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Anna Ugo, Jennifer Harbaugh, Paige Sweet, Shane Moran, and Jared Lambert
MKT 300
Professor Pirouz
18 March 2020
Cadillac Case

Cadillac is a company that has a rich history with many rises and falls that have impacted

where the company is today in both the segment and how the company views itself. In the past

few years Cadillac has worked hard in both rebranding the company and trying to make it stand

out to new types of consumers. They have worked hard to make themselves become a more

cutting edge luxury car company.

GOALS

Some of the key goals at Cadillac are using psycho-demographics and focusing on

expanding to female buyers. They also are looking to expand the company with both technology

and with how it is perceived from different consumers.

Cadillac had a primary focus on the male demographic but is now working to align with

the female demographic. By collaborating with girlboss and #KeepRising, they show they intend

to reach women, but there could be more research on how they intend to push the other areas of

focus, such as young consumers.

The focus is now highlighting the rich heritage that makes them one of a kind, such as

being the only US luxury car brand for affluent luxury car buyers who want to show pride in

their hometown roots. They moved the company from where they had been headquartered in

New York to Detroit so they could be in the forefront of cutting edge technology as well as

having strong ties to its history. But, they also intend to reposition themselves to being the top

tier luxury brand no matter domestic or foreign.

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They intend to focus on high performance to reach new customers no matter the age, as

well as consolidate the product line and focus on SUVs and crossovers. This goal is to release a

new model every 6 months until 2021, and to move the car line to become fully electric by 2030.

Electric cars, the rising ability of women becoming a bigger segment in their consumers,

and staying true to what the company has valued since its beginning. These are all goals of

Cadillac and they all are aimed towards the future.

EXTERNAL FACTORS & BUSINESS SUCCESS

Some of the external factors that affect Cadillac’s success are future demand for electric

vehicles, self-driving vehicles, and the long-term rental car experience. Opportunities like this

are crucial to the future success of Cadillac, and they should always be on the lookout for

possible methods of expansion.

They need to be conscientious of Tesla, who is one of their biggest rivals in the luxury car

market. They have created plans to expand into the self-driving car business, and they are

already implementing the release of all-electric battery cars. When they do this they are working

to create a greater competitive edge for themselves by appealing to the segment that is very

eco-conscious.

Other ways that Cadillac is appealing to buyers over their competitors is by using “Book

by Cadillac”. This is a great opportunity to give customers the experience of Cadillac, without

having to initially pay for the luxury vehicle. This can be successful if potential consumers are

already considering the brand.

Another factor is being able to keep their Average Transaction Prices (ATPs) up. When

compared to their peers they have the ability to have the greatest return for the amount of time.
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They have the highest price average for luxury brands, and being able to continue that will never

be a bad thing as long as they stay relevant to the consumers and continue to have people who

want the product.

INTERNAL FACTORS & BUSINESS SUCCESS

It is evident that the heritage of the Cadillac brand is one of the most important internal

factors for their success. They have a loyal segment of consumers who expect Cadillac to be a

certain way. This limits their ability to be technologically innovative. They need a balance

between satisfying the loyal segment and bringing in new segments. This loyal segment is a

strength of the brand as long as they continue to capitalize on this potential, but also a weakness

because Cadillac is perceived as being a brand for older clients. Moving to Detroit will help

Cadillac recement their roots, making loyal consumers happy. It will also bring them closer to

where their parent company is headquartered to help them become part of the larger brand and

develop technology.

Along with moving back to the Motor City, Cadillac needs to continue to push the

envelope in their V performance division. With the German counterparts all having exclusive

high end performance models such as AMG, M, and RS, it is crucial that Cadillac continues their

V trim of vehicles. The perception of Cadillac as a performance car company falls behind

significantly. It must be a focus of their new Chief Marketing Officer (CMO) to offer sedans that

challenge and even outperform the imported vehicles.

Cadillac has struggled with marketing initiatives in the past when Uwe Ellinghaus was

their CMO. This is a weakness because it was very costly to the company and did not bring new

revenue or consumers to the company. Their current CMO, Deborah Wahl, seems to be pushing
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Cadillac in the right direction. A strong CMO is a great strength for a company. She encourages

continuous improvement. Cadillac is striving to keep technology innovations in the forefront,

which is crucial in a world with rapidly changing technology.

Additionally, the small market share that they hold needs to increase in order for Cadillac

to remain successful. Cadillac’s year on year growth has been pretty low historically (see Figure

1). This is something they should work to change so that they are in a stronger financial position

to gain market share.

COMPETITOR ANALYSIS

Competitors for Cadillac are starting to change as the market demand and shift towards

EV vehicles is becoming more apparent. What was once typical for German luxury brands has

now expanded to Tesla, Lexus, Acura, and Infiniti. What defines a competitor has expanded with

the increasing technological advancement and new consumer preferences. The largest portion of

competition is foreign, meaning that the domestic Cadillac has a price advantage over the other

imports. Unfortunately, BMW has started to produce domestically as well, hindering the price

advantage. The critical components of the competition are the aspects of what the competitors

are succeeding at and why. Examples of this is the Japanese manufacturers are succeeding in a

foreign market due to their production innovations, whereas the German producers are

succeeding due to their long standing status and performance. With LIDAR being prevalent in all

the competitors’ vehicles, Cadillac must make their main point of technology different from the

competition. When consumers were asked how they perceived performance for different car

companies, Cadillac scored the lowest while Porsche scored highest. They have acknowledged

that and intend to focus on performance to compete with them.

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Mercedes Benz is a potential threat because they hold such a strong position in the

market and could attack Cadillac. With 15.8% market share (2018), they are in a much better

position to fight off competition than Cadillac. They have a strong name for themselves as a

luxury car brand. They have very strong marketing initiatives. Tesla is also a concern because

they are well known for their technology. If Cadillac is going to put a lot of resources into

electric vehicles and technological innovations, they need to keep an eye on what Tesla is doing.

Tesla also has around the same market share as Cadillac (although they surpass Cadillac’s). This

puts them in a similar position in the market, which means they will potentially need to fight

with each other to gain more of the market.

CUSTOMER ANALYSIS

Currently, the majority of Cadillac consumers are Caucasion or African American males.

With this in mind, it is wise to focus some marketing initiatives on women. This is something

they are already pursuing with their collaboration with Girlboss and #KeepRising. They also

have a lot of wealthy customers who are particularly interested in domestic vehicles.

40% of their recent buyers are considered technology wizards. This will help in their

venture to appeal to a younger demographic. Technology is a huge component if they intend to

appeal to the younger demographic as opposed to being seen as the “car my grandparents used to

drive.” The implementation of “Book by Cadillac”, a unique feature to the car industry, provides

the sense of a subscription based service which the younger demographic is familiar with. They

also have to keep in mind that they have older consumers who may be scared off by technology.

They have both ends of the spectrum.

VALUE PROPOSITION
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Cadillac is a pioneer in safety with our eye on innovative technology and maximum

performance to give our customers the finest in luxury.

RECOMMENDATIONS: TARGET SEGMENTS, STRATEGY & TACTICS

Keeping in mind the constant improvements and innovations in technology these days,

Cadillac should make it a priority to have even more technological advancements. A large

portion of their customers are young, which means they are familiar with technology and it is

likely a huge part of their lives. They should capitalize on this and use it as motivation to dive

deeper into how technology can improve their vehicles. Cadillac’s cars with the SuperCruise

feature, like the CT6, would be a great fit for this segment. This type of technology is appealing

to the technologically savvy because it makes their driving experience easier and it offers them a

car that is as up to date as they are. Not only that, but it is a snazzy looking car that will turn

heads. These are cars of the future that young people will be particularly interested in. This focus

would have Cadillac competing more with Tesla, which could help them to gain some of Tesla’s

market share and rise up in the market.

The concern with this type of car targeted for young people would be the price range.

Cadillac is exclusively a luxury brand without any models in the lower price range. Cadillac is

the lowest price luxury car on the market (on average), and this helps their cause in reaching that

demographic. If they would be able to create a slightly more affordable car with some quality

technology features, they could get the Cadillac name on their lips and reach this segment at an

even younger age. This car should use its technological features to keep young drivers safer.

People in this segment are generally attached to their phones, so Cadillac should create features

that keep them connected and safe at the same time.

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In order to focus on this segment, they should create a special group of advertisements

directed towards college age students/recent college grads. They could show a car like the CT6

cruising around a large college campus, like MSU, while everyone on the sidewalks turns their

heads to see it pass. They could also show someone driving it to their first job out of college with

sunglasses on and a confident smile. Even if someone is unable to afford it at the time, these

images will stick with them and it may be a car they save up for after college. They can make

Cadillac the new “cool” car that young people want to be seen with. Many students have very

nice cars on campus, but it is sort of an untapped segment for Cadillac at the moment. For this

initiative, they should focus on sleek, dark colored cars. These types of cars look sporty, but also

very nice. Here is the positioning statement for this segment: For the recent grad who needs an

upgrade, Cadillac has the best in show, technology and performance. Congratulations on your

graduation and welcome to the club. We saw you coming and made this just for you.

Additionally, we think that Cadillac should continue their efforts to reach females.

Cadillac could do an ad campaign to boost sales in the female segment. There are all kinds of

women and there are different types of Cadillacs to suit them all. Imagine a young professional

woman coming out of her building, letting her hair down, taking her blazer off, stepping into her

sportier Cadillac and driving through the downtown streets for a night out. Then flip to a mother

loading her kids and groceries into one of the SUVs. A Cadillac for every woman. The

positioning statement for this segment would be: From the pro to the party girl, and from the

carpool mom to the camping mom, Cadillac has the options you need from cars to SUVs, in the

luxury you want. We know you’re a strong woman with your own wants and needs and we made

this just for you. #KeepRising

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One improvement that Cadillac can make is further expanding the types of vehicle

segments they have to offer. For example, there is no Cadillac pickup truck or sports cars

currently. As they are trying to make the company more profitable, looking at expanding their

range of cars could help the company gain customers. A Cadillac pickup truck would be bold

and risky, but it could redefine what a pickup truck is. Another way they can improve is by

making more specific, quantifiable goals. It could be beneficial to have some short-term goals

that show how they plan to achieve their long-term goals.

Appendix

Figure 1: Year on Year Growth of Unit Sales