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i What is Suzuki͛s marketing strategy in the U.S?
i What are the three major positioning options (as per
industry practice) according to a vehicle͛s physical
characteristics?
i What are the pros and cons of positioning the
Samurai in each of these segments individually
i What are the pros and cons of the ͞Un-positioning͟
strategy?
i What strategy would you recommend for the Suzuki
Samurai in the U.S?


 
 

 

 
i o 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 °  
 
. 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. hen 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. he 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. hen Suzuki (he 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. herefore, Suzuki decided to establish its own
presence in U.S automobiles industry.
 | !:
i Suzuki͛s goal was to establish itself as a major car company in
U.S.
i o 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.
i hen he designed a dealer agreement that required
prospective Samurai dealers to build an exclusive sales facility
for the Samurai.
i Service and parts could share a facility with a dealer͛s 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.
i he facility had to include a showroom, sales offices,
customer walking and accessory display area.
i Required dealership to display specific signs and outside
the sales office and in the service stalls.
i 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.
i 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.
 X|!"X |#$ %:
i he company aimed to gain market response for its
high quality with low price advantage.
i Engage a strong dealership bigger than traditional
based on the belief that quick dealer profitability
would be key to successͶas a dealer͛s sales
opportunities grew.
i Dealerships selected with trading areas that
encompassed zip codes with high concentrations of
households that fell into Suzuki͛s target market.
i Cost efficient product (almost half the traditional one)
to attract & catch the customer quickly.
i †ocus on early entry (Before Hyundai Motor
Company of South Korea and Zavodi Crvena
Zastava (Yugo) of Yugoslavia,)
i Introduce several unique vehicles into the U.S
(the always something different car company)
i Establishing its own presence in the U.S
automobile industry for independence
(collaboration with GM is not guaranteed to
continue)
 !
X |"!&
i (SJ413) for customer attractiveness & product
modification for overcoming import barrier for
big quantities.
i Chose to introduce the Samurai into
California, the nation͛s largest automobile
market, and †lorida and Georgia, where
Japanese import sales were higher then the
U.S. average
 X  !!"%"#:
i Positioning is placing a brand in that particular
part of the market where it will receive a
favorable reception compared to competing
products.
i VP of ASMC wanted a fresh approach for his
company's new product.
i he gave the responsibility to that advertising
agency, which had no experience in developing
campaign for automobiles.
i Pearlstein and his associates scanned the industry
practice for automobile advertising.
i hey found out that the industry practice was to
position vehicles according to their physical
characteristics
i hey also found out that most advertising was feature/
benefit or price oriented.
i Based on its physical characteristics, the major three
positioning options for Samurai SJ413 were as follows:

Position as a  ' 
'   ° .

Position as a  ' ' '
Position as a
( '  .
 | X%|X #)|:
i he most obvious position for the samurai is as a sport utility
vehicle. It looked like a "mini- jeep" and had 4-wheel drive
capability.

PROS:
i he features matched exactly with the attributes of compact sport
utility vehicle.
i Designed to drive well off road.
i Positioning as a sport utility vehicle is consistent with the samurai's
heritage.
i he Samurai was smaller and lighter than the other vehicles.
i Praising of foreign owners because of samurai's reliability. It had the
ability to go anywhere where larger vehicles could not.
i Ease of repair.
i Smaller and lighter than the other vehicles.
i Its price and size made it distinct from all other sport
utility vehicles in the U.S. market. It was sold below
the price of the other vehicles. Its l
 suggested
retail price was well below the other vehicles͛
$10,000 to $13,000 price range.
i hus the positioning of Samurai as sport utility
vehicle solely concentrated on the low price and its
ability to squeeze through places where bigger
vehicles could not go. It needed to be advertised as a
͞ough little cheap Jeep."
CONS:
i here seemed to be a problem of whether the
positioning could generate the envisioned sales
volume.
i he market for sport utility vehicle was relatively
small. In 1984 it was less than 3% in the U.S
market. he goal was to build as annual sales of
30,000 units within 2 years of its introduction. o
achieve this it was required to exceed the
combined 1984 sales of all imported sport
vehicles.
 | X%|X|*X|*&

he second option, positioning the Samurai is as a compact pickup

truck.
X &
i It would tap a market two and one-half times the size of that for
compact sport utility vehicles.
i It had the advantage that Japanese trucks sold well in the U.S
accounting for 54% of total 1984 compact pickup trucks.
i It had the high level of US consumer͛s acceptance.
i he Samurai could be used as a truck when purchased without back
seat or when its back seat was folded up.
i he price was set at the retail price to keep it in comparison with
Japanese imported trucks. hus the positioning strategy would only
indicate uniformity with other truck prices but rather uphold a
serious, practical, male-targeted tough truck.
CONS:
i o penetrate as a new company, price is one
of the factors to attract customers. But it did
not have any price advantage over other
similar cars.
 | X%||%:
i he third option is to position the Samurai as a subcompact car.

PROS:
i Positioning the Samurai as a subcompact car would open up the
largest of the three possible markets.
i A trend had been developed that professional like lawyers, doctors
drove it to their offices leaving their Mercedes at home.
i he Samurai boasted an average 28 miles per gallon in combined
city and highway driving, was priced lower than many subcompact
cars, and offered more versatility. hose who were
shopping for an economy car could consider it.
hus the positioning strategy should give emphasis upon looks and
style
CONS:
i If it was positioned as a car then it might not
meet the expectations of the consumers
because the Samurai was built on a truck
platform, its ride was stiffer and less
comfortable than the least-expensive
subcompact cars
 !X  !!"%"#
i Un-positioning is just the opposite of
positioning. It is offering a single product to
the entire market.
i Pearlstein Ad agency suggests that Samurai SJ
413 should be un-positioned in the market to
cover all three possible segments; compact
sport utility vehicle, compact pickup truck and
subcompact car.
 %%!%" $!X  !!":

i Larger arget Customers:

i Customer satisfaction:
i Higher Profitability:
i hreat to Competitors:
 Larger arget Customers
i Due to un-positioning Suzuki Samurai
American Suzuki Motor Corporation (ASMC)
gets the opportunity to target the entire
potential consumers segment.
i he Un-positioned Suzuki Samurai will appeal
the users of pick up truck, subcompact cars
and sports utility vehicle. hat ensures higher
consumer acceptance by offering a car for
various needs.
 Customer satisfaction
i If each consumer is allowed to personally
define the Samurai, this would lead to greater
similarity between the vehicle's promise and
its delivery if Suzuki told customers what the
Samurai was; by clearly defining the image of
the vehicle.
 Higher Profitability
i As un-positioning will target a larger customer
segments, it will definitely increase sales and
thus add larger profit to the company's
income statement also.
i hus this strategy is perfectly compatible with
company's goal that is to establish ASMC as a
major car company in the US.
 hreat to Competitors
i Un-positioning will offer a car with different
purpose. It will also serve the purpose of
versatile transportation.
i he broader appeal of the car can reduce its
competitor͛s sales and thus can guarantee
sales more than 6000 units in the first six
months. So, in the mean time, competitors'
sales might deteriorate.
%%!%" $!X  !!":

i Losing of present Customers

i Loosing Potential Market
i rouble for the Sales People:
i Increased Confusion:
 | !%"#
i Market argeting
i Positioning
i Relationship
i Distribution
i Pricing
i Promotion and
i Advertising
 %*%"!":
i Suzuki wants its Samurai to sell extensively in the US market. So to
target market it should follow extensive targeting strategy.
i he car should not be for any specific Suzuki's Marketing Strategy in
the U.S. segment but for all who needs a car. It will maximize the
sales of the car and thus will increase revenue and profit.
i it is likely to build customer awareness and eagerness to buy a
Samurai in every potential car buyer.
i here are less risk as the research showed that there is huge
demand for the earlier model and the market was preferring the
Japanese vehicle as they were ensured about the quality of
Japanese product and these vehicles were economical (Both
mileage and price).
 X  !!"
i hree alternatives, including sport utility vehicle, compact
pick-up truck, and a subcompact car, are mentioned earlier to
position Samurai among the clients but research shows that
customers perceive the car in different ways.

i o achieve higher market share and sales it will be unwise for

Suzuki to impose any perception on consumers mind.

i Any sport utility buyer can be attracted by just looking at the

vehicle, it can be perceived as an alternative to dull
automobiles for small-car buyers and small truck purchaser
were buying them to use as cars than import subcompact
cars.
i disadvantages regarding un-positioning the
car but the 80-20 rule is more applicable here.
i As the vehicle has every characteristic to
attract every possible market segment,
adoption from any of the segments would get
the job done.
 | |%"#
i Customer Service strategy should also be planned
among the organizations, dealers and customers.
i Suzuki should take measures to build strategic
alliance with potential companies in US.
Relationship among dealers and customers are
also important.
i Customer satisfaction and after sales services are
two major issues that can play effective role in
positive attitude and perception towards
Samurai͛s success.
 %!!"
i As Samurai is a new product in the market it
should build a strong brand image among the
potential customers.
i he matter to consider is Suzuki, the maker of
Samurai, is not new in the market and already
it has a place in customers mind.
i he strategy that Suzuki should take is to
make efficient use of that identity to make the
new brand stable and reliable.
  !
i Suzuki can go for vertical integration system for
distribution. Vertical Integration dominates the
retailing sector.
i A primary feature of it is the management of the
distribution channel by one organization.
i he firm that is the channel manager directs
programming and coordination of channel
activities and functions.
i Operating rules and guidelines indicate the
functions of responsibilities of each participant.
i Management assistance and services are
supplied to the participating organizations by
the firm that is the channel leader.
i ASMC can also practice competitive channel
strategy simultaneously to increase sales of
Samurai.
i Addition intensive may be offered to sell
certain numbers of Samurai to each dealer in
this regard.
 X|!"
i Price may be used as a signal to buyer because the
price of Samurai is visible to the buyer and provides a
basis of comparison between brands. It may be used to
position the brand as a high-quality product at a less
price.
i It may be used as an instrument of competition. In the
US market all of the similar cars are selling at $8000 -
$13000 while Samurai is priced at $5995.
i It is a competitive factor. It may be used to improve
financial performance of the company also. And
productivity, expansion, investment etc. mostly
depends on financial performance.
i he low price of the Samurai can be used as
penetration pricing strategy to capture greater
share of the market. Penetration pricing reflects a
long-term perspective in which short-term profits
are sacrificed in order to establish sustainable
competitive advantage.
i At the same time Samurai can enjoy the
advantages of one-price strategy also that
includes administrative convenience, easier
pricing process etc.
 X   !%!%!"
i he advertising and promotion budget of
ASMC for the first six month is $2.5 million.
i ypically an automobile manufacturer spent
77% of its advertising dollars on television ads,
10% on print ads, and 3% on highway
billboards. he print ads were to run in both
general-interest magazines and enthusiast
magazines.
 (+ ° ,

 ,   &
i Creating or increasing buyer awareness of the car
Influencing buyer attitude toward the company Suzuki
and the brand Samurai.
i Achieving increases in sales and market share for
specific customer or prospect target.
i Generating repeat purchase of the car.
i Encouraging trial of the car.
i Attracting new customers with existing Suzuki clients.
i Encouraging long term relationship.
i Suzuki should follow the integrated marketing
communication to integrate the promotion tools because,
marketing communication programs are comprehensive.
i Advertising, personal selling, publicity, direct marketing,
sales promotion are all considered in the planning of
marketing communication.
i he messages delivered by all media are the same or
supportive of a unified theme. Marketing communication
programs are targeted. he public relation programs,
advertising programs, and dealer/distributor programs all
have the same or related target markets.
i Marketing communication programs coordinated execution
of all the communication components of the organization.
Suzuki may also apply sales promotion activities to the
following groups to achieve its goal of selling
designated number of Samurai.
hey are
i X  
 

 
&consumers may be
offered free servicing for certain time period, or some
gifts with the purchase.
i X  
 

 -
' 
  &Discounts
may be given for big orders from such organizations.
i X  
 

(
&Intensive or bonus
may be announced to the channel members for selling
certain number of vehicles.