Analysis of Subaru Company - Case Study Example

1) Consumption Experience Firms need to ensure that the products they market provide a complete and unique experience to their end-users. Assuch focusing on customer value is important in order to successfully market and develop the products. The consumption experience therefore suggests that the consumers derive more value from what they purchase and use. Higher customer value means that the experience of using the product should at least be greater than price paid by the customers while at the same time ensuring that the overall experience of using the product creates more value. (Hoyer and Macinnis). What distinguishes Subaru from other brands on the market is fuel efficient cars therefore saving on fuel create a better overall consumption experience. Convenience Convenience refers the ability to actually buy the product with relative ease as consumers often have to go through a conscious process of making a buy decision. (Ratneshwar, Mick and Huffman). Subaru maintains a very well-oiled network of dealers offering customers a larger choice to buy their cars. This network is also leveraged through an efficient network of parts distributors thus creating a further convenience for existing customers. Convenience also offers a better opportunity to consumers to have acquires Subaru cars because the same is leveraged through offline and online distribution channels where firm can actually sell its cars. Cost Cost often refers to cost to satisfy the customers i.e. determining the overall cost to the consumers to purchase and finally utilize the product. This often includes the ability of customer to easily obtain the product and at relatively cheaper cost. Subaru’s dealership network is relatively well spread and is also duly supported by distributors selling parts. This well organized distribution network therefore allows Subaru to actually reduce the cost for its customers. Customers can gain easy access to dealers in their neighborhood thus reducing costs for themselves. Affordable cost also entices the customers to actually acquire the product with relative ease. (Butterworth) On average, a Subaru user keeps the vehicle for almost seven years therefore the overall disposition of the product may be relatively slow as consumer tends to prefer to use the product for longer period of time. This may however increase the cost to finally dispose of the product and start using a newer one. Communication Communication outlines the way consumers of Subaru actually interact with the firm at the time of making their buying decisions and after sales services. (Ind). Consumers communicate through a large network of dealers to communicate what they actually wish to look for in new models. Subaru also uses advance analytics to actually understand what their customers and place its dealers so that overall reach towards customers can be increased. Customers can take advantage of strategically aligned network of dealers and distributors to communicate with the firm for their preferences. 2) Loyalists One of the key characteristics of loyalists of Subaru is the fact it offers durability and reliability to the end users. For example, those customers who have to drive through the winter season find Subaru a better option because of the reliability offered by vehicles during severe winter season as well as running rugged areas. (Green and Ohnsman). Further, the loyalists seem to enjoy the fact that though their Subaru cars may be lacking little extras however functions like remoter start and warm seats offer a very good opportunity to the users to get more utility out of it. Another important feature of loyalists of the brand is based upon the fact that average user keeps the car for approximately 7.4 years thus making Subaru a preferred vehicle for drive. Loyalists often recommend the product due to the fact that most of the cars are safe to drive while at the same time offer superior performance and value to the customers. These characteristics therefore outline that Subaru customers buy their cars based upon their psychographic association with the car. Though Subaru cars are mostly driven in urban areas because of a certain sort of lifestyle image associated with these cars. (Gorman) Geographically, loyal customer of Subaru seems to be split into two critically important regions of California and Los Angeles. Customers look for durability as well as performance in both these regions. New Customers The new customer segment of the market seems focused upon those customers who want the car which can offer effective climate control. Many of the new customers therefore look for features in their cars which can help them to avoid damaging the environment while at the same time offer same level of functionality and value. Further, potential new customers of Subaru seem to subscribe to a particular lifestyle wherein speed and luxury are two important factors determining the purchase decisions. Potential customers therefore look for safety first and along with that, they are also looking for more fun to drive. (Kotler and Armstrong). Subaru’s muscle cars are considered as more attractive for young and potential customers due to their ability to offer performance as well as thrill and fun of ride. Subaru focuses on a well-developed niche market which includes both the repeat users as well as the new potential customers. The overall brand appeal is therefore based upon affecting the psychographics of the customers along with defining the segmentation based upon demographic factors. (Greimel, 2010). The fact that Subaru tend to sell higher in some places and don’t do that much better in other areas of the country critically suggest that the demographics based segmentation is relatively more effective for Subaru. 3) One of the key aspects of the loyalists is the convenience offered by Subaru cars in terms of performance and durability. Many new potential customers however may first look at the safety and fun associated with the use of cars however; loyal customers look more for convenience. What distinguishes both niches of the market therefore is the difference between the preferences of each of the group. Loyalists believe that Subaru offer them durability and performance even during the times when other cars fail to provide the required utility. It is also important to note that the loyal customers of the firm is their ability to hold the car for almost 7.5 years thus making secondary market for cars as relatively less liquid. Given the preferences of new customers to own used cars, this critical difference between the two groups may further, force potential customers to buy new cars. Customers have to make a decision in terms of deciding as to when to acquire the product and when to dispose of. However, this decision invariably depends upon the ability of customers to analyze and assess the cost associate with the overall acquisition of the product. Though cost may not be an issue for the loyalists as they tend to love the cars and psychologically associate themselves with their vehicles however, the same may be a critical component for the new and potential consumers. What is however, critical to note that Subaru cars are fuel efficient thus can create significant savings in terms of fuel efficiency for the new and potential users. The combination of SUVs with fuel efficiency therefore may be a critical combination for newbie’s to try Subaru’s cars. (Mitchell, 2009). If considered from an overall brand experience, both segments of the market seem to rely on different combination of factors. Driving refinement as well as the fuel frugality is two important factors which both the segments of the market prefer to enjoy. Overall, brand expectations therefore are based upon offering a combination of different consumer preferences satisfied by Subaru cars. These factors however, seem to be fixed in nature as consumers look for few peculiar features in Subaru products. (Kong) 4) Though more Subaru cars are used in Portland area than any city within US however, it does not mean that consumers of Subaru are geographically concentrated. The overall success of Subaru is based upon a combination of factors such as design, durability, fuel efficiency as well as prestige. Outback is considered as a rugged model with advance level durability as well as performance thus making it one of the most preferred cars of Subaru. Given its existing features and functions, this product is considered as one of the hottest selling products of Subaru with an established and loyal base of customers. Considering its traditional look and feature, the sales of the products will probably increase in the Portland area as compared to other parts of the nation. Since, Outback also carries extra space for luggage, it is also considered as a better car for pet owners. The extra luggage facility as well as Wagon like functionality of vehicle will make this model of car relatively a convenient alternative with a price which ranges around $30,000. (Greimel, 2010), Though the higher sales in one geographic region may be due to some particular factors however, it may not reflect the overall sales trends in entire nation. Customers belonging to a certain region may show strong tendencies and preferences towards certain special characteristics of the products which may not be considered by customers from other region. This geographical diversity in the overall preferences of the customers therefore may reflect on the choices of the customers. Works Cited Butterworth, Virginia. "THE BUY DECISION." Bottom Line: Managing Library Finances 2.1 (1989): 37-38. Gorman, Theresa. Living Loyalty... the United People of Subaru™. 17 Feb 2012. 12 March 2012 . Green, Jeff and Alan Ohnsman. Subaru barrels through recession. 31 May 2010. 12 March 2012 . Greimel, Hans (2010), Subaru seeks to dump ‘quirky’, broad appeal, Automotive News, July 12, 2010 Hoyer, Wayne D. and Deborah J Macinnis. Consumer Behavior. New York: Cengage Learning, 2009. Ind, Nicholas. "Beyond branding: from abstraction to cubism." Journal of Product & Brand Management 15.2 (2006): 148 - 149. Kong, Benson. Strong Demand Spurs Subaru to Increase Outback and Legacy Output. 20 April 2010. 12 March 2012 . Kotler, Philip and Gary Armstrong. Principles of marketing. New York: Pearson, 2010. Ratneshwar, S., David Glen Mick and Cynthia Huffman. The why of consumption: contemporary perspectives on consumer motives, goals, and desires. London: Routledge, 2000. Mitchell, Jason (2009), 2010 Subaru Outback Roof Rails…Should I Say Roof Rack FAIL,” gear.com http://www.gear.com/2010-subaru-outback-roof-rails-should-i-say-roof-rack-fails, 12 March 2012 Read More