Managing The Marketing Mix for The Launch of the new Fiat Panda.
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Introducing the New Panda The New Panda has been designed to fit, or be positioned, into what is essentially a new middle ground between very traditional sections of the car-buying public, the small car segment and the new emerging ‘big’ small car segment. The New Panda has been created to stand out in its own right but to meet the needs of different kinds of car buyers. It is neither simply a family car nor a ‘grown up’ small car. To achieve its marketing objectives for New Panda, Fiat has used its experience in the marketplace and the strength of its existing portfolio of cars to position and launch its new model. In the highly competitive car market, it is important to keep innovating and introducing dynamic new models. New styling, new features and competitive price positioning all play a critical role in the success of any new car as it is launched into what can be a very fickle marketplace. The rest of this case will look at the innovative positioning strategy for the New Panda in more detail, and the way Fiat assigns resources to the different elements of the marketing mix to reflect this strategy. Product Positioning and Target Audience Expectations The story of the market positioning and launch of the New Panda, perfectly illustrates how car companies such as Fiat, innovate and design in line with customer expectations to secure a market share for each model. Getting to Grips with Consumer Expectations The New Panda hopes to appeal to the small car segment and the initial first car buyer segment while also appealing to families who wish to acquire a second car, or to those using their car in urban or city areas. However, there is a marketing challenge at the centre of targeting these segments.This car interests distinct and different groups of car buyers so there is a need for careful product positioning in the mind of the consumer. Some considerations when positioning a new car might include: ◗ first car or small car users who expect specific design qualities from a car ◗ families who want a second car to get them from A to B or to complete the school run twice a day and who will also want different features ◗ people who may wish to acquire a slightly larger car or one that is more powerful ◗ young people looking for ‘personality’ from their car - perhaps more sporty features or individual and distinctive design finishes. Indeed it is an interesting fact that carmakers need to be very specific about product positioning as they often do not compete on price alone. New Panda’s key target market is young dynamic people. Fiat has a marked advantage in this area because it is known for its keen pricing and is also an established, highly recognisable brand that young people can relate too.‘Compact car’ advantages i.e. size and functionality are of critical importance in this target market therefore product design and price are key elements in the marketing mix for the Fiat New Panda (See Task 1). Business 2000 Seventh edition www.business2000.ie Managing the Marketing Mix for the Launch of the New Fiat Panda Introduction TO FIAT Business 2000 seventh edition FIAT - Managing the Marketing Mix for the Launch of the New Fiat Panda Fiat was one of the founders of the European motor industry. From its inception in Turin, Italy on July 11th, 1899, the company continued to guide its evolution by focusing on both the quality of its products and the adoption of cutting edge industrial systems. Fiat’s first factory opened in 1900 and employed 150 workers producing 24 car models of cars.The first distinctive Fiat logo was designed in 1904. Fiat not only stands for cars but has a vocation for all forms of mobility: from cars to aircraft, trucks, trains, tractors, marine engines, and even space launching systems.Today,with revenues of more than 57 billion,The Fiat Group is one of the world's largest industrial groups, operating in 61 countries with 1,063 companies that employ over 223,000 people, 111,000 of whom are outside Italy.The Group runs 242 manufacturing plants (167 abroad) and 131 research and development (R&D) centres (61 abroad). 46% of production is generated outside Italy, while exports account for over 67% of sales. Italy Outside of Italy Manufacturing Plants 75 167 R&D 70 61 Fiat itself has been successful in supplying the small car market. The 1990s saw the addition of several new models to the Fiat family: including the Cinquecento in 1991, the Punto in 1993 and the Seicento in 1998.The Punto was named European Car of The Year in 1995 and has remained one of Fiat’s best selling small cars. It has been at the top of Ireland’s best-seller’s list for more than half of its life. Fiat is highly regarded, particularly in the small car market. Many customers choose a Fiat as their first car because they can purchase a model that is stylish, practical, safe and that represents good value for money. This overall positioning within the small car market has resulted in a competitive advantage for Fiat and will be discussed further in this case study regarding product positioning. Power Size The positioning of The New Panda Small Car Segment The New Panda - not a small car but a car that has the power and energy of a ‘big’ small car. New Segment - The ‘Big’ Small Car New Panda Seicento Punto
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Fiat Panda's Marketing Mix, Business2000
Transcript of Managing The Marketing Mix for The Launch of the new Fiat Panda.
Introducingthe New Panda
The New Panda has been designed to fit, or be positioned, into what isessentially a new middle ground between very traditional sections of thecar-buying public, the small car segment and the new emerging ‘big’ smallcar segment. The New Panda has been created to stand out in its ownright but to meet the needs of different kinds of car buyers. It is neithersimply a family car nor a ‘grown up’ small car.
To achieve its marketing objectives for New Panda, Fiat has used itsexperience in the marketplace and the strength of its existing portfolio ofcars to position and launch its new model. In the highly competitive carmarket, it is important to keep innovating and introducing dynamic newmodels. New styling, new features and competitive price positioning allplay a critical role in the success of any new car as it is launched into whatcan be a very fickle marketplace.
The rest of this case will look at the innovative positioning strategy for theNew Panda in more detail, and the way Fiat assigns resources to thedifferent elements of the marketing mix to reflect this strategy.
Product Positioningand Target Audience
Expectations
The story of the market positioning and launch of the New Panda, perfectlyillustrates how car companies such as Fiat, innovate and design in line withcustomer expectations to secure a market share for each model.
Getting to Grips with ConsumerExpectations
The New Panda hopes to appeal to the small car segment and the initialfirst car buyer segment while also appealing to families who wish toacquire a second car, or to those using their car in urban or city areas.However, there is a marketing challenge at the centre of targeting thesesegments.This car interests distinct and different groups of car buyers sothere is a need for careful product positioning in the mind of theconsumer. Some considerations when positioning a new car mightinclude:
◗ first car or small car users who expect specific design qualities from acar
◗ families who want a second car to get them from A to B or tocomplete the school run twice a day and who will also want differentfeatures
◗ people who may wish to acquire a slightly larger car or one that ismore powerful
◗ young people looking for ‘personality’ from their car - perhaps moresporty features or individual and distinctive design finishes.
Indeed it is an interesting fact that carmakers need to be very specificabout product positioning as they often do not compete on price alone.
New Panda’s key target market is young dynamic people. Fiat has amarked advantage in this area because it is known for its keen pricing andis also an established, highly recognisable brand that young people canrelate too.‘Compact car’ advantages i.e. size and functionality are of criticalimportance in this target market therefore product design and price arekey elements in the marketing mix for the Fiat New Panda (See Task 1).
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Managing the Marketing Mixfor the Launch of the New
Fiat Panda
Introduction TO FIAT
Business 2000s e v e n t h e d i t i o n
FIAT - Managing the Marketing Mix for the Launch of the New Fiat Panda
Fiat was one of the founders of the European motor industry. Fromits inception in Turin, Italy on July 11th, 1899, the company continuedto guide its evolution by focusing on both the quality of its productsand the adoption of cutting edge industrial systems. Fiat’s first factoryopened in 1900 and employed 150 workers producing 24 car modelsof cars.The first distinctive Fiat logo was designed in 1904.
Fiat not only stands for cars but has a vocation for all forms ofmobility: from cars to aircraft, trucks, trains, tractors, marine engines,and even space launching systems.Today, with revenues of more than
57 billion,The Fiat Group is one of the world's largest industrialgroups, operating in 61 countries with 1,063 companies thatemploy over 223,000 people, 111,000 of whom areoutside Italy.The Group runs 242 manufacturing plants(167 abroad) and 131 research and development(R&D) centres (61 abroad). 46% of production isgenerated outside Italy, while exports account forover 67% of sales.
Italy Outside of Italy
Manufacturing Plants 75 167R&D 70 61
Fiat itself has been successful in supplying the small car market. The1990s saw the addition of several new models to the Fiat family:including the Cinquecento in 1991, the Punto in 1993 and the Seicentoin 1998.The Punto was named European Car of The Year in 1995 andhas remained one of Fiat’s best selling small cars. It has been at the topof Ireland’s best-seller’s list for more than half of its life.
Fiat is highly regarded, particularly in the small car market. Manycustomers choose a Fiat as their first car because they can
purchase a model that is stylish, practical, safe and thatrepresents good value for money. This overall
positioning within the small car market has resultedin a competitive advantage for Fiat and will bediscussed further in this case study regardingproduct positioning.
Power
Size
The positioning of The New Panda
Small Car Segment
The New Panda - not asmall car but a car that hasthe power and energy of a
‘big’ small car.
New Segment - The ‘Big’ Small Car
New Panda
Seicento
Punto
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Thenew Panda
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Positioning the New Panda The New Panda car has been designed to be maneuverable and easy todrive, particularly in city areas. Its size and height make it a far more visiblecar than other small cars in its class. It has a strong sporty look and hasfeatures that will appeal to many types of customers.
Task 1:◗ Using ‘Level of Design’ and ‘Price’ where do you think Fiat intend the
New Panda to be placed?
◗ How would you compare this positioning with other branded cars?
◗ What cars would you associate with this area of the perceptual map?
The Importance of Product Design The New Panda design reflects its multifunctional, compact outside with itsinternal space (box shape) and versatility. Its design aims to reflect thepanache and look of a sporty car but it is also pragmatic and is built withthe space and power of a ‘big’ small car. It has been designed to win overmotorists who currently drive small five door cars and to maintain thecustomers who already drive Fiat’s Seicento or Punto. Fiat has identified itstarget market as being:
◗ existing Seicento owners
◗ young active people
◗ those who require a second or third family car.
◗ those who wish to downsize.
Managing the MarketingMix for the New Panda
A ‘marketing mix’ is used to convert the positioning strategy into a reality.It is made up of four elements: product, price, place and promotion. Themarketing mix is used to reinforce the advantages of the New Pandacarefully reflecting its core values and positioning. It confirms how and whyit will be of interest to various segments of the car-buying public.
‘Product’ – Reflecting the Brand In its branding and market positioning, Fiat wishes to communicate anumber of key attributes of the New Panda – it is an intelligent smart carthat is ready for action and it is also a little crafty, lighthearted andirresistible. The New Panda’s positioning statement is designed tosuccinctly convey the product advantages and the ‘character’ of the modelin a way that will best attract the New Panda target market.
Full of Life, Cheeky,Versatile and Ready For Everything
As discussed above the product design is linked in with branding andpositioning strategies. It is important that all of these features are linked.
‘Place’ – Getting the Productto the Customer
A marketing decision was made to ‘launch’ the New Panda to ‘the trade’.A launch to the dealers is different to launching a car to the public. Pre-publicity directed at the trade is used to create interest in the new model.Increased demand for a car is also know as a ‘pull factor’ as it essentiallypulls the product through the distribution channel from the manufacturertoward the consumer.
In order to succeed at getting the product to the consumer, Fiat has anInternational network of ‘agents’ or dealers who carry Fiat cars and other‘marques’ (car brands e.g.Alfa Romeo) in the companies stable.This meansthat support is given to the Fiat dealers around Ireland to promote thenew model in a way that generates demand for the new car.
‘Price’ – Reflecting thePositioning Strategy
Fiat has a clear understanding of its key target market (young people andother price-conscious car buyers) and has designed pricing strategies tobest address their needs and the positioning of the New Panda. In the caseof the New Panda it was imperative that it be keenly priced and also thatrunning costs were low.
The price quoted by Fiat is the price you pay at the dealership.This is Fiat’sOpen Book pricing policy. As a marketing concern transparency of pricesis important. Some prices quoted by competitors are ‘ex works’ whichis the price of the car quoted from the factory. Additional charges fordelivery are thus not included in the final price quoted.
Fiat have finance packages. One example is where customers can opt topay only 25 per cent of the total cost of the car and then pay the balanceof the cost of the car, i.e. the remaining 75 per cent, over a period of 36months with zero per cent interest. Another package focuses on thebenefit of low monthly repayments. This finance package is essentially aHire Purchase agreement and is subject to the Consumer Credit Act of1995. Monthly payments can represent a more attractive option to firsttime car buyers or people on a limited income, sooner than borrow 100per cent of the cost of a new car.
‘Promotion’ – Communicatingthe Positioning of New Panda
Pre-publicity in the form of motoring reviews and test drives are critical tothe success of a trade launch as this activity must generate sufficient consumercuriosity and interest in the new model. In this way, experts and drivingcorrespondents or journalists, are also given the opportunity to assess themerits of a new car before the car-buying public delivers its own verdict inthe form of car sales. Fiat showcased the New Panda (formerly known asGingo) at the prestigious 73rd International Motor Show in Geneva.
One of the most popular ways to do this is to hold ‘open weekends’ ingarages where customers can come along to test drive the new car. Bygetting potential car buyers to test drive a car, product usage increases.Thishas a knock on effect to car sales.
The primary above the line medium used to promote and communicatea new car is through advertising. In the case of the New Panda, the mainadvertising mediums used, aside for those used when communicating withthe trade, are outdoor billboard advertising and TV advertising.
If we analyse who we are trying to communicate with when we are launchinga new car, the choice of TV and outdoor advertising makes perfect marketingsense. However, increasingly newer forms of communications are being used,such as the internet, to reflect the attributes or ‘characteristics’ of the NewPanda. Here we see the positioning statement being used once more to formthe basis of the advertising message. This ensures a consistency across allelements of the marketing mix. The New Panda‘s ‘characteristics’ aresummarised in the following ideas:
◗ The Essentials - it has those features that really count and will beof most service
◗ Surprise - you get more than you expected
◗ Energy - the car is dynamic, vital, endowed with good humour andoptimism
◗ Freedom - to move about and go where you want easily and withworry-free driving.
Car advertising is highly visual and largely image based, for visual impactand advertising images and copy messages are built on these concepts.
New Panda advertising themes and images revolve around ideas ofsurprise, independence, spontaneity and versatility. Key factual messages thatneed to be conveyed include the smart design of the car, the value for moneyand cost of the car and the low runningcosts. If possible the car should havecharacteristics that give it an edgeon its competitors or have aUnique Selling Point (USP)that can be communicated topotential car buyers. In the caseof the New Panda, its USPhinges on the fact that you getmore than you expected; it is apractical small car with all thedriver advantages that go with thatbut it also has a sporty, cheeky, andirresistible appeal.
1) If you were a marketing Executive in Fiat, with industryresearch at your disposal, what criteria do you think a newcar buyer would consider when looking to purchase a firstcar? Rate these issues in order of importance (e.g. pay-backoptions, fuel economy, styling, size etc.)
2) You have been asked to design a programme to support thelaunch of a new Fiat car model. How would you plan andexecute a ‘Test-drive Saturday’ promotion in your local FiatDealers showrooms? Visit your local dealership and interviewthe manager to get ideas. Present your plan to your classmates.
3) A new car launch through the trade requires local advertisingand promotional support in addition to corporateadvertising.What value for money and effective promotionalor advertising channels would you recommend that a localcar dealer use in your area?
4) Possible task would be to provide the perceptual map for thesegment and get students to assess where they think the NewPanda might fit compared to the other cars in the market.
5) How is product design used to reflect the nature of acompany’s positioning strategy?
While every effort has been made to ensure the accuracy of information contained in this case study, no liability shall attach to either The Irish Times Ltd. or Woodgrange Technologies Ltd. for any errors or omissions in this case study.
TASKS & ACTIVITIES
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Price
Prod
uct
Des
ign
The positioning of The New PandaTask 1
High End Designat a Price Premium
Branding, Positioning & Design
Branding
Positioning Design
Conclusion
The New Panda was designed to answer the driving needs ofdifferent sections of the car buying public. Fiat has answered thismarketing conundrum by presenting a new car to the market thatdefies an easy classification. It has technical attributes and‘characteristics’ that let it sit happily in many customer segmentgroups satisfying each unique group of consumers.
The story of the launch of the New Panda illustrates theimportance of accurate and informed market positioning. Thecreative translation of this positioning through promotion into thecar trade and through consumer advertising must answercustomer expectations if a new car model is to compete andsecure a position in the market.
Glossary of termsAbove-the-line – this refers to communications which paycommission to advertising agencies, namely press, radio,television, outdoor and cinema. Below-the-line refers to non-media promotions and would include such items as direct mail,exhibitions, sales literature, and carrier bags.Perceptual Map – the use of a graph or map in thedevelopment of a product positioning using two measurements,relative to the those of a competitors product to give anindication of the new product's likely success.
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