Suzuki Samurai Case Analysis080114

CASE ANALYSIS : SUZUKI SAMURAI
Presented by:
ARUNA C K SHARMA
SRINIVASARAO
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CONTENTS
History of Suzuki
Suzuki samurai in US
Analysis Target segmentation of Suzuki Samurai
Marketing plan for ASMC

Suzukis Goal, Strategy and its success
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HOW TO POSITION SUZUKI SAMURAI IN USA
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SUZUKI IN JAPAN
Michio Suzuki started as Suzuki loom works in 1909
It was a loom manufacturing company
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1952 and 1954

1952 Suzuki introduced first 2-cycle 1954 Suzuki introduced 2nd motorcycle
Popularity of these motor cycles led to change in name as Suzuki motor company, Ltd.
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1959
After 7 years of success, Suzuki introduced a first light weight Van
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1961
After 9 years of success, Suzuki introduced a first CAR of 2 stroke engine named SUZULIGHT
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1964 1965
After 12 years of success in 1964, SUZUKI started exporting motorcycles to USA, quickly established as a Major brand in U.S. motorcycle industry. By 1965, SUZUKI product line had:
Motorcycles Automobiles Motorized wheel chairs Outboard motors General purpose engines
Generators
Water pumps and Prefabricated houses
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In 1979 and By 1984
In 1979, SUZUKI automobiles introduced to foreign markets, after 27 years of success And
By 1984, SUZUKI goes global in over 100 countries and Hawaii
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1983
General Motors (GM) buys 5% of Suzuki and helps company develop a subcompact car for the U.S. market
CHEVROLET SPRINT Free Powerpoint Templates Page 10
DEMAND FOR SPRINT

In mid 1984, Sprint was Suzukis first entry into continental U.S. automobile market. These cars were sold exclusively by Chevrolet dealers. Voluntary restraint agreement (VRA) limited the shipping number of cars to U.S. by 17,000. All cars were quickly sold by GM even though its distribution was limited to U.S. west coast dealers.
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EMERGENCE OF ASMC
SUZUKI planned to introduce several unique vehicles to U.S. market over a time.
Unknown of GM willingness SUZUKI DECISION To form American Suzuki Motor Corporation
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CANADA PLANT
Upon success of sprint, Suzuki plans to introduce several unique vehicles to US but VRA quota allows Suzuki to only export sprints. Consequently, GM and Suzuki negotiate for an Ontario plant to produce 200,000 subcompact cars per year but it was expected to be online by early 1989. In 1986, Hyundai and Yugo were expected to enter US market . Market forces and projected new entrants makes Suzuki introduce SJ413 (Upgraded samurai) to U.S. market. *(As a TRUCK)*
SUZUKI SAMURAI FOR U.S.

U.S. Govt. classified SJ413 as a TRUCK Trucks were not subject to Japanese VRA quotas Instead subject to 25% tariff v/s 2.5% tariff on cars SUZUKI management yet found deal worthy On May 10, 1985, Douglas Mazza was hired. - To organize and head new subsidiary, ASMC - To develop Suzuki dealer network to sell SJ413 by Nov 1985 - To create the marketing plan for Suzuki samurai in U.S. Suzuki planned to market 2 versions of SAMURAI - Convertible version and - Hard-top version
FIVE FORCE ANALYSIS

Barriers to Entry a. medium difficulty b. Huge capital requirements c. Govt. policy and regulations (VRA) d. advertising and other costs
Buyer Power a. Consumer most power b. Supplier (Dealerships) very little power c. ASMC wants good dealers who are able to invest both monetarily and emotionally
Supplier power Industry Rivalry Medium to little power a. Several car components have multiple substitutes b. Each car component manufacturer has multiple substitutes. Thus, suppliers have little powers in forcing car manufacturers to submit to their choices. C. Some companies such as Suzuki exhibited vertical integration.
Nutshell: Import market is growing.

Ex. Hyundai and Yugo pressurized the release of samurai. Industry experts predicted 19.2% share of U.S. market.
d. Dealer agreement to safeguard Suzuki current sales and future expansion plans too.
Substitutes a. Chevrolet Jimmy (AMC)
b. Tercel (Toyota)
c. Sentra (Nissan) etc.
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DRAFTED DEALER AGREEMENT BY MAZZA

Suzuki goal was to establish itself as a major car company in U.S. Hence, Mazza convinced prospective and limited 50 dealers to provide the following: Exclusive sales facility for Samurai that includes: Showroom Sales offices Customer-waiting and accessory-display area Dedicated minimum 2 service stalls and operated by Suzuki trained mechanics Shall display required signs at inside service stalls and outside the sales office 3 sales executives 2 service technicians General manager General office clerk
ASMCS STRATEGY
ASMC planned retail price : $ 5,995 and Dealer invoice price would be 7.5% lesser ASMC wanted to attract dealers such that opportunity match investment requirements. Thus, boost dealers average unit profit, dealers loyalty, greater sales support, higher control over retail market. Initial dealers limited to 47 nos. ASMC guaranteed supply of minimum 37 units per month than planned 30 unit earlier for 50 dealers. The target selling of 6000 units in 6 months were raised to 10,500 units, by Mazza. Introduce Samurai into U.S. largest automobile market : California, Florida and Georgia
SUZUKI GOAL
Enter the continental U.S.
Automobile customers were buying imported Japanese cars Industry experts predicted command of 19.2% share of U.S. market in 1985. Sell 2 version of Samurai Too limiting SUCCESSFUL GOAL BUT VERY CONSERVATIVE PROJECTIONS. Suzuki is entering this market conservatively. This also limits their product.
WHAT DOES SUZUKI LOOK LIKE?
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This is SJ413 SUZUKI SAMURAI, 1985 US MODEL
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SJ413 SUZUKI SAMURAI, 1985 US MODEL
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Even this
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PRODUCT OVERVIEW
PRODUCT BENEFIT Ruggedness EMOTIONAL BENEFIT Feeling of being strong and rough Feeling of austerity and satisfaction Being in vogue, pride in being watched and appreciated PERSONALITY Outdoorsy, tough Sincerity, honesty Hedonistic
Efficient gas mileage, low maintenance Looks Cute and Stylish
Easy off road handling, choice of convertibility
Comfortable and adaptable to all situations
Spirited, Daring
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QUESTION
HOW DO YOU FEEL SUZUKI SAMURAI SHOULD BE
POSITIONED?
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MARKET SEGMENTATION
The market segmentation of the Suzuki Samurai
COMPACT SPORT UTILITY VEHICLE
SMALL PICKUP TRUCK

COMPACT CAR
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COMPACT SPORT UTILITY VEHICLE

PROS 4x4 drive capability CONS Low Market Potential which might not reach target sales Limited Market of SUVs [less than 3% in 1984] Some consumers correlate Price and Quality
Built like an SUV Drives well off-road Low Price Smaller and lighter
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SMALL PICKUP TRUCK

PROS CONS
Relatively large size of the market 2.5 times that of the SUV market Americans favor trucks imported from Japan [54% of total sales in 1984]
Losing out on the subcompact car segment which was larger It had a 25% import tariff compared to the 2.5% for cars
Used as truck when purchased without back seat/folded up
Narrow target segment
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SUBCOMPACT CAR
PROS Opens up the largest of the 3 markets Stiff and less comfortable than even the least expensive subcompact car CONS
Priced lower than many other subcompact cars
Very good mileage of 28 miles to the gallon
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CONSUMERS LOOK FOR

Everyday driving Off road/snow driving Passenger comfort Quality/Durability Styling Capacity
Gas mileage
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PRIMARY TARGET MARKET

Single male, 18-30 years old First time car buyer Students, fresh graduates, young professional Come from 2-person households that earn an average income annually
Young, unconventional, works hard, often go parties, desires to be rugged, takes pride, likes to be different and who seeks fun.
SECONDARY TARGET MARKET

Single/Married, Male, >30 years old Has at least 2 cars Businessmen and established professionals Has children (usually female) who can already drive Come from households that earn higher than an average annual income Young at heart, Straight-laced, loves his family, but wants to break free and indulge at times
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CONSUMER INSIGHTS
Consumers think that SAMURAI was A symbol of their independence to do different
Practicality to drive a versatile vehicle

They felt as Cute, Neat and Fun that make them : stand out goes well with their lifestyles break the traditional mould and away from the traditional Sedan.
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CONSUMER PERCEPTION ANALYSIS
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CONSUMERS COMPLEX BEHAVIOUR CONSUMER PERCEPTION
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CONSUMER ANALYSIS
CAR can be used for: City travel (good mileage) Passenger car (accommodations for 5 people) Transportation of material (pick up truck capability) Possibility of a convertible (cool summer car) Off road capabilities Designer looks Price for car A car with a wide range of capabilities for a good price
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MARKET ANALYSIS
Based on the five forces analysis: The Suzuki samurai is the perfect debut vehicle for U.S.
No significant substitutes that matched Price Capabilities Appearance Get ahead of other Asian companies that would plunge shortly to take advantage of the growing imports industry
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COMPETITIVE ANALYSIS
Key resources and capabilities Brand name GM support Useable statistics (Gray market)
Competitors
They are relatively new entrants (Hyundai and Yugo)

Price remains same for all custom type of vehicles Free Powerpoint Templates Page 38
HOW TO POSITION SJ413
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POSITIONING STRATEGY ANTIDOTE TO TRADITIONAL TRANSPORTATION
ITS AN UNPOSITIONING STRATEGY
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PEARLSTEIN CONCLUSION
ANTIDOTE TO TRADITIONAL TRANSPORTATION
MARKETING TAG LINE

The end of DULL. The start of Suzuki
SUZUKI TAG LINE

Its an everything vehicle
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SEGMENTATION CONCLUSION
SUV buyers would like the Samurai because its cheaper. Small car buyers would like to buy it because its not Dull Small truck buyers would like to buy because its cheaper than a Subcompact car but more versatile.
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ADVANTAGES OF UNPOSITIONING
Appeals all consumers as ensures higher customer acceptance by offering various needs . Its prospected as Multi purpose vehicle. Dull breaker Its Fun 4x4 wheel driver Economy High quality More versatile (than import subcompact cars)
ADVANTAGES OF UNPOSITIONING
Customer satisfaction: Customer defines car to his own desire, leads to better congruence between vehicles promise and value delivered.
Ensures larger profit and enables Suzuki establishment stronger in U.S.

Able to attract new customers along with existing customers Low risk
DISADVANTAGES OF UNPOSITIONING
Sacrifices the possibility of being number one in the niche market in particular segment. Might loose brand image if customers reject Jeep with different appeals. Trouble for the sales people Increased confusion might drop sales but alternative to small -car-boredom. 80/20 rule adopted
ADVERTISING BUDGET
TO ADD / ANSWER QUESTION GIVEN IN CASE IN LAST PAGE
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CUSTOMER RELATIONSHIP
Customer relation ship to be strategically planned
After sales servicing

Customer satisfaction Strategic alliance with potential companies in
U.S.
Good relationship b/w dealers
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SUCCESS OF SUZUKI SAMURAI

The SUZUKI SAMURAI became extremely popular. Buyers liked the light 4 wheel drive because: positioned as the
Light 4WD
Reliable on and Off roads Light weight and compactness gave it an
advantage edge (Beginners off road Car)
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END OF SUZUKI SAMURAI
After 1988, SUZUKI SAMURAI was under scrutiny for being unsafe and prone to rollovers.
This led SUZUKI to modify SAMURAI because of low sales and some safety regulations.
In 1995, the SIDEKICK replaced the SAMURAI.
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END OF SUZUKI SAMURAI

After 1988, SUZUKI SAMURAI was under scrutiny for being unsafe and prone to rollovers.
This led SUZUKI to modify SAMURAI because of low

sales and some safety regulations. In 1995, the SIDEKICK replaced the SAMURAI.
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Suzuki Samurai Case Analysis080114

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CASE ANALYSIS : SUZUKI SAMURAI

Marketing plan for ASMC

Free Powerpoint Templates

HOW TO POSITION SUZUKI SAMURAI IN USA

Free Powerpoint Templates

Free Powerpoint Templates

1952 and 1954

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

In 1979 and By 1984

By 1984, SUZUKI goes global in over 100 countries and Hawaii

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CHEVROLET SPRINT Free Powerpoint Templates Page 10

DEMAND FOR SPRINT

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SUZUKI SAMURAI FOR U.S.

FIVE FORCE ANALYSIS

Nutshell: Import market is growing.

Substitutes a. Chevrolet Jimmy (AMC)

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DRAFTED DEALER AGREEMENT BY MAZZA

WHAT DOES SUZUKI LOOK LIKE?

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This is SJ413 SUZUKI SAMURAI, 1985 US MODEL

Free Powerpoint Templates

SJ413 SUZUKI SAMURAI, 1985 US MODEL

Free Powerpoint Templates

Free Powerpoint Templates

Efficient gas mileage, low maintenance Looks Cute and Stylish

Easy off road handling, choice of convertibility

Comfortable and adaptable to all situations

Free Powerpoint Templates

HOW DO YOU FEEL SUZUKI SAMURAI SHOULD BE

Free Powerpoint Templates

The market segmentation of the Suzuki Samurai

COMPACT SPORT UTILITY VEHICLE

SMALL PICKUP TRUCK

Free Powerpoint Templates

COMPACT SPORT UTILITY VEHICLE

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SMALL PICKUP TRUCK

Used as truck when purchased without back seat/folded up

Narrow target segment

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Priced lower than many other subcompact cars

Very good mileage of 28 miles to the gallon

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CONSUMERS LOOK FOR

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PRIMARY TARGET MARKET

SECONDARY TARGET MARKET

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Practicality to drive a versatile vehicle

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CONSUMER PERCEPTION ANALYSIS

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CONSUMERS COMPLEX BEHAVIOUR CONSUMER PERCEPTION

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