Smart ForTwo - Integrated Marketing Communications - Case Study Example

SMART FORTWO INTEGRATEDMARKETING COMMUNICATION Executive Summary This integrated marketing communicant plan outlines communication strategies that will be implemented to create and increase awareness of Smart ForTwo. The target audience for the proposed campaign is college students and recent graduates. The program aims at attracting those who have negative opinions towards Smart ForTwo. These issues will be raised by Smart through internet advertising, television advertising, experiential marketing, and promotions on university campuses. The marketing and communication plan objectives will be achieved by these integrated marketing communications. Contents Executive Summary 2 MARKETING OBJECTIVES 4 Situational Analysis 4 SWOT (Strengths, Weaknesses, Opportunities, Threats) 4 Product History 7 Target Audience 8 Competition 10 Messaging and Branding 11 Vehicles of communication 13 Media Plan 19 Budget 19 Conclusion 20 Scope of this Integrated Marketing Communications Plan This plan provides an outline of the objectives and strategies for communication needed to execute integrated marketing successfully. Moreover, it also provides an outline for activities for launching communications for the product. MARKETING OBJECTIVES 1. Increase sales of Smart ForTwo among current students and those that recently graduated. At least 550,000 students and graduates are expected to purchase Smart ForTwo in two years. 2. Utilize advertising, promotions, and marketing outlined in the plan to increase Smart ForTwo’s market share in two years by 20% Communications Objectives 1. By the end of one year 20% of the target audience should be aware of Smart Fortwo cars. 2. Increase the number of Smart ForTwo newsletter subscription by the end of the first year by 25% 3. Increase the visit to dealerships by our target market by 20% by the end of the first year. Issues and Challenges It is hard to reach the target audience because marketing cannot easily nail down college students (Policastro, 2014). Smart company will therefore have to be very innovative and creative in order to effectively communicate with this target market. Many marketing attempts seem to find it challenging to penetrate through this target group. Situational Analysis SWOT (Strengths, Weaknesses, Opportunities, Threats) Strength Affordable to purchase Cheaper car insurance Easy parking Environmentally friendly Fuel Efficient Established brand and dealership Online Platform Weakness Car size Public perception Opportunities High Insurance Costs High Fuel Costs Kyoto protocol Threats Stiff competition Strengths College students pay fees and have a lot of needs that need money. However, Smart ForTwo is affordable as it can be purchased for around $13, 900. Its fuel mileage is great as it uses less fuel compared to other car brands. The car is small making it amazingly easy to find parking space. If the parking is full it can be squeezed close to the pavement. The Smart ForTwo is fuel efficient reducing the amount of pollution in the air. There is an online platform that customers can choose the design and color of the car they would like. They can make deposits online and the car delivered to them wherever they are. Smart company is owned by Mercedes Benz a well-established automobile manufacturer in the industry. Its dealerships distribute the Smart ForTwo and this enables the public trust the cars. There is a twenty four hour technical support known us ‘smart move’ which assists customers whenever they have a problem on the car. Though the car is small it provides safety assurance in case someone involves in an accident. This was tested when a SUV weighting 7,000 pounds was put on a Smart ForTwo Car weighing 2,000 pounds. The car’s tridion cell never bent. Weaknesses The public believes bigger cars are stronger and safe while (Esurance Insurance Services, 2014) a mini car like Smart ForTwo is perceived as one that can easily be blown away by wind (Schwoerer, 2007). Smart will have to do a lot of demonstrations for testing its safety in order to change the public perception. The Smart ForTwo can only accommodate two people and has limited space for luggage. The target market involves college students who would like to accommodate two or three of their friends to spend time together. This car does not serve this purpose. Opportunities Fuel prices are high a trend that is affecting almost every country in the world (Australian Institute of Petroleum, 2014). College students usually want to spend less on fuel as they also have other needs that need money. They will therefore be forced to look for vehicles that are fuel efficient. The Kyoto protocol expects every country to reduce gas emission to a certain level. The government will therefore continue develop measures that will meet these objectives. This will force customers to purchase vehicles that are environmentally friendly. Threats In 2008 General Motors introduced the GM & U College Discount Program to great customer loyalty by targeting college students (GM Inside News, 2008). Lexus has also started manufacturing high quality cars while Volvo brand is growing as the leader in safety (Volvo, 2014). However, none of them has a smaller, safe and fuel efficient car like Smart ForTwo. Product History Product Background The Smart ForTwo was introduced in 1988 by Daimler AG. The aim was to design a car that is small, safe, fuel efficient and environmentally friendly. Its features include offset passenger and driver seats, H-point seating, short overall length, Tridion cell (safety cell), plastic body panels that can easily be interchanged, and De Dion tube (Smart 2014). Current Problems Facing Product The Smart ForTwo’s biggest problem is that it has not specifically focused on college students and recent graduates. Very few of them see Smart ForTwo their ideal car and many are not aware of it. Another challenge or problem is that with many car brands emerging with different designs customer brand loyalty is not guranteed (Power Decisions Group, 2014) and Smart is not an exception. Smart ForTwo also faces the economic problem. Few people are buying new cars with deterioration of income. Recent graduates may not find employment easily or a well-paying job that would attract them to make big purchase decisions like buying a new car. Current Marketing Strategy The Smart Company has a current campaign for Smart ForTwo. The campaign includes cinema and online spots, print ads, TV ads, online banners and posters, social media, and trade shows (Daimler, 2011). The campaign is also integrated on the company’s website (www.smart.com). Target Audience With the rise in current economic conditions and cost of college tuition Smart ForTwo focused on the price as the most influential factor for students in college. When purchasing a vehicle college students are more interested in its price and the cost of fuel (Undergraduate Research Community, 2014). The target market was narrowed to 21-25 years of age based on the actual vehicles college students’ purchases. Out of 100 students who purchased cars 75% of them said their parents bought for them. The target market was settled to 21-25 years because there was a high chance that more students after two or several years of their graduation will purchase a new vehicle. The company also focused on adults aged 35-50 years old returning to school. This group has disposable income that they may be willing to spend on purchasing a new car. Therefore Smart ForTwo settled on college students aged 21-25 years and 35-50years to capture a large share of each market. College students were asked what influenced their purchase decision 80% chose price as a determining factor to purchase a car. 75% commented that a car that can consume less fuel is ideal for them. Additionally, 85% commented that it was important to have a car that assures safety, while 72% said car design and quality were the main factor. The Smart ForTwo will be positioned as stylish, small, high quality, energy-efficient and affordable. Target Audience Purpose College students aged 21-25 years Age 18-20 were left our because it was believed that they are sophomores and freshman who are still getting used to the college environment and may not be reading to buy a new car. Most of the students at age 21 are at the junior level thinking of graduating and further. They will have saved some money to make a big purchase. When asked when they would want to buy a car 25% said they would purchase one after 1 year of their graduation, while 48% said they would not purchase a car while in college but after graduation. 21-25 year old graduates Graduates are more established in terms of income compared to undergraduate students. Therefore, they are in a good position to purchase a new car. 35-50 year old students and graduates As the world economy hit a crises many middle-aged people have go back to college. They are likely to have saved more money than young college students since they have been working for over ten years. Neglecting them as a target market would be a major mistake. During these tough times this group is likely to purchase a new affordable vehicle. Competition Comparison of Product GM provides a discount program specifically for college students and recent graduates. Suzuki and Toyota also provides discounts to new and used cars to students who have six months to graduation or two years after graduation (Car Locate, 2010). However, none of these auto manufacturers have a small car that is fuel efficient, easy to park, less expensive insurance, low car price, and safe. Entry Barriers Low awareness has been affecting Smart ForTwo making it difficult to enter this market. Other motor manufacturers are having problems of providing fuel efficient and low price vehicles to the target market. Many people are not spending much during in this tough economy. If this continues them it will be difficult to sell new cars because most of the graduates will be servicing student loan debt. Competitor Differentiation Toyota and Suzuki allow college students with six months to graduation and 2 years after graduation to pay less $1000 dollars. There is no down payment for Toyota and provides free roadside assistance for one year. The discount applies to both new and used vehicles (Opstitnik, 2011). Suzuki on the other hand provides discount on all new models. Messaging and Branding Branding Design The Smart ForTwo is a brand that positions itself as affordable, energy efficient, safe, easy to park and stylish mini car. Positioning Statement ‘Small is Smart Choice’ is the statement that will be used to position Smart ForTwo. It will communicate to the target market that though the car is small it is bigger in terms of performance. It is affordable and uses less fuel reducing fuel cost. It is easier to find parking space as it can easily be squeezed in a small space. The insurance fees for Smart car are easier and one can customize the design and color to their own preference. Choosing Smart ForTwo is making a wise choice. Value Propositions Smart ForTwo offers proposition to urban setting as being a reliable, two-door best choice compared to bulky four-seaters of traditional vehicles. Smart company saw that it was not enough to differentiate themselves from competitors through fashion and style. It provided a ‘mobility’ concept in addition to the Smart ForTwo. This concept refers to a set of services including train tickets, discounted rental rates, ferry rates and parking rates, among other ways of transforming a Smart car. These services were communicated to a customer as a complete lifestyle package to ease the mobility of Smart owners. This gives it a competitive advantage over its competitors. Major Messages and current views of Customers Problem Addressing the Problem Message Smart ForTwo is weak, unstable and unsafe Conduct a public demonstration like the one Insurance Institute for Highway Safety (IIHS) to assure of the safety Smart for Two may be small but it carry the weight of 7000 pounds SUV. No cargo space Should give exact measurement of available cargo space The available cargo space is enough to fit two adults’ suitcases. Major Customer Messages Core Message Message Authentication Smart for Two may be small but it carry the weight of 7000 pounds SUV. Smart For Two is safe to drive and stable. It has a tridion cell than protects an individual from being hit hard The available cargo space is enough to fit two adults’ suitcases. Currently the company is working on a new model that will create more space Vehicles of communication 1. Promotion Promotion is allocated 50% of the marketing plan budget. The internal research that surveyed 150 Smart ForTwo owners on how they knew about the company and the product, 128 reported friends and family (word of mouth), and events. Therefore, major marketing plan efforts will be directly towards events and promotion for the Smart ForTwo. The aim is to increase awareness of the product and allow customers to have emotional experience with the brand through experiential marketing. The Smart ForTwo will be promoted within the campus through the selection of universities based on demographics and location. 35 campuses are targeted across the country to maximize the promotion results. Some students from these campuses will be hired by Smart Company as interns to represent the product as ‘Smart Ambassadors’ to spread the word of mouth of Smart ForTwo to their colleagues in their respectful campuses. Selection of interns will be based on social skills, work ethics, and responsibility in order to promote the brand of Smart within with their age group. Utilizing of interns will ensure that product promotion will be conduct at local level or grass roots. Interns will be trained and given methods they can use in promoting the Smart brand within the culture of their campuses. The selection of universities will be based on its location, the number of students who live near campus or on campus, sports fan base and the university enrollment. There will be a selection of four interns from each university making a total of 140 student representatives of Smart brand across the nation. This will also ensure that Smart has gatherers of network information. $1500 will be paid to each intern spread across three semesters. There will be a competition between interns from different universities to reach their target. Below are the objectives se for each student ambassador of Smart: Each team will be required to host an event quarterly to promote Smart ForTwo. There will be a minimum of 300 contacts collected by each intern for both direct and electronic mailing list of Smart. Each student intern will participate in a Corporate Social Responsibility event yearly where other campus students will be involved. During university sport events like basketball and football on and off the campus the interns will be expected to participate in those events. 2. Newspaper Advertising in the newspaper depends on the type of product or business to be advertised. Smart ForTwo’s newspaper strategy will be based on the specific discount provided or a certain period of time. Both local and university newspapers will be used. University newspapers are more viable as students can be reached directly. Local university will cover the target market spread across the country. In addition, parents and guardians may see the advert and decide to support their children in buying the car. Placement is an important aspect that will be considered greatly. For familiarity small advertisements will repeatedly be run to perform better. Advertisements will be run on days that the target audience read more. For the case of the newspaper Friday, Saturday and Sunday are the days when students read papers most to catch up with the weekend. The add message and design will be continuous and uniform. A direct respond advertisement will be run to grab the attention, interest, and desire of readers that will provoke an action immediately. To entice the target audience to visit the dealership for test drive the focus will be mainly on copy-write. The direct response advertising will aim at capturing readers’ attention through timing, placement, ad size, and design. It will also purpose to stimulate readers’ interest by touching on their needs, desires and emotions. By providing solutions or offering benefits to needs, problems, and emotions the ad will create desire. Investigation of action will be done by making available a solution that is desirable, easy and affordable. 3. Television Visitors’ interest in gaining information will be ignited by increase awareness of Smart ForTwo through TV commercials. Requests will be authorized through the website of Smart which with high traffic will lead to more potential customers visiting the dealerships or purchasing the cars. According to the survey conducted by Smart Company the target market for Smart ForTwo ranked TV commercials second most influential type of advertisements. When asked about the last advertisement of a vehicle they remembered the majority responded that it was a commercial. It is therefore important to ensure that every TV commercials of Smart are memorable. Some of the brands that the target market remembered were Toyota, Honda, BMW, Mercedes and Lexus. From the information gathered from the target audience Smart will need to incorporate comparisons and humor in its TV commercials to make it memorable. 4. Magazines Advertising in magazines enables a business to reach its target audience and provide them with information about its services and products and help them make a purchase. Advertising cost for magazines vary depending with the vendor. By placing an ad in a particular magazine can create an image for a product or brand. Most of the target market read Cosmopolitan, That’s life and Take 5 among others. These magazines have a wider circulation and readership that would be ideal for Smart to advertise and reach its target market. 5. Internet According to the internal research conducted among the target market internet ads reported to be among the top three marketing strategies that capture the attention of consumers in the target market. According the research to the order of most traffic the websites that many male college students visited were Facebook, ESPN, Google, Twitter, and YouTube, while females visited websites as follows: Facebook, Myspace, Twitter, Google, and Youtube. The internet trends show that college students mostly visit Facebook, Twitter, Google and Youtube. These websites will be the focus for Smart ForTwo’s internet advertisements. Smart will still continue with its online platform to showcase different designs, colors, features, and prices of Smart ForTwo have been convenient to customers. The platform allows customers to make an order, pay the deposit and the car delivered to their destination. Facebook has a high traffic with over three hundred million active users (Facebook, 2014). This will allow users Smart to reach a wider market and target users easily with age ranging 21-25 and 35-50 graduates and college students. Classification of segments can be by geographic area, sex, age making it easier to Smart o reach its specific market segment. Facebook provides a report of performance ads with details like who clicked on the advertisements, sex, region, age and the number of clicks made. This report will allow Smart to narrow further the range of market interests in its products, thus ensuring that no unnecessary costs are incurred in future. Powerposition ads will be displayed on the preferred websites to ensure high visibility. The banner advertisements will feature dealership logo, Smart logo and the message that can be displayed in search engine results to build traffic. This is also an effect way of reaching the target market in a cost-effective way. Today Youtube is known worldwide with over three hundred million active users. 40% of the users are 18-45 years old covering the target market of 21-25 years old. Smart will target viewers by what they will be watching through YouTube advertising. It will used to show each and every part of the car, test drives, customer comments and safety tests. A contest will be sponsored by Smart ForTwo where the winner will be awarded with $15,000. Students will be required to post a video about why they need a car as a student and why they need Smart ForTwo. The video that gets most views wins. The aim of this contest is to increase awareness of Smart ForTwo among the target market. Google ‘AdWords’ are popular for advertisements through google to reach a target market (Google, 2014). These ads appear on top or right of the search engine results page and target those searching for related criteria as the ad. If an individual searches on google for the word ‘affordable car’ the website for Smart would be among results that will be shown. Google advertisements reach over 80% users of internet and Smart ForTwo will be able to get qualified leads at a cheaper price, thereby boosting ROI and sales. Media Plan Communication Vehicle Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Newspaper                         Website                         Magazines                         Experiential Marketing                         Internet Ads                         Television                         Smart Ambassadors                         Budget The total budget for executing the integrated marketing communication is $18,700,000. Promotion is allocated the largest portion of the budget of 50% since 68% of the target market relies on events marketing and word of mouth to make a purchasing decision. Television advertising is allocated 30% of the purchase because 52% of the target market watches Television commercials. The third most influential advertising to students is print advertising which is allocated 10% of the budget. Flyers, magazines, direct mail marketing, and newspapers form print advertising. Internet advertising is allocated 10% of the budget as 30% of students and recent graduates were influenced by internet advertising. Allocation of Budget Conclusion According to Belch & Belch (2011), the aim of integrated markeing communications is to combine all the protional and marketing activities of a company portray a unified and consistent image to the marketing place. The Smart Integrated marketing communications (IMC) plan follows this approach. The integration of all forms of eternal contact into one message will enable Smart ForTwo sales and awarenss to increase in the next two years. The objectives outlined in this plan can be measured efficiently as the strategies used are researched well. The strategies and objectives have been designed to fit into strong values and missiono of Smart company. The plan is more cost effiecient faciliated by the many strategies that will be implementd to achieve more than one objective. References Australian Institute of Petroleum. (2014). Facts About Petrol Prices and the Australian Fuel Market. Retrieved from http://www.aip.com.au/pricing/facts/Facts_about_Petrol_Prices_and_the_Australian_ Fuel_Market.htm Belch, G.A. & Belch, M. A. (2011). Advertising and Promotion: An Integrated Marketing Communications Perspective (9th ed.). New York, NY: McGraw Hill. Car Locate. (2010). Discount Programs for New Graduates. Retrieved from http://www.carlocate.com/Blog/post/2010/05/26/Discount-Programs-for-New- Graduates.aspx Daimler AG. (2011). Smart launches a new international 360° brand campaign: smart fortwo – a big idea for…. 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