Saturn Case Study
Saturn Case Study The following paper is on the case study Saturn: An Image Makeover. The case study is an overview of how Saturn, a GM company, created an image makeover to appeal to a different car buying crowd to maximize profits. This dramatic shift in the original philosophy of the company created a dynamic shift and allowed the company to achieve efficiencies of scale. Using the full spectrum of segmentation variables, describe how GM has segmented the automobile market? GM used the full spectrum of segmentation variables which included geographic, demographic, psychographic and behavioral.
Geographic segmentation deals with geographic criteria which includes regions and location issues. GM used geographic segmentation such as the United States of America and the market size that was looking at passenger cars. Demographic segmentation such as age, income, family size and the type of generation that was buying cars were used by GM. Third segmentation variable that GM used was psychographic, that deals with lifestyle, class and personality. GM catered to the middle class and buyers who didn’t want to spend a lot for a car. Finally GM used behavioral which dealt with usage, loyalty and benefits.
These included regular usage of a car, loyalty to a brand and benefits such as fuel economy and safety. In the beginning Saturn used different products to differentiate the market segments. Since GM invested a lot of money in the brand the company focused on their customer relationships and offered employees’ salaries to not force sales and service. Cars appealed to buyers who wanted better fuel economy and a lot safety options for a cheaper price. What segment(s) is Saturn now targeting? How is GM now positioning Saturn? How do these strategies differ from those employed with the original Saturn S-series?
Saturn is now targeting people who want to buy import cars, customers with more money and people who like expensive cars. GM is now positioning Saturn by creating a brand image that has quality and service behind it. They decided to introduce new models in the form of the Sky, Aura and Outlook. Introducing these new models creates a higher priced vehicle and a change in their product line. GM also went with their European Opel brand which they rebadged as Saturn to sell in the US. The differences from the original S-series was that now they have a luxury car and now have a model line which was lacking before.
The con from the S-series is that the car quality dropped with the new line of vehicles. Describe the role that the social responsibility plays in Saturn’s targeting strategy? Saturn was created they have declared that the company’s focus is people: customers, employees and communities. Social responsibility is what helped Saturn become the company it started out as. The company had a loyal following that had the customers coming back to Saturn for new cars or the newer models. Do you think that GM will accomplish its goals with the “new Saturn”?
Why or why not? It’s hard to answer this question since Saturn is no longer a GM brand but if I were to take my thoughts back to when Saturn was a brand I would say that GM did accomplish its goals with the new Saturn. Saturn changed the perception of the company with new models. Saturn had valuable things like a solid dealership, JD Power awards and a loyal customer base. With the new models the margins would result in higher profits and revenue. The ultimate demise of Saturn was due to a restructuring in GM that was part of the whole downturn of the economy.
What segmentation, targeting, and positioning recommendations would you make to GM for future Saturn models? If this was 2008 I would have to give a different answer than currently (where there is no Saturn brand). I would suggest that Saturn segment based on personality & loyalty, by using its strong customer base, it can change its brand image to more luxurious & stylish one. By adding little style & sporty accessories its segmentation will itself stretch to more psychographic (social class, lifestyle & personality) platforms.
Saturn should target more than just the middle class income group by adding more stylish and luxury options. I think adding something like navigation would have been a nice option to have in these models. Finally as far as positioning recommendation I think Saturn should continue to take other world model cars and rebadge them to position themselves more to luxury car buyers. If they position themselves as more for less and offer enhanced features because they are selling a world platform then they can increase quality and not price.