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This case chronicles the successful history of Saturn as a company narrowly focused on a single line of compact cars. Some attempts the company has made to differentiate into other market segments have not exactly been successful. In most recent years, Saturn’s financial performance has suffered. However, executives at GM are intent on changing that. Saturn is poised to launch an entirely new vehicle lineup, including a compact, a mid-sized sport sedan, an eight-passenger crossover SUV, a hybrid SUV, and a two-seat roadster. A $3 billion investment in Saturn clearly illustrates the confidence that GM has in its newest division, especially given that it is one of the smallest GM brands. GM hopes to take sales from 215,000 in 2005 to 500,000 by 2010. With all the new models, some question whether Saturn will maintain its image as the United States’ lone “Asian” brand and a socially responsible company. Some industry insiders are confused about the segment that Saturn is trying to target.
1. market. Given the information in the case, this may be challenging. Students will have to call upon their external perceptions to create a more complete profile of the “old” Saturn’s customer profile. They are likely to come up with general conclusions rather than specific. But a profile should emerge, nonetheless. Here are some suggestions: Demographic: • • • Age—younger than the average GM buyer. Most typically college age on through early 40s. Gender—fairly evenly split. Family life cycle—young marrieds with and without children are certainly among Saturn’s early target market. However, young to middle-age singles are also prevalent. Some customers may exist in other categories (the image of an SL1 being towed behind a motor home with a retired couple at the wheel comes to mind), but are not part of Saturn’s core. Income—lower-middle income. Using the full spectrum of segmentation variables, describe how GM has segmented the automobile
Psychographic: • Personality—environmentally and socially responsible
Behavioral: • • 2. Benefits—quality, economy, innovation, personal service, and the image of an Asian import Loyalty status—strong
What segment(s) is Saturn now targeting? How is GM now positioning Saturn? How do these strategies differ from those employed with the original Saturn S-series? This is the core of the case and the question that is posed toward the end. The case cites industry observers who question what segment Saturn is targeting, that the message they are sending is fuzzy. Yet GM proclaims that they are not creating another Chevrolet, a brand that is all things to all people. Students should give this careful consideration to see if they can identify a general profile that links the different sub-segments that Saturn will target with its broader line of specialized vehicles. Demographic:
Age—A classic strategy is to grow old with your target audience while still trying to keep the young ones coming in. The Japanese Big Three have clearly done the former. They added more models to the lineups and even new luxury divisions to appeal to those who were raised on Japanese imports. So Saturn’s move in this direction makes complete sense. Gender—likely not much change here.
Thus. The new Saturn line is heavily infused with European design and engineering. Saturn’s goals should be clearly identified by students. and hybrid SUVs have not demonstrated the type of sales numbers that fourdoor sedans typically do. innovation. Will this be important to Saturn customers? • 3. Social responsibility has been central in both attracting customers that GM would never have otherwise attracted as well as contributing to the strong loyalty of Saturn’s customer base. and communities. as mentioned in the previous answer. targeting. Loyalty status—strong Describe the role that social responsibility plays in Saturn’s targeting strategy. Specifically. Behavioral: • Benefits—quality. Do you think that GM will accomplish its goals with the “new Saturn”? Why or why not? Student responses will likely cover the spectrum on this question. One key change that poses a big challenge for Saturn is that its previous image has always been that of an import … an Asian import. Many examples are given in Saturn’s history on its own Web site at http://www. a cross between an SUV and a sport compact. Caution should be taken by Saturn not to get too broad too quickly. While the focus on customers may not exactly be social marketing. Another concept vehicle that Saturn is currently considering is a compact SUV called the Prevue. the models mentioned in the case. employees. personal service. Industry wide.000 units. And there are likely only so many bases that a single car division will be able to cover. can Saturn attract enough new customers to account for the incremental increase in projected unit sales. and positioning recommendations would you make to GM for future Saturn models? A major consideration for future models will depend on the success of the models that Saturn will have already released by the time this text goes to print. Social responsibility has always played a big role. innovation. This is part of the Saturn image that Saturn should make every effort to maintain. From the beginning. social responsibility.to upper-middle incomes. The main goal is increasing sales to 500. does the new Saturn focus on the wrong type of import? Another key change is the added benefit of “sporty. Income—lower. But they must consider that many buyers of the new models will be customers who would have bought one of the previous Saturn models anyway. But one thing should be very clear in student responses: Saturn should maintain a strong focus on the characteristics that have established its success. . At the same time.saturn. again. Saturn has proclaimed that its sole focus is people: customers. middle-aged married and unmarried (two-seat roadster). The question with respect to this sales goal should be. while at the same time retaining traditional Saturn customers? Saturn’s shift in image may affect the answer to both parts of this question. they should target customers who value quality. 5. that is clearly not the focus of the entire new line. Some students may simply surmise that because Saturn is more than doubling the number of models in its lineup. it is impossible to predict what is going to happen. the policies and initiatives that focus on employees and communities are. and a low-pressure personal sales environment. Saturn is going to have to continue to post very strong numbers with its compact line and its new mid-sized sedan. roadsters. What segmentation.jsp.• • Family life cycle—While there will still be models that will appeal to the same core customer. And while the benefit of economy will still be there with some models. then doubling its sales should not be that difficult. 4. but the question is. Saturn has recognized that its loyal customers of many years have graduated into other phases of life—married with more and older kids (bigger sedan and eight-passenger cross-over SUV). Psychographic: • Personality—environmentally and socially responsible.com/saturn/aboutus/ourstory/index. these factors are part of the core Saturn image that has made them successful. Students should also consider that many of the new models are not high-volume models.” This is something that Saturn has never really been. cross-over SUVs. GM says that it wants Saturn to continue to appeal to customers who would only consider an import.
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