dealer agreement to safeguard Suzuki current
sales and future expansion plans too.
Substitutes
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DEALER NETWORK
Suzuki goal “To establish itself as a major car company in U.S.”
SUZUKI REQUIRED:
• Exclusive sales facility for Samurai with• Showroom, Sales offices
• Customer-waiting and accessory-display area• Dedicated minimum 2 service stalls and operated by
Suzuki trained mechanics• Shall display required signs at inside service stalls
and outside the sales office• 3 sales executives, 2 service technicians, General
manager, General office clerk• Planned to limit dealership – 50nos., lucrative ROI
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ASMC’S STRATEGY • ASMC planned retail price : $ 5,995
and Dealer invoice price would be 7.5% lesser
• ASMC wanted to attract dealers such that opportunity match investment requirements. Thus,
boost dealers average unit profit, dealers loyalty, greater sales support, higher control over retail
market.
- Initial dealers limited to 47 nos.- ASMC guaranteed supply of minimum 37 units per
month than planned 30 unit earlier for 50 dealers.
• The target selling of 6000 units in 6 months were raised to 10,500 units, by Mazza.
• Introduce Samurai into U.S. largest automobile market : California, Florida and Georgia
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WHAT DOES SUZUKI SAMURAI LOOK LIKE?
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This is SJ413 SUZUKI SAMURAI,
1985 US MODEL
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SJ413 SUZUKI SAMURAI, 1985 US MODEL
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PRODUCT OVERVIEW
PRODUCT BENEFIT EMOTIONAL BENEFIT PERSONALITY
Ruggedness Feeling of being strong and rough
Outdoorsy, tough
Efficient gas mileage, low maintenance
Feeling of austerity and satisfaction
Sincerity, honesty
Looks “Cute” and “Stylish”
Being in vogue, pride in being watched and
appreciated
Hedonistic
Easy off road handling, choice of
convertibility
Comfortable and adaptable to all
situations
Spirited, Daring
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QUESTION
HOW DO YOU FEEL SUZUKI
SAMURAI SHOULD BE
POSITIONED?
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OPTIONS FOR POSITIONING
• COMPACT SPORT UTILITY VEHICLE
• SMALL PICKUP TRUCK
• COMPACT CAR
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COMPACT SPORT UTILITY VEHICLE
PROS CONS
4x4 drive capability Low Market Potential which might not reach target sales
Built like an SUV Limited Market of SUVs[less than 3% in 1984]
Drives well off-road Some consumers correlate Price and Quality
Low Price
Smaller and lighter
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SMALL PICKUP TRUCK
PROS CONS
Relatively large size of the market –
2.5 times that of the SUV market
Losing out on the subcompact car segment
which was larger
Americans favor trucks imported from Japan [54% of total sales in
1984]
It had a 25% import tariff compared to the 2.5% for
cars
Used as truck when purchased without back seat/folded up Narrow target segment
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SUBCOMPACT CAR
PROS CONS
Opens up the largest of the 3 markets
Stiff and less comfortable than even the least expensive
subcompact car
Priced lower than many other subcompact cars
Very good mileage of 28 miles to the gallon
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SUBCOMPACT CAR
PROS CONS
Opens up the largest of the 3 markets
Stiff and less comfortable than even the least expensive
subcompact car
Priced lower than many other subcompact cars
Very good mileage of 28 miles to the gallon
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Market research by:
- PEARLSTEIN (Ad agency) - Don Popielarz (Director of research and planning)
- Tim O'Mara (External agency, Account supervisor)
To make prospects think Unique about SUZUKI SAMURAI
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SUZUKI COMPETETIVE ADVANTAGE ANALYSIS
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• Everyday driving
• Off road/snow driving
• Passenger comfort
• Quality/Durability
• Styling
• Capacity
• Gas mileage
CONSUMERS LOOK FOR
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Target segment market were identified by face to face and focus group interview
• Primary Market
• Secondary Market
TARGET MARKET SEGMENT
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PRIMARY TARGET MARKET
• Single male, 18-30 years old
• First time car buyer
• Students, fresh graduates, young professional
• Come from 2-person households that earn an average income annually
• Young, unconventional, works hard, often go parties, desires to be rugged, takes pride, likes to be different and who seeks fun.
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SECONDARY TARGET MARKET
• Single/Married, Male, >30 years old
• Has at least 2 cars
• Businessmen and establishedprofessionals
• Has children (usually female) who can already drive
• Come from households that earn higher than an average annual income
• Young at heart, Straight-laced, loves his family, but wants to break free and indulge at times
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CONSUMER INSIGHTS
Consumers think that SAMURAI was
• A symbol of their independence to do different
• Practicality to drive a versatile vehicle
They felt as “Cute”, “Neat” and “Fun” that make them :
• stand out • goes well with their lifestyles• break the traditional mould and away from the
traditional Sedan.
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ANALYSIS BY CONSUMER
SJ413 CAR can be used for:
City travel (good mileage)Passenger car (accommodations for 5 people)Transportation of material (pick up truck capability)Possibility of a convertible (cool summer car)Off road capabilitiesDesigner looks Price for car
A car with a wide range of capabilities for a good price
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MARKET ANALYSIS
Based on the five forces analysis:
The Suzuki samurai is the perfect debut vehicle for U.S.
• No significant substitutes that matched • Price• Capabilities• Appearance
• Get ahead of other Asian companies that would plunge shortly to take advantage of the growing imports industry
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COMPETITIVE ANALYSIS
• Key resources and capabilities
• Brand name• GM support• Useable statistics (“Gray
market”)
• Competitors
• They are relatively new entrants (Hyundai and Yugo)
Price remains same for all custom type of vehicles
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POSITIONING STRATEGY
IT’S AN UNPOSITIONING STRATEGY
ANTIDOTE TO TRADITIONAL TRANSPORTATION
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PEARLSTEIN CONCLUSION
“ANTIDOTE TO TRADITIONAL TRANSPORTATION”
MARKETING TAG LINE
“The end of DULL. The start of Suzuki”
SUZUKI TAG LINE
Its an everything vehicle”
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POSITIONING CONCLUSION
SUV buyers would like the Samurai because its cheaper.
Small car buyers would like to buy it because its not “Dull”
Small truck buyers would like to buy because it’s cheaper than a Subcompact car but more versatile.
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ADVANTAGES OF “UNPOSITIONING”
• Appeals all consumers as ensures higher customer acceptance by offering various needs .
• It’s prospected as • Multi purpose vehicle. • Dull breaker• It’s Fun• 4x4 wheel driver• Economy• High quality• More versatile (than import
subcompact cars)
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ADVANTAGES OF “UNPOSITIONING”
• Customer satisfaction: Customer defines car to his own desire, leads to better congruence between vehicles promise and value delivered.
• Ensures larger profit and enables Suzuki establishment stronger in U.S.
• Able to attract new customers along with existing customers
• Low risk
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DISADVANTAGES OF “UNPOSITIONING”
• Sacrifices the possibility of being number one in the niche market in particular segment.
• Might loose brand image if customers reject Jeep with different appeals.
• Trouble for the sales people
• Increased confusion might drop sales but alternative to small -car-boredom.
• 80/20 rule adopted
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ADVERTISING MEDIA
• TV
• Radio
• Billboard
• Print ads• Outdoor – bus top, public highways• Indoor – malls, stadiums, etc.• Sports magazines, news paper
• Social media• Blogs• Face book• Twitter
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CUSTOMER RELATIONSHIP
• Customer relation ship to be strategically planned
• After sales servicing
• Customer satisfaction
• Good relationship b/w dealers
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SUCCESS OF SUZUKI SAMURAI
The SUZUKI SAMURAI became extremely popular.
Buyers liked the light 4 wheel drive because:
positioned as the
• Light 4WD
• Reliable on and Off roads
• Light weight and compactness gave it an
advantage edge (Beginners off road Car)
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END OF SUZUKI SAMURAI
After 1988, SUZUKI SAMURAI was under scrutiny for
being unsafe and prone to rollovers.
This led SUZUKI to modify SAMURAI because of low
sales and some safety regulations.
In 1995, the SIDEKICK replaced the SAMURAI.
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