Your decide week 3
Activity
Well, here is a career-making or career-breaking decision. You will want to consult
Chapter 8 (Perception), Chapter 9 (Learning, Memory, and Product Positioning), and
Chapter 10 (Motivation, Personality, and Emotion) as you formulate your strategy.
Primarily, you’ll want to prepare a 350–700-word brief to the CEO and Board of
GenMax, one in which you weigh the pros and cons of the go-it-alone strategy and
the partnering strategy. You will want to give a high-level rationale justification of
the strategy.
For each strategy, you’ll want to explain
risk/reward;
how you want to use the existing Aero brand, and the practicality of using current
Pinnacle owners as part of your promotion effort; and
how you’ll make your recommendation.
Assignment
Given the scenario, your role and the information provided by the key players
involved, it is time for you to make a decision. If you are finished reviewing this
scenario, close this window and return to this Week’s You Decide tab, in eCollege, to
complete the activity for this scenario. You can return and review this scenario again
at any time.
Scenario
Aero Motors, a subsidiary of GenMax world-wide, has a great reputation for
producing high-end, luxury cars for primarily the European and Asian markets. The
flagship model, the Pinnacle, starts at $50,000 and goes up from there. While the
cars enjoy a devoted following and great customer reputation in those markets, the
sales of the cars have never taken off in the U.S., primarily because the cars were not
attractively priced and had a very limited service and dealer support system in the
U.S. There is no real following for the cars in the U.S., and most U.S. consumers have
never seen one. Those people who do own the cars in the U.S. are extremely devoted
and have clubs and associations such that owning a Pinnacle is a lifestyle decision
into which an owner can build a lot of social status. Now, Aero has access to a
leading market technology that will allow them to build very fuel efficient
automobiles in the compact and subcompact range. The cars can be produced and
sold in the $15,000-$20,000 range. GenMax has decided to attempt to penetrate the
U.S. and North American markets with these new cars. Your task is to decide what
branding strategy to use, how to organize the U.S. unit, and even to decide how to
brand and name the cars. They are asking you to develop the strategy, and how to
develop the relationship with Aero in the U.S. market – basically run the show! Your Role
You are the new Director of Business Development for Aero Motors, a subsidiary of
GenMax. The Board of GenMax has tasked you with managing the introduction of the
Aero Motors brand to the North American market. You are going to need to review a
few possible combinations of branding strategies for the introduction of Aero
Motors to the North American market segments – in particular the United States.
Key Players
Raymond Burke (Technical Director )
Statement — With our lack of infrastructure in the U.S. market, we need to focus on
an alliance with an existing U.S. company and basically private label the new car. We
can’t just start trying to sell this car without a dedicated, trained support system to
service the new technologies. If we don’t establish it, we will have a lot of unhappy
owners when the cars need service and repairs. We will need to seek out an existing
company in the U.S. market, enter into a non-disclosure agreement with them, and
go to market that way. You’ll have to figure out how to control the brand and
reputation from there. We will not be able to keep our technology advantage for
more than two years before our competitors fully understand it and are able to
completely utilize it in their models. We must get as wide a footprint as possible, as
quickly as possible, in this market or we will lose our competitive advantage!
Kathy Lee (VP of Marketing)
Statement –Everything regarding this vehicle has to be controlled by us from the
beginning. Otherwise we will never get a chance to make our mark again. I think we
must introduce the car on a very limited basis in urban regions, set up our own
dealers and service centers, and market to green-oriented consumers. We want to be
known as a lifestyle type of company and use the existing, very loyal customer base
for our cars to do viral and buzz marketing type activities for us. Although the price
of the cars will be entry level, I think we can build a certain status around the Aero
ownership experience and give our cars a desired, even somewhat elite, status.
Patricia Lopez (Art Director)
Statement — You have to decide what sort of marketing approach you want – do you
want to appeal to frugal consumers or an eco-savvy customer who wants to drive
something different than the status quo? I don’t know if you want to go with a massappeal, "every man" type of campaign, or make the model introduction more for a
discriminating few?
Allison Tanney (CFO)
Statement– My thoughts are to try to minimize risk and capital exposure as much
as possible. While branding entirely on our own has advantages, I believe that it will
be more expensive and offer less return on investment for at least the first five years.
Partnering with an existing company would offer much less control, but we would
almost certainly sell more units and have less growing pains than going it alone.
