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Suzuki Samurai Essay

Suzuki Samuri
In June 1985, Leonard Pearlstein, president and CEO of keye/donna/pearlstein advertising agency, and his colleagues were finalizing the presentation that they would make the next day to Douglas Mazza, vice president and general manager of American Suzuki Motor Corporation (ASMC). Pearlstein’s agency was competing with a half-dozen other advertising firms to represent Suzuki’s new entrant into the U.S. automobile market, the Suzuki Samurai. Mazza had asked each agency the question: “How do you feel this vehicle should be positioned?” He had given keye/donna/pearlstein eight days to prepare an answer.

Company Background
Suzuki Loom Works, a privately owned loom manufacturing company, was founded in 1909 in Hamamatsu, Japan, by Michio Suzuki. In 1952, the company began manufacturing and marketing a 2-cycle, 36 cubic centimeter (cc) motorcycle, which became so popular that in 1954 the company introduced a second motorcycle and changed its name to Suzuki Motor Company, Ltd. (Suzuki). During the late 1950s, lightweight vehicle sales boomed in Japan. Suzuki’s motorcycle business grew, and in 1959 it introduced a lightweight van. The van’s success encouraged Suzuki to develop lightweight cars and trucks. In 1961, it introduced its first production car, the “Suzulight,” the first Japanese car with a 2-stroke engine.

In 1964 Suzuki began exporting motorcycles to the United States, where it established a wholly owned subsidiary, U.S. Suzuki Motor Company, Ltd., to serve as the exclusive importer and distributor of Suzuki motorcycles. Suzuki quickly established itself as a major brand in the U.S. motorcycle industry.

By 1965, Suzuki’s product line included motorcycles, automobiles, motorized wheelchairs, outboard motors, general-purpose engines, generators, water pumps, and prefabricated houses. The company concentrated, however, on producing and marketing lightweight vehicles. Until 1979, Suzuki cars and trucks were sold only in Japan, where they were popular as economical transportation. In 1979 Suzuki automobiles were introduced into foreign markets, and by 1984 they were available in over 100 countries and Hawaii.

In 1983, General Motors (GM) purchased 5% of Suzuki and helped the company develop a subcompact car for the U.S. market. The car, named the Chevrolet Sprint, was introduced on the West Coast in mid-1984 and was sold exclusively by Chevrolet dealers. The Sprint was Suzuki’s first entry into the continental U.S. automobile market. The Sprint was subject to Japan’s “voluntary” Research Assistant Tammy Bunn Hiller prepared this case under the supervision of Professor John A. Quelch as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1988 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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restraint agreement (VRA) on car shipments to the United States. The VRA, in place since 1981, limited the number of cars that each Japanese automobile manufacturer could ship to the United States in a given year. In 1984,

Suzuki’s total VRA quota of 17,000 cars went to GM as Sprints. GM quickly sold out of its allotment even though Sprint’s distribution was limited to its West Coast dealers.

American Suzuki Motor Corporation (ASMC)
GM’s success with Sprint showed Suzuki that a market existed for its cars in the continental United States. Suzuki, which called itself “the always something different car company,” planned to introduce several unique vehicles into the U.S. market over time. Suzuki had no guarantee, however, that GM would be willing to market the vehicles. Therefore, Suzuki decided to establish its own presence in the U.S automobile industry.

Japan’s VRA quotas made it impossible for Suzuki to export any cars other than the Sprint to the United States in the foreseeable future. Consequently, in 1985, Suzuki and GM began negotiations with the Canadian government to build a plant in Ontario that could produce approximately 200,000 subcompact cars per year. Suzuki management expected the plant to be online by early 1989, and the company could then begin selling cars in the United States under its own name.

Market forces, however, made Suzuki loath to wait until 1989. In 1984, Japanese imports achieved a record 17.7% share of U.S. new-car and truck sales. Based on first-quarter sales, industry experts predicted that Japanese imports would command a 19.2% share of the U.S. market in 1985. Total U.S. automobile sales were expected to grow by 10% in 1985, and this rapid growth made dealers optimistic and willing to invest money in new car lines, especially Japanese brands. In addition, two other car companies, Hyundai Motor Company of South Korea and Zavodi Crvena Zastava (Yugo) of Yugoslavia, were expected to enter the U.S. car market in 1986. Suzuki managers believed that brand clutter might limit their success if they waited until 1989 to introduce the Suzuki name into the continental United States.

Suzuki management was convinced that the time was right to enter the continental United States and that Suzuki had the right product to do so, the SJ413. Its forerunner, the SJ410, was a minifour-wheel drive off-road vehicle with a 1,000cc engine that Suzuki had introduced in 1960. By 1985, the SJ410 was sold in 102 countries and Hawaii. In 1985, Suzuki introduced the SJ413, an upgraded model that featured a 1,324 cc engine and was designed with the U.S market specifically in mind. The SJ413 was more powerful and more comfortable than the SJ410. The upsizing of Suzuki’s vehicle, combined with the downsizing of U.S. consumer automobile preferences, made the SJ413 a viable continental U.S. product.

If the SJ413 was imported without a back seat, the U.S. government classified it as a truck, for customs purposes. Trucks were not subject to Japanese VRA quotas; instead, they were subject to a 25% tariff (versus a 2.5% tariff on cars). The tariff was high, but Suzuki management believed that it was worth paying.

On May 10, 1985, Suzuki hired Douglas Mazza to organize and head its new subsidiary, ASMC. Mazza was charged with developing a Suzuki dealer network to begin selling the SJ413 by November 1985. He was also responsible for creating the marketing plan for the SJ413, which would be named the Suzuki Samurai in the United States, as it was in Canada. Suzuki planned to market two versions of the Samurai in the United States +a convertible and a hard-top.

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Samurai Dealer Network
Mazza’s goal was to establish ASMC as a major car company in the United States. To achieve this goal, he believed that he had to convince prospective dealers to build separate showrooms for the Samurai. If ASMC allowed a dealer merely to display the vehicle in an existing showroom, the dealer would invest little in the Samurai, monetarily or emotionally, and probably would sell only a few Samurais each month. Low Samurai sales per dealer and lack of facility and management commitment could jeopardize Suzuki’s plan to introduce other cars into the United States, starting in 1989.

Therefore, Mazza drafted a dealer agreement that required prospective Samurai dealers to build an exclusive sales facility for the Samurai. The facility had to include a showroom, sales offices, and a customer-waiting and accessory-display area. Service and parts could share a facility with a dealer’s other car lines, but a minimum of two service stalls had to be dedicated to Suzuki and operated by Suzuki-trained mechanics. Furthermore, Suzuki dealerships had to display required signs outside the sales office and in the service stalls. A minimum of three salespeople, two service technicians, one general manager, and one general office clerk had to be dedicated to the Suzuki dealership.

The prospectus also explained that, as the product line grew, dealer requirements would expand to include a full, exclusive facility complete with attached parts and service. This upfront expansion plan was a first in the industry and was based on the belief that quick dealer profitability would be key to success—as a dealer’s sales opportunities grew, so too would the financial commitment and overhead.

ASMC’s planned suggested retail price for the basic Samurai was $5,995. The planned dealer invoice price was $5,095, only 7.5% higher than AMC’s own landed cost for the vehicle. ASMC planned to offer about 50 dealer-installed options, the sale of which would boost a dealer’s average unit profit. Mazza estimated that each dealership would need to sell approximately 30 Samurais per month to cover its monthly operating costs plus the finance charges on its initial investment. To attract good dealers, Mazza knew that he must make the opportunity match the investment requirements. He therefore planned to limit the number of Samurai dealers so that ASMC could guarantee a minimum supply of 37 units per month to each one.

Thus each dealership could earn a profit every month if it sold its total allotment. Suzuki had set Mazza the goal of selling 6,000 Samurais in the first six months of U.S. distribution, but Mazza and his new management team convinced the Japanese management that the U.S. opportunity was far greater. Suzuki raised its commitment to ASMC to 10,500 vehicles for the same time period. Consequently, Mazza decided to limit his initial dealer network to no more than 47 dealers. This small network implied rolling out the Samurai in only two or three states in November 1985. Mazza chose to introduce the Samurai into California, the nation’s largest automobile market, and Florida and Georgia, where Japanese import sales were higher than the U.S. average.

Before Mazza could enlist dealers, he had to decide how to position the Samurai to consumers. The position he chose would help define the vehicle’s target market which, in turn, would influence ASMC’s preferred dealer locations. By combining car registration data and census information, the concentration of owners of imported vehicles or owners of sports utility vehicles, for example, could be pinpointed by zip code. Dealerships could be selected with trading areas that encompassed zip codes with high concentrations of households that fell into Suzuki’s target market.

Samurai Positioning
The keye/donna/pearlstein advertising agency had no experience in developing campaigns for automobiles. This appealed to Mazza, because he believed that a fresh approach was needed for 3
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his company’s new product. After accepting Mazza’s offer to compete for the Samurai account, Pearlstein and his associates quickly scanned automobile advertising of other manufacturers. They concluded that industry practice was to position vehicles according to their physical characteristics as, for example, subcompact cars versus compact cars versus luxury sedans. Most advertising was feature/benefit- or price-oriented. A typical ad noted that a vehicle was of a specific type and emphasized differentiating features and/or superior value for the money. If they followed industry practice, Pearlstein’s group had three options for positioning the Samurai based on its physical characteristics—as a compact sport utility vehicle, as a compact pickup truck, or as a subcompact car.

Exhibit 1 shows pictures of the Samurai. The most obvious position for the Samurai was as a sport utility vehicle. It looked like a “mini-Jeep,” had 4-wheel drive capability, and was designed to drive well off-road. Such a position would be consistent with the Samurai’s heritage and its positioning in the 102 countries where the SJ410 and SJ413 were sold. Foreign owners praised the Samurai’s reliability, ability to go places where larger vehicles could not, and ease of repair. The Samurai’s size and price distinguished it from all other sport utility vehicles sold in the United States in 1985. The Samurai was smaller and lighter than the other vehicles, and its $5,995 suggested retail price was well below the other vehicles’ $10,000 to $13,000 price range.

Pearlstein believed that if the Samurai were positioned as a sport utility vehicle, it should be advertised as a “tough little cheap Jeep.” Advertising copy would show the Samurai in off-road wilderness situations, squeezing through places where bigger sport utility vehicles could not go. Ads would also emphasize that the Samurai cost only half the price of an average Jeep. Pearlstein was unsure, however, whether a compact sport utility positioning could generate the sales volume that Mazza envisioned for the Samurai. The market for sport utility vehicles was relatively small. As Exhibit 2 shows, total 1984 compact sport utility vehicles sales in the United States were less than 3% of total automobile industry sales. Mazza’s goal was to build annual U.S. Samurai sales to 30,000 units within two years of the vehicle’s introduction. To achieve this objective, annual Samurai sales would have to exceed the combined 1984 sales of all imported compact sport utility vehicles.

The second option, positioning the Samurai as a compact pickup truck, would tap a market that was two and one-half times the size of that for compact sport utility vehicles. Moreover, Japanese import trucks sold well in the United States, accounting for 54% of total 1984 compact pickup truck sales. The Samurai could be used as a truck when purchased without a back seat or when its back seat was folded up. Therefore, positioning it as a truck seemed feasible. ASMC set the Samurai’s suggested retail price at $5,995 in order to price it comparably with Japanese import compact pickup trucks, which had a high level of U.S. consumer acceptance.

Therefore, in Pearlstein’s view, if advertised as a truck, the Samurai’s price would not be emphasized but mentioned only to indicate parity with other truck prices. Advertising copy would probably be serious, practical, male-targeted, and designed to portray the Samurai as a tough truck. The third option, to position the Samurai as a subcompact car, would open up the largest of the three possible markets. Although the Suzuki SJ413 was not positioned as a car in Europe, a trend was developing in which professionals, especially doctors and lawyers, drove their SJ413s to their offices in the city and left their Mercedes at home. Similarly, in the United States, especially in California, sport utility vehicles were sometimes driven in town, although none had hitherto been positioned as a car.

The Samurai boasted an average 28 miles per gallon in combined city and highway driving, was priced lower than many subcompact cars, and offered more versatility. Therefore, it could 4

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reasonably be considered by those who were shopping for an economy car. If positioned against subcompact cars, Pearlstein believed that Samurai advertising copy should emphasize the vehicle’s looks. The message to consumers would be “Why buy a Toyota Tercel or a Nissan Sentra when, with the same amount of money, you can buy a much cuter vehicle, the Samurai?” However, the vehicle might not meet consumers’ expectations if it was positioned as a car. Because the Samurai was built on a truck platform, its ride was stiffer and less comfortable than even the least-expensive subcompact.

Market Research
Pearlstein defined positioning as “the unique way we want prospects to think about a product.” Before choosing a position for the Samurai, he asked Don Popielarz, director of research and planning, to conduct research in order to gain a thorough understanding of not only the attributes that prospective buyers ascribed to the Samurai versus other vehicles but also the profile and characteristics of potential buyers. This information would help Pearlstein decide how to position the vehicle. Then his team could develop advertising copy and choose the media that would be most efficient in delivering the Samurai’s message to its consumer target. Popielarz started by reviewing the latest research available from outside sources. A demographic segmentation study conducted by J.D. Power and Associates divided new-car buyers into demographic segments based on the size/style of the car that was purchased. The “basic smallcar” segment included cars such as the Chevrolet Sprint, Ford Escort, Honda Civic, Toyota Tercel, and Mazda 323. Most (54%) of the car purchasers in this segment were men, but only 43% of the principal drivers were male.

The median age of the buyers was 38. The average domestic car buyer was 41, while the average import car buyer was 36. Sixty percent of the car buyers were married; over one-third had executive/professional/technical careers, and 43% were college graduates. The median household size was 2.69 people, and the median household income was $34,240. From a survey conducted by Newsweek for use by pickup truck and sport utility vehicle manufacturers, Popielarz learned how consumers perceived sport utility vehicles versus pickup trucks. Consumers were asked to rate 29 vehicle features of domestic and imported pickup trucks and sport utility vehicles.

The features were aggregated into seven factors that were then plotted on two-dimension perceptual maps. The seven factors were everyday driving, off-road/snow driving, passenger comfort, quality/durability, styling, capacity, and gas mileage. Exhibit 3 lists the vehicle features that made up each of the seven factors. Exhibits 4-7 show four maps that summarize consumers’ perceptions of pickup trucks versus sport utility vehicles on the seven factors. After reviewing research from outside sources, Popielarz studied a survey that Suzuki had recently conducted in Canada, where it sold approximately 4,000 Samurais in 1984. Suzuki randomly surveyed 374 Canadian Samurai owners. The majority (75%) of the Samurai buyers were male, and 62% were between the ages of 18 and 34. The average age of the buyers was 33. The most frequently mentioned occupation was a skilled tradesperson (32%). Only 21% were college graduates, and only 1% were currently students. Fifty-one percent of the buyers lived in two-person households, and the average household income was $43,800.

When asked “When you hear the name Suzuki, what do you think of?” 40% of the Samurai owners responded “motorcycle.” Other answers included 4×4/4-wheel drive (23%), Jeep (16%), Japanese product/efficiency (14%), quality/well-made (11%), dependable/reliable (10%), versatility/work/play/goes anywhere (10%), small (9%), pleasure vehicle/fun (8%), my car (7%), and economical (6%). When the owners were asked to describe the Samurai using only one word or phrase, the word most often mentioned was “fun.” Exhibit 8 lists all the words that were volunteered by five or more owners.

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As Exhibit 9 shows, design/appearance was mentioned most frequently by owners as their main reason for purchasing the Samurai. When asked “Before making your purchase, what other automobiles did you consider?” 29% mentioned various models of Jeep. Other vehicles mentioned included Ford Bronco and Ranger (24%), GMC Chevrolet Jimmy (7%), GM Chevrolet 5-10 Blazer (8%), Toyota 4×4 pickup truck and Landcruiser (12%), and Nissan 4×4 pickup truck (4%). No other model was mentioned by as many as 4% of the respondents. When asked why they selected the Samurai over their “first alternative” vehicle, the overwhelming response was economy/value (59%) followed by design/appearance (29%).

Popielarz was unsure how to interpret the data from the Canadian study, given climatic and cultural differences between the United States and Canada.
Furthermore, the Samurai was positioned as a rugged utility vehicle in Canada, where it was priced higher than was planned in the United States. In Canada, the Samurai was priced similar to the least-expensive sport utility vehicles and substantially higher than both light trucks and subcompact cars. Fortunately, there was one continental U.S. market where Suzuki SJ410s were being sold, albeit unauthorized by Suzuki. In Florida, a “gray market” existed for Suzuki SJ410s. Since 1984, approximately 3,000 had been sold there by dealers who imported them from other Suzuki markets, including Puerto Rico, Guam, the U.S. Virgin Islands, and Panama.

Popielarz and Tim O’Mara, one of the agency’s account supervisors, decided to conduct faceto-face interviews with five sales managers and sales representatives at three Florida dealerships that sold SJ410s. They asked the salespeople four questions. The first question was “Who is the buyer?” The dealers said the SJ410 buyer was young, on average between 18 and 30 years old, often single, often a first-time car buyer, and often a student. Young women seemed to like the vehicle, and many sales involved fathers buying SJ410s for their children. Additionally, there was an important secondary buyer group comprising people over 30, both single and married, who bought the Suzuki to use as a third or fourth vehicle.

The second question, “What does the buyer see as competition?” elicited a unanimous response from the dealers. There was no direct competition. Indirect competition included fourwheel drive vehicles, small cars, and convertibles. The SJ410 was less expensive than other convertibles and four-wheel drive vehicles, however, and was more “fun and [had more] style than small cars.”

“Why does the buyer want this vehicle?” was the third question the dealers addressed. The “most fun for the dollars” was usually mentioned. As one sales manager stated, “I don’t see too many people driving down the road in Chevettes and having a blast.” Other replies included convertible top; versatility; utility; gas mileage; durability; cute and unique; handles in rain, snow, and off-road; and great for fishing, camping, and skiing.

The final question (“How are they selling?”) prompted smiles from the salespeople, who typically responded, “People were just lining up to get them. Just couldn’t get enough of them in.” The SJ410s sold for an average price of $8,500 at the three dealerships. One of the dealerships, King Motors in Fort Lauderdale, routinely surveyed its automobile buyers.

The dealership had surveys completed by 150 recent Suzuki SJ410 buyers, which it allowed Popielarz and O’Mara to study. The vehicle buyer filled out the questionnaire; however, in many instances, the buyer was not the ultimate driver. Information on age was incomplete, but of those who gave their age, 56% of the buyers were between 18 and 30; the rest were over 30. One-third of the purchasers were women.

Exhibit 10 tabulates the King Motors survey responses. The majority of buyers learned about the Suzuki through word of mouth or seeing it when driving by the dealership. Most buyers came to King Motors planning to buy the Suzuki rather than the AMC Jeep line, which was also sold there. 6

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Fewer than half of the buyers considered buying another vehicle but when other automobiles were considered, they included both new and used Jeeps, small imported cars, and large used American convertibles.

Four-wheel drive was not the principal feature generating interest in the Suzuki. Only 45% of the men and 32% of the women surveyed said that it was an important factor in their purchase decision. The attributes that buyers rated as most important were price and the fact that it was a convertible model.

Popielarz knew that the Florida buyers who participated in the survey might not be typical of the kinds of people who would buy the Samurai once it was introduced nationwide. He did believe, however, that the survey results gave clues about who the early adopters were likely to be. After interviewing the Florida dealers, Popielarz and O’Mara conducted focus group interviews in California with a group of women aged 25 to 33, a group of men aged 18 to 24, and another group of men aged 25 to 35. All of the participants were actively shopping for a new vehicle that was either a sport utility vehicle, a subcompact car, or an imported pickup truck.

All had visited at least one dealer showroom within the previous two months. During the sessions, focus group members viewed pictures of both the convertible and hardtop Samurais that would be sold in the United States, pictures of a variety of people who might drive the Samurai, a five-minute videotape showing the Samurai in action, and pictures of several vehicles with which the Samurai might compete. Respondents reacted favorably to the Samurai’s appearance, describing it as “cute,” “neat,” and “fun.” The Samurai’s size invoked mixed reactions. Some believed its size would add to its drivability and maneuverability; they said it looked easy to drive around town and in the country. For others, especially those with children or pets, the small size was a drawback. Also, those who planned rugged off-road use said the Samurai was too small. Group members who needed occasional four-wheel drive capability readily accepted the Samurai as a viable alternative to other four-wheel drive vehicles. Those people who did not need the four-wheel drive feature said that it did not reduce their acceptance of the vehicle.

Some people said that the Samurai was exactly what they were looking for in a vehicle. They saw it as a symbol of their independence to do something different and their practicality to drive a versatile vehicle. Interest in the Samurai among focus group members appeared to be linked more to attitude than to age. When asked to choose potential Samurai buyers from the pictures that were shown to them, the interviewees chose the younger, more active people. Most of the interviewees recognized the Suzuki name and associated it with motorcycles or the attributes of the Japanese manufacturers, that is, higher quality and better engineering than the domestic competition. Their price expectations were between $8,000 and $12,000, significantly higher than the planned $5,995 price tag. They were quite knowledgeable, however, about the prices of the competitive vehicles discussed. When told the Samurai’s actual price, most people expressed surprise and pleasure. A few expressed suspicion about the vehicle’s quality at that price.

Conclusions
Popielarz and O’Mara reviewed the market research findings with Pearlstein and Spike Bragg, the agency’s executive vice president. They concluded that any young or young-at-heart person considering the purchase of a small car, small truck, or sport utility vehicle was a prospect for the Samurai. Suzuki should, therefore, avoid positioning the Samurai as a specific type of vehicle so as not to exclude large groups of potential buyers.

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Furthermore, they reasoned that Suzuki should not “overdefine” the vehicle. The Samurai appeared to represent different things to different people. Therefore, Suzuki should try to develop a position with broad enough appeal to attract a wide range of consumers so that each person could define the Samurai in his or her own way and rationalize the purchase decision in his or her own terms. Moreover, the ad agency thought that if each consumer was allowed to personally define the Samurai, this would lead to greater congruence between the vehicle’s promise and its delivery than if Suzuki tried to tell consumers what the Samurai was.

Bragg suggested that the Samurai be positioned as “the alternative to small-car boredom.” He reasoned that sport utility buyers could be attracted to the Samurai just by looking at the vehicle but that small-car buyers would need to be told that the Samurai was a fun alternative to dull automobiles. Furthermore, he believed that many purchasers of small trucks were buying them to use as cars because compact import pickup trucks were less expensive than import subcompact cars and offered more versatility. An “alternative to small-car-boredom” positioning could, therefore, attract buyers from all three vehicle segments.

Pearlstein liked Bragg’s idea but expanded on it. He thought that the Samurai should be positioned as the “antidote to traditional transportation.” It was important that the Samurai not be labeled as any type of vehicle. No ads should refer to it as a car, truck, or sport utility vehicle.

Final Preparations for Presentation to Mazza

Pearlstein and his associates had to present their positioning recommendations to Mazza the following day. Although Mazza had not asked to be shown any creative execution of the position, the four men had developed copy that they believed would help to explain the “antidote-to-traditionaltransportation” position that they had chosen. Exhibits 11 through 16 show examples of their proposed advertising copy.

Mazza had told Pearlstein that he planned to spend $2.5 million on advertising and promotion during the first six months after the Samurai’s introduction. For 1985, estimated Jeep advertising was $40 million for the American market. Industry experts expected total 1985 car, truck, and sport utility vehicle advertising expenditures in the United States to approximate $4.25 billion. Traditionally, automobile manufacturers spent between $200 and $400 per vehicle on advertising and up to an additional $500 per vehicle on incentives such as rebates and extended warranties. Pearlstein and his group had to recommend how the Samurai’s advertising budget should be spent.

A typical automobile manufacturer spent 77% of its advertising dollars on television ads, 10% on radio commercials to add frequency to the television schedule, 10% on print ads, and 3% on highway billboards. The print ads were to run in both general-interest magazines and enthusiast magazines—depending on the vehicle’s positioning as a car, truck, or sport utility vehicle. Pearlstein addressed his colleagues:

If we are to win the ASMC account, tomorrow we must sell our Samurai positioning strategy to Mazza. To sell it to him, we must be convinced that it is the best positioning for the Samurai. Let’s now discuss the pros and cons of the “unposition” we are proposing versus the three options we originally considered. We must be able to back up our positioning recommendation with sound market research data. We must address any risks associated with our recommended positioning. Finally, we must develop a recommendation on how to spend the $2.5 million six-month advertising budget. We should discuss how our budget allocation recommendations would vary according to the positioning strategy chosen.

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Suzuki Samuri

Exhibit 1

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Samurai Convertible and Hardtop

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Exhibit 2

U.S. Automobile Industry Unit Sales

Make

1984 Unit Sales

Compact Sport Utility Vehicles
Suzuki SJ410 (Hawaii)
Mitsubishi Montero
Toyota 4Runner
Toyota Landcruiser
Isuzu Trooper
Total Japanese import

Projected 1985
Unit Sales

2,124
2,690
9,181
4,170
6,935
25,100

2,500
2,800
19,300
4,400
25,400
54,400

98,446
175,177
41,627
84,352
399,710

104,500
225,200
40,100
113,900
483,700

424,810

538,100

Compact Pickup Trucks
Mitsubishi P/U
Toyota P/U
Nissan P/U
Mazda P/U
Isuzu P/U
Total Japanese import P/U 2WD

11,102
144,675
140,864
115,303
32,372
444,316

21,900
171,500
188,700
114,600
46,200
542,900

Jeep Comanche P/U
Ford Ranger P/U
Chevy/GMC S10/S15 P/U
Dodge Ram 50 P/U
Total domestic P/U 2WD

0
173,959
181,692
37,356
393,007

3,800
185,800
200,200
56,100
445,900

Total compact P/U truck 2WD

837,323

988,800

Mitsubishi P/U 4×4
Toyota P/U 4×4
Nissan P/U 4×4
Isuzu P/U 4×4
Total Japanese import P/U 4×4

2,156
81,904
51,082
3,537
138,679

1,900
101,400
65,400
4,900
173,600

Jeep Comanche 4×4
Ford Ranger 4×4
Chevy/GMC S10/S15 4×4
Dodge Ram 50 P/U 4×4
Total domestic P/U 4×4

0
48,110
47,409
12,499
108,018

4,800
56,400
51,200
12,500
124,900

246,697

298,500

582,995
501,025
1,084,020

716,500
570,800
1,287,300

Ford Bronco II
GM Chevrolet S10 Blazer/GMC S15 Jimmy
Jeep CJ/YJ series
Jeep Cherokee/Wagoneer
Total domestic
Total compact sport utility

Total compact P/U truck 4×4
Total Japanese import P/U 2WD and 4×4
Total domestic P/U 2WD and 4×4
Total compact P/U 2WD and 4×4

(continued on next page)
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Suzuki Samuri

Exhibit 2

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U.S. Automobile Industry Unit Sales (continued)

Make

1984 Unit Sales

Projected 1985
Unit Sales

Subcompact Cars
Toyota Starlet
Toyota Tercel
Toyota Corolla
Nissan Sentra
Nissan Pulsar
Mitsubishi Mirage
Honda Civic
Mazda 323/GLC
Isuzu I-Mark
Total Japanese import

781
107,185
156,249
194,092
39,470
2,354
173,561
43,641
4,822
722,155

0
95,400
173,900
225,700
51,400
12,400
196,800
60,000
13,000
828,600

Volkswagen Rabbit/Golf
Chevrolet Spectrum
Chevrolet Sprint
Dodge/Plymouth Colt
Total domestic

85,153
1,646
9,464
82,402
944,668

71,300
51,700
29,700
96,100
1,112,900

1,752,248

2,016,095

Total Car and Truck
Total Japanese car
Total Japanese truck
Total Japanese car and truck

1,846,398
664,813
2,511,211

2,139,500
849,800
2,989,300

Total industry car
Total industry truck
Total industry car and truck

10,128,318
4,048,998
14,177,316

10,888,600
4,675,200
15,563,800

Total subcompact

Note:

Sums of individual vehicle makes do not always equal totals and subtotals since only the top-selling makes are listed.

Source:

R. L. Polk & Company market area report.

11
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 3

Newsweek Study: Factors and the Features That Constitute Them

Factor

Feature

Everyday driving

For highway driving
Acceleration/power
Riding comfort
Ease of handling
Quietness
Maneuverability in traffic
For long-distance vacations
Safety features
Seating comfort
Towing capacity

Passenger comfort

Passenger seating capacity
As a family vehicle
Interior roominess
For long-distance vacations
Seating comfort
Level of luxury
Riding comfort

Quality/durability

Quality of workmanship
Durability/reliability
Quality of materials
Tough, rugged

Styling

Interior styling
Exterior styling
Design of instrument panel
Level of luxury
Ground clearance

Off-road/snow driving

Off-road capability
For driving in snow
Ground clearance
Fun to drive
Tough, rugged

Capacity

Ability to carry large items
Cargo capacity
Towing capacity

Gas mileage

Gas mileage/fuel economy

12
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

Suzuki Samuri

Exhibit 4

589-028

Perceptual Map from Newsweek Study: Off-Road/Snow Driving versus Everyday Driving

13
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 5

Perceptual Map from Newsweek Study: Passenger Comfort versus Styling

14
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

Suzuki Samuri

Exhibit 6

589-028

Perceptual Map from Newsweek Study: Gas Mileage versus Everyday Driving

15
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 7

Perceptual Map from Newsweek Study: Quality/Durability versus Passenger Comfort

16
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

Suzuki Samuri

Exhibit 8

Canadian Samurai Buyer Survey: Suzuki Samurai One Word/Phrase Description

Word/Phrase Mentioned
Fun
Jeep
Great
Goes everywhere
Good
Economical
Practical
Reliable
All-terrain
Fantastic
Pleasure
Tough
Four-wheel drive
Four-by-four
Sporty
Versatile
Note:

589-028

Number of Mentions
41
15
13
11
11
10
9
8
7
7
7
7
6
5
5
5

Samurai buyers were asked, “If you had to describe the Suzuki Samurai using
only one word or phrase, what would you say about it?”

Exhibit 9

Canadian Samurai Buyer Survey: Reasons for Purchasing Samurai

Main Reason for Purchasing

Percent Mentioning

Design/appearance (net)
4×4/4-wheel drive/jeep
Appearance/good-looking/sporty-looking
Convertible
Size/small/compact

64%
39
22
19
8

Economy/value (net)
Economy/economical
Good mileage/fuel saving
Cost/reasonable price
Inexpensive/low price

55
18
18
18
10

Performance (net)
Traction/can go anywhere
All-season vehicle/functional
Fun/fun to drive
Ease of driving/handling/parking

51
19
17
11
7

Reliable/service (net)
Dependable/reliable
Quality/well-made/good
Need for jeep/second vehicle
Suits my life-style/needs/I like it

19
13
7
8
5

Note:

Samurai buyers were asked, “What are your main reasons for purchasing this vehicle?”

17
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 10

King Motors’ Suzuki SJ410 Buyer Survey
Total

Total Men

Total Women

Where heard about Suzuki
Word of mouth
Dealer location
Ft. Lauderdale newspaper
Radio
Pompano Shopper

41%
30
20
6
3

41%
36
17
5
1

42%
22
24
7
5

Came to dealer to see
Suzuki
AMC Jeep
Encore
Alliance
Wagoneer
Other

76
17
1
0
0
5

75
21
0
0
0
4

77
14
2
0
0
7

Considered other vehicle
Yes
No

40
60

42
58

37
63

Considered AMC Jeep first
Yes
No

28
72

30
70

25
75

Important purchase factors
Price
Convertible
Gas mileage
Four-wheel drive
Size of vehicle
Color
Driving and handling
Other

76
62
46
40
39
22
20
7

72
59
46
45
37
26
22
9

80
66
45
32
41
18
16
5

18
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

Suzuki Samuri

Exhibit 11

589-028

”End of Dull” Proposed Print Ad

19
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 12

”Dull Barrier” Proposed Print Ad

20
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

-21-

Exhibit 13

“Suzuki and Driver” Proposed Print Ad

589-028

This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

589-028

Suzuki Samuri

Exhibit 14

Copy for Proposed Television Ad

Setting:

A road leading from awesome mountains.

Atmosphere:

Dawn. Mysterious electrical storm flashes over the mountains. Something is about to happen. Something strange or wondrous.

What happens:

We see headlights approaching camera. From the dramatic music and overblown announcer, whatever’s coming must be
magnificent. Then the little Suzuki drives by at a casual speed. People inside wave to camera, giggle, car drives out of frame. Camera does double take, then watches car drive away.

(Dramatic music begins)
Voice over:

”Prepare for the most extraordinary event of your lifetime. . .”

(Music builds)
“An event that will forever alter the course of mankind and womankind. . .”
(Music builds)
“The next major turning point in the history of all civilization.” (Music crescendos, then stops)
(Beep, beep)
People in the car:

“Hi!”

(Music continues)
Voice over:

”Introducing the new Suzuki Samurai 4×4.

(Fades)

The beginning of the universe was dull by comparison. . .The discovery of fire pales in significance.”

(Live announcer dealer tag)

22
This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

-23-

Exhibit 15

Storyboard for Proposed “Dull Barrier” Television Ad

589-028

This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.

-24-

Exhibit 16

Storyboard for Proposed “Amusement Park” Television Ad

589-028

This document is authorized for use only by Syed Hassan at Lahore University of Management Sciences until December 2013. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860.


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