Marketing Strategy Cadillac Escalade EXT. Shivshakti Patki. Pat Stornant. Geeta Pai. Deepa Subbaraman. Esra Adigozel. Keith Klochack. Corporate / Business Unit Goals. General Motors’ Vision
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Marketing Strategy Cadillac Escalade EXT Shivshakti Patki Pat Stornant Geeta Pai Deepa Subbaraman Esra Adigozel Keith Klochack
Corporate / Business Unit Goals General Motors’ Vision GM's vision is to be the world leader in transportation products and related services. GM will earn customer's enthusiasm through continuous improvements driven by the integrity, teamwork and innovation of GM people.
Corporate / Business Unit Goals General Motors' Goals • Revenue growth • Increased global market share • Net income margin growth • Top quartile stock price performance
Corporate / Business Unit Goals General Motors' Corporate Priorities • Innovative products and services • E-business leadership • Global growth • Business results
Cadillac Introduces New Family Member for 2002 Escalade • The Cadillac EXT is one way GM is attempting to reach their goals. • According to a J.D. Power and Associates report issued in March 18, 2002, the sporty car, luxury car and pickup segments are seeing strong year-over-year sales. • Not only is the EXT an innovative product for GM, it will help with growth goals and priorities.
Business Unit Strengths and Weaknesses • Core Competencies • Product lines • Technologies • Customer base • Market share positions
Core Competencies • Manufacturing, Distribution • In 2001, GM sold more than 8.5 million cars and trucks - more than any other automaker and 15.1 percent of the world vehicle market. • Cadillac is the GM business unit with offerings to satisfy the luxury segments.
Cadillac Sales In Units • While growing sales steadily into the late 1970s, sales have been decreasing since the early 1980s.
Product Lines • CTS • DeVille • Eldorado (Discontinued after 2002) • Escalade • Escalade EXT • Seville • SRX (planned for 2003) • XLR (available 2003)
Technologies • GM OnStar • A competitive advantage for GM • Communications and information service providing a variety of services, including personalized assistance, emergency aid, and hands-free, voice-activated access to Internet-based information, including news, sports, weather, e-mail and stock quotes. • The Personal Calling service provides hands-free, voice-activated, cellular phone access • More than 2 million subscribers
Customer Base • GM's major markets are North America, Europe, Asia-Pacific, Latin America, Africa and the Middle East. • Cadillac, however, is mostly a North American brand. • Below is the where luxury car makers sell around the world
Market Share Positions • Compared to other luxury carmakers, Cadillac has fallen behind. • In 2000, Cadillac held only 12 percent of U.S. luxury car and truck sales.
Product Life Cycle Vehicle History: • The Escalade was introduced as a 1999 model in fall of 1998 as the first Cadillac in a multi-year, multi-product plan to establish a presence in the luxury sport-utility market. • For 2002, Escalade expands its offerings with four distinct versions: all-wheel drive, two-wheel drive, a Middle East export version and the all-new luxury sport utility truck - the Escalade EXT. • Product Life Cycle Diagram…
Product Life Cycle • Although it is brand new, it belongs in the growth phase of the product life cycle. Extension of the Escalade. The vehicle was unveiled at the beginning of 2001 and it was not available for sale until much later in the year.
Product Life Cycle Implications on the EXT based on this stage are: • The market growth rate will be high • Changes to the vehicle will be moderate • Profitability will be high • At this time, the luxury sport utility truck (SUT) market is occupied by Cadillac’s EXT, the Lincoln Blackwood. It would be expected that there would soon be many competitors for this segment.
Buyer Behavior • Individuals or groups acquiring, using, and disposing of products, services, ideas, or experiences. • Includes acquisition and use of information, influences, sourcing patterns.
Buyer Behavior – Information Needs • Areas of knowledge required in order to make an informed and effective decision.
Buyer Behavior – Information Needs • Consumer Reports / Periodicals • Dealer Visits • Internet (CarClub.com, GM BuyPower,Edmunds.com) • Television Advertising
Buyer Behavior – Buying Influences • Conscious & Unconscious factors which contribute to a decision to buy a given product or service. • Social factors, geography, culture, economic conditions all contribute.
Buyer Behavior – Buying Influences • Movies (Matrix II), MTV/VH1 videos (Rappers) • Flashy television advertising for Cadillac line of vehicles • Super bowl MVP Prize (Tom Brady) • Generous lease programs • NBA player ownership of vehicles
Buyer Behavior – Sourcing • Relationship between purchaser and seller. • Traditional marketing – sellers visit buyers. • Reverse marketing – buyers seeks out the seller. • Both are common and intertwined today
Buyer Behavior – Sourcing • Traditional & Reverse • Flashy television ads, movie-spots, lease deals all can lure in buyers • Buyers seek out EXT after seeing one on dealer lot, neighbor’s driveway • Buyer influences create sourcing patterns
Target Demographics • Age : 35-55 • Gender : 80% Male 20% Female • Household Income : $125,000 • Education : College • Occupation : Professional, Managerial, Entrepreneur
A clear signal to GM Research shows: • About 20 percent of luxury households own a full-size pickup • About 23 percent of Cadillac households own a full-size pickup, and most of those get the up level trim The Midgate was born of customer comments saying, 'I really like having a sport-utility, and I really like having a truck, but I can't afford to have both,' it's nice to have an SUV and truck in one vehicle’
Comparison test at Pebble Beach in Northern California Escalade EXT Vs Lincoln Blackwood • Go-Getters type A personalities,out to prove that they are king of the hill probably opt for EXT • Successful type B personalities will choose Blackwood for its more laid back style.
Car Maker AverageAge % of female Buyers Median Income % of college Degree Lincoln 59 30% $128,893 49% Cadillac 63 30% $130,432 50% Lexus 52 40% $155,622 69% BMW 45 35% $162,114 74% Mercedes Benz 52 52% $181,127 73% Luxury Demographics
EXT Club- Access to Stars • Actress Rosanna Arquette, left, checks out the Cadillac Escalade EXT at The Standard in downtown Los Angeles. To gain exposure, Cadillac and other automakers loan cars and trucks to celebrities.
New Ad Campaign aims for boomers and youngers • Cadillac bidding to ditch its elderly image and draw a younger crowd • The "Break Through" campaign reflects Cadillac's return to its heritage of producing vehicles known for head-turning design and innovative technology.
Escalade EXT : 2236 Blackwood : 379 U.S SalesFrom Nov 2001 – Feb 2002
Positioning • Positioning Strategy • Relevant Brand Set of Competitive Products • Lincoln Blackwood • Chevy Avalanche • Dodge Ram • GM Sierra 1500HDGM Sierra Denali Quadrasteer • Ford F-Series • Toyota Tundra
Positioning • Determinant Attributes • Physical • Reconfigurable rear cargo and expandable cargo bed • Powerful • StabiliTrak • Road-sensing suspension • On Star • Prestige • Features • Converts from SUT to pickup truck
Positioning • Customer perception of products • Prestige • Eliteness • Price • Quality • Looks
Positioning • Perceptual Map
Positioning • Customers Most Preferred Combination of Attributes • Expandable: Mid-Gate allows expansion from 5 feet to 8 feet • Powerful engine: 345 hp-6-lt V-8, All-wheel drive, heavy duty 4-speed automatic gearbox • Cutting edge technology: StabiliTrak – all types of weather • Suspension: Road-sensing suspension adjusts from “soft” to “firm” • On-Star
Positioning • Fit between preferences of market segments and current product position • Differentiation based Focus strategy • Narrow target • Upscale, urban market segments
Positioning • Positioning Strategy • Statement • For upscale American families, the Cadillac Escalade EXT is a vehicle that is both functional and luxurious • Value Proposition • Target Market – upscale, urban communities • Benefits – convertible from luxury sports utility to pickup truck • Price Range – High as compared to similar vehicles
Product – Cadillac Escalade EXT • Manufacturer: General Motors • Product Type: 1. Luxury Sport Utility 2. Consumer good
Product – Cadillac Escalade EXT • Technology level of the product: High • Needs satisfied(or aimed to be satisfied): - Transportation needs of both people and goods - Luxury and comfort for its users • Brand strategy: Brand extension strategy
Product - Safety and Security • Front and side passenger airbags • AWD stabilitrack: Helps maintain control over the vehicle in various types of weather • Ultrasonic rear parking assist: Helps in responding stationary objects behind the vehicle • Hydroformed framed sections:Gives additional protection in the event of collision • Improved structural rigidity
Product - Technology and Performance • Reconfigurable midgate • 345-hp V8 engine • 7900 lb towing capacity • Road sensing suspension system • All speed traction control • On star luxury and leisure
Product -Style and Convenience • Bose 200-watt stereo system, six CD changer and seven speakers with independent controls for two sets of earphones • Heated power seats.Nuance leather surface • Programmable seats and mirrors. Heated mirrors
Pros Strong engine Innovative packaging Passenger and cargo room Cons Love it or hate it styling Poor mileage Steep price tag Pros and Cons
Pricing Strategy • MSRP: $49,990 • Pricing Objectives Of The Company: - Target return on investment - Target market share - Maximum long/ short run profits - Growth and Stability
Pricing Strategy • Current Pricing Strategy - Penetration pricing - Market holding pricing - Market oriented pricing - Multiple pricing for international markets
Place • GM BuyPower: the fast and easy way to buy a car • About 75% of GM dealers, almost 6,000 participate • (www.gmbuypower.com), the Web site program lets consumers : - view the inventory of nearby GM dealers - view third-party comparisons - find up-to-the-minute rebate deals - get price quotes - apply for financing