Category: Fiat

Introduction

The partnership between Tata Motors (TM) and Fiat Auto drastically changed the passenger car market in India. The alliance took place at a time when both firms were beginning to revive their sales in the international market. For instance, due to internationalization, Fiat Auto made a quarterly trading profit for the first time in almost four years from its sales in Europe (Shalley & Satish, 2009). On the other hand, TM was implementing its expansion strategies and aggressively made forays in the international market. For instance, the firm signed a joint venture with the Brazilian firm Marco Polo with an aim of enhancing its distribution channels within the Brazilian market.

Business Opportunities in India

Generally, the automobile industry in India is one of the most growing in the developing economies and is projected to go up by over 1.9 trillion US dollars in the year 2015. The automobile industry is expected to continue growing because of increased number of middle-class, which provides sufficient market for the products. Further, the country’s huge population provides a large pool of skilled and cheap labor, which propels the industry to success (Shalley & Satish, 2009). The automobile industry in India is estimated to be worth over 120 billion US dollars with the small car market contributing around sixty percent of the country’s total car sales. Moreover, the industry is currently growing at an estimated annual rate of about nine percent. However, the industry is highly competitive.

Fiat’s Benefits from the Venture

Fiat Autos’ partnership with TM is critical in developing dealership network and increased customer base. The reason is that Fiat Auto has been experiencing decreased demand and market share. As such, the joint venture is expected to change the trend. In addition, the firm‘s image was dented due to poor customer services and failure to deliver sufficient spare parts to its clienteles. Intrinsically, the firm found difficulties in competing within the Indian automobile market. Therefore, the joint venture would redeem the firms lost image. Besides, the goodwill enjoyed by TM would be helpful in redeeming Fiat’s dented image without incurring additional costs (Netherland, 2008).

In addition, the partnership would assist Fiat Auto to cut on both manufacturing and production costs. Cost reductions would be facilitated by the presence of TM subsidiaries that supply auto components to Fiat Auto at fair prices. Moreover, the alliance would assist Fiat Auto to save costs of production through inclusion of spare parts from TM. Besides, the partnership would significantly cut manufacturing costs and improve efficiency. The agreement allowed Fiat to use cost-efficient production procedures applied by TM at its facilities.

Furthermore, the partnership would assist Fiat Auto acquire and develop new technological knowhow from TM’s pool of machinery. Fiat would utilize the opportunity to develop new designs while making improvements on the current models (Ellentuck, 2011). Equally, TM would benefit from highly developed Fiat Auto’s expertise gained through several years of manufacturing small cars.

Generally, the joint venture would help Fiat Auto compete aggressively and capture the growing compact cars market in India. Furthermore, both companies would make use of their presence in foreign markets to come up with a formidable force that would enable them to compete effectively in the global automobile markets (Ellentuck, 2011). The alliance would ensure rapid expansion of both firms across the globe.

Whether TM and Fiat Auto can make Good Partnership

Actually, these are two firms in the same industry making almost similar competing products. However, the partnership between the firms is construed to be complementary. For instance, Fiat Auto would supply TM with bodies while TM would provide Fiat Auto with spare Parts. The ability of the firms to manufacture complementary products make the partnership to be the best given the highly competitive environment in which they operate (Netherland, 2008).

The relationship between the two firms can best be described as symbiotic. Besides, the agreement between the firms establishes a platform where both companies would jointly manufacture passenger vehicles, engines and transmissions in an attempt to capture key markets. For instance, TM would benefit from Fiat Auto well distribution network in Europe and Latin America to penetrate and increase its market share within the regions.

Possible Long-term Challenges of the Partnership

The success of TM-Fiat Auto alliance can be hindered by various challenges. First, the partnership provoked other firms in the industry to form similar alliances, which provide stiff competition. The unexpected competition holds back the partnership from fulfilling its global expansion objectives. In fact, because of the partnership, most automobile manufactures have introduced similar or better cars models compared with those produced by the partnership between TM and Fiat Auto. Second, the possibility of brand dilution in the long-term exists. For instance, TM signed the agreement to strengthen its global automobile market while maintaining its domestic market in India. However, threats from Fiat Auto’s models could jeopardize the success of the partnership (Shalley & Satish, 2009).

The Business Case for Joint Venture Strategy

Joint ventures involve combination of firms to accomplish a couple of reasons. In the case of TM-Fiat Auto alliance, the reasons for the joint venture were inevitable. TM needed to expand their venture into the international market. On the other hand, Fiat Auto wanted to increase its presence across the country (Shalley & Satish, 2009). Nevertheless, Fiat Auto lacked the debut to enable its presence be felt within the domestic market. As such, the joint venture would enable the firms attain their expansion strategies in both local and international markets using diverse distribution networks.

Besides, the joint venture is expected to reduce the cost of operations and increase efficiency in production. The combined expertise and facilities are aimed at reducing operation costs and increase efficiency in production. Essentially, the combination of the firms’ operations ensured efficiency in resource utilization resulting from cost reductions and increased benefits in terms of economies of scale. Additionally, the partnership between the two firms is aimed at increasing their competitiveness both locally and internationally. In fact, the increased technological and distribution competencies gained through the partnership augments the firms’ competitive advantage particularly within the global market (Ellentuck, 2011).

Recommendations for the Alliance’s Success

The success of the Alliance greatly depends on how the two firms handle challenges confronting their partnership. The two firms should come up with a complete merger that transforms into a new outfit. Such mergers will eradicate the internal threat of competitions between the two partners. Besides, the firms should merge their production units to come up with multiple products targeting diverse market segments, which in effect facilitate market penetration. In addition, the alliance should deal with diverse cultural issues associated with differences formerly present in the firms. As such, the partnership should come up with a single uniting culture, which facilitates easier negotiations and decision-making processes.

References

Ellentuck, R. P. (2011). Fiat’s strategic alliance with Tata. Web.

Netherland, B. V. (2008). Tata-Fiat joint venture launch fiat 500 in India. Web.

Shalley, S. & Satish, J. (2009). Tata-Fiat joint venture to break even by 2011-2012. Web.

Introduction

Advertisement and promotion determine the level of market penetration, product acceptance, and market sustainability. This paper presents a marketing planning development for the Fiat Motors’ Panda Cross product. The company has been operational in the automobile industry since the year 1899.

Product decisions and target market

The product to be marketed is the Panda Cross edition which is new in the UK market. This car is suitable for the UK market since it is a 4*4 drive with low fuel consumption. The picture of the car is attached below.

Pricing decisions

The Fiat Company will use the ‘good, better, best’ pricing strategy comprising of discounts for every Panda Cross sold during the period of market entry. The company will be able attract customers from the young adults’ market segment and achieve the goal of increasing the number of cars sold at a discount in the UK market (Bowden 65).

Channel of distribution decisions

The Fiat Company should apply integration of marketing distribution channel for the Panda Cross within its current network within the UK. This will reduce the cost of creating a new distribution network (Bowden 66).

Promotional decision and promotion to trade

Since the business of the Fiat Motors Company is based on the B2B and B2C models, the company’s promotion and advertising activities should include usage of appropriate advertising tools within the UK market. The company’s goal will be to build loyalty and trust towards the Panda Cross brand. The company’s superiority in comparison to its competitors should be clearly established in the proposed promotional plan (Kotler and Keller 31).

Advertisings

Advertisements are very manipulative and use tactics that directly and involuntarily appeal to the mind of the target persons. Therefore, through timely appeal to emotions and self prejudice, the advertisement messages for the Panda Cross should embrace the ‘perceived goodness’ and need to identify with ‘the ideal’ in the packaging of the model as third generational, efficient, and affordable (Kotler and Keller 24).

Direct marketing and Interactive marketing

The proposed direct and interactive marketing for the Panda Cross within the UK market will involve the use of the company’s website, social media, fliers, telephone calls, catalogue, and email messages to the targeted market and customers (Bowden 67). These strategies will increase the visibility of the Panda Cross model across the UK market.

Sale promotions and personal selling

The sale promotion messages will be deeply entrenched within the principles of keeping reliable and professional reputation in exchanging ideas and convincing customers. The Fiat Company may appoint trained sales executives of the UK origin to attend automobile seminars and expos in order to approach target customers and generate business for the company (Kotler and Keller 38).

Publicity and public relations

The main message in selling of the Panda Cross will be creation of increased value through adoption of the high-end quality automobile model (Bowden 65). The customers will be given free test drives and personalized response to inquiries on the car within the UK market.

Promotion to final buyers

Promotion to final buyer will be done through offering of discounts, free service, and customisation upon request through different channels such as television, print, social media, and short SMS (Kotler and Keller 13).

Internet interactive

Social media will be used as a promotional tool to place the Panda Cross brand in the digital sphere. The product’s visibility on the social media websites such as Bing, Facebook, Twitter, and Fiat website will be used to advertise the Panda Cross’ presence in the UK market (Bowden 67).

Works Cited

Bowden, John. “The Process of Customer Engagement: A Conceptual Framework.” Journal of Marketing Theory & Practice, 17.1(2009): 63-74. Print.

Kotler, Philip, and Kevin Keller. Marketing management. 14th ed. 2012. New Jersey, NJ: Pearson Prentice Hall. Print.

Executive Summary

The motor vehicle market is a flooded one; each and every day, a new player enters into the market, and this makes the already murky situation a lot more competitive. For a brand new device manufactured by a company known for, underperformance, a combination of several marketing strategies should be implemented to get the required effect in the shortest possible time. The book calls for proper market research with the aim of identifying what each player fails to do. After determining this, all the efforts are made to improve on strategies and develop several competitive advantages for the former market players (Albert 2006).

Fiat 500 is a brand that is introduced by an Australian company that is venturing into this market for the first time. After carrying out market research, it was determined that the market needed a car that would offer the user easy operational navigation, offer the strength of a sports car yet the class and comfort of a limo. The Fiat 500 model, therefore, boasts providing these two and low fuel consumption, thus dispelling the notion that all race cars are fuel guzzlers. This is in addition to other several multimedia provisions that are aimed at offering the occupants quality entertainment providing the feeling of real value for money (Jeffery 2001).

The strategy that the car intends to use to win a larger proportion of the market is to position itself as a leader in quality. To achieve this, there are only two strategies, either to offer cheaper price or to enhance the quality. Cars are gadgets to which people attach a feeling of dignity and pride. Introduction of one at a low price would lead to questions on the quality of the product, and, therefore, Fiat 500 offers relatively competitive prices while assuring its users of the quality through a provision of a twelve months or sixty thousand kilometres premium warranty.

SWOT and issue analysis

With its introduction, it is predicted a good early performance of the supercar. This is major because it targets at a specific segment of the market that for a long time has been left unattended to by other market players who have played in the market before. The car offers dual usage, for lovers of sports this would be the car of choice, with durability comparable to no other in the market and the strength of a stallion. It has the power to go over rugged terrain and still stay in good condition. Therefore this car is ideal for races. Despite this strength, the car comes in a sleek soft finish and a convertible cover back that makes it ideal for a family outing. This is further enhanced by the increased number of seats, the car is a double door, but on the inside, the space can be increased by rolling up the additional two seats to occupy the space that was initially the trunk. (Jeffery 2001).

Its fuel consumption becomes yet another competitive advantage. Unlike other cars in its category, the Fiat 500 runs on unleaded petrol which it still consumes very economically. A liter of this cheap brand of petrol, that is also very environmentally friendly, is adequate to power the car for an approximated thirty five kilometers. This is because of the fact that the car is a single engine but a promise of a dual engine for the lovers of dual engine being introduced later in the year. This would make the car receive appreciation from the low and middle class section of the market which coincidentally forms the larger proportion of the market. Those who are environmental conscious would also favor the car purposely because the car does not pollute the environment. This contributes to the fact that the car is very timely as this is time that more and more activism is picking pace gunning for lesser and lesser production of the green house gases.

The price of the car is most likely to be a competitive strength; it is a little less expensive than any other super cars with similar features in the market. This will attract the low and middle class segment of the market which, as a matter of fact, forms a bigger percentage of the market.

The performance of the car model can, however, be negatively affected by some of its weaknesses which include the lack of information about the brand and its image. Currently, not so many people know of the presence of Fiat 500 in the market and the advantages it offers, and this greatly hampers its sales. Furthermore, the fact that the car has a metallic housing means that it is a little heavier than any other car in its category (Tony 2012). A segment of the market that does not fancy the weight may not appreciate the product.

One of the opportunities that the model aims to exploit is that there has been an increased demand for sports cars. It introduces a twist to the numerous range of sports cars in the market that one can easily convert from a the strong racing mode car to the highly comfortable family car that can be used to several other uses without one feeling ill placed. The high demand thus means that the car is a very timely entrant into the market, so if the marketing procedures should go as planned, then the sales will boom. Besides, the car also assures of cost effectiveness; it deals with the need for one to have some additional entertainment gadgets such as an IPod while on a drive, and a user gets service for his/her money (Stefan, Christopher & Jochen 2008 ).

The performance of the product in the market faces a number of threats, and these include intense competition from other products with superior qualities, Volvo and volks wagen continue to introduce newer brands too and this is a big source of threat to the performance of these cars. With the competition, there comes the need to keep lowering prices, and this could make the company run into loses. Finally, the product has a compressed life cycle, and this can lead to a shift of customers within a short period of the brand’s presence in the market (Tony 2012).

Learning reflection

At the onset of the project, hopes were high that one would learn the tricks used in the market to position a brand. This goal was met when the group determined the ways of identifying the opportunities and the strengths that the product had and how to overcome them. The greatest problem encountered in the process of developing the project was the lack of resources, most specifically, books and journals on the manufacture and sale of motor vehicles. However, these were overcome with visits to some of the manufacturing firms where information was offered voluntarily. One can easily say that the environment is not as messy as anticipated, and a new product is still doing well capturing the attention of the target market. Studying in groups has a key importance in the life of a student as it improves the interpersonal skills of the group members (Richard 2003).

Reference List

Albert, N 2006, Creating a winning E-Business, Cengage, New York.

Bracey, B & Culver, T 2009, Harnessing the Power of Cell Phone Technology for Education: A Multi Stakeholder Approach, University of Washington, Washington.

Jeffery, F. B 2001, Introduction to Business Law, Boston University Press, Boston.

Richard, B 2003, Vocational business training, developing and motivating people, McGraw-Hill, NewYork.

Stefan, L, Christopher, W & Jochen, S 2008, Designing E-Business systems markets, services and networks. 7^th workshop on E-business, Springer, Paris.

Tony, D 2012, Mouse that roared: The classic hatch now has a gusty engine with added greenness, The Australian Financial review, Sydney.

Introduction

Corporations, firms, and companies implement stringent measures to improve operations during periods of severe financial constraints. Many livelihoods depend on their stability and it would be unethical to fail to take action. In addition, it is necessary to protect the investments and interests of stakeholders who would be affected if the businesses collapsed (Pride et al, 2009). Therefore, it is crucial for organizations and companies to take necessary steps to safeguard interests of stakeholders. The 2009 strategic alliance between Chrysler and Fiat was a bold move towards saving Chrysler, a company that had operated for many years (Reeves, 2012).

The merger was a major setback for Chrysler to a certain degree. Chrysler lost a lot of money when it allowed Daimler to relinquish its portion of the company to Cerberus because the offer price was less than a quarter of the initial capital (Reeves, 2012). However, the merger saved Chrysler because it was in a financial crisis that had pushed it to file for bankruptcy. It was a lose-win deal. The merger was a rescue deal initiated by the Obama administration as part of a plan to bail out companies that were on the verge of collapse.

The strategic alliance was beneficial to Chrysler considering that it had made huge losses during the 2006 financial year. Chrysler dismissed over 13,000 employees because it was on the verge of bankruptcy and could not afford to pay them. The merger was beneficial to Fiat because it was an important strategy to reenter the North American market. Reentry would not have been possible if Chrysler had merged with other automakers such as General Motors, Toyota, Isuzu, or Volkswagen. Fiat exited the car market in North America back in the 1980s after decline in sales. On the other hand, Fiat was highly successful in Europe.

This created an opportunity for Chrysler to create a niche in the European market. The merger combined the forces of two great automobile companies. The merger is currently benefiting both companies. Fiat has capital and advanced technology that supports manufacture of high-efficiency automobiles. On the other hand, Chrysler is a reliable and trusted brand that has international appeal. Chrysler has improved its operations by utilizing Fiat’s advanced technology to manufacture fuel-efficient vehicles (Natarajan, 2011). The merger has a bright future because of Chrysler’s new leadership. In 2003, Fiat was on the verge of bankruptcy.

However, under the leadership of Sergio Marchionne, it made a turnaround and regained financial stability. There is hope for the merger’s success because Marchionne is the current CEO of Chrysler. The future of the auto industry rests on manufacture of fuel-efficient vehicles. With Fiat’s advanced car manufacturing technology, the merger is a good bet for the future prosperity and stability of the auto industry.

Chrysler-Fiat alliance

Before 2009

Chrysler had several strengths before 2009. It was an established brand in the North American market. It had well-structured sales and distribution channels that enhanced its manufacture and sale of utility trucks and sub-contract vehicles (Natarajan, 2011). In addition, its brand of Jeep vehicles was popular in the market (Bartlett, 2009). Despite these strengths, it had weaknesses too. Chrysler lacked diversification in its vehicle portfolio. It had few models of sub-compact cars, which were under high demand in car markets. Losses incurred between 2008 and 2009 decreased its organizational value (Bartlett, 2009). In addition, it had formed alliances with Hyundai and Mitsubishi that failed to meet goals and objectives. These alliances were among factors that led to its failure.

Before 2009, Fiat had several strengths. Its recovery from poor financial management under Marchione’s leadership boosted its organizational value. Financial recovery increased its international appeal and corporate culture (Ciravegna, 2012). Fiat was also an accepted brand in Europe for its small cars and new models. In addition, its turnaround strategy under Marchionne was beneficial. It led to alliances with highly productive companies (Ciravegna, 2012).

Despite these strengths, weaknesses existed too. Fiat lacked competitive advantage in the market against other auto companies such as Toyota. Its marketing strategies were weaker than strategies adopted by other companies. In addition, it lacked diversification in its vehicle portfolio. It had few car brands in the market that decreased its chances of competing effectively with other companies.

After 2009

The merger was beneficial for the Chrysler and Fiat. Chrysler’s strengths after the merger included new leadership, new strategies, and access to Fiat’s advanced technology (Clark, 2011). Chrysler was able to develop new car models using Fiat’s technology thus kick starting its recovery journey. After Marchionne became Chrysler’s CEO, prospects changed. He introduced new plans that comprised short-term and long-term recovery strategies (Clark, 2011).

This contributed towards its recovery and growth into a leading automobile company. Weaknesses included closure of several dealerships and weakening of corporate structure. The merger forced Chrysler to close several dealerships and abdicate some manufacturing plants (Griffin, 2011). Today, prevailing financial constraints have strained Marchione’s leadership and corporate plan. Fiat also benefited greatly from the merger.

After 2009, Fiat’s main strength was ownership of a portion of Chrysler. This presented an opportunity to reenter the North America market (Griffin, 2011). Weaknesses include stiff competition and potential threat to its brand. Fiat and Chrysler need to develop better strategies that will enable them compete with established auto companies such as Toyota and Ford (Clark, 2011). This may be difficult to achieve because of Chrysler’s financial constraints. In addition, the merger structure might lead to changes in Fiat’s vehicle portfolio, causing loss of market share (Vlasic, 2009).

Global operations and manufacturing issues

General Motors, Toyota, Volkswagen, Daimler, Chrysler, and Fiat have a strong global presence in various markets. For example, Chrysler has strong market presence in America while Fiat has strong presence in Europe (Vlasic, 2009). Ford operates mainly in America while Volkswagen operates mainly in Germany. Chrysler is one of the top three automakers in Canada and the United States (Groth 2011). This has given it market advantage over other auto companies excluding Toyota, GM, and Ford. Toyota, GM, and Ford have overshadowed Chrysler’s presence in North America and other markets after its near-collapse in 2009.

In 2012, GM and Ford witnessed a decline in global operations. GM lost 8.2% of its market share while Ford lost 5.3% (Hitt et al, 2012). In 2009, General Motors filed for Chapter 11 restructuring owing to adverse financial constraints. This contributed to decline in global operations. Falling sales have reduced global operations of GM and Ford significantly. For example, the manufacturing capacity of GM facilities decreased by 85% in 2006 (Clark, 2011). This capacity was below that of Toyota, Ford, and Daimler. Toyota has the greatest global presence among all automakers in the world (Groth 2011). Fiat has operations in America, Africa, and Europe. This is in contrast to Toyota’s operations in all seven continents. Daimler’s operations are minimal compared to operations of Chrysler and Fiat.

Manufacturing issues

Chrysler and Fiat have less manufacturing issues compared to the other five companies. The main manufacturing issue that companies face is car design error, which leads to car recalls for repairs (Clark, 2011). Fiat has advanced technology that reduces design errors and other manufacturing issues. The other automakers have experienced several manufacturing issues in the past. For example, Toyota has recalled several models that include Toyota Prius, Lexus HS 250h, and Toyota Sai for various manufacturing problems (Clark, 2011). In 2012, GM recalled more than 473,000 cars that had mechanical problems. They included the Chevrolet, Pontiac, and Satum sedans models. Daimler is planning to recall more than 3500 vans in Europe.

Conclusion

The 2009 Chrysler-Fiat merger was beneficial to both parties. Chrysler stood to benefit by utilizing Fiat’s advanced technology and car platform to manufacture fuel-efficient car models for the American market. On the other hand, Fiat stood to benefit by using Chrysler to reenter the North American market, which it exited in the 1980s. The merger combined strengths of the two companies and as such improved their production capacity and market presence. The merger has a bright future because the companies have a reputation for quality and value. In addition, they are working towards joining their market shares to create a larger market for their cars.

References

Bartlett, J 2009, Chrysler and fiat reliability-merger of equals. Web.

Ciravegna, L 2012, Sustaining Industrial Competitiveness after the Crisis: Lessons from the Automotive Industry, Palgrave Macmillan, New York.

Clark, J 2011, Mondo Agnellli: Fiat, Chrysler, and the Power of a Dynasty, John Wiley & Sons, New York.

Griffin, R 2011, Organizational Behavior, Cengage Learning, New York.

Groth, A 2011, From 2009 to today: more on why the Fiat-Chrysler merger makes sense. Web.

Hitt, M, Ireland, D, & Hoskinsson, R 2012, Strategic Management Cases: Competitiveness and Globalization, Cengage Learning, New York.

Natarajan, P 2011, Fiat-Chrysler merger-birth of a new Auto giant. Web.

Pride, W, Hughes, J, & Kapoor, J 2009, Foundations of Business, Cengage Learning, New York.

Reeves, J 2012, Corporate Mergers Transitioning the American Economy, iUniverse, New York.

Vlasic, B 2009, Chrysler and fiat have hopes for happy relationship. Web.

Fiat is a manufacturer and a seller of the common Fiat brand vehicles based in Italy and with many sales branches around the world. It has been successful for many years in the production of its vehicles and has made a lot of returns from that. However, the company has faced a lot of challenges, especially the effects of the global financial crisis, factors that have caused it to undergo a recession and a great fall in its business resulting to very low returns. On the other hand, the company has undergone a lot of pressure from its competitors in Italy and also other car manufacturers from prominent countries like Germany and Japan and this has resulted to a lowered competitive advantage. All these factors have contributed to what has been referred in the vehicle business world as the fall of Fiat.

In addition, the company suffered a lot of pressure, both internal and external, which forced it to experience a severe downward trend. The effects of the global oil crisis and the high rates of political instability in Italy cost the company a lot and forced it into a large debt burden by the mid 70s. The company had a lot of struggles within its management and as a result of the stiff competition from its main competitors like the Volkswagen and Japanese car manufacturers especially due to the lack of flexibility in its manufacture strategies that did not allow it to meet the rising requirements of its target market in Italy and around the world. The greatest challenge for the company was its penetration into the world market as the competition there was very stiff and most of its competitors were considered as offering better services, higher quality and more competitive and friendly prices. All these resulted to a lot of problems and complications within the company (Hoffman 46).

Though the management of Fiat was trying all it could to contain the situation, the company continued to fall further especially in its sales and image, even as it plunged deeper into debts that could not be easily covered. The climax of the situation was experienced in 2002 when the company was left with no other option rather than instilling restructuring strategies as well as seeking for more sources of income and lowering its spending. The company undertook a lay-off in its labor sector and over 14, 000 workers were laid off within a span of one year. This cost the company a lot as there were thousands of families that depended on it for their income and hence there was a public unrest as a result of the lay-offs. The international bodies, especially the humanitarian ones, were also opposed to its decision resulting to lowered acceptance both within the country and around the world. This further resulted to loss of a large part of the market share and lowered returns, leaving the company in a lot of debts and losses.

However, all was not lost. After what was seen as the final blow for the company and as the fall of Fiat, the new CEO of the company made proposals for what was later to be referred to as the turn-around of the company and the rise of Fiat. He laid down a lot of strategies that were to see the company transform and gain its lost glory through restoration of its place and its market share in the market.

There were a lot of strategies that were considered in ensuring the corporate turn-around of the company. First, the company planned to enhance its partnership with GM so as to reduce the risks it faced operating as a single entity. This way, it would be cautioned against large losses and also would undergo a facelift that would elevate it to a higher position in the market.

The company came up with strategies that would enable it gain a lot of income so as to be able to settle its debts and also to be able to cater for its operations. It also embarked on selling of some of its sectors, such as the aerospace department, so as to concentrate on the production of vehicles. This way, the company was able to concentrate all its resources and efforts to one sector, a factor that ensured increased quality of products and service delivery and resulted to customer satisfaction.

In addition, the company formulated a strategy of reorganization and restructuring of its management and the staff so as to maximize the labor output and create satisfaction within the employees. The whole management was scrutinized and all the management personnel that were noted as lacking a culture for growth of the company were laid off while more talented workers filled their slots. Also, the structure was re-organized so as to reduce the hierarchy that was in existence and ensure that the management and employees interacted in a better way. This factor was bound to increase the productivity of the company. This in return ensured that all the labor was properly utilized and hence it was economical for the company to maintain the number of employees it had at that particular moment (Hoffman 51).

Further, the company formulated an investment strategy that focused available funds into the sales and marketing of its products so as to increase customer awareness and attract many prospective buyers of its products. This was expected to raise the company’s competitive advantage against its competitors as well as enlarging its market share.

Another strategy that was used by the company was the redesigning of the brand for the company, a factor that was aimed at lifting the face of the company so as to create an image for the company and also uplift the trust and loyalty of its clients.

Through the use of different corporate turnaround strategies, Fiat was able to overcome its main challenges that had caused its fall and was able to rise again and maintain its position as a competitive car manufacturer in the world. This way, the company was able to increase its profits and also to utilize more innovations and inventions that made its production better and more competitive in the market.

Works Cited

Hoffman, Richard. “Strategies for corporate turnarounds: What do we know about them?” Journal of General Management. 1989: 46-66. Print.

Introduction

Marketers employ a series of tactics to have the strongest impact on the market. In most marketing contexts, the use of sex appeal to influence consumer behavior is contentious because some cultures, societies, or governments do not support its use in contemporary marketing spaces (De Mooij, 2004). Some of their concerns have been centered around the effect that such a marketing strategy would have on children, women, and society (Sandhu, 2019). In other contexts, the use of sex appeal in marketing has been criticized for objectifying women (De Mooij, 2004). Therefore, most of the criticisms leveled against this marketing technique have been advanced on moral or ethical grounds.

This paper analyses a commercial of an automobile that is being sold to customers because of its improved features. The analysis is being undertaken from two basic tenets affecting consumer behavior and by extension, its success, or the lack of it. The first one is how the commercial tries to capture the attention of consumers and the second is the commercial’s relationship with the ethical implications of marketing. In the context of this analysis, the use of sex appeal refers to the use of both genders in sexual contexts to manipulate customers to behave in a predetermined way (Solomon, 2011; Lawrence et al., 2021). The use of sex appeal in marketing is among a series of other strategies used by marketers to influence consumer behavior with the others being humor, romance, and adventure (Griffith et al.. 2016). Sex appeal emerges as one of the most commonly used marketing strategies and stems from the widely held belief that “sex sells.”

This marketing strategy was first used in 1960 America to encourage customers to buy goods and services (Solomon, 2011; Lawrence et al., 2021). Since then, the advertisement strategy has been a core part of western marketing culture. This document reviews the use of the marketing strategy to advertise a car in an innovative commercial involving a man, woman, and a blue pill. Key sections of this paper will explore the theoretical foundation of employing such a strategy and the ethical implications of its adoption in the automotive sector. By doing so, it will be possible to understand how best to tweak such a marketing strategy for optimum results and how effective marketers could be in changing modalities for improving the context in which it is adopted. However, before delving into the details of this analysis, it is important to understand the contents of the commercial as described below.

Description of Commercial

The Fiat 500X commercial uses sex appeal to draw attention to the car’s features. It involves an incident where an old couple is about to have sex and the man rushes to the bathroom to take a Viagra pill. In an attempt to ingest it, he misses the target and the pill falls off from the window into the fuel tank of a Fiat 500X cr. Consequently, the car becomes bigger and more masculine (Sheth and Mittal, 2004). The lesson learned from the advertisement is that the Fiat 500X car is stronger, bigger, and more powerful than older models. Therefore (Schiffman and Kanuk, 2010), based on the assumptions derived from the advertisements, it is safe to assume that the commercial draws comparisons between the effects of the Viagra pill on a man and the car’s features.

Analysis of Commercial from Consumer Behavior Perspective

As highlighted in the introduction section of this paper, the FIAT advertisement will be analyzed based on two fundamental concepts – how the advertisement captures audiences and the second one is the ethical implications of the advertisements. These two concepts are critically reviewed below.

Capturing Audiences

Part of the role of marketers is to capture the attention of audiences and most of them use different and unique ways to do so. To understand the impact that a company’s marketing strategy would have on the attention of audiences, it is important to review several theoretical basses that seek to highlight this philosophy (Bagozzi et al., 2007). Several theories have been proposed in the analysis of consumer behavior and most of them are relevant to marketers who want to predict such conduct. They depend on using basic assumptions from the theories to achieve this objective (Haugtvedt et al., 2008). These theories can only be used to achieve one objective if they are implemented or applied correctly. In the context of the current investigation, applicable theories are those that strive to explain the use of sex appeal in the advertisement because this is the core of the current analysis of the Fiat commercial.

The psychoanalytic theory presupposes that human unconscious biases play a critical role in influencing their behaviors and, by extension, their purchasing habits. Proponents of the theory argue that it is an effective way of drawing the attention of customers towards a specific advertisement issue (Ariely, 2008; Underhill, 2004). Relative to this assertion, scholars say that most customers perceive sexual themes advertisements as more interesting and fun compared to those that do not (Solomon et al, 2009).In this regard, sex appeal has been used as a practical way of increasing the strength of the bond that customers have with the products they wish to buy (Peter and Olson, 2010). Research studies suggest that sex-based advertisements that have nudity appeal more to women than men (Solomon et al., 2009). However, cultural and national differences have a moderating effect on the impact that such advertisements would have on both genders.

Ethical Implications of Advertisement

As highlighted in the introduction section of this paper, sex appeal has been used in the Fiat case study to draw attention to the product being sold. This strategy is not unique to the advertisement because other researchers have used it to achieve the same goal with varying levels of success (Eagle et al., 2020) The use of sex appeal in advertisement draws several ethical and legal implications, some of which are unavoidable (Hawkins & Mothersbaugh, 2010). At the root of this strategy is evidence that shows the efficacy of sex appeal in influencing consumers to behave in a particular manner suitable to marketers (Csikszenthmihalyi & Rochberg-Halson, 1989). Consequently, several theories have been proposed to explain the subconscious bias that this type of advertisement has on customers.

The Fiat commercial has no nudity, meaning that it could appeal to both genders. However, given the cultural differences in various markets, the impact that such an advertising campaign would have on audiences is likely to vary with the context of analysis (Hoyer et al., 2017). For example, it is established that the use of sex in advertisements is likely to work best in western cultures and countries, such as the US and the UK. However, its efficacy is probably going to decline in markets that subscribe to Eastern cultures (Schiffman and Kanuk, 2010). For example, the Asian culture frowns upon the use of sex in advertisements. Therefore, the FIAT commercial is likely to have a lower level of efficacy if it is marketed to people who live in these countries. The opposite is true in western cultures because most people are not bothered by it (Schiffman and Kanuk, 2010). In this regard, cultural differences play an important role in understanding the ethical implications of implementing such a marketing campaign.

Given that the selected advertisement is about cars, the use of sex appeal emerges as an appropriate marketing selection tool because men are more enticed by sex in an advertisement compared to women and are more likely to buy cars compared to their female counterparts. (Schiffman and Kanuk, 2010). Therefore, the use of sex in the Fiat advertisement is consistent with the views of researchers who opine that men are more attracted to such types of marketing campaigns compared to women (Gabriel & Lang, 2006). Therefore, from a gender perspective, the marketing campaign is effectively designed to appeal to men as the target audience.

Evaluation of Good and Bad Attributes of Commercial

The Fiat commercial had several aspects of its development that appealed or discredited the commercial. The most appealing part about it is the “element of surprise” that was ingrained in the commercial’s development. Indeed, at first, it did not seem to be a car commercial; instead, it appeared to be about a home-based product or service because the commercial started with a woman lying on the bed and beckoning her partner to join her. Several seconds later, the man rushes to the bedroom to take a sex enhancement tablet that slips and falls into the fuel tank of a car.

This crossover of the environment from the bedroom to the fuel station is an abrupt twist of circumstances, which keeps audiences glued and amused at the same time. The bedroom scene served its purpose, which was to draw attention to the commercial because it keeps audiences asking, “What is next?” Instead, the commercial quickly turns into a car marketing promotion campaign – a departure from the bedroom. These two scenarios seem unrelated and have an impact on the audiences’ attention span (Underhill, 2004; Solomon, (2009). The ultimate value of the message is revealed at the end of the commercial when the car transforms into a “muscular” vehicle, which was the message of the advertisement – that the car is newer, bigger, more powerful than older models. Therefore, the use of sex appeal to draw the audience’s attention is a significant advantage of the commercial’s design.

Another positive attribute of the commercial is its relatively short duration. Cumulatively, the commercial runs for about a minute and a half, which is enough time to hold a customer’s attention at a time before they lose interest (O’Driscoll, 2018). If the commercial were longer, customers would have been unable to understand its ending, which is the most important part of the advertisement (Cialdini, 2007). Therefore, the ability of the developers to summarize the campaign in less than two minutes is a significant advantage of the campaign.

A negative attribute of the commercial is that it is over-imagined to the extent that it could make the audience assume that the marketing concept was far-fetched. This challenge stems from the fact that the journey through which the Viagra pill makes as it misses the man’s mouth, out through the window, and into the car’s fuel tank is overstretched and over imagined (O’Driscoll, 2018). In other words, it is highly improbable that a pill would fall from the balcony of a house, bounce through several surfaces, and end up in the fuel tank of a car. Therefore, it is over-imagined and appears fake to an extent.

Summary

This paper has highlighted the important role of marketing techniques in changing or influencing consumer behavior. Based on the contents of the Fiat commercial, two marketing concepts have been investigated in this context and they relate to how the advertisement draws the attention of its audiences and the ethical implications of using sex as advertisement bait. The findings of this study suggest that the use of sex appeal was effective in drawing the attention of its audiences towards the marketing campaign and played a significant role in maximizing its impact on men who are ideally the target market for the campaign.

The ethical implications of using sex as bait stem from the cultural context of implementing the marketing campaign. It is established that western cultures are more receptive to such marketing campaigns but Asian markets are not. Therefore, it is pertinent to understand the socio-cultural context of using this marketing strategy to draw the attention of audiences. By extension, this analysis means that the marketing strategy does not have serious moral or ethical implications in a western market but it may be unacceptable in conservative countries. Therefore, it is crucial to understand the ethical implications of using such a marketing campaign, relative to the sociocultural dynamics of a market.

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