‘Suzuki Samurai’ – Case Analysis
This Document weighs the potential benefits and cons of the various positioning alternatives for the Suzuki Samurai model of ASMC and thereby evaluating the pros and cons of the proposed “unpositioning” strategy.

Group 2: Abhinav Nimje, Abhishek Magdum, Nirali Kothari, Nikita Sharma, Ritu Bhargarh, Ujjal Kumar Boro

1) Situational Analysis:
Over the years Suzuki‟s business expanded across 100 countries because of the economic cost of the automobiles combined with the superior Japanese technology. In 1983, General motors purchased 5% of Suzuki, and launched the Chevrolet Sprint, a subcompact car for US market which turned out to be a great success. Thus, Suzuki decided to set its new subsidiary American Suzuki Motor Corporation (ASMC) in US and appointed Doughlas Mazza as its head to create the marketing plan for their new launch, SJ413.

2) Problem Identification:
Success of the GM Sprint showed Suzuki that the market existed in US for its Cars. Suzuki was unsure whether GM would market the cars if Suzuki introduced different unique vehicles in the US market. So, to capture the potential market, company decides to come up with its own plant with capacity of 200,000 vehicles in Ontario, Canada. The plant was expected to be operational by 1989. Suzuki felt it would be too late to wait till 1989 as brand clutter will increase due to presence of the other brands and which may further limit the success of Suzuki. This was the problem and to overcome this problem company decided to go ahead with the immediate launch of its SJ413 by November 1985.

3) Decision to be made:
Mazza‟s goal was to establish ASMC as major car company in US and his main challenge was positioning Suzuki Samurai in US. Based on Samurai‟s physical characteristics there were three options available: positioning it as a compact sport utility vehicle, as a compact pickup truck or as a subcompact car. A decision was required to be taken for the potential targeting strategy.

 4 P’s:
•4WD, Convertible and Hardtop Options •Versatile, Good Mileage and Better Design • Higher Engineering Quality

•Retail Price=$5995 •Very less than Domestic Price and Consumer Expectations

•Selective Distribution in California, Florida and Georgia • US auto industry to grow by 10% and Japanese Imports to increase to 19.2% in1985

Product

Price

Place

•Positioning options as Compact SUV, Subcompact Car, Compact Pick up Truck •Planned spend=2.5mn$

Promotion

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 Positioning Strategy:
I. As a Compact SUV:  Pros:
  Foreign owners are appreciative of Samurai‟s reliability, manoeuvrability and ease of repair Samurai is smaller and lighter than any other SUV in the US and is proposed to price at $5,995 which is much cheaper than other SUVs (which are priced upwards of $10,000). ASMC can position the Samurai as a „Tough little cheap jeep‟, highlighting the compact yet sturdy structure as well as the price advantage that the vehicle offers. The main disadvantage of positioning is the relatively smaller scope for generating sales volume since the market for SUVs is less than 3% of the total automobile industry. This is not in keeping with the sales volumes envisioned by ASMC because in order to build annual sales of 30,000 units in 2 years, the Samurai will have to exceed the 1984 combined sales of all imported compact SUVs, which is easier said than done.

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II. As a Subcompact Car:  Pros:
 Subcompact cars have the largest market in US automobile industry with sales of 1,752,248 units for the year 1984. Suzuki‟s strategy of launching Samurai for low price and the versatility it is offering will attract attention of buyers who are shopping for economy car. In Europe SJ413 was successful in setting the trend that the professionals drove SJ413 to their workplaces. Same can be thought of replicating in US. Samurai‟s mileage of 28 miles per gallon in city and highway driving is one of the advantages for Suzuki to position Samurai as Subcompact car. Samurai‟s looks can be emphasized during promotion as styling is one of the considerations by buyer while purchasing. Samurai was built on a truck platform and positioning it as Subcompact car might not match with the consumers‟ expectations. Passenger comfort is one of the factors considered as purchasing decision by buyers. Ride on Samurai is stiffer and less comfortable than even the leastexpensive subcompact.

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 Cons:
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III. As a Compact Pickup Truck:  Pros:
 This market positioning addresses the shortcoming of the SUV positioning by offering a market which is two and a half times the size of the market for compact sport utility vehicles. The Japanese trucks have high level of consumer acceptance in US market accounting for 54% of total 19084 compact pickup truck sales The tariffs on their exports from Japan to US enforce a tariff of 25% as compared to the 2.5% imposed on cars. To achieve selling target of 10,500 vehicles

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positioned as trucks would thus reduce the margins of the product thus hitting the profitability of the company in the long run. The advertising campaign would have to be very serious, practical, male targeted and designed to portray Samurai as a tough truck. Thus no unique selling proposition is portrayed through the advertising which will not create a strong brand image for Suzuki.

IV. Proposed Strategy: Unpositioning  Pros:
 The un-positioned Suzuki Samurai will appeal to a larger pool of consumers and ensure acceptance. In the highly competitive sector of automobiles, the company may be able to carve out a special place for itself in the market and establish its dominance. If each customer defines the car according to his own desire, it would lead to better congruence between the vehicle‟s promise and value delivered, ensuring better consumer satisfaction. This strategy may also help to beak the dominance of the already established players in the sector as Suzuki would be playing on its own plane where none other companies have significant presence. This strategy would augment sales and help the company in its long term strategy of establishing itself as a major player in the market. With the purpose of versatile transportation being addressed by the product offering, the company may prove to be a major threat to the existing players by taking up their share of the market. The strategy is very delicately poised as the vehicles offered may face rejection by the consumers in case they are not able to associate with the product or are confused about its utility/positioning. The thought of “alternative to small-car boredom” would lead to considerable confusion and a difficulty in choosing which features to emphasise on while trying to gauge the need of a potential customer. In addition, by adopting this strategy, the company would have to forego the opportunity cost of establishing as a market leader in the niche segment of the “Tough-Little-Cheap-Jeep”. This trade off and the possibility of confusion amongst the consumers would need to be strongly addressed before taking up this strategy. In the long run, the company may be advised to highlight on a specific need of consumer so as to increase the sales of the vehicles.

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4) Conclusion:
The company should go ahead with the unpositioning strategy so as to appeal the larger consumer base during the early adoption phase. Current advertising campaign of the company looks appealing but the company should revise its planned expenditure on promotions. The major publicity of SJ413 should be targeted through the word of mouth (41% users heard about SJ410 this way) and spend on the print and media ads should be adjusted accordingly.

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