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Strategic Marketing


Analyze the marketing environment for the GM/Chevrolet Volt.

After describing the target market for th GM/Chevrolet Volt, assuming that the GM/Chevrolet Volt will be available in 2011, present a marketing strategy for the GM/Chevrolet Volt.

The Situation - The GM/Chevrolet Volt is a plug-in series hybrid vehicle to be produced by General Motors, expected to be launched as a 2011 model with production currently slated to begin in 2010.

Neil, Dan (2009, July 17). BMW Mini E: A rumble in the electric-car jungle
Los Angeles Times. Los Angeles, Calif. B1. Available in ProQuest at
&sid=1&Fmt=3&cl ientId=29440&RQT=309&VName=PQD
on 20-Jul-09

Some of what BMW calls its Mini E "pioneers" have dropped out of the program because of delays in the installation of home charging equipment, others because of the expense of upgrading their home's electrical service. [...] Steinberg says, the company underestimated the time and difficulty in coordinating the installation of the home recharging equipment among subcontractors, utilities and municipal inspectors.

LaReau, Jamie (2009, July 13). Auto News: Lutz Promises Drastic Changes in GM Marketing: Says Focus Needed on Brand Differentiation in Design, Advertising. Advertising Age. Available at
on 20 July 2009

Stoll, John D & King, Jr, Neil (2009, July 7). GM and U.S. Backers Face Rough Road Ahead --- As Company Emerges From Bankruptcy, Market Share Is Down; Voters Look for Return on Investment. Wall Street Journal (Eastern edition). New York, N.Y. B1. Available via ProQuest at
?did=17780 60031&sid=2&Fmt=3&clientId=29440&RQT=309
on 20 July 2009

Since taking over in April, Mr. Henderson has repeatedly said the executive ranks must be thinned.

Murphy, John (2009, July 1). Toyota Builds a Thicket of Patents Around Hybrid to Block Competitors. Wall Street Journal (Eastern edition). New York, N.Y. B1. Available via ProQuest at
&sid=2&Fmt=4&cl ientId=29440&RQT=309&VName=PQD
on 20 July 2009

The Japanese company is betting the rules will give an advantage to its expanding lineup of hybrid vehicles, and it also aims to boost revenue by licensing to other car makers the patents that protect its fuel-saving technologies. Since it started developing the gas-electric Prius more than a decade ago, Toyota has kept its attorneys just as busy as its engineers, meticulously filing for patents on more than 2,000 systems and components for its best-selling hybrid.

Welch, David (2008, May 26). GM: LIVE GREEN OR DIE: The lumbering, money-losing giant finally sees that gas engines are a losing bet. But is it too late? Business Week. New York. 36. Available at
clien tId=29440&RQT=309&VName=PQD
on July 20, 2009

In April of 2005, General Motors Chairman and Chief Executive G. Richard Wagoner Jr. convened his management team for a monthly strategy session. Vice-Chairman Robert A. Lutz spoke up. Maybe, he told GM's brain trust, it was time to build another electric car--one that would use a giant version of the lithium ion batteries that power cell phones and laptops. But no one at the meeting wanted to hear about electric cars. We lost $1 billion on the last one. Do you want to lose $1 billion on the next one? Lutz recalls one executive saying. It died right there. And yet 20 months after the meeting, in January, 2007, Wagoner stood on a stage at the Detroit auto show and surprised the world with a vow to start developing a newfangled electric car called the Chevrolet Volt. It would plug into a regular outlet, leapfrog the competition, and could be ready in three years. Why did Wagoner suddenly get religion? After years of avoiding the future, he finally understood oil prices were not going to return to earth, global warming was a de facto political reality, and Washington was serious about imposing tougher fuel economy rules on his industry. GM would have to live green or die. Now Wagoner is racing the clock. Not only has he promised to get the Volt ready by 2010, but he also must transform GM's entire fleet to meet stringent new fuel economy rules that take effect in 2017

Author Unknown (2009, February 2). CHEVY VOLT: THE FUTURE IS ELECTRIFYING. General Motors Corporation. Available at
on July 20, 2009

Lyle Dennis, Lyle (2009, February 2). About Available at
on July 20, 2009

Lyle Dennis, Lyle (2009, February 2). GM VP Troy Clarke on Why GM Doesn't Have a Strong Hybrid Sedan. Available at
on July 20, 2009

Lyle Dennis, Lyle (2009, February 2). Chevy Volt Generation Two. Available at
gm-vp-troy-clarke-on-why-gm-doesnt- have-a-strong-hybrid-sedan/
on July 20, 2009

Dolan, Matthew & Murphy, John (2009, June 24). Nissan, Ford Plan Electric Push Aided by US; Demand Is Uncertain. Wall Street Journal. Available vi ProQuest at
sid=4&Fmt=3&client Id=29440&RQT=309&VName=PQD
on June 29, 2009.

Other car makers working on electric vehicles include Toyota, Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd., maker of Subarus. [...] electric cars have been marketed as a costly niche product.

In preparing your CASE1, ensure that you demonstrate your learning of the marketing concepts and frameworks for analysis outlined in the modular learning objectives.

In particular, consider the ways in which the market for automobiles is segmented. In terms of the marketing environment for the Volt, if you are defining a target market based on 'tootling around town' or 'going to work' rather than a family-oriented car, consider who 'tootles about' relative to who buys other types of cars. Definition: tootle - to move along in a leisurely or unrushed manner

The foundation for this approach to considering who 'tootles about' relative to other types of cars is based on the premise that we voluntarily purchase items that reflect who we are.

Grubb, Edward L & Grathwohl, Harrison L (1967, October 1). Consumer Self-Concept, Symbolism and Marketing Behavior: A Theoretical Approach. Journal of Marketing. 31(4). 22-28. Available via EBSCOhost at
direct=true&db=bth&AN=49993 46&site=ehost-live
on July 20, 2009. Click on <PDF> icon.

Of course, there is an opposing viewpoint.

Michael Fassnacht, Michael (2009, April 13). The Death of Consumer Segmentation: Rethinking a Traditional Marketing Tool. Advertising Age. Available at
on April 14, 2009.

Note that this assignment does NOT require you to prepare a detailed essay. Instead use section headings for each of the topics you address in your paper followed by a discussion of each of those topics.

Solution Preview

Marketing Environment for GM/Chevrolet Volt:

The environment for Chevrolet Volt is one in which the price of gas is rising continuously. In addition, the government is likely to impose stringent fuel economy rules that will rule out most of GMs present cars. The global warming is likely to affect the automobile industry, and there is a strong possibility of stringent fuel rules on the economy. Competition has had a head start in the economy. Toyota has developed Prius and is filing a large number of patents so as keep competitors out of the market.

As taxation is concerned GM feels that Chevrolet Volt will qualify the US buyers for the maximum tax credit as delineated in the Emergency Economic Stabilization Act 2008. There is an excellent market for Chevrolet Volt in the European countries.
The rules and regulations are covered by the US Environmental Protection Agency. The US Environmental Protection Agency rules will be applied to Volt to determine its fuel economy rating. The Chevrolet Volt will require meeting the rules and regulations of all the regulating bodies in the countries in which it is marketed. Chevrolet Volt will get a tax advantage to the extent of $7,500 but such advantages may not be available in other countries.

The economic environment in which Chevrolet Volt is to be launched is weak. Low rates of economic growth mean that people will not be willing to spend $32,500 for a Chevrolet Volt. Further, even though interest rates are low, there are few takers of finance and the banks have low trust on borrowers. In addition, the exchange rate fluctuation may cause GM to quote higher prices for its cars making them unattractive.

The social environment is such that people are willing to travel more to get and keep their jobs. There are several people that travel more than 40 miles just to reach their workplace ...

Solution Summary

This answer provides you an excellent discussion on Strategic Marketing