General Motors and Saturn

Case Study

Saturn: An Image Makeover

Questions for discussion:

Q1: Using the full spectrum of segmentation variables, describe how GM has segmented the automobile market?

GM is a company that produces a lot of car models which are directed towards various segments of the market. A complete structural breakdown is discussed below that provides detailed information about GM’s market segmentation.

Demographic Segmentation:

If one arranges market segments on a demographic basis, one finds that the company basically targets young to middle age customers. It does not distinguish between the gender of its audience and targets both male and female people. The Saturn models are designed to provide a life cycle of vehicles that can follow the history of young people who may be married or not. This means that Saturn models start from compacts and gradually increase in size to offer SUVs for large families. The company targets people with low income as most models are cheaper than the competition and designed to provide people with good experience. Saturn models are available for everyone whether be a salaried person or a person with professional job position.

Geographic Segmentation:

The case study does not mention people of different ethnicities or cultural entities. This means that the company targets the general people that are available in the target market of United States. The company is also targets its models for urban situations such as those found in New York City.

Behavioral Segmentation:

The Saturn brand offers safety, economy and personal experience in their car models. They believe in providing different models for different stages in a man’s life. This business model strongly relies on creating loyalty status with its customers. The company targets this kind of segmentation by providing personal services and offering gradual improvements in its models.

Psychographic Segmentation:

The Saturn brand targets people of a lower social class who are looking to move ahead in the society and occupy a position that offers prestige due to the use of good quality cars.

Q2. What segment(s) is Saturn now targeting? How is GM now positioning Saturn? How do these strategies differ from those employed with the original Saturn S-series?

Targeting :

The company is targeting various customers. These customers include high quality imported car users as well as mid-level income people. The company also targets its loyal customers to change models. It targets young people with compacts, roadsters and sedans. The company also produces luxury SUVs to target people who only have an eye for class and luxury travelling.

Positioning:

The company is set up to offer a new brand by introducing European Opel. GM also constantly attracts people who want to buy imported models. The company has also positioned itself in sports car market by introducing two models of roadster and sports sedan. The brand is now shifting to provide higher quality vehicles that are more costly yet provide better services.

How do these strategies differ from those employed with the original Saturn S-series?

The company is now offering two lines by the name of red and green line. The red line is designed to provide the improved Opel Astra and will take the place of Ion model. The green line is designed to offered car models that are completely based on hybrid technology which are offered at the most cheapest rates in the region.

Q3. What segmentation, targeting, and positioning recommendations would you make to GM for future Saturn models?

Segmentation recommendations:

GM should work more on providing high quality luxury cars for its high end customers. These customers are loyal to the GM brand and this market segment should be given more importance. These luxury models should also be improved by offering more options for sports accessories as well provide various style options.

Targeting recommendations:

GM should move ahead from targeting the mid income market and move towards both the high end customers as well as low income customers. The company profits will definitely improve if the market segmentation and targeting improves and covers different groups of people with different ages and social positions. The company should add more options of comfort, style and sports in its car models to increase its loyal fan base.

Positioning recommendations:

GM must create their own brand name effectively by targeting not only the local but also the global market. It must work to produce a good quality name among its competition. GM should consistently improve its car models by providing more features and offering higher quality.