Suzuki Samurai: Case Analysis

Submi ed by
NIKITA MISHRA
LAKSHMI SOWMYA
A.GANESH PRASAD
AKHILESH CHELIMILLA
SARAD SONTHALIA
SUMIT THAKUR

{GROUP-8}
1) Mazza’s goal was to establish ASMC as a major company in the United States. In order to
achieve this goal, Mazza believed that the prospec ve dealers should be able to build
separate showrooms for Samurai, so that the dealer would invest a li le more both in
monetary and emo onal terms and hence would be able to sell more Samurais. This would
also set the stage for Suzuki to launch new cars beginning in 1989. ASMC has set the goal of
selling 10,500 vehicles in the first 6 months, through dealership network of 67, each selling
37 (minimum supply) Samurais per month. The posi oning of Samurai in the market is an
important factor, in choosing the loca ons for the dealership network.
Market Segmentation Popielarz reviewed the latest research available from outside
sources. The U.S Automobile industry has been segmented based demographics, size and
style of the vehicle preferred/purchased etc.
▪ The Basic Small-Car segment: This segment included cars like Chevrolet Sprint, Honda
Civic, Ford Escort, Toyota Tercel and Mazda 323. 54% of this segment purchases were men but
only 43% of the principal drivers were male. Median age of buyers was 38, whereas the
average domes c car buyer was 41 and the import car buyer was 36. 60% of buyers were
married. 1/3rd of them had execu ve/professional/technical careers. 43% were college
graduates. Median household size was 2.69 people and the median household income was
$34,240.

2) Market can be segmented in to two, Primary and secondary

Primary Target Market:

⦁ Single male, 18-30 years old.

⦁ First me car buyers.
⦁ Students, fresh graduates, young professionals.
⦁ 2-person households who earn more than an average annual income.
⦁ Young, work hard, unconven onal and who seeks fun.
Secondary Target Market:

⦁ Single/Married, Male, >30 years old.

⦁ Who has at least 2 cars.
⦁ Businessmen and established professionals.
⦁ Who has children (usually female) who can already drive.
⦁ Come from households that earn higher than an average annual income.
⦁ Young at heart, Straight-laced, loves his family, but wants to break free and indulge at
mes

3) By 1965, product line included motorcycles, automobiles, motorized wheelchairs, outboard

motors,general purpose engines,generators,water pumps and prefabricated houses.So,there
can be various ways in which it can posi on itself based on the product’s specifica ons. There
can be 3 ways of posi oning: Compact Sport U lity Vehicle, Compact Pickup truck,
Subcompact car.
 Market size,target segment,specifica ons,consumer’s percep on can be the influencing
factors for posi oning.Compact SUV is low market poten al which is not that good in
reaching target sales and it has got limited SUV and some correlated price and quality.The size
of the market of Compact Pickup Truck is 2.5 mes of SUV market.This could be used as a
truck when purchased without backseat.This being a reason,it had a very narrow target
segment, Subcompact cars being the largest market, has a very good in mileage of
28miles.But,it is less comfortable than the subcompact car.Consumer’s percep on of cars are
different, so samurai should avoid posi oning as a specific type of a vehicle.Posi oning in a
specific way will narrow down the market and may also have a chance in excluding large
groups of poten al buyers.

4)

Sub Compact cars

Sporty, Fast Prac cal/Economical

Sport U lity Vehicle

Pickup Truck

5) Pearlstein’s group had three op ons for posi oning the samurai based on its physical
characteris cs as a compact sport u lity vehicle, a compact pickup truck, as a subcompact
car.

compact sport u lity vehicle:

Pros :

⦁ Off road drive capability

⦁ Built like an SUV
⦁ Smaller and lighter
Cons :

⦁ Low price
⦁ low market poten al
⦁ some consumers correlate price and quality
compact pickup truck:

Pros:

⦁ Americans favour trucks imported from japan

 ⦁ it can be used as a truck when purchased without a backseat or a folded backseat
⦁ rela vely large size of the market
Cons:

⦁ losing out of the subcompact car segment which was larger

⦁ narrow target segment
subcompact cars:

Pros:

⦁ opens up largest of three market

⦁ priced lower than many other subcompact cars
⦁ very good mileage
Cons:

⦁ s ff and less comfortable than even the least expensive subcompact cars

6) Ethical issues to be dealt with in the positioning decision

Suzuki decided to establish its own presence in the U.S Automobile industry during
1985, following its success with Sprint. Initially due to the VRA constraints, Suzuki
contemplated the idea of setting up a manufacturing unit in Canada, which would be
operational by 1989, to serve the U.S markets. But the increasing market share of
imports and the entry of competitors made it inevitable to enter the market as soon
as possible and not wait till 1989. As a result, Suzuki ended up taking advantage of
the points that VRA wasn’t applicable on trucks and
that when Samurai was exported without the back seat, the U.S government would
consider it a truck. Thus, evolved the American Suzuki Motor Corpora on (ASMC). Given
that the Samurai is expected to be a major player, it might have to face the ethical issues
rising from the indirect viola on of VRA constraints.