Suzuki Samurai Case Study

Case Study on Suzuki Samurai

Course: Strategic Marketing (EMB620)

Prepared By

.....

Submitted To

Dr. Riad Mahmud

North South University

Submitted on 27th September 2009

Table of Contents

Preface iii

1. What is Suzuki's marketing strategy in the U.S? 1

2. What are the three major positioning options (as per industry practice) according to a vehicle's physical characteristics? What are the pros and cons of positioning the Samurai in each of these segments individually? 2

3. What are the pros and cons of the "Un-positioning" strategy? 5

4. What strategy would you recommend for the Suzuki Samurai in the U.S? 7

Preface

As a part of a case study of Strategic Marketing (EMB-620) Course, this formal repot has been prepared. The whole report covers on the case analysis of the positioning strategy of Suzuki's new entrant into the U.S. automobile market with the Suzuki Samurai brand. All the analysis & explanation have been written in this report on the basis of the provided case information.

1. What is Suzuki's marketing strategy in the U.S?

To meet the dynamic market demand, Suzuki changes its policy many times. At first they entered in the US market as exporter of a single product (only motor cycle) with vertical integration. In 1964 Suzuki began exporting motorcycles to the United States where it established a wholly owned subsidiary, U.S Suzuki Motor Company, Ltd., to serve as the exclusive importer and distributor of Suzuki motorcycles. Then it began to export multi products and out sources its one brand: In 1983, General Motors (GM) purchase 5% of Suzuki and helped the company a subcompact car for the US market. The car, named Chevrolet Sprint, was the first entry into the continental US automobile market. GM's success with Sprint showed Suzuki that a market existed for its cars in the continental of United States. Then Suzuki (The always something different car company) planned to introduce several unique vehicles into the US market over time. Suzuki had no guarantee that GM would be willing to market the vehicles. Therefore, Suzuki decided to establish its own presence in U.S automobiles industry.

SELECTIVE DISTRIBUTION: Suzuki's goal was to establish itself as a major car company in U.S. To achieve this goal, Mazaa, Vice President of ASMC (American Suzuki Motor Corporation), adopted the step of Convincing prospective dealers to build separate showrooms for the Samurai.

Then he designed a dealer agreement that required prospective Samurai dealers to build an exclusive sales facility for the Samurai. The facility had to include a showroom, sales offices, customer walking and accessory display area. Service and parts could share a facility with a dealer's other car lines, but a minimum of two service stalls need to be dedicated to Suzuki, which had to be operated by Suzuki-trained mechanics. Required dealership to display specific signs and outside the sales office and in the service stalls. A minimum of three sales people , two service technicians, one General manager and one general office clerk had to be dedicated to the Suzuki dealership. The bold points above are illustrating the fact that the company followed the selective distribution (close to exclusive distribution). It allowed the company to achieve higher profitability, dealer loyalty, greater sales support and also higher degree of control over the retail market.

PRICING POLICY FOR DEALERS: Price is the only marketing variable that generates revenue.

Though it is close to exclusive distribution that is characterized by high margin, high profit and low volume, Mazza adopted with an opposite view. The company aimed to gain market response for its high quality with low price advantage. Thus their strategy was to sell high volume with low profit margin.

Engage a strong dealership bigger than traditional based on the belief that quick dealer profitability would be key to success--as a dealer's sales opportunities grew, so too would the financial commitment and overhead.

Dealerships selected with trading areas that encompassed zip codes with high concentrations of households that fell into Suzuki's target market.

Cost efficient product (almost half the traditional one) to attract & catch the customer quickly.

Focus on early entry (Before Hyundai Motor Company of South Korea and Zavodi Crvena Zastava (Yugo) of Yugoslavia,)

Introduce several unique vehicles into the U.S (the always something different car company)

Establishing its own presence in the U.S automobile industry for independence (collaboration with GM is not guaranteed to continue)

NEW PRODUCT DESIGN: (SJ413) for customer attractiveness & product modification for overcoming import barrier for big quantities.

Chose to introduce the Samurai into California, the nation's largest automobile market, and Florida and Georgia, where Japanese import sales were higher then the U.S. average

PRODUCT DIFFERENTIATION: To grab different market segment by two different products, a convertible and a hard-top.

2. What are the three major positioning options (as per industry practice) according to a vehicle's physical characteristics? What are the pros and cons of positioning the Samurai in each of these segments individually?

Before Suzuki could enlist dealers, it had to decide how to position the Samurai to consumers. The position it chose would help define the vehicle's target market which, in turn, would influence ASMC's preferred dealer locations.

POSITIONING STRATEGY: Positioning is placing a brand in that particular part of the market where it will receive a favorable reception compared to competing products.