Suzuki Samurai Case

SITUATIONAL ANALYSIS

Michio Suzuki founded Suzuki Loom Works, a privately owned loom manufacturing company, in 1909 in Hamamatsu, Japan. In 1954 it changed its name to Suzuki Motor Company, Ltd.

Suzuki changed its policy many times according to the market requirements. Suzuki started with introducing its products in Japan and then exporting it to various foreign markets (100 countries). It started off with motorcycles and was now producing trucks & subcompact cars as well.

Japan's voluntary restrain agreement (VRA) quotas made it impossible for Suzuki to export any cars other than the Sprint to USA in future. In1985 Suzuki introduced the SJ413 an upgraded model of SJ 410 and designed especially for US market as further delay would increase the threat of 'Brand Clutter'. Suzuki planned to market two versions of the Samurai in USA, a convertible and a hard top.

There were other players who were also planning to enter the market. Hyundai Motor Company & Zavodi Crvena Zastava (yugo) were expected to enter in 1986.

DECISION PROBLEM

Suzuki, was now facing the following question?

* How should SJ 413 be positioned in the US market?

POSITIONING

From the exhibits provided we can figure out that there were two things which were important for the customer while selecting a vehicle:

* Physical Characteristics (Design/appearance)

* Price

Based on its physical characteristics, the major three positioning options for Samurai SJ413 were:

* Position as a compact sport utility vehicle

* Position as a compact pickup truck

* Position as a subcompact car

Positioning as a Sports Utility Vehicle

The most obvious position for the samurai was as a sport utility vehicle. It looked like a "mini- jeep" and had 4-wheel drive capability.

The positioning of Samurai as sport utility vehicle solely concentrated on the low price and its ability to squeeze through places where bigger vehicles could not go. But there seemed to be a problem of whether the positioning could generate the envisioned sales volume, as the market for sport utility vehicle was relatively small.

Important: The market for sport utility vehicle was relatively small. In 1984 it was less than 3% in the U.S market. The goal was to build as annual sales of 30,000 units within 2 years of its introduction. To achieve this it was required to exceed the combined 1984 sales of all imported sport vehicles.

Positioning as a Compact Pickup Truck

In this the advertising should emphasize on the vehicle's looks

The Positioning strategy would only indicate uniformity with other truck prices but rather uphold a serious, practical, male-targeted tough truck image.

Important: Women are also potential buyers for this vehicle. They were 1/3rd of the purchasers in case of SJ 410.

Positioning as a Subcompact Car

This would open up the largest of the three possible markets.

But if it was positioned as a car then it might not meet the expectations of the consumers because the Samurai was built on a truck platform, its ride was stiffer and less comfortable than the least-expensive subcompact cars.

There was also a 4th option available that was the "unpositioning" strategy

The 'unpositioning' Suzuki Samurai gives ASMC the opportunity to target the entire potential consumers segment. The Unpositioned Suzuki Samurai will appeal the users of pick up truck, subcompact cars and sports utility vehicle. That ensures higher consumer acceptance by offering a car for various needs. It can also result in:

* Loss of potential (niche) market

* Trouble for sales people as they would have to explain the various uses of the vehicle

* Increased confusion among customers when they see that the car is also meant for different segment of people, which can confuse them. Everybody likes to have a car for his or her own convenience.

The advertising agency wanted the car to be positioned as "antidote to traditional transportation" and thought an "alternative to small-car-boredom"

Therefore, unpositioning could therefore attract buyers from all three-vehicle segments. But, in the long run the company needs to highlight a more specific need to motivate the consumers to purchase Samurai SJ 413.

RECOMMENDED STRATEGY

Before positioning strategy is decided few other things have to be considered:

Target Market:

Suzuki wants its Samurai to sell extensively in the US market.

* So