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Subaru is a brand with Japanese origins that has built its popularity in most developed countries of the world. Its history shows a clear interest in technology and innovative solutions complemented by high quality and reliability. Thus, the new project proposal will root itself in these ideas, targeting such populations as Millennials and early Generation Z. Based on the previous assessment of the company, the chosen focus for the new product is an environmentally-conscious plug-in vehicle with electronic safety appliances.
Company Description, History, and Competition
First, it is necessary to revise the essential information about Subaru to see its opportunities for marketing the selected product. The company was founded in 1953, although the history of its aircraft research laboratories goes as far as 1917 ( Our story, n.d.). Thus, one can see that Subaru has been present for all significant developments in the automotive industry, continuously adapting its processes. Currently, the brand focuses on two divisions cars and aircraft, and the automotive segment can be further divided into vehicles for everyday use and motorsports cars. One can see that this approach to manufacturing results in a variety of products that Subaru offers to its clients. In the automotive division, Subaru sells many types of vehicles, including sport utility vehicles (SUVs), crossovers, and hatchbacks. Moreover, automobiles range from luxury models to vehicles suitable for middle-income drivers. It should be noted that Subaru already offers cars with electric and hybrid engines in addition to classic petrol and diesel options the company is on par with other large manufacturers.
The range of sold cars increases the number of possible competitors for the business. Restricting the list to companies that manufacture cars, one can consider such brands as Toyota, Hyundai, Honda, Nissan, Ford, Kia, and Mazda. All manufacturers have a wide range of crossovers and SUVs, which are often chosen by the demographic targeted by Subaru. Furthermore, such companies as Toyota also produce and sell electric and hybrid vehicles, which calls for Subaru to innovate.
SWOT and Rationale for the New Product
The first strength of Subaru is its long history in the automotive industry. Over the years, the company has adapted to the changing customer needs, which shows a level of flexibility and a clear understanding of the markets progression. Subaru also holds a rather high position in the market of the United States it has high sales levels that are comparable to other prominent brands ( Net sales and operating, 2019). Next, Subarus segmentation is apparent as it targets people who love outdoors and are searching for a reliable off-road vehicle prepared for rougher terrain (Schendler, 2015). The companys recognition among rally drivers further strengthens its position as a manufacturer of high-quality cars. Finally, one should note the technical advancement of Subaru the brands vehicles are loaded with features and technologies such as EyeSight, pre-collision brakes, or adaptive cruise control.
The weaknesses of the brand are connected to its strong sides as Subarus role as a rally car producer can undermine its appeal as a manufacturer of daily use vehicles. Moreover, it is currently almost absent from emerging markets and developing countries. The recent issue with a product recall is another point of concern ( Subaru recalls 100,000 more cars, 2018). Another scandal in manufacturing that affected several car producers did not harm Subaru as much the companys US vehicles did not have flaws in the self-reported gas mileage (Gilboy, 2018). Nonetheless, the problem in Japan can lower the trust between the company and its clients worldwide.
The foremost opportunity for Subaru is to continue adapting its products for the changing customer base. Currently, the new generations (Millennials and Generation Z) are looking for a car that is efficient, technologically advanced, and environmentally-friendly (Brand, Cluzel, & Anable, 2017). Thus, the electric and hybrid cars segment seems to be the most appropriate for development. However, the threat of increasing competition and low awareness of the customers about the product are the limits to Subarus outreach.
Thus, the chosen product for this marketing plan is a widened range of plug-in hybrid and electric vehicles. Subaru already has some cars with these features, and the research and manufacturing of these cars may attract a new audience while also capturing the existing customers. Furthermore, these cars may be positively viewed in markets where environmental policies put restrictions on diesel or petrol engines. The main weakness of this plan is the need to review the line of original vehicles, while the central threat is the customers low interest in the new line.
Segmentation Approach
Subarus segmentation approach already demonstrates a level of awareness about peoples preferences. At the present moment, the primary demographic for Subarus cars are urban adventurers people who spend time in both in and outside the city. These individuals can be single or married; they are relatively young and without children. Furthermore, they like to travel by car, often venturing into areas with bad roads or rough terrains. This segmentation can be seen in the companys modern product line, which heavily features crossovers, SUVs, and hatchbacks cars that are compact but not small. In Japan, Subaru also offers smaller vehicles to comply with the local laws, but US-marketed vehicles are much larger. Furthermore, most Subaru cars for this segment have full-time all-wheel drive and high ground clearance, which are appropriate for some logging roads.
This segment could be expanded to include people who care about the environment but do not want to sacrifice comfort and technological advancement at the same time. The current green trends are further strengthened by the growing amount of eco-conscious legislation and peoples recognition of climate change as a global issue. Thus, many people informed about this problem are searching for a vehicle that will not harm the air quality substantially and hybrid and electric cars with easily rechargeable batteries are a good solution.
Geographically, this marketing plan chooses city-dwellers from developed countries since plug-in cars require roads with fully-equipped charging stations and easy access to electricity. The chosen age group is from 25 to 40 years old individuals of this age can be single or in a relationship, with or without young children. The previous characteristics also require the segmentation to focus on middle- and high-income populations since electric cars continue to be rather expensive. However, the company should not position all models in the luxury segment, and the middle-income range should be prioritized to reach more people. For example, hybrid models can be emphasized in areas where charging is not always available, while fully electric vehicles can be marketed in large cities with good networks of charging stations.
Target Market
Analyzing the chosen segmentation strategy, one may see the uniting features of the target audience for the new Subaru product line. All people described above are young, active, urban, and interested in alternative sources of energy, as well as current environmental issues (Mertl, 2018). Major US, UK, and European cities, as well as developed regions of China and Japan, are the primary locations that should be reviewed (Phillips, 2019). For example, Norway is a country with the highest share of electric cars, and its goal of improving the infrastructure for sustainable vehicles is an excellent opportunity for Subaru to market its products (Phillips, 2019). Other European countries and the US provide an option of choosing between hybrid and fully electric cars, depending on the legislation and peoples preferences.
Positioning Statement
For the chosen target market of young, environmentally-conscious urban adventurers, Subarus cars offer a combination of high quality, reliability, technological advancement, and sustainability that is currently not as flashed out among other car manufacturers. Subarus involvement in the improvement of the environment and sustainable manufacturing spans across the last decade. For example, since 2008, the company has been on its way to fully offset the carbon footprint of its customers (Gilboy, 2018). Subaru is the first zero-landfill manufacturer in the American automotive industry, and the firm often holds meetings, plants trees, and explores new ways of helping to alleviate the problem of climate change ( Zero landfill achieved, 2004). This is the unique value of Subarus products and services to the customer, and this position should become the center of the new marketing campaign. The companys efforts in creating hybrid and electric cars and its exceptional attention to appliances for a safe driving experience are two other points that deserve to be mentioned.
Marketing Mix
Product
Subarus products are tangible goods; this marketing plan considers the new line of hybrid and electric plug-in cars. These vehicles are designed according to the traditional style of the company, including compact SUVs and crossovers, and featuring a smaller model for markets with strict laws about the carbon footprint. The product line is universal enough to attract both city-dwellers and people interested in travel outside of the citys limits. Furthermore, the customization of each model with appliances and technology should be similar to the current system that Subaru offers online and in stores. As a result, all models will have a range of prices according to their features and category. The quality of the new line has to be emphasized in comparison to its competitors, with a focus on reliability and sustainability. All cars are practical the use of appliances such as EyeSight and the ways of recharging the battery are explained to the customer; the technology has an intuitive interface. Additional benefits are offered for the new line, including extended after-sale service and warranty.
Place
Currently, Subaru uses two primary channels of distribution its own online store and a wholesale-retail chain that allows the company to sell vehicles across the US. The online store offers a high degree of product customization, and Subarus delivery system further helps this channel to be popular among customers (Guo, Zhu, Jiang, & Li, 2019). Subarus authorized dealers also undergo an assessment of their contribution to the environment this procedure can attract the target market and increase sales with increased promotion (Mathur, Valecha, & Khanna, 2018). Another opportunity is to open Subarus personal stores that demonstrate the benefits of plug-in cars and allow for direct sales to customers without the control of wholesalers and retail chains. Online sales also play a significant role in promoting green options since they can provide clients with vast amounts of information about cars (White, 2019). The website should be expanded to feature the new line and its characteristics.
Price
The pricing of Subaru can be described as competitive for some models and luxury for high-end vehicles. All prices are fixed, depending on the configuration of each vehicle, and online prices also include the cost of shipping. The strategy for plug-in cars can be applied similarly luxury models with high-tech appliances can be priced according to the market of luxury cars. In the middle-income category, however, a competitive approach is advised to increase the interest of customers is switching from petrol to an electric engine. Nonetheless, some customers are willing to pay more for a car with a lower carbon footprint this is especially relevant for more prosperous cities and populations (Musonera & Cagle, 2019). A chosen model with minimal configuration can be priced using the market penetration strategy. Still, it may negatively contribute to the overall appearance of Subaru as a high-quality vehicle manufacturer. Thus, it is advisable to avoid excessive discounts and focus on promotion and post-sale initiatives.
Promotion
Subaru focuses on traditional media for advertising, using press publications and television or radio advertisements. While this approach may have been practical for previous generations, Millennials and Generation Z, chosen for this product line, spend much more time online (Guo et al., 2019). Thus, a major part of the promotion efforts should be focused on online publications (specialized online magazines and newspapers) and the companys own website. Furthermore, collaboration with bloggers and social media personas may be another way to attract an audience and demonstrate the brands stance on environmental issues. A consistent message showing the benefits and prospects of driving a plug-in vehicle should be delivered to the target demographic. Subarus presence on social media has to highlight its previous efforts in sustainability to showcase the long-term commitment of the company to their ideology. Digital marketing is an effective way to attract consumers in the modern online-based world. Banner advertisements, social media calls to action, and native marketing are among the main strategies to employ.
Success Metrics
In marketing, success can be measured by a variety of behavioral, economic, and attitudinal metrics. Only one of these fields cannot adequately demonstrate the outcomes of a marketing project. Among the financial options, sales revenue seems to be the most transparent. It is a clear indicator of whether the cars are selling or if the customers prefer diesel and petrol engine lines. Next, the number of sold items and the comparison of these rates to other modes of the company, as well as similar electric cars of Subarus competitors, should show the effect of Subarus efforts. The contrast with other brands is especially necessary to see customers knowledge about Subaru as a manufacturer of electric cars. Finally, Subaru can measure its social media presence and feedback as well as brand awareness through surveys pre- and post-sale, click-through rates, visits to the website, and mentions on social media (Hanssens & Pauwels, 2016). Online performance metrics are directly connected to the companys increased attention to online promotion.
International Considerations
This plan is heavily focused on the US market, and its implementation in other countries requires adjustments. For European countries, Subaru has to consider the legal restrictions put on vehicles that refer to carbon emissions, electric and hybrid engines, and car dimensions ( CO2 emission performance, 2020). The European Union sets specific emission targets for manufacturers to which they have to comply. For markets such as Japan, the size of the car is also relevant. The countrys small dimensions and high population density require people to buy smaller cars to park and drive without complications. Another issue that may arise is related to models names and their marketing approach. It is clear that different nations have their own linguistic and cultural features that can make certain names undesirable or even offensive.
Conclusion
This marketing plan presents an option for innovation and environmental sustainability that aligns with Subarus projects completed or initiated in the last decade. The history of conservation and carbon print offsetting make the project not merely viable but natural the progression to a broader range of electric and hybrid vehicles should not be surprising for the brand. One of the companys strengths is its established image as an innovator, thus attracting a younger and more ambitious clientele. The target demographic is young, middle- and high-income urban adventurers with an increased concern about environmental issues. The segmentation centers on geographic locations (cities and countries with a developed infrastructure), income levels, and lifestyles. The products in the marketing mix include several hybrid and electric plug-in models with customization. The pricing uses luxury and competitive strategies, and place and promotion share online and offline channels. The focus on post-sale support and online outreach makes the current market plan appealing to the younger audience.
References
Brand, C., Cluzel, C., & Anable, J. (2017). Modeling the uptake of plug-in vehicles in a heterogeneous car market using a consumer segmentation approach. Transportation Research Part A: Policy and Practice, 97, 121-136.
CO2 emission performance standards for cars and vans (2020 onwards). Web.
Gilboy, J. (2018). Subaru: No U.S. vehicles affected in emissions, efficiency scandal. Web.
Guo, S., Zhu, L., Jiang, S., & Li, B. (2019). The application of marketing 4P theory in automobile sales. Advances in Economics, Business, and Management Research, 91, 255-260.
Hanssens, D. M., & Pauwels, K. H. (2016). Demonstrating the value of marketing. Journal of Marketing, 80(6), 173-190.
Mathur, S., Valecha, R. R., & Khanna, V. (2018). A study on the impact of green marketing on consumer buying behavior in automobile industry. International Journal for Advance Research and Development, 3(1), 286-290.
Mertl, S. (2018). Subaru targets urban adventurers as segments become more niche. The Globe and Mail. Web.
Musonera, E., & Cagle, C. (2019). Electric car brand positioning in the automotive industry: Recommendations for sustainable and innovative marketing strategies. Journal of Strategic Innovation and Sustainability, 14(1), 120-133.
Net sales and operating income by business segment. (2019). Web.
Our story. Subaru heritage. (n.d.). Web.
Phillips, I. (2019). Top 18 electric car countries in 2020. Web.
Schendler, A. (2015). Subarus new sustainability pledge is pretty weak. Heres why. Grist. Web.
Subaru recalls 100,000 more cars due to lax quality inspections. (2018). Web.
White, S. (2019). Principles of marketing (2nd ed.). Web.
Zero landfill achieved. (2004). Web.
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