1
2
Our project is based on the vehicle industry, and our target market is Generation Y. The
vehicle company chosen for this project is Opel. Opel was founded in Germany in January 21
1862. Opel first started with producing sewing machines and now is known as a car
manufacturer in Germany, and is now owned by General Motors (GM). However, it is not doing
well in the market today. They do manufacture good-quality cars which are gas efficient and
reasonably priced. In addition, they have sold about 1.2 million passenger cars, but now they
are suffer from losses and have been saved by the German government. General Motors
decided to sell Opel; nonetheless it withheld this decision for a while. The problems Opel is
facing are that they do not have a good image, they lack product differentiation and the market
they are involved in is saturated. During our research, we found many possibilities to solve their
problems and most importantly how to rebuild their image in the industry to avoid a possible
discontinuation and therefore going out of business. In this project, there is a detailed discussion
about our target market and their behavior. Our mission in this project is to make Opel a
successful vehicle company not only in Europe, as it once was, but also in United States.
3
Introduction
Objective of the agency and organization
Brief background
Environmental scan; identify problem(s)
Current and proposed potential consumer
segment (target market)
Theories, concepts and/or frameworks
from readings
Market research
Proposed solutions
Charts, graphs, and visuals
Desired future outcomes &
Discussion/Conclusion
References/Bibliography
Appendix
4
5
6-7
7-8
8-9
9-10
11-12
13
14
15
16-17
18
4
Opel has been a brand of reliability, durability, and innovation ever since it was founded
by Adam Opel in 1862. Opel has stood the test of time and adversity. After going through two
devastating world wars, Opel knows what it is like to have its situation look dim. Every time
though, they have roared back with a vengeance. If two wars could not shut the company down
and keep it from turning a profit, then the economic crisis of 2008 is another challenge that they
can successfully face, as they did before. As of today, Opel’s product is better than ever before,
however the problem lies in the brand’s current image and the fierce competition that exists in
the vehicular market today.
Opel’s vision for the future is a bright one and they are confident they will rise to the top
of the market share once again. New models and engines are being worked on for a total
revamping of the company. New marketing strategies are being developed along with targeting
different markets all inclusively. Also, penetrating new markets that have never been reached
before to reel in new and loyal customers, is a key component for breaking even by 2015.
Above all, the end goal is to make money and Opel sees the greatest opportunity lying not
within a certain nation or ethnicity, but a generation. Generation Y is the generation of the
future. The men and women that will run this world 20-30 years down the road, are right in the
classrooms today struggling for their futures. Opel intends to target these consumers while they
are young to build a relationship of reliability, durability, cost-effectiveness, and green efficiency.
Opel is hard at work to see this plan come into fruition, and are working tirelessly with the new,
fresh and brilliant minds of today to establish an image and brand that will shake Generation Y
and help push Opel to market dominance.
5
Opel Company Objectives
1. File break-even results by 2015
2. Significantly increase revenue and variable profit by greater cost-efficiency, as well as:
a. re-focusing go-to-market strategy
b. improving image of Opel brand
c. strengthening market share
d. entering new markets and segments
3. Launching 23 new models and 13 new engines between 2012 and 2016
4. Opel expects that they can grow significantly in Russia and Turkey, as well as expanding
outside of Europe, Australia and Chile
The GM Authority Take
1. GM will introduce Opel also in Argentina and Brasil.
2. GM disposed of the inconsistent brand policies, where Opel developed cars could be
badge-engineered as Chevrolet, Saturn, Holden, and even Cadillac.
3. The separation of Opel and Chevrolet is very visible in Brazil
4. Opel developed cars could be badge-engineered as Chevrolet, Saturn, Holden, and
even Cadillac.
Objectives for this project
1. Revamp Opel’s image and reputation completely to allow the company to fulfill its goal of
breaking-even by 2015.
2. Establish a new marketing strategy to aid Opel in their product differentiation and
allowing them to enter into new markets
3. Allow Opel with these new ideas to re-establish its strength on the vehicle market in
Europe and other parts of the world.
.
6
OPEL was founded in Russelsheim, Hesse, Germany, on January 21, 1862, by Adam
Opel. Opel started by just producing sewing machines in a cowshed in Russelsheim. The first
cars were eventually produced in 1899 after Opel's sons entered into a partnership with
Friedrich Lutzmann.These cars were not very successful and so the partnership failed after two
years. As a result, Adam Opel's sons signed a licensing agreement in 1901 with the French
automobiles company Darracq S.A., to manufacture vehicles under the brand name "Opel
Darracq". The company first showed cars of its own design at the 1902 Hamburg Motor Show.
They started manufacturing their designs in 1906, with Opel Darracq production being
discontinued in 1907. In the early 1920s, Opel became the first German car manufacturer to
establish a mass production assembly line in the building of their automobiles. Opel pioneered
the way for motorized transportation to become a reliable way for people of all classes to travel.
Opel had a 37.5% market share in Germany and was also the country's largest automobile
exporter in 1928.
In March 1929, General Motors , was impressed by Opel's modern production facilities,
and decided to buy 80% of the company, and but the remaining 20% in 1931. In 1935, Opel
became the first German car manufacturer to produce over 100,000 vehicles a year. Opel also
produced the first mass-production vehicle with a self-supporting all steel body. Due to its small
weight and aerodynamics, it became a significant improvement in both performance and fuel
consumption. Opel received a patent for this innovation which was considered one of the most
important innovations in automotive history. On November 1948, GM resumed executive control
of Opel after some years in which Opel started to produce trucks and introduced new passengar
car models. Changes in the Opel cars under GM's management didn't appear until January
1950. Opel found itself in the middle-priced bracket in Germany's postwar auto market, a
7
familiar position to both GM and Opel. In 1953, production rose above 100,000 cars for the first
time since WWII. In 1954, 167,650 vehicles were built, and Opel actually fully recovered from
the devastations of the postwar era.
Following the 2008 global financial crisis, with ongoing plans to restructure the company,
Opel announced the closure of its Antwerp plant in Belgium. On February 29 2012, Opel
formally announced the creation of a major alliance with PSA, as part of which GM became
PSA's second-largest shareholder, after the Peugeot family, with a holding of 7%. The alliance
is intended to enable $2 billion per year of cost savings through platform sharing, common
purchasing and cost efficiency.
After having a 20% share of the German car market, Opel has gone down due to a variety of
reasons. These have been responsible for the problematic situation that the company has been
suffering during the past years. We believe that tackling the following problems would allow the
company to improve and be what they were before.
1. 2008-2009 economic recession
a. Due to the fact that Opel is a daughter company of General Motors (GM), it
suffered through the same struggles as GM, who filed for bankruptcy in the year
2009. Opel has not been able to fully recover from this recession, even though
the German government intervened to save the company. The times of a 20%
share and the entrance to the premium segment of the market were very far
away.
2. Market saturation
a. One of the main problems that Opel faces is that there is market saturation in the
European vehicle industry. There was a decrease in the amount of new cars sold
annually, from 16 million to the current 12 million. This data clearly demonstrates
that there are many cars available in the market and for a variety of reasons the
new purchases are done to companies that have an excellent reputation and
image, unlike Opel.
3. Image problems
a. Opel currently has a terrible reputation and image. Their strong, powerful image
that they had, even for malicious lampoons in Germany during the 90’s, when Til
8
Schweiger was drove an Opel Manta, has disappeared. Their lack of authenticity
and product differentiation does not allow them to have a strong image. They are
now seen as retrograde and their vehicles are constant subjects of jokes, despite
the fact that they are good quality vehicles.
4. Brand differentiation
a. Besides the fact of dealing with a saturated market and a terrible image and
reputation, Opel is also affected by a lack of brand differentiation. Their parent
company General Motors does not differentiate a Chevrolet from an Opel car,
neither the Opel dealerships that offer a Chevrolet, a similar car that is a few
thousand euros cheaper. They have to deal with competing with lower prices,
added to their already lacking image and a saturated market.
The target market for the project is Generation Y, people that were born between 1977
and 1994. However, we are focusing on those born between 1988 and 1993, which live in
Miami, Florida and are college students. Generation Y is one of the fastest growing generations
as of right now. They are the generation that will out spend all other generations that came
before them. Some of the traits of Generation Y are that they are in advanced in technology,
thinking about the environment, focused on their family, and socially responsible. Some of the
core values of Generation Y are being optimistic, confident and having a diverse background.
Many Generation Y consumers have cell phones that they use on a normal basis. They grew up
having internet access and being associated with Facebook, Google and other social media.
They tend to be close with their parents as well help in the purchase of products in the
household. One of the most important characteristics of the members of Generation Y is that
they are mostly financially dependent of their parents, even if they have a job.
Generation Y consumer behavior is considered to be fickle because they tend to want
have new things automatically; they want to have the newest trend that is coming out.
Generation Y is not loyal to one brand or another. When they purchase any products, they want
to know if the brand is credible in what they produce or sell to their consumers. When they want
9
to purchase a new product, they listen first to their peers and then to their parents and/or family
members. For the brand of Opel cars we are trying to appeal to consumers interested in gasefficient and eco-friendly vehicles with sleek designs. It is important for this market to see that is
a brand that is worth buying. We are marketing towards their values and lifestyles.
SWOT Analysis: consists of an appraisal of a company’s internal strengths and weaknesses
and external opportunities and threats




Strengths
o Opel is flexible with their cars, such as making more room for large loads.
o They provide comfort and convenience to their cars as well. They make sure to
have easy access with their doors.
o Opel has taken the time to make their cars safer for drivers and passengers.
They have added a system called Forward Lighting, it helps drivers to see further
in a distant with their light. There is a parking assistant that will help you.
o Good quality vehicles, gas-efficient, and constant innovation to reduce CO2
emmissions.
Weaknesses
o Opel has not done any marketing in the United States. Being GM their parent
company, they can use their strong influence as an aid to their strategies.
o Has a bad image and reputation
Opportunities
o Opel has been given the opportunity to work with one of the top selling car
company GM. They need to work with GM and figure out ways to market their
cars or their image for people to see that are someone they can trust.
o Market to new group of consumers in different countries to expand their business
Threats
o Opel can go bankrupt if they do not work on their marketing image.
o Since Opel and General Motors (GM) have collaborated together, GM can
probably out sell their cars over Opel cars.
o The strong competition in the market can make their share be reduced even
more and lead them to exiting the industry.
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CSR (Corporate Social Responsibility)
Opel corporate responsibility consists of taking care of the environment; they know how
important the environment is to people and how much waste and contamination can go into
making a car. Opel has taken the time to make their cars out of more recycled products, so that
there is less waste created and reuse what had once been used. They have made the effort to
make recyclable products from the start of producing the car.
Opel has come up some
guidelines called 'Recyclability/Recoverability’; to make sure they meet their recycling
objectives. Many of the recycled parts they use have different uses all over the car, whether it is
visible or hidden.
Opel is trying to find ways to use less CO2-emissions in their car. They are using smaller
engines in their vehicles and adapting new technology to monitor the useful life of the engine.
They have their cars using liquefied petroleum gas to make it cheaper and cleaner to use. They
even have alternatives to gas, like using electricity and hydrogen reacting with the oxygen in the
air. Even if they have not established all of these options, the company has a clear idea on the
future and the impact their vehicles will have on the environment. They have been doing socially
responsible activities and implementing them in their vehicles for many years. It is clear that
they are dedicated to be sustainable, constantly reinventing their ideas and generating new
ones to help reduce waste, emissions, and contamination in general.
Marketing plan and strategy
The marketing plan and strategy that has been used by Opel in the recent years has
been proven to be ineffective due to their poor image and reputation. Our main goal is to
establish a new plan, with a new strategy that will enable them to reinstate their position as
market leaders in Germany and if possible in other parts of the world, such as Miami.
11
The primary information utilized on this project was obtained from a survey done to 50
individuals that fit under our targeted demographics. Our main goal was to determine the
reaction of these specific consumers when the brand Opel is introduced into the market here in
Miami as itself, not under General Motor’s Buick. Precisely due to this issue, we did not mention
the brand Opel until the last question of the survey, due to the fact that it is a mostly unknown
company. This was proven by our results.
Our main goal for this survey was to determine if whether or not the US market would be
a good-fit for Opel, a company that has undergone losses in the last years and requires an
overhaul to be able to change this issue. Our target market, college students in Miami ranging
from 18-25 years, represents a good sample since we are concerned with modern issues like
global warming that determine if whether or not we would purchase a car that follows our
beliefs.
The first question in our survey gave us a general idea of the consumers’ perspective of
German-engineered cars. The majority of the answers we were given show that consumers
would purchase a German car. This shows that these cars have a reputation of being reliable
cars that would not fail in a short period of time. Nonetheless, the answers did not provide us
with a price range in which the consumers would buy a German car.
The next question in our survey tackled an important factor that is considered while
taking many of the decisions on vehicle purchases. Our goal was to determine if quality or costeffectiveness is the most important factor considered for these decisions. We came up with this
question because referring to one of them does not necessarily imply that the other factor is
met. Our results show that consumers from our target market have cost-effectiveness as the
primary factor on decision-making vehicle purchases. This shows that the new generations are
more concerned about the rising life expenses than on purchasing a good-quality product that is
12
very expensive. College students in Miami prefer to have a vehicle that is cost-effective, which
means that it does not consume a lot of gas and helps them with transportation than having an
excellent quality vehicle that is very expensive to maintain.
We decided to base the next question on a comparison with other vehicle brands that
have the reputation of producing excellent quality cars, Honda and Toyota. We utilized the price
for an Opel vehicle, $23,000, as the base to determine if consumers would buy a Honda or
Toyota quality vehicle for that same price. A vast majority of the answers show that the price for
the vehicle is reasonable if the quality of the vehicle is assured to be great. We also asked the
same question, but rather used a German car sold at that price. The answers of the consumers
varied drastically, showing that the majority of them would not buy a German car at that price.
The possible reasons are that they might think that it would be a poor quality German vehicle, or
that it is unlikely that a German vehicle could be sold at that price.
We then asked to the consumers we surveyed if they knew the brand Opel. We asked
this question last in order to get to know the consumers’ likes and beliefs before we introduced
them to the brand Opel. If the consumers we surveyed did not know what the brand Opel is, as
most of them did not, then it would allow us to have a better idea of what are the actions that the
company can take and show them that a German-engineered, good quality vehicle can be
purchased at a reasonable price of $23,000.
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There are many possibilities for Opel to improve their overall condition as a company.
Nonetheless, we believe that the company should focus on three of their most important
problems: market saturation, image problems and brand differentiation. With the following
solutions, we believe that Opel will be able to recover successfully as a well-established vehicle
manufacturer and once again have an important role in the vehicle industry worldwide.
1. Market saturation
a. Due to the fact that the European market is saturated, we propose the idea of
expanding into other markets, especially the Miami area in Florida. The target
market discussed previously shows that there would be acceptance of the
product after an initial doubt and questioning regarding the product. Nonetheless,
the qualities and strengths of the product, such as the quality, its relatively-low
price compared to other German-engineered vehicles and its fuel efficiency, will
allow Opel vehicles to grow in a market as demanding as Miami.
2. Image problems
a. The most important solution we propose is to change dramatically the image of
Opel and make it strong. The emphasis should be placed on the high-quality
vehicles manufactured and use as a main point the reliability on every vehicle
they offer as a brand. One of the ways we propose this change to be made is by
establishing the already existent ECO Driving program, which allows consumers
to test drive Opel vehicles, in a new market such as Miami. We would encourage
a focus group done by these testers to identify more of their likes, dislikes and
further improvements that could be done to the cars. This way, the company
would take these suggestions and use them in their cars; the transmission of the
qualities and strengths of the cars via word of mouth of the focus group
participants towards their friends and family, as well as live transmission through
social media, would allow Opel to improve their image consistently. Another of
the possibilities we consider can help revamp Opel’s image is by using a
celebrity, such as David Hasselhoff, that is known both in Germany and in the
USA in a campaign that involves him with the car and the company. There would
be a TV commercial with him and the car, so people are able to understand that
Opel is a good quality vehicle that is used by celebrities.
3. Brand differentiation
a. The proposed solution for this problem comes hand in hand with the previous
two. As Opel enters a less-saturated market and reinvents its image, its brand
differentiation is key to the success of these solutions. We propose a complete
separation of Opel and other GM brands of vehicles. Despite the similarities in
these vehicles, Opel should separate and establish itself as an individual
company. It would be easier to establish an image and be a key player in the
market.
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SURVEY ANALYSIS
100%
80%
17
19
13
42
60%
40%
33
31
46
NO
YES
37
20%
8
0%
1
2
Questions for the Survey
Question 1
Question 2
Question 3
Question 4
Question 5
3
4
4
5
Would you buy a GermanEngineered car?
Would you prefer Cost-effective
over Quality?
Would you pay $23,000 for a
Toyota/Honda based quality of a
car?
Would you pay $23,000 for a
German car?
Do you know the brand Opel?
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Our primary goal is that this new marketing strategy will revamp the image of the
company Opel so it regains its strength in the vehicle market in Germany and in the USA,
especially in Miami as our project focuses on. We believe that the introduction of their products
in a completely new market, as a differentiated brand and separating themselves from other
brands such as Buick, is key for the success of our plan to make Opel a powerful company as it
once was. The market research that we performed demonstrates that the Miami market is a
viable option to start introducing the vehicles, due to the characteristics of the consumers and
the different possibilities that the environment of the city as a whole brings to the company. We
want our marketing plans to run smoothly to be able to start introducing the vehicles with a
market familiar with the new image of the company. Generation Y consumers are characterized
for trying new products and innovations, so by focusing on their behavior and appealing to their
likes, our marketing strategies can be successful.
Opel has been a company that has successfully adapted and gone through struggling
times. They have the history and the possibilities of regaining that power that they used to have.
Being partners with GM and other powerful vehicle manufacturers in Europe, allows them to
have the resources to change their situation and adapt to the changes we have proposed in the
project. As their slogan states, they live cars and a company with such a rich vehicle history will
not be reluctant to the changes and will once again have a strong market share and overall
position in the worldwide car market.
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Business Owners Must Understand Generation Y Marketing Psychographics. (n.d.). Business
Owners Must Understand Generation Y Marketing Psychographics. Retrieved from
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Deloitte | Audit, Consulting, Financial Advisory, Risk Management & Tax Services | Global |.
(n.d.). Deloitte | Audit, Consulting, Financial Advisory, Risk Management & Tax Services |
Global |. Retrieved from https://www.deloitte.com/assets/Dcom-Global/Local%20Assets/
Download this Complimentary Small Business Marketing White Paper! (n.d.). Marketing to Gen
Y: What You Can''t Afford Not to Know. Retrieved from http://www.startupnation.com/businessarticles/9011/1/marketing-GenY.htm
Fetzer, T. (2010). Exporting the American model? Transatlantic entanglements of industrial
relations at Opel and Ford Germany (1948-1965). Labor History, 51(2), 173-191.
doi:10.1080/00236561003729420
Five reasons why GM would be better off without Opel. (n.d.). Autoblog. Retrieved from
http://www.autoblog.com/2012/10/11/five-reasons-why-gm-would-be-better-off-without-opel/
Gen Y: The Next Generation of Spenders - CRM Magazine. (n.d.). CRM Magazine. Retrieved
from http://www.destinationcrm.com/Articles/Editorial/Magazine-Features/Gen-Y-The-NextGeneration-of-Spenders-79884.aspx
Generations Guide. (n.d.). Generations Guide. Retrieved from
http://www.quixoteconsulting.com/News_articles/Topics/generations_guide.html
GM's plans for the Epsilon II platform. (n.d.). Motor Authority. Retrieved from
http://www.motorauthority.com/news/1030328_gms-plans-for-the-epsilon-ii-platform
INNOVATION MILESTONES. (n.d.). Http://www.opel.com. Retrieved from
http://www.opel.com/experience_opel/innovation/milestones.html
Kerin, Hartley, & Rudelius. (2011). Marketing The Core (4th ed.). NewYork, NY: MC GRAW
HILL.
MAXIMUM DRIVING PLEASURE. MINIMUM EMISSIONS. (n.d.). Http://www.opel.com.
Retrieved from http://www.opel.com/experience_opel/sustainability/mobility.html
McElroy, J. (2012). Different Plan to Save Opel. Ward's Dealer Business, 46(9), 46.
OPEL. KEY FACTS. (n.d.). Http://www.opel.com. Retrieved from
http://www.opel.com/experience_opel/company-information/facts-figures.html
Opel to Return to America? (n.d.). Wide Open Throttle (WOT). Retrieved from
http://wot.motortrend.com/opel-return-america-88239.html?ti=v2
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PASSION FOR INNOVATION. (n.d.). Http://www.opel.com. Retrieved from
http://www.opel.com/experience_opel/innovation/passion.html
REFILE-Opel unions' failed German gambit plays into GM's hands. (n.d.). CNBC.com.
Retrieved from http://www.cnbc.com/id/100583301
SAFETY. (n.d.). Http://www.opel.com. Retrieved from
http://www.opel.com/experience_opel/innovation/safety.html
SCULPTURAL ARTISTRY MEETS GERMAN PRECISION. (n.d.). Http://www.opel.com.
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from http://www.rosettathurman.com/2010/07/36-facts-about-generation-y-in-the-workplaceand-beyond/
18
Survey
1. Would you buy a German-engineered car?
YES OR NO
2. Cost-effective or quality?
YES OR NO
3. Would you pay $23,000 for a Toyota/Honda based quality of a car?
YES OR NO
4. Would you pay $23,000 for a German car?
YES OR NO
5. Do you know the brand Opel?
YES OR NO