Subaru Brand in Europe

The best-matched lifestage group is The Cosmopolitans: Upscale Younger Family Mix which belongs to the urban uptown social group and the midlife success lifestyle group. This group can be predominately found in major metropolitan areas and regions known for high economic success. There is a significant number present of this group in the New York metropolitan area where I reside.

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Other areas with high concentration of this group include St. Louis, Denver, Porland, and virtually every county around San Francisco and Los Angeles. The zip-code analysis is relatively applicable to my household with the primary age range of 25-54, The ethnicity, family type, and income bracket between the website description and personal household characteristics match completely. Compared to the previous section on the national level, the local parameters mostly match in regard to age, race, and income.

The mentor marketer company is Subaru, the well-known car manufacturer, particularly known for its family station wagons and outdoor-reliable vehicles as well as some sports-type cars. Considering the Cosmopolitan group are urban dwellers, it is important to rely on Subaru’s attraction to the niche market of being a reliable outdoor car. It can be pitched as either a family vehicle or one for individual purposes used to get out of the city and in the outdoors, on hiking/fishing trips popular upstate or a long family vacation across state lines. The Subaru car does not fit well in the city, so the emphasis should be made on its use outside the urban area.

The promotion should pair excellent quality in combination with features such as an all-wheel drive to a reasonable price tag, which is slightly on the premium side but not exuberant, fitting for the income bracket typically seen for the majority of the group at 50-100k annually. Packaging a free annual service check-up for the first 2 years, may especially attract the adventurist types of households which are seeking for a reliable vehicle investment and continuous support.

Subaru is an international car brand which manufactures its vehicles primarily in Japan, but also some facilities in the United States. However, it is sold globally in all primary major markets and continents. There are very few countries where Subaru Global does not conduct official business. Subaru has sold 865,000 vehicles in international markets with net sales of 3,160.5 billion yen (Subaru, 2019). An article by Winton (2019) in Forbes reveals an analysis that while the Subaru formula succeeded in the U.S. due to its niche market, reputation, and social advertising, it has been stagnating in Europe. While in the U.S. Subaru had a 3.92% market share, outselling even Volkswagen, in Europe that market share is at 0.9% with only 36,688 vehicles sold (Winton, 2019).

Subaru entered the European market in the 1980s, but it did not gain significant prominence until the late 1990s when more models where introduced to the market. As globalization was taking place with abolished import quotas to the EU, Subaru began making an impact.

Despite having the smallest presence in Western Europe out of Japanese car manufacturers, Subaru gained a reputation of being a ‘Japanese BMW’ focusing the niche market of the specialist all-wheel-drive which included either sporty models with high-tech engines and transmissions or models like the Forester which was the world’s first sport-activity car, a combination of sport utility and station wagon vehicle types. However, despite its popularity in the 1990s, Subaru has always maintained a strategy of carefully controlled growth in its international markets (Weernink & Catterall, 1999).

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Subaru faced numerous challenges entering the European market. First, it faced tough economic conditions. In 1991, Japan experienced an economic recession which resulted in almost a decade of difficult economic conditions. Carmakers were severely impacted as real wages and subsequent sales fell significantly. This crisis reverberated across the global economy and definitely strongly impacted the business of entering or expanding in foreign markets for a company such as Subaru.

However, it was able to come out of the crisis successfully and begin making an impact. A second challenge was government regulations in terms of quotas. The late 1980s and early 1990s saw an adoption of quotas on Japanese car imports in order to protect the European industry from Japanese rapid market share growth with their manufacturing efficiency. This leads into the third challenge of competition, from both local European brands as well as other Japanese car manufacturers such as Toyota and Honda that aggressively began expanding their presence in Europe towards the end of the 20th century, with all competition commonly challenging niches that Subaru was attempting to target (Sachwald, 2014).

Subaru appeals to a very small niche of consumers in Europe, primarily farmers and foresters as well as drivers in countries with tough road conditions in the winter. Subaru’s primary marketing strategy focused on product, emphasizing the all-wheel drive and the quality and power of its SUVs. One aspect that can changed is running price promotions or emphasizing how affordable Subaru’s vehicles are for their quality. In fact, in the U.S. many higher-income buyers choose Subaru over other luxury manufacturers for this reason. Promotions focused on all-wheel drive in Europe, but it failed to emphasize its use.

Therefore, it is recommended to include targeted practical promotions which highlight the daily usability of 4×4 drive. Finally, advertising to social niches, emphasizing the “people” aspect of marketing is important. Unlike in the U.S. where Subaru has embraced its appeal to particular niches, it has not openly done so in Europe. Appealing to numerous farmers, outdoorsmen, or even social groups such as the LGBTQ community which Subaru has embraced openly in the United States, may be effective in Europe as well.

References

Sachwald, F. (2014). Japanese firms in Europe: A global perspective. Abingdon, UK: Routledge.

Subaru. (2019). Annual report 2019. Web.

Winton, N. (2019). Subaru formula wins big in the U.S., but neglected Europe stagnates. Forbes. Web.

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Weernink, W.O., & Catterall, M. (1999). Subaru strengthens brand in Europe. Automotive News Europe. Web.

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StudyCorgi. (2021, June 21). Subaru Brand in Europe. Retrieved from https://studycorgi.com/subaru-brand-in-europe/

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"Subaru Brand in Europe." StudyCorgi, 21 June 2021, studycorgi.com/subaru-brand-in-europe/.

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StudyCorgi. "Subaru Brand in Europe." June 21, 2021. https://studycorgi.com/subaru-brand-in-europe/.

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StudyCorgi. 2021. "Subaru Brand in Europe." June 21, 2021. https://studycorgi.com/subaru-brand-in-europe/.

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StudyCorgi. (2021) 'Subaru Brand in Europe'. 21 June.

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