CADILLAC

When Cadillac recently introduced the Cimarron, it represented a car, which

featured many firsts For GM’s flagship division. Among those firsts was a manually
shifted four- speed transmission as standard equipment, a cylinder engine, and a
sporting suspension. Perhaps most important was the fact that the Cimarron
represented an attempt to offer a small sedan, which the division has been perceived
primarily as a producer of large automobiles.

There are many reasons for offering the Cimarron, but two have paramount
importance to the Cadillac division. First, the division needed to develop the
expertise to produce smaller, more fuel- efficient automobiles that will satisfy the
needs of a new generation of luxury car buyers and help GM comply the
Environmental Protection Agency’s CAFÉ (Corporate Average Fuel Economy). In
1985 the EPA standard for auto companies is a fleet- wide 27.5 miles per gallon.

The second reason is the need to attract the growing number of buyers who are
interested in foreign luxury cars such as the Audi, BMW, Jaguar and Mercedes. The
market for traditional cars (like the Cadillac fleet and the De Ville series autos),
which are noted for their plushness and largeness declining as a proportion of the
market for all luxury automobiles. This was due to the changing tastes of many
first- time luxury car buyers.

The Cimarron was targeted for well- educated buyers in their late twenties to their
early thirties, who had high- paying jobs with prospects of an even better future,
and who enjoyed the better things in life. People in this segment are what marketers
frequently refer to as “upscale”, meaning these buyers present good sales potential
now, and will be even more lucrative prospects in the future. Research has shown
that when these buyers enter the automobile marketplace, they often choose one of
the Following: BMW 318I, Audi, Volvo GLE, or Saab 900. Common to all these
vehicles are small, moderate size, good handling, and a sporting flair. Traditionally,
Cadillac has not been noted for offering these features.

The Cimarron was introduced in the 1982 model year, and by 1984 several market
problems had become apparent. First, many Cimarron purchases had come from
Cadillac’s traditional base of customers. Management views this fact as undesirable
because in many cases, these buyers would have purchased the more profitable
Cadillac de Ville had the Cimarron not been available.

A second problem involves the perceptions held by the new, upscale buyers whom
Cadillac had originally targeted. Most of these buyers do not consider Cadillac, or
their dealers, a legitimate source of sporting luxury cars. There is a serious question
regarding the image of the product and those who sell it by the targeted buyers.
There is also a problem associated with the General Motors family of cars from
which the Cimarron is derived- the J- car. For example, a four- door Chevrolet
Cavalier is not very different from the Cimarron. Both cars share many common
body panels, as well as a common drivetrain (engine and transmission), yet the price
of the Cavalier is only about 60 percent of the Cadillac version of the J- car.
Consequently the perception is that the Cimarron represents less than a unique
luxury car, and that it does not offer a good value for the price charged.

In view of the foregoing, Cadillac is considering what changes to make to its

marketing strategy for the Cimarron. They want to have the car recognized as a
legitimate competitor against those makes that potential buyers in the targeted
segment are considering, and hopefully to increase sales for the Cadillac division.

QUESTIONS
1. If Cadillac decides to pursue a multisegment strategy, what variables would
Cadillac use in developing a marketing mix for Cimarron

2. Using the consumer decision- making framework, profile the customer in the
market that Cadillac is targeting.

3. Based on Cadillac’s experience with Cimarron, should Cadillac adopt a

concentration strategy or a multisegment strategy?