IIBMS MMS CASE STUDY ANSWER SHEETS – Young people with limited incomes often look for a great deal on a new car. One way to save money is to forgo options and upgrades, like a sunroof or a CD player. But when Toyota introduced its funky “Scion” brand, it considered offering a version without something most people assume comes standard: paint.


Young people with limited incomes often look for a great deal on a new car. One way to save money is to forgo options and upgrades, like a sunroof or a CD player. But when Toyota introduced its funky “Scion” brand, it considered offering a version without something most people assume comes standard: paint.

Young people with limited incomes often look for a great deal on a new car. One way to save money is to forgo options and upgrades, like a sunroof or a CD player. But when Toyota introduced its funky “Scion” brand, it considered offering a version without something most people assume comes standard: paint.

Advertising Management

Case II  – Toyota Goes after Tuners

Young people with limited incomes often look for a great deal on a new car. One way to save money is to forgo options and upgrades, like a sunroof or a CD player. But when Toyota introduced its funky “Scion” brand, it considered offering a version without something most people assume comes standard: paint. Although they ultimately decided against the idea, at one point Toyota’s plan was to sell the brand with just gray primer.

Toyota wasn’t really targeting people so cheap they wouldn’t spend money on paint. Just the opposite – the car company was going after a group with money to burn, called tuners. Tuners are young car buyers who live to customize hteir cars. The trend really began among young Asian Americans, who typically bough t inexpensive Asian import cars and then spent thousands of dollars customizing them. The hobby has spread to other young people, so that today Asian Americans are a minority of tuners. But Japanese brands remain the cars of choice among those dedicated to creating a work of art on wheels. Explaining the idea of a “no paint” option, Jim Farley, Scion general manager, says, “As much as possible, we want to give them [tuners] a black canvas.”

What does a tuner do with his car? He (or she; women make up almost 20 percent of the tuner subculture) might take a basic Honda, add a large and loud exhaust system, paint the intake manifolds, and add ride-lowering springs. Other popular add-ons are technologies that increase vehicle speed, like turbochargers, superchargers, and nitrous kits. And there are some serious bucks involved. The Specialty Equipment Market Association estimates that auto after-market spending (spending on car accessories after the original car purchase) increased from $295 million in 1997 to 2.3 $billion in 2002. The motivation? “ You build a car for yourself,” says one day install on Acura RSX Type-S engine into his Honda Civic. “ The satisfaction is in making it your own and knowing that nobody will ever have something that’s the same.”

The amount of money tuners spend is reason enough to attract the attention of marketers. GM hoped to interest tuners in its Saturn Ion, Chevrolet Cavalier, and Pontiac Sunfire when it when it launched a “ Tuner Tour” of 10 National Hot Rod Association races. GM allowed young car enthusiasts to play games and enter contests for prizes, as it in turn collected names and e-mail addresses. GM’s focus on relationship marketing makes sense because tuners don’t watch a lot of TV. Both Mitsubishi and Ford believe the best way to reach them is with product placements in movies (Mitsubishi bought air time in the popular for (“2 Fast 2 Furious”). But even companies selling products unrelated to cars are interested in the tuner lifestyle. Pepsi has hired tuners to customize some of its promotional vehicles.

Which brings us full circle back to Scion, Toyota’s goal is to make the new car an immediate hit with tuners. So rather than spend a great deal of money on network television, Toyota decided to sponsor a 22-minute movie On the D.L. The movie is a comical docudrama that tells the story of a pair of musicians trying to obtain their first drivers licenses. The stars are musicians trying to obtain their first drivers licenses. The stars are musicians from youth-oriented bands: Ahmir “Questlove” Thompson, from the Roots, and DJ King Britt, who played for the Digable Planets. The film premiered at the Tribeca film festival, after which segments were shared on peer-to-peer networks such as Kaazaa. Toyota hopes that enthusiasts will download the segments and share them with friends.

           

Questions:

  1. Why are tuners so attractive to marketers, even after accounting for their spending power?

  2. Evaluate Toyota’s strategy of targeting tuners with the Scion campaign. What are the difficulties for a large company in marketing effectively to a youth-oriented subculture? What techniques do you think companies like Toyota are using to try to understand their market?

  3. Explain how “tuner” campaigns, such as those by GM and Toyota, work. Analyze these campaigns using the Facets Model to identify the effects they are designed to achieve. How would you determine if these campaigns are effective?

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