Rollins College

International

Marketing Plan

Pedro Martin-Moreno Torres

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Table of context Executive Summary ........................................................................................................................ 4 1. Company Analysis .................................................................................................................... 5

1.1 The Company ...................................................................................................................... 5 1.1.1 History .......................................................................................................................... 5 1.1.2 Mission, Values and Way ............................................................................................. 5 1.1.3 Brand Image ................................................................................................................. 5 1.1.4 Human Resource Management ..................................................................................... 5 1.1.5 Corporate Social Responsibility (CSR) ........................................................................ 6

1.2 The Organizational Structure .............................................................................................. 6 1.2.1 Internal Analysis ........................................................................................................... 6 1.2.2 Production and R&D .................................................................................................... 6 1.2.3 Product Categories and Target Markets ....................................................................... 6 1.2.4 International Involvement ............................................................................................. 7

1.3 Financial Information .......................................................................................................... 7 1.4 Marketing Strategy Changes ............................................................................................... 8 1.5 SWOT Analysis ................................................................................................................... 9 1.6 Industry Analysis ............................................................................................................... 10 1.7 Competitors ....................................................................................................................... 11

2. Global Market Search ............................................................................................................. 11 2.1 Country Selection .............................................................................................................. 11

2.1.1 Country Comparison ................................................................................................... 11 2.2 Selection Criteria ............................................................................................................... 12 2.3 Country Evaluation ........................................................................................................... 12 2.4 Conclusion and Recommendation ..................................................................................... 12

3. Market Analysis ...................................................................................................................... 12 3.1 Pest Analysis ..................................................................................................................... 12

3.1.1 United States ............................................................................................................... 12 3.1.2 Mexico ........................................................................................................................ 13 3.1.3 Singapore .................................................................................................................... 14

3.2 Competitive Analysis ........................................................................................................ 14 3.3 Country Selection .............................................................................................................. 15

3.3.1 Country Side-By-Side Selection ................................................................................. 15 3.3.2 Market Attractiveness ................................................................................................. 15 3.3.3 Evaluation and Country Selection .............................................................................. 15

4. Marketing Plan ........................................................................................................................ 15 4.1 Overview of Marketing Mix ............................................................................................. 15

4.1.1 Cultural Distance ........................................................................................................ 16 4.1.2 Degree of Adaptation .................................................................................................. 16

4.2 Market Entry Mode ........................................................................................................... 16 4.2.1 Segmenting, Targeting, and Positioning ..................................................................... 16

4.3 Product .............................................................................................................................. 17 4.4 Price ................................................................................................................................... 18 4.5 Promotion .......................................................................................................................... 18 4.6 Placement .......................................................................................................................... 18

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Recommendations ......................................................................................................................... 19 References ..................................................................................................................................... 20 Appendix……………………………………………………..........23

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Executive Summary This marketing plan has been developed for the Italian luxury car manufacture Alfa Romeo. Alfa Romeo, based in Milan is one of the leading performance and luxury car manufactures in the current automobile market. Alfa Romeo provides a diverse selection of cars that give them the ability to compete with the leading competitors such as Ford, BMW, Mercedes, Audi, and Porsche. Currently, Alfa Romeo is attempting to expand internationally in order to increase awareness about its brand and its products. This analysis will be comparing all countries that could potentially be an entry point for the company to begin its expansion. Asia, North America and Europe are all potential entry markets, however after conducting research, Alfa Romeos growth potential lies within the borders of the United States. The United States has many competitors but has been waiting for a company that can offer a product that is not cheap, not overpriced but priced just right. With its partnership with Fiat Chrysler Automobiles, Alfa Romeo products will be sold at Chrysler dealerships nation wide. Considering all growth factors, the United States has a large market size for the competitively priced performance and luxury cars that Alfa Romero manufacture. Due to the United States heavy demand and involvement in importing foreign luxury cars, Alfa Romeo will have the chance to compete and grow in its prime market. Present in the European and Asian markets since 1910, Alfa Romeo’s 105 years in the automobile manufacturing business have given the company the ability to build a respectable reputation. However Alfa Romeo has not been in the American market since 1995 when the company decided to pull out of the United States market due to lack of sales. Another reason to why the United States is an appropriate market is due to the fact that people are not accustomed to the brand and its products creating a sense of exclusivity and curiosity in the brand. Alfa Romeo will be labeled, as a comeback company in the American automotive markets, therefor must come out with a product that the company trusts and is passionate about, in order to regain costumers and expand.

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1. Company Analysis 1.1 The Company 1.1.1 History Alfa Romeo began in Milan on 24, June 1910 after a group of businessmen got together and decided to purchase the Italian Darracq automobile company, which became Alfa motor company. The company began its first production car during the exact time plastics were being introduced to the world. They debuted with the world famous 24hp a car that had a lot of success and became a racing icon one year after the first production car came out for the public. After World War 1 Alfa was having financial difficulties so in 1915 Nicola Romeo, an engineer and entrepreneur from Napoli, bought the company Alfa. Due to the heavy demand of military products the company was forced enter the military market and stay in it producing aircraft parts until they were able to have enough capital to produce other products once again. In 1920 the company once again had to change to another market in order to survive. It began manufacturing tractors and drills. That same year the company was able to produce their first car since the purchase of the company Alfa. The Alfa Romeo Torpedo was not only the first car that was labeled with the new official name of Alfa Romeo, but also was the same car that the inventor of Ferrari used to put the company on the map by gaining a spot in the Targa Florino. Please refer to Exhibit 2 for information on The Targa Florino. 1.1.2 Mission, Values and Way AlfaRomeoisacompanythatstrivestokeep itshistoricrootswhilealsoadapttothe newmodernmarkets in order to stay successful yetmaintain itsmorals andtraditions. "Alfa Romeo has a legendary history, made up of great men, greatengines, victoriesand revolutionary innovations.Today, aplace inwhich to relivethemisborn.“2Exhibit 1 in the Appendix shows their missions, values, and way more in depth.

1.1.3 Brand Image AlfaRomeohasaveryspecificbrandimage.Itisaveryorganizedandprofessionalcompanyyetprovidessuchdiversitycreatingtheperfectbalanceandimageasacompany.Therearenoextremeswhenitcomestothecompany.Thecompanyhasdevelopedtheperfectbalance.Itisviewedasluxuriousyetnotoverpriced,allowingittostillberespectedforitsquality,andnotviewedasacheapcompanyinanyofitsaspects.31.1.4 Human Resource Management Alfa Rome is a company that not only provides for its costumers but also for its employees. Working for a company like this means getting a chance to

Figure1AlfaRomeosLogo.Source:AlfaRomeo

1 Alfa Romeo. Company Info: History

2 Alfa Romeo Company Info: Our Mission, Values and Way. 3 Alfa Romeo. (2015) Annual Report 2015. 4 Alfa Romeo (2014) Company Info: Human Resource

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People are valued for their aptitudes and their abilities, where one is gauged based on meritocracy and where dialogue, exchange and participation are a tool for sharing ideas and projects to reach ambitious worldwide goals together. 1.1.5 Corporate Social Responsibility (CSR) AlfaRomeoisacompanythatstrivesonbeingprofessionalinallitsdepartmentsintheorganizationboard.Itisimportanttogivebacktotheresourcesthatallowthecompanytocreatetheirproducts.Thecompanyhasdedicatedintensiveresearchonmakingemissionsdecreaseineverypantorfactoryworldwide.Thecompanyfollowsa4-stepruleinordertoachieveitsenvironmental success it follows four key objectives: “zero accidents, zero waste, zero breakdowns and zero inventory.”5 To access more specific information on environmental statistics and emissions please refer to exhibit 4 and 5.

1.2 The Organizational Structure

1.2.1 Internal Analysis Alfa Romeo is part of a larger organization known as FCA, or Fiat Chrysler Automobiles. They are currently located in Asia, Europe North America and Latin America. FCA is present in 40 countries and has commercial relationships with customers in approximately 150 countries worldwide. They also have ownership of the following automotive brands: “Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram, Ferrari and Maserati, in addition to the SRT performance vehicle designation and Mopar, the parts and service brand.”6

1.2.2 Production and R&D Alfa Romeo has production plants and assembly plants all over the world including Italy, Brazil, and Poland. Italy is the location of the headquarters and most of its production plants are also located there. The company recently has made a deal with Chrysler to use them as the dealer for the distribution and sales of the new 2015 Alfa Romeo 4C. This strong partner ship will result in great success through the United States due to the fact that Chrysler has 2390 dealerships in the Unites States.7 These expansion will allow Alfa Romeo to be put back on the map as a new very dangerous competitor full of potential.

1.2.3 Product Categories and Target Markets AlfaRomeohasafantasticpartnershipwithFiatChryslerallowingittoexpanditsproductsinternationally.ThisisaprofitableandsustainablerelationshipbecauseofthefactthatFCAsellsthousandscarsmakingitapowerhousethatwillelevateAlfaRomeoabovethecompetitionfromthestartduetoitsfinancialbackingsandfutureplansofexpansion.

5Alfa Romeo. (2014) Company Info: Corporate Social Responsibility (CSR) 6 Alfa Romeo. (2014) Internal Analysis: Internal Analysis 7 Alfa Romeo. (2014) Company Info: ProductionandR&D

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Alfa Romeo’s products are designed and manufactured with the passionate mindset of creating a car that is crafted around the driver. Every detail matters when driving a luxury sports car. With it’s racing background and its efficient yet profitable structure, Alfa Romeo’s newest product the 4C, which will be used to enter the US market, is a exact representation of what the company is. The car was designed to enter the drivers market. There are costumers that only identify a car as a machine that gets them from point A to point B. There are also the costumers that view their car as a personal machine that connects them to what they love, driving. The 4C is priced below competition at $55,000 yet outperforms it. As a light weight car, with its turbocharged and direct-injected 1742-cc four-cylinder with 237 horsepower, the 4C is truly a driver’s car that pushes one to their driving limits. 9 PleaserefertoExhibits6and7formorespecificinformationonproductcategoriesandtargetmarkets. 1.2.4 International Involvement Alfa Romeo is currently present in 52 countries worldwide. 90% of the company’s sales come from European markets. Most of its manufacturing Plants are also located in Europe as well as a few in South America. As shown in figure 3, Latin America and Mexico make up (0.7%) of sales, Africa (2%), Asia and Australia make up (6%) and the rest (91%) of sales are from Europe.10

1.3 Financial Information

Figure 3 International Involvements. Source: Alfa Romeo Full Sales Analysis. (2014) Company info

Figure2AlfaRomeosLogo.Source:Autocar

8 Alfa Romeo (2014) Product Categories and Target Markets 9Alfa Romeo (2015) Product Categories and Target Markets 10Alfa Romeo (2014) International Involvement 11Alfa Romeo (2014) International Involvement

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Italy, which makes 42% of the brand’s sales, fell a massive 28% in 2012, which hit the company hard due to the fact that 91% of sales come from Europe.11

1.4 Marketing Strategy Changes Alfa Romeo has become more digitally enhanced in the way they market their products especially now that they have re entered the American market. They have enhanced their websites making them more appropriate for younger audiences and potential costumers. Graphics and the quality of the website in general have been improved giving the company a sneak new feel to it. A new program has been developed called Sky Experience, which allows a costumer to have the ability to digitally choose different combinations of the product. For example break caliper color, car color, interior color and trim, exhaust style, can all be customized to the costumers preference.12

Figure 4 Marketing Strategy Changes. Source: Alfa Romeo

12Alfa Romeo (2015) Marketing Strategy Changes

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1.5 SWOT Analysis Strengths: Alfa Romeo has a very strong brand portfolio due to the fact that it is part of Fiat Chrysler Automobile. Due to the power and size of FCA, Alfa Romeo has a stable financial backing along with perfect market entry points due to the multiple brands FCA manages. The company also has a very respectable racing background with many wins in multiple international races allowing them to have valid accurate racing data that can be applied to production vehicles.13 This also attracts passionate drivers creating a new target market. Alfa

Figure 5 SWOT Analysis Romeo has very good R&D due to its passionate employees working to expand and improve the company. With professional research comes a professional product that has been created and molded around data collected the R&D branches. Weakness: In 1995 Alfa Romeo pulled out of the American market duh to lack in sales therefor the company lacks experience in the United States. The outcome of these actions has also forced the company to depend of Europe for more than 90% of its sales. Overdependence creates issues for companies because if that sector fails than the company takes a hard hit and that is exactly what is happening. Alfa Romeo had a decrease in sales in Europe and the entire company was affected in a large amount because Europe covers 90% of sales.14

Opportunities: Alfa Romeos decision to enter the American market creates many opportunities for the brand to expand. The company will be something new and uncommon to most people therefor creating exclusivity and curiosity. The United States is divers country. These will guarantee a target market due to the fact that many people will know about Alfa Romeo because of their European dissent and knowledge on the brand increasing the chance of sales.15 With their new product, the 4C, the company will be able to tease the American market warming up costumers for the future products that Alfa Romeo will bring to the US market. Threats: The Company currently depends 90% on Europe for its sales and this creates a weakness for Alfa Romeo.16 If Europe decreases in sales than the company takes a big hit. If the company depended less on Europe than they could balance out economical issues with other revenue entry points from other markets, but that is not the case. Alfa Romeo also has to compete with the top leading car manufactures such as Ford, BMW, Mercedes, Audi, and Porsche. Alfa Romeo sells to a very specific market decreasing the size of potential target markets.17

Strengths Weaknesses! Brand Portfolio ! Brand Image ! International

Experience ! Iconic Racing

History ! R&D

! Lack of presence in USA

! Overdependence on European markets

! Significant loss in sales over the past 3 years

Opportunities Threats ! New entrance

into American market

! New popular product (4C)

! New Reputation

! Fuel cost fluctuation ! Other car

manufactures ! Less buyers due to

specific target markets

13Alfa Romeo SWOT analysis 14 Alfa Romeo SWOT analysis 15 Alfa Romeo SWOT analysis 16Alfa Romeo SWOT analysis

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1.6 Industry Analysis Threats of New Entrant:

ThreatsofNewEntrantsLow

BargainingPowerofBuyers

Low

RivalryHigh

ThreatsofSubstitutes

High

BargainingPowerofSuppliers

Low

Threats of New Entrants: Barriers to entry include: Adapting Alfa Romeos new products to a brand new market. The lack of experience in the American market could pose a threat. Pricing is also a factor that could pose a threat do to the fact that some costumers would not pay over $50,000 for a car manufactured by a brand they don’t know well.18 Competitor brands pose a threat as well because they have more experience with the American market. Alfa Romeo is also a niche brand therefore target marketing will consist of small potential populations rather than working with a large population making it more difficult to acquire costumers. Threat of Substitutes: Alfa Romeo has a high threat of substitutes because the automobile market is under high demand therefore providing many brands that costumers can elect from. Companies such as Ford, BMW, Mercedes, Audi, and Porsche all pose a threat of substitution.19

Bargaining Powers of Suppliers: The company has a low bargaining power of suppliers because FCA, Fiat Chrysler Automobiles, is a massive and respectable company therefor allowing Alfa Romeo, one of their brands, to have backup for any situation.20 Any supplies needed can be easily allocated do to the companies efficiency and size. Bargaining Power of Buyers: The automobile market is a competitive one therefor allows costumers to have many products and brands to choose from. This concept creates a low bargaining power of the buyers. Intensity of Competition: Due to the large amount of companies producing cars in the automobile market, Alfa Romeo has a high level of rivalry intensity. With so many brands and cars to choose from, Alfa has to offer something unique and new that will make a target market purchase their products.21

Figure 6 Porter’s 5 Forces: Cosmetics Industry

17Alfa Romeo (2014) Industry Analysis 18Alfa Romeo (2014) Industry Analysis 19 Alfa Romeo (2014) Industry Analysis 20 Alfa Romeo (2014) Industry Analysis

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1.7 Competitors BMW Porsche Audi Alfa Romeo Sales (USD, in millions) 34,31022

15,38223

17,10224

7,225

% Of Total Industry Sales

16.6% 2.7% 10.3% N/A

Employees 106,000 17,500 54,000 5,000

Table 1 Comparison of Alfa Romeo with Competitors. Source: Each Company’s respective 2014 annual report 2. Global Market Search 2.1 Country Selection Alfa Romeo has taken the decision to expand to new markets in order to become a true competitor in the automotive industry. Since it currently depends on Europe for 90% of its sales, the company will now expand to the US market to reduce overdependence. When selecting the countries it is crucial that the GDP of each one is analyzed and compared in order to have the correct information to make an accurate decision on the companies new entry point.25 Population is another key factor to consider. Alfa Romeo is not a cheap brand their for a large population is crucial in order to target the wealthier sectors of the population when segmenting target markets. If the population were too small than there would not be enough costumers for the product due to its exclusivity and price. Please refer to Exhibit 10 for more details on GDP comparisons. 2.1.1 Country Comparison In order to narrow down the country selection to three countries with the most market potential, a side-by-side comparison was conducted based on market and economic factors.

Table 2 CountryComparison

21 BMW (2014) Annual Report 22 Porsche (2013) Annual Report 23 Audi (2013) Annual Report 24Alfa Romeo Country Selection

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2.2 Selection Criteria The factors that are considered significant are: GDP per capita; economic freedom, which is very important since all business regulations affect the company in some way; inflation, since it will affect prices; and Amount of Disposable income per Capita. GDP per capita is crucial when targeting a specific market especially because Alfa Romeo products are not cheap. GDP per capita will let the company know what segments of the population of the market to target. The segments that include populations of a high level of GDP per capita will be ideal markets for Alfa Romeo products. Economic freedom is another crucial variable when determining the most appropriate entry point, in this case the countries that will be compared are the entry points. Lastly economic freedom will be analyzed and compared as well. This aspect is important because it allows the company to know how much freedom they will have to push their product. A countries economic freedom could determine the success of a product.

2.3 Country Evaluation Ranking countries on a scale of 1 to 5, in which five is the highest score, was how the evaluation was conducted.

2.4 Conclusion and Recommendation It is recommended that Shiseido select one of the three countries that ranked the highest (United States, Mexico, or Singapore).

3. Market Analysis

3.1 Pest Analysis 3.1.1 United States Political Factors: Recognized as the leading super power of the world, the United States of America has many valid accomplishments. Besides its positive aspects such as having a powerful economy, the US also possesses a negative reputation. After the so-called ‘War on Terror’ many countries have questioned the American solutions to terrorism.26

Economic Factors: The US has created a GDP of $16.760 trillion dollars making the US the largest economy in the world. Even though the United States took a hard economical hit in the 2008 rescission, it was able to slowly return to a more stable status. The recession caused unemployment rates to increase causing the total GDP to decrease. In 2014 the countries economy reported a growth of 4% in the third quarter.27 The economy has not yet been able to fully bounce back due to the $504 million dollar deficit it currently holds. Social Aspects: Currently, the US has a population that is aging quicker than other countries, causing labor shortages to happen. The country also faces an immigration problem due to the 11.7 million people who currently live in the United States Legally.28

25Alfa Romeo (2014) Market Analysis

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This issue has also caused racial discrimination to increase causing social verdicts and violence. Technological Factors: The US has some of the world’s top technological innovations and products. Even though it has to compete with countries such as China and Russia, the Americans have been able to be on of the top 3 leaders in global technology. The US also leads in biotechnology and environmental technology. The country also has efficient Internet as well many American social networking companies such as Facebook and Twitter. 3.1.2 Mexico

Political Factors: Mexico’s politics consist of three political parties, PRI, PAN, and PRD. The country is also involved in the North American Free Trade Agreement. This is very beneficial to the country because it allows it to trade globally, therefor has less importing restrictions.29 Mexico deals with many drug cartel related events that have corrupted the country creating a negative reputation for politicians and their decisions. Economic Factors: Mexico’s economy in mostly influenced by the service industry. Currently the country relies on 73% of the total GDP.30 The countries economy declined during the 2009 rescission but was able to stabilize. Mexico’s real estate industry also plays a vital role in the countries total GDP producing 21% of its total GDP. 31 Mexico’s economy also consists of the automotive industry, as well as being ranked as the fourth largest car exporter in the world. Social Aspects: The country is ranked 11th in the world for population size. This creates a larger market than most countries due to its impressively large population.33 Due to the fact that the population is so large; Mexico suffers from poverty and social class discrimination. There is no efficient healthcare system and millions of families suffer from hunger and lack of clean water.34 The current drug war has caused many social conflicts and political issues relating to corruption and violence.35

Technological Factors: Mexico has become one of the leaders in Information Technology. This is a perfect quote that demonstrates Mexico’s rapid growth. “In 2001, Mexico’s IT services exports reached only 50 million dollars. This year, the industry’s numbers will close at an unprecedented level of 4.2 billion dollars in service exports.” 36

Mexico’s Telecommunications is another large business that contributes to Mexico’s GDP. 37

26 Alfa Romeo (2014) Market Analysis –PEST Analysis-USA 27 Alfa Romeo (2014) Market Analysis –PEST Analysis-USA 28 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 29 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 30 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 31 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 32 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 33 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 34 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 35 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 36 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico

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3.1.3 Singapore Political Factors: Singapore is known for its honest politics and ethical business morals. Due to its democratic government, people are able to elect their leaders. 38 The country is also known for its zero tolerance policy that is applied to corruption. A negative aspect of Singapore politics is the lack of free speech in its legal sectors. Economic Factors: Singapore has an economy that is developing and growing rapidly. It also has the highest per-capita income in ASEAN (Association Southeast Asian Nations.)39 Due to its free-market economy, Singapore promotes other countries to do business with them. Many countries are attracted to Singapore economy and markets dude to its lack of corruption. Social Aspects: Singapore focuses on maintaining its traditions and culture values. Family values are crucial in this country and are followed religiously.40 Education is required and is competitive due to its large amount of prestigious schools that deliver an impressive education that is respected worldwide. Technological Factors: “The penetration rate for household broadband Internet is over 70%. E-commerce and eB2Cmodels have flourished in turn.”41 That is a very impressive percentage to have for a country that is relatively new to the broadband Internet. Because the Internet is so efficient and reliable in Singapore, many countries start up operations in Singapore.42

3.2 Competitive Analysis The United States as a whole appears to be a complete, divers, and stable market to utilize as an entry point. Its GDP per capita is one of the highest.43 Some of today’s most successful companies in the world have been developed in the US. The American market is also experienced with international automotive companies such as Ford, BMW, Mercedes, Audi, and Porsche. As well as other premier companies such as Ferrari, Lamborghini, and even Bugatti and Pagani.44 Mexico is also an appealing due to its telecommunications and its Information Technology use. Mexico also has a very competitive market in the automotive industry due to the fact that not only do they produce and manufacture cars but also they are constant importers of luxury brands.45 Singapore is an attractive entry port as well due to its heavily enforced ethical morals that are applied to daily business. As well as a welcoming market that promotes business and countries to do business in Singapore.46 Please refer to table 3 for statistics.

37Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 38 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 39 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 40 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 41 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 42 Alfa Romeo (2015) Competitive Analysis 43 Alfa Romeo (2015) Competitive Analysis 44 Alfa Romeo (2015) Competitive Analysis 45 Alfa Romeo (2015) Competitive Analysis 46Alfa Romeo (2015) Competitive Analysis

Table 3

Competitive Analysis47

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3.3 Country Selection 3.3.1 Country Side-By-Side Selection After viewing the countries side-by-side we can come to some important decision making conclusion. The United States and Singapore seem to be the two best choices out of the three original countries, United States, Mexico, and Singapore. Mexico has been eliminated do to the fact that its economy is dealing with too much unbalance and financial extremes, very poor or very rich. These negative aspects would put the company in a financial issue because Alfa Romeo would struggle finding a target market that would have potential of producing sales. From this point forward we can narrow down the countries to the United States and Singapore as an entry point for Alfa Romeo. 3.3.2 Evaluation and Country Selection

After comparing all three countries using Table 2 CountryComparisonandTable 3 Competitive Analysis, Alfa Romeo’s most beneficial point of entry would be between the

United States and Singapore, eliminating Mexico due to poor ranking scores. After analyzing all data that has been collected, the most beneficial and appropriate market for

Alfa Rome to utilize as an entry point would be the United States.

4.MarketingPlan

4.1OverviewofMarketingMix 4.1.1 Cultural Distance

Figure 7 Country Comparison: Hofstede Dimensions. Source: The Hofstede Centre

The lower individualism and low masculinity scores for the US indicate that it is a society that is more collective, therefore, the country has a high dependence on social groups. This means that Alfa Romeo should focus on creating a valid and respectable reputation via word of mouth in order to attract costumers. Due to the LTO, UAI and MAS scores we can indicate that Alfa Romeo will have to gain the costumers trust especially because it is a new brand in a new market. In order to create noise in the market about the product, Alfa Romeo will have to promote the brands history as well as its impressive reputation in Europe.

Figure 8 Alfa Romeos Logo. Source: Alfa Romeo

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4.1.2 Degree of Adaptation

4.2 Market Entry Mode Due to the fact that Alfa Romeo is new to the American market, the company will be using its parent brand, Fiat Chrysler Automobile, to push Alfa Romeos products. Because FCA, has such a respectable reputation and significant levels of experience, Alfa Romeo wont be that large of an underdog to other experienced competitors because its parent brand will guide it through the market, finding target markets to penetrate. All the marketing strategies should be composed of FCA’s past marketing campaigns, in order to learn from the past and adapt the knowledge acquired from mistakes in the past. Another important action to take would be to create track days all over the United States, with Alfa Romeo products, so costumers can test drive the car and feel a true driving experience when pushing the car to its limits. TV commercials and social networking are crucial in order acquire interest. Unique and sporty themes should be adapted to the campaign as well so younger markets can be attracted. 4.2.1 Segmenting, Targeting, and Positioning The American automobile market consists of many different kinds of costumers. Alfa Romeo sells to a specific niche market because their products are created around the driver, creating the perfect balance of performance and luxury. This allows the company to be able to segment, certain populations within larger markets, allocating the correct segmented group of costumers and selling the products. Alfa Romeo will enter the market with the Alfa Romeo 4C, an efficient yet luxurious and powerful sports car that has designed around a passionate driver who can feel the car.

The recommended degree of adaptation for each component of the marketing mix is shown in Figure 8. Alfa Romeos mission is to become more international therefor; the product and price should be similar in order to maintain a global reputation. Because Alfa Romeo is from Italy and has been in Europe for most of its existence, the company will have to increase promotion in order to reach the market. The adaptation of products will have to be decreases in order to control costs. The placement of the product will rely on appropriate KPI’s and efficient channels so the product can be placed in a potential market.

Figure 8 Marketing Mix Overview

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4.3 Product The product that Alfa Romeo will be using to enter the U.S. market will be the Alfa 4C. The 4C is a small, light, turbocharged and direct-injected 1742-cc four-cylinder, with 237 horsepower. The engine is located in the mid-rear area of the car producing a well-balanced car with accurate weight distribution. The turbo charged engine is small and efficient due to its turbo charger creating less work for the engine, allowing the car to utilize less fuel. The breaks on the 4C are strong and don’t overheat after being pushed on the track. The engine sound is throaty for a 4-cylinder turbo engine that is paired along side with a well-fitted exhaust system. The car produced a very sporty sound wile it throws you back into your seat taking it only 4.5 seconds to reach 60 mph. The interior of the car is sporty yet has enough luxury details to maintain its comfort and quality. Fitted with a quick paddle shift duel clutch transmission, the 4C will shift within milliseconds of pushing the shift paddles. The 4C is priced at $53,500 without any additional options, which can be viewed in figure 9.

Figure 9 Alfa Romeo Products

47Alfa Romeo (2015) Product 48 Alfa Romeo (2015) Product 49 Alfa Romeo (2015) Product 50 Alfa Romeo (2015) Product 51Alfa Romeo (2015) Product

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4.4 Price The Alfa Romeo 4C has been strategically priced to be expensive enough to be labeled as luxurious performance car, but also not to expensive creating a specific costumer base who have these qualities.52 Many of the competitors price their sports cars over $65,000 dollars. Usually consisting of a naturally aspirated 8-cylinder engine creating significant horsepower numbers, but an engine that cannot remain efficient wile preforming under heavy driving. That is were the 4C comes in. It has a starting price of $53,500 dollars making it cheaper than the competitors and also cutting fuel costs due to its efficient 4-cylinder turbo engine.53 The price is set to also attract younger costumers who want to look and feel successful, but have a budget they must follow.

4.5 Promotion Alfa Romeo will be entering a new market; therefor they must promote their new product, the 4C, with specific target audiences in mind. For example, promoting the 4C at local track days around the nation would increase popularity of the product and the brand. With its exclusivity, the 4C is a rare car to see, creating curiosity in the brand and pulling costumers in. Alfa Romeo needs to promote any data that demonstrates superiority over competitors. For example, if the 4C lapped a track quicker than a competitor, the time of the lap and the brand of the car it won against would be posted and boasted. If an experienced market of drivers and costumers can see that the 4C outperformed a more expensive sports car, than people truly get the purpose of the car.

4.6 Placement Alfa Romeo has the advantage of using its parent company, Fiat Chrysler Automobile’s resources. The 4C will be sold from Fiat and Chrysler dealerships nationwide. This works out efficiently because Alfa Romeo can use FCA, as their main distribution channel. When any costumer walks in to a Chrysler sister brand such as Jeep or dodge, they will end up at one point in contact with a 4C. This creates a strong and potentially profitable relationship within the company, wile promoting its other smaller brands as well.54

52 Alfa Romeo (2015) Price 53Alfa Romeo (2015) Placement

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Recommendations Alfa Romeo has not been in the American market for years and is now coming back. The company has the advantage of being a new company, which attracts a lot of attention to your brand, especially in the Automotive Markets. Mexico and Singapore have had the company in their markets for years now, hence one of the reasons why they were eliminated. The company has the opportunity to access an entire new market for their future products. The 4C is a perfect product for a company to release as a comeback car. Overall, the 4C could be successful in Mexico or Singapore, but would not reach the same success as in the selected U.S. market. The 4C is just the beginning of a new era of luxury and performance cars in the U.S. Alfa Romeo is finally back with a fantastic product, and the company is here to stay.

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References 1. http://www.aroc-uk.com/company-history 1 Alfa Romeo. Company Info: History 2. http://www.alfaromeohalloflegends.com/ 2 Alfa Romeo Company Info: Our Mission, Values and Way 3. https://www.alfaromeousa.com/ 3 Alfa Romeo. (2015) Annual Report 2015 4. http://www.fcagroup.com/en-US/careers/group/Pages/group.aspx 4Alfa Romeo (2014) Company Info 5. http://www.fcagroup.com/en-US/sustainability/we_care_about_environment/responsible_production/Pages/default.aspx 5Alfa Romeo (2014) Company Info 6. http://www.fcagroup.com/en-US/group/our_businesses/Pages/default.aspx 6 Alfa Romeo (2014) Internal Analysis 7. http://www.fcagroup.com/en-US/group/brands/Pages/alfa_romeo.aspx 7 Alfa Romeo (2014) Company Info 8. http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 8

Alfa Romeo (2014) Product Categories and Target Markets 9. http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 9

Alfa Romeo (2015) Product Categories and Target Markets 10. http://fiatgroupworld.com/2013/05/04/alfa-romeo-sales-2012-full-year-analysis/ 10

Alfa Romeo (2014) International Involvement 11. http://www.fcagroup.com/en-US/group/brands/Pages/alfa_romeo.aspx 11 Alfa Romeo (2015) Marketing Strategy Changes 12. http://www.fcagroup.com/en-US/group/brands/Pages/alfa_romeo.aspx 12Alfa Romeo (2015) Marketing Strategy Changes 13. http://www.aroc-uk.com/company-history 13 Alfa Romeo SWOT analysis 14. http://2014annualreport.fcagroup.com/en 14 Alfa Romeo SWOT analysis 15. http://2014annualreport.fcagroup.com/en/report-operations/risk-factors 15 Alfa Romeo SWOT analysis 16. http://2014annualreport.fcagroup.com/en/report-operations/our-strategic-business-plan 16Alfa Romeo SWOT analysis 17. http://www.alfaromeousa.com/en_us/performance/efficiency 17 Alfa Romeo (2014) Industry Analysis 18. http://selectusa.commerce.gov/industry-snapshots/automotive-industry-united-states 18Alfa Romeo (2014) Industry Analysis 19. http://www.fcagroup.com/en-US/group/our_businesses/Pages/default.aspx 19 Alfa Romeo (2014) Industry Analysis 20. http://www.academia.edu/5661995/AUTOMOBILE_INDUSTRY_ANALYSIS 20

Alfa Romeo (2014) Industry Analysis 21. http://annual-report2014.bmwgroup.com/reports/bmwgroup/annual/2014/gb/English/3010/report-of-the-supervisory-board.html 21 BMW (2014) Annual Report 22.http://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2014/03/Porsche_AR_2013.bin.html/binarystorageitem/file/Porsche-Download-e.pdf 22 Porsche (2013) Annual Report

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23. http://www.audi-reports.com/ar2014/ 23 Audi (2013) Annual Report 24. http://www.fcagroup.com/en-US/group/brand_stories/Pages/building_a_better_tomorrow.aspx 24 Alfa Romeo Country Selection 25. http://pestleanalysis.com/pest-analysis-of-usa/ 25 Alfa Romeo (2014) Market Analysis-PEST-USA 26. http://pestleanalysis.com/pest-analysis-of-usa 26 Alfa Romeo (2014) Market Analysis –PEST Analysis-USA 27. http://pestleanalysis.com/pest-analysis-of-usa/ 27 Alfa Romeo (2014) Market Analysis –PEST Analysis-USA 28. http://eugeniachanlush.weebly.com/country-pest-mexico.html 28 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 29. http://www.reuters.com/article/2014/06/04/research-and-markets-idUSnBw045782a+100+BSW20140604 29 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 30. http://www.reuters.com/article/2014/06/04/research-and-markets-idUSnBw045782a+100+BSW20140604 30 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 31. http://www.reuters.com/article/2014/06/04/research-and-markets-idUSnBw045782a+100+BSW20140604 31 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 32. http://www.reuters.com/article/2014/06/04/research-and-markets-idUSnBw045782a+100+BSW20140604 32 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 33. http://www.countriesquest.com/north_america/mexico/people/social_issues.htm 33 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 34. http://www.countriesquest.com/north_america/mexico/people/social_issues.htm 34 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 35. http://thecatalist.org/2011/10/mexico-is-an-information-technology-powerhouse/ 35 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 37. http://www.budde.com.au/Research/Mexico-Key-Statistics-Telecoms-Market-and-Regulatory-Overviews.html?r=51 36 Alfa Romeo (2014) Market Analysis –PEST Analysis-Mexico 38. http://pestleanalysis.com/pestle-analysis-of-singapore/ 37 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 39. http://pestleanalysis.com/pestle-analysis-of-singapore/ 38 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 40. http://pestleanalysis.com/pestle-analysis-of-singapore/ 39 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 41. http://pestleanalysis.com/pestle-analysis-of-singapore/ 40 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 42. http://pestleanalysis.com/pestle-analysis-of-singapore/ 41 Alfa Romeo (2014) Market Analysis –PEST Analysis- Singapore 43. http://knoema.com/sijweyg/gdp-per-capita-ranking-2015-data-and-charts 42 Alfa Romeo (2015) Competitive Analysis 44. http://selectusa.commerce.gov/industry-snapshots/automotive-industry-united-states 43 Alfa Romeo (2015) Competitive Analysis

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45. http://www.reuters.com/article/2014/06/04/research-and-markets-idUSnBw045782a+100+BSW20140604 44 Alfa Romeo (2015) Competitive Analysis 46. http://pestleanalysis.com/pestle-analysis-of-singapore/ 45 Alfa Romeo (2015) Competitive Analysis 47. http://knoema.com/sijweyg/gdp-per-capita-ranking-2015-data-and-charts 46Alfa Romeo (2015) Competitive Analysis 48. http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 47 Alfa Romeo (2015) Product 49. http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 48 Alfa Romeo (2015) Product 50. http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 49 Alfa Romeo (2015) Product 51.http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 50 Alfa Romeo (2015) Product 52.http://www.caranddriver.com/reviews/2015-alfa-romeo-4c-coupe-first-drive-review 51 Alfa Romeo (2015) Product 53. http://www.alfaromeousa.com/en_us/vehicles 52 Alfa Romeo (2015) Price 54. http://www.alfaromeousa.com/en_us/vehicles 53 Alfa Romeo (2015) Placement

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Appendix

Exhibit 1 Alfa Romeo History Source: http://www.sportscardigest.com/history-of-the-targa-florio-race-profile/

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1.1.2 Exhibit 2 Alfa Romeo’s Mission, Values and Way Source: http://www.alfaromeohalloflegends.com/

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Exhibit3HumanResourceManagementSource:http://www.fcagroup.com/en-US/careers/group/Pages/group.aspx 1.1.6

1.1.7 Exhibit 4 Corporate Social Responsibility (CSR). Source:

http://www.fcagroup.com/en-US/sustainability/we_care_about_environment/responsible_production/Pages/default.aspx

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Exhibit 5 Corporate Social Responsibility (CSR). Source: http://www.fcagroup.com/en-US/sustainability/we_care_about_environment/responsible_production/Pages/default.aspx

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1.1.8

1.1.9 Exhibit 6 Product Categories and Target Markets. Source: http://blog.caranddriver.com/chrysler-reboots-companywide-product-plans-goldmine-of-info-lots-of-delays-six-alfas/

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Exhibit 7 Product Categories and Target Markets. Source: http://blog.caranddriver.com/chrysler-to-import-refreshed-200-sedan-from-detroit-in-2017/

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1.1.10 Exhibit 8 International Involvement. Source: http://fiatgroupworld.com/2013/05/04/alfa-

romeo-sales-2012-full-year-analysis/

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1.1.11 Exhibit 9 International Involvement. Source: http://fiatgroupworld.com/2013/05/04/alfa-

romeo-sales-2012-full-year-analysis/

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Exhibit10Country Comparison