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Business 2000

Seventh edition

Introducing the New Panda

Managing the Marketing Mix for the Launch of the New Fiat Panda
Introduction TO FIAT
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. Fiats 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 Manufacturing Plants R&D 75 70 Outside of Italy 167 61

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. The positioning of The New Panda
Size New Segment - The Big Small Car Punto New Panda Seicento Small Car Segment Power The New Panda - not a small car but a car that has the power and energy of a big small car.

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 Pandas 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).

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 Fiats best selling small cars. It has been at the top of Irelands best-sellers 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.

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:

Business 2000
seventh edition

FIAT - Managing the Marketing Mix for the Launch of the New Fiat Panda

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Positioning the New Panda


The New Panda car has been designed to be maneuverable and easy to drive, particularly in city areas. Its size and height make it a far more visible car than other small cars in its class. It has a strong sporty look and has features that will appeal to many types of customers. The positioning of The New Panda
Task 1

Product Reflecting the Brand


In its branding and market positioning, Fiat wishes to communicate a number of key attributes of the New Panda it is an intelligent smart car that is ready for action and it is also a little crafty, lighthearted and irresistible. The New Pandas positioning statement is designed to succinctly convey the product advantages and the character of the model in a way that will best attract the New Panda target market.

Promotion Communicating the Positioning of New Panda


Pre-publicity in the form of motoring reviews and test drives are critical to the success of a trade launch as this activity must generate sufficient consumer curiosity and interest in the new model. In this way, experts and driving correspondents or journalists, are also given the opportunity to assess the merits of a new car before the car-buying public delivers its own verdict in the form of car sales. Fiat showcased the New Panda (formerly known as Gingo) at the prestigious 73rd International Motor Show in Geneva. One of the most popular ways to do this is to hold open weekends in garages where customers can come along to test drive the new car. By getting potential car buyers to test drive a car, product usage increases.This has a knock on effect to car sales. The primary above the line medium used to promote and communicate a new car is through advertising. In the case of the New Panda, the main advertising mediums used, aside for those used when communicating with the trade, are outdoor billboard advertising and TV advertising. If we analyse who we are trying to communicate with when we are launching a new car, the choice of TV and outdoor advertising makes perfect marketing sense. However, increasingly newer forms of communications are being used, such as the internet, to reflect the attributes or characteristics of the New Panda. Here we see the positioning statement being used once more to form the basis of the advertising message. This ensures a consistency across all elements of the marketing mix. The New Pandas characteristics are summarised in the following ideas:

Conclusion
The New Panda was designed to answer the driving needs of different sections of the car buying public. Fiat has answered this marketing conundrum by presenting a new car to the market that defies an easy classification. It has technical attributes and characteristics that let it sit happily in many customer segment groups satisfying each unique group of consumers. The story of the launch of the New Panda illustrates the importance of accurate and informed market positioning. The creative translation of this positioning through promotion into the car trade and through consumer advertising must answer customer expectations if a new car model is to compete and secure a position in the market.

Full of Life, Cheeky,Versatile and Ready For Everything


Product Design High End Design at a Price Premium

As discussed above the product design is linked in with branding and positioning strategies. It is important that all of these features are linked.
Branding, Positioning & Design
Price

Branding

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?

Positioning

Design

Glossary of terms
Above-the-line this refers to communications which pay commission to advertising agencies, namely press, radio, television, outdoor and cinema. Below-the-line refers to nonmedia 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 the development of a product positioning using two measurements, relative to the those of a competitors product to give an indication of the new product's likely success.

The Importance of Product Design

The New Panda design reflects its multifunctional, compact outside with its internal space (box shape) and versatility. Its design aims to reflect the panache and look of a sporty car but it is also pragmatic and is built with the space and power of a big small car. It has been designed to win over motorists who currently drive small five door cars and to maintain the customers who already drive Fiats Seicento or Punto. Fiat has identified its target 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 Marketing Mix 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. The marketing mix is used to reinforce the advantages of the New Panda carefully reflecting its core values and positioning. It confirms how and why it will be of interest to various segments of the car-buying public.

The new Panda


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. Prepublicity 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 essentially pulls the product through the distribution channel from the manufacturer toward the consumer.

Place Getting the Product to the Customer

In order to succeed at getting the product to the consumer, Fiat has an International network of agents or dealers who carry Fiat cars and other marques (car brands e.g. Alfa Romeo) in the companies stable.This means that support is given to the Fiat dealers around Ireland to promote the new model in a way that generates demand for the new car.

The Essentials - it has those features that really count and will be of most service Surprise - you get more than you expected Energy - the car is dynamic, vital, endowed with good humour and optimism Freedom - to move about and go where you want easily and with worry-free driving.

TASKS & ACTIVITIES


1) If you were a marketing Executive in Fiat, with industry research at your disposal, what criteria do you think a new car buyer would consider when looking to purchase a first car? Rate these issues in order of importance (e.g. pay-back options, fuel economy, styling, size etc.) 2) You have been asked to design a programme to support the launch of a new Fiat car model. How would you plan and execute a Test-drive Saturday promotion in your local Fiat Dealers showrooms? Visit your local dealership and interview the manager to get ideas. Present your plan to your classmates. 3) A new car launch through the trade requires local advertising and promotional support in addition to corporate advertising. What value for money and effective promotional or advertising channels would you recommend that a local car dealer use in your area? 4) Possible task would be to provide the perceptual map for the segment and get students to assess where they think the New Panda might fit compared to the other cars in the market. 5) How is product design used to reflect the nature of a companys positioning strategy?

Price Reflecting the Positioning Strategy

Fiat has a clear understanding of its key target market (young people and other price-conscious car buyers) and has designed pricing strategies to best address their needs and the positioning of the New Panda. In the case of the New Panda it was imperative that it be keenly priced and also that running costs were low.

Car advertising is highly visual and largely image based, for visual impact and advertising images and copy messages are built on these concepts. New Panda advertising themes and images revolve around ideas of surprise, independence, spontaneity and versatility. Key factual messages that need to be conveyed include the smart design of the car, the value for money and cost of the car and the low running costs. If possible the car should have characteristics that give it an edge on its competitors or have a Unique Selling Point (USP) that can be communicated to potential car buyers. In the case of the New Panda, its USP hinges on the fact that you get more than you expected; it is a practical small car with all the driver advantages that go with that but it also has a sporty, cheeky, and irresistible appeal.

The price quoted by Fiat is the price you pay at the dealership.This is Fiats Open Book pricing policy. As a marketing concern transparency of prices is important. Some prices quoted by competitors are ex works which is the price of the car quoted from the factory. Additional charges for delivery are thus not included in the final price quoted. Fiat have finance packages. One example is where customers can opt to pay only 25 per cent of the total cost of the car and then pay the balance of the cost of the car, i.e. the remaining 75 per cent, over a period of 36 months with zero per cent interest. Another package focuses on the benefit of low monthly repayments. This finance package is essentially a Hire Purchase agreement and is subject to the Consumer Credit Act of 1995. Monthly payments can represent a more attractive option to first time car buyers or people on a limited income, sooner than borrow 100 per cent of the cost of a new car.

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Business 2000
seventh edition