Identify the Problem
 Not enough North Americans are buying the Fiat 500
 Fiat has a rather small market share over in North America
 Fiat has not built a strong enough brand image in this new
market
Causes of Problem
 Fiat brand vehicles have a reputation for being poor quality
(Fix It Again Tony)
 Bad reputation from the 1970’s
 Economic Recession fears and the US economic slump
 New Generations are not familiar with brand name
Problem Statement
 Which product strategies can Fiat use to increase their
market share in North America by 50% by the end of 2014?
About Fiat S.p.A
 Founded in Turin, Italy in 1899
 Is the largest car manufacturer in Italy since 1910
 Inspired vehicles compete well in Europe
 Unsuccessfully entered the US market twice
 Acquisition of Chrysler signified a third attempt
 Fiat released the Fiat 500 in North America last year
About the Fiat 500
 Successful in Europe, especially in Italy, France and the UK
 Many awards including European Car of the Year
 Above average reliability index according to consumers
 Not selling well in North America
 Did not meet the sales goals last year
 Sales rising steadily
 Fiat hasn’t shed the reputation it has earned in America
SWOT Analysis
Strengths
 Above average reliability
 Potential for widespread distribution through Chrysler
 Biggest car manufacturer in Italy
 Aligned with Ferrari and Maserati
 Strategic management (Sergio Marchionne)
 Lowest CO2 emissions of any car manufacturer
 Fiat brand reputation for style
SWOT Analysis
Weakness
 Small Product line
 Many product recalls 2011-2012
 Bad reputation in North America (Fix it again Tony)
 New Brand
 Lack of Scale
 Only makes a 1/3 of the revenue than competitors.
 170 dealerships in US
SWOT Analysis
Opportunities
 Positive outlook for hybrid and electric vehicles
 Gradual fade away of market for SMART Cars (SMART
Fortwo)
 Fast growing market for subcompacts
 Increasing gas prices
SWOT Analysis
Threats
 Stiff competition
 Mini
 Green Cars
 Labour strikes impacting production
 Increases in prices of raw materials
 Global economy is still in recession
Competitive Analysis
Fiat 500
2012
Smart
Fortwo
2011
Mini
Cooper
Hardtop
2011
Ford
Fiesta SE
Hatchbac
k 2012
Toyota
Yaris 3Door L
2012
Scion IQ
2011
Honda Fit
2012
Price
(MSRP)
$15,500
USD
$12,490
USD
$20,100
USD
$15,500
USD
$14,115
USD
$16,020
USD
$15175
USD
Gas
Mileage
30.5 MPG
37 MPG
33 MPG
33 MPG
34 MPG
37 MPG
30 MPG
Power
101 HP
70 HP
121 HP
120 HP
106 HP
94 HP
117 HP
City Gas
Mileage
27 MPG
33 MPG
29 MPG
29 MPG
30 MPG
36 MPG
27 MPG
Seating
capacity
4
passenger
s
2
passenger
s
4
passenger
s
5
passenger
s
5
passenger
s
2
passenger
s
5
passenger
s
Engine
Type
1.4L 4cylinder
1.0L 3cylinder
1.6L 4cylinder
1.6L 4cylinder
1.5L 4cylinder
1.3L 4cylinder
1.5L 4cylinder
Warranty:
BumpertoBumper
4
years/50,0
00 miles
2
years/24,0
00 miles
4
years/50,0
00 miles
3
years/36,0
00 miles
3
years/36,0
00 miles
3
years/36,0
00 miles
3
years/36,0
00 miles
Perceptual Map
Classy (Expensive)
Mini Cooper
Volkswagen Beetle
Conservative
Ford
Fiesta
Toyota
Yaris
Sporty/ trendy
Honda Fit
Smart
Fortwo
Fiat 500
Practical (Affordable)
Scion iQ
Market Size
Top 10 Subcompact Cars in the US for August
2012
Nissan Juke
Kia Rio 5%
7%
Kia Soul
19%
Mini Cooper
7%
Fiat 500
6%
Nissan Versa
17%
Ford Fiesta
9%
Honda Fit
7%
Hyundai
Accent
10%
Chevrolet
Sonic
13%
Market Segments
Demographic
 Age
 16 through 65
 Gender
 Male and Female
 Family Size/Martial Status
 Single or Married
 With or without children
 Empty nest
 Income
 Under 10k through 45k
 Occupation
 Student
 Career Beginning
 Retired
 Self employed
 Education
 High School
 College
 Degree
Geographic
 Region
 America
 Canada
 Mexico
 Density
 Urban
 Suburban
 Metropolitan
Market Segments
Behavioural
Psychographic
 Benefits Sought




Mid-quality
Low price
Style/flavour
Safety
 Usage Rate
 Light to Medium
 User Status
 Prospect
 Non-user
 First-time
 Loyalty Status
 Medium to Strong
 Liberal
 Urban lifestyle
 Environmentally conscious
 Strong emphasis on style
 Basic transportation needs
1st Segment
Students
 Young (Generation Y)
 Low income
 Urban and Suburban dwelling
 Basic Transportation Needs (point A-B)
 Parents purchase
 Emphasis on safety, style, and practicality
2nd Segment
Young Urban Professionals
 Middle aged (Generation Y and X)
 Finished school
 Starting their career
 First or second time purchasers
 Single or starting a family
 Emphasis on style
3rd Segment
Baby Boomers
 Ages 45 - 65
 Established family looking for a secondary vehicle
 Empty Nesters or Retired with only basic transportation
needs
 Larger disposable income (up sell on accessories)
 Emphasis on style and practicality
Position Statement
For urban dwelling eco-conscious individuals who desire a
smaller, stylish car with excellent performance capabilities, and
a reasonable price.
Alternative 1
Improve Product Quality
 Increasing safety features
 Changing problematic areas or components
 Increasing passenger comfort
 Increasing engine size and horsepower
 Increase/extending product warranty
Improve Product Quality
Advantages and Disadvantages
Advantages
 Improves brand reputation
in North America
 Increases consumer
confidence in the Fiat brand
 Improve customer
relationship management
Disadvantages
 High labor and capital costs
for remodeling product
components and extending
warranty
 Product changes may affect
other features (e.g. fuel
consumption, size and
shape)
 May increase the overall
pricing of the product
Alternative 2
Establish brand image and equity
 Change the positioning of product through emphasis on style
 Promoting traditional Italian Style
 Aligning the brand with Ferarri and Maserati
 Collaborate with designer brands




Louis Vuitton
Prada
Armani
(add brands images)
Establish brand image and equity
Advantages and Disadvantages
Advantages
 Solidifies mental model
 Makes the product
recognizable
 Differentiates the product
from competitors
Disadvantages
 Costs time and capital to
develop
 May alienate consumers
who are averse to certain
brands
 Dilutes focus of other
aspects of the product
Alternative 3
Expanding Product Line
 Currently 5 models:





POP
Lounge
Sport
Convertible
Turbo (Abarth)
 Introducing more models of the current product





Hybrid
Electric
All-Wheel Drive
Larger
Luxury Sport
Expanding Product Line
Advantages and Disadvantages
Advantages
 Able to reach more market
segments
 Caters to specific needs of
market segments
 Reinforces Fiat’s
customizable brand image
Disadvantages
 High cost for product
development
 May dilute mental image
held by market
 Logistics of distribution are
complex
Implementation
 Obtaining resources
 Borrowing capital for R&D may be more expensive
 Utilize more Chrysler plants to increase production space
 Designing a marketing organization
 Use Product Development teams already in place
 Marketing for North America will be handled by Laura Soave
 Developing a schedule
 Ensure the Product line is available by next fall
 Timing allows proper preparation for promotion
 North American International Auto Show
 Super Bowl
 New York Fashion Week
Course Concepts
 Developing marketing
 Market-Product Strategies
 Goal Setting
 Market Segmentation, Targeting and Positioning
 Situational (SWOT) Analysis
 Competitive Analysis
 Managing the product lifestyle
 Modifying the product, Modifying the market, Repositioning the
product, Brand Management, Multibranding, Creating perceptual
benefits
 Strategic Marketing Process
Bibliography
 Best Affordable Small Car Rankings. (2012, October 19). Retrieved
from U.S. News & World Report. U.S. News & Report LP, n.d.
 Fiat 500 (2007). (2012, October 19). Retrieved from Wikipedia The Free
Encyclopedia. Wikipedia®:
http://en.wikipedia.org/wiki/Fiat_500_%282007%29
 Fiat History. (2012, October 19). Retrieved from Official Web Site of Fiat
Canada.
 Wall Street Journal. (2012, October 02). Retrieved from Auto Sales Markets Data Center: http://online.wsj.com/mdc/public/page/2_3022autosales.html
 Snavely, B. (2012, March 23rd). At last, Fiat gaining a foothold in U.S.
car market. Retrieved from DRIVEON USA TODAY:
http://content.usatoday.com/communities/driveon/post/2012/03/at-lastfiat-gaining-a-foothold-in-us-car-market/1#.UIa7SYKKImd
 Trudell, T. E. (2012, March 12). Fiat Tries Again in the U.S. Retrieved
from Business Week: http://www.businessweek.com/articles/2012-0308/fiat-tries-again-in-the-u-dot-s-dot
 Wunker, S. (2012, February 1st). Fiat's Smart U.S. Launch Strategy —
Really. Retrieved from Harvard Business Review:
http://blogs.hbr.org/cs/2012/02/fiats_smart_us_launch_strategy_really.ht
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Team Seven Cents
FMGT Set C Group 1
 Miguel Canizares
 A00788549
 Yulia Grineva
 A00854360
 Kasun Kotteduwa
 A00843930
 Fiona Lee
 A00860033
 Jason Quan
 A00831138
 Cam Staffen
 A00859895