Chevy Volt free essay sample - New York Essays

The Chevrolet Volt has been named the most influential product in the General Motors repositioning strategy by top executives because of its direct correlation to all the core business initiatives through some form. As Chevrolet has repositioned itself in North America they have adopted an initiative of going from â€Å"Gas Friendly to Gas Free†, through the development of their advance propulsion strategy. The advanced propulsion strategy is comprised of technologies such as: Ethanol85, active fuel management, hybrid technology, fuel cell technology, and electric (plug-in) technology. Therefore, by tying the business objectives of the North America turnaround plan and the advanced propulsion strategy together, the Volt was designed. The use of tying these two strategies together on other vehicles for Chevrolet has been very successful (hybrids E-85 capable models), but it must be taken into consideration that no other vehicle on the market has the Chevrolet Volt’s technological prowess. In order to achieve competitive positioning globally and improved business Chevrolet realizes it is necessary to satisfy needs unknown in the automotive industry. General Motors CEO, Rick Wagoner, noted 100 years ago there were three competing engine technologies: electricity, steam, and gasoline. Therefore, going forward it is highly unlikely that oil alone is going to supply all of the world’s rapidly growing automotive energy requirements; hence, by producing the Volt, Chevrolet will be competitively aligned globally which will give way to improved business results for the future. Strategic Business Unit (SBU) Background Chevrolet â€Å"An American Revolution† Chevrolet being a subsidiary of General Motors has very similar objectives and goals, but there are some key items to note. The Chevrolet Company has produced many new models over the years. They have become a leader in the industry under General Motors. With newer models of sports cars, full size pickup trucks, sedans, and coupes the company has grown with immense popularity. The company proved the need of American manufacturers to diversify their products. They improved using new styles such as disc brakes, headlamps, engine size, faster, as well as more reliable cars. Some of their greatest accomplishments were the Camaro, Corvette, Caprice, Chevelle, and the Impala. Chevrolet has always been a competitor; they produce in order to satisfy the needs of the consumer by offering great automobiles at low prices. Chevrolet, created in 1908, has always had an emphasis on the customer. With the development of emerging markets and new movements (The Green Movement) Chevrolet has had to adopt strategies within the scope of their business to compete. Currently, consumer needs being satisfied has been developed primarily by the innovative approaches of offering alternative fuel sources at the SBU. Clearly consumers need high quality vehicles at competitive prices, a Chevrolet core objective, but by offering alternative sources of energy Chevy believes they are satisfying a new need for consumers of the 21st century. General Motors recently adopted Chevrolet as their global fuel solutions leader. The marketing of the Chevrolet Volt will be protected by this assignment, but there are some important factors to consider. General Motors and the EV1 At the turn of the 20th century, General Motors had developed the EV1. The EV1 was a plug-in vehicle that relied solely on an electrical battery as its source of power. This vehicle which had generated lots of hype, such as the Chevrolet Volt is now, never made it into production. This result has caused many enthusiastic electrical powered potential buyers to be weary of the production of the Chevrolet Volt because of the heartbreak they suffered a decade ago. Additionally, analysts on Wall Street deemed the EV1 a massive failure because of the non commercial production of the vehicle. Trying to understand why this vehicle failed to reach its potential is absolutely necessary in the development of the Chevrolet Volt’s marketing strategy. The primary problem with the EV1 from a marketing perspective was the product itself. Unlike the Volt, GM’s EV1 didn’t have the capability to use other fuel sources when the battery died, but instead just died. Therefore, the product design of the vehicle was not aligned with customer’s expectations that had to make normal commutes throughout the day. Another key factor was that the marketing of for this product was almost non-existent. Other than a few appearances at car shows and a television commercial that never aired, no additional marketing data could be found. In conclusion due to General Motors creating a product that was not suitable for day-to-day life and not creating awareness about the product the EV1 idea was short lived. We will take these points into consideration when developing our marketing strategy. Campaign Objectives Transitioning back to the Volt, objectives are important to clarify and set targets that ought to be achieved by the planned actions. Objectives exist on three levels; Corporate, marketing and communication. Corporate objective can be summarized as maximizing shareholder wealth and is ultimately achieving higher profits and increased sales. Marketing objectives are the successful introduction of a new car to the market. Communication activities play the most important role in tying everything together as they must coordinate with all other company activities (production, sales, purchasing, etc). Listed below are the campaign objectives for the Chevrolet Volt. †¢Strengthening the consumer relationship with the Chevrolet brand. †¢Increase the consideration for Chevrolet when planning a new car purchase. †¢The target market should be reached to its fullest extent. †¢Consumers have to be made aware this new product and its brand name. Being a new product with a new technology, a prime objective is to educate consumers and explain the features and benefits of the Volt. †¢Target markets should be excited about the release of the Volt and spread word of mouth. †¢Communications should motivate consumers to find out more about the Volt; either by visiting the website, ordering brochures, visiting a local dealer, or by doing a test drive. †¢The Volt should be considered as a full and valid alternative to traditional cars, as well as hybrids. †¢Ultimately communications should lead to a purchase, and a higher percentage of showroom visits should turn into increased sales. In a perfect world communications would guide our target market right into the showroom. However, being a completely new product for Chevrolet and General Motors, there is no historical data to estimate any trends that are possible or realistic. Even if we succeed on every part of our communications plan, there is still a slight chance that this product could be a complete bust. However the success of some of our competitors, like the Prius, as well as the success of our own hybrids can, to some degree, prove that this product will be equally if not more anticipated. Whether or not these objectives will be met can only be determined by post campaign research. This research should start during the campaign and be continued in intervals to monitor the situation. Market Analysis The market analysis that will be covered will pertain to different situations that have manifested as potential factors to the introduction of the Chevrolet Volt. These situations include: product situation, competitive situation, distribution situation, and the macro-environment situation. Product Situation GM is pursuing a revised sales and marketing strategy by focusing on clearly differentiating our brands, optimizing their distribution network, growing in key metropolitan markets, and re-focusing marketing efforts on the strength and value of products. GM continues to support a more orderly and consistent alignment of its dealers. GM’s promotion strategy emphasizes its brands and vehicles, rather than price incentives. In addition, GM intends to increase advertising in support of new products and specific marketing initiatives to improve GM’s sales performance in certain metropolitan markets. GM is allocating capital and engineering to support more fuel-efficient vehicles, including hybrid vehicles in the United States, and is increasing production of active fuel management engines. GM recently announced its intention to build its first plug-in hybrid and unveiled the Chevy Volt extended range electric concept vehicle, while at the same time announcing two partnerships to accelerate development of advanced lithium ion batteries. In addition, GM is undertaking a major initiative in alternate fuels through sustainable technologies such as E85 Flex Fuel vehicles. GM has sold two million E85 vehicles and plans to build over two million more in the next five years. GM is also adding five more E85-capable models to its lineup for 2007, raising GM’s total flex-fuel offerings to 14 vehicles. In addition to offering its flex-fuel vehicles, GM responded to the strong market demand for fuel economy by selling more than one million 2006 model year vehicles that achieve 30 miles per gallon or better on the highway. In the 2007 model year, GM will increase the number of vehicles that achieve 30 mpg or more to 23 models. In support of new car and truck programs, GM’s total capital spending in 2006 was $7. 5 billion, of which $5. 0 billion was devoted to GMNA. GM expects an increase in this commitment in the future by spending between $8. 5 billion and $9 billion in each of 2007 and 2008, of which approximately $5. 7 billion in 2007 and approximately $5. 5 billion to $5. 7 billion in 2008 will be devoted to GMNA. In addition to continuing to improve the efficiency of internal combustion engines, GM is focused on the introduction of propulsion technologies which utilize alternative fuels. GM has also continued to develop electrically driven vehicles, hybrid vehicles, and hydrogen fuel cell vehicles. For example, in November 2006 GM announced that they had begun work on their first plug-in hybrid, and in January 2007 they introduced the Chevrolet Volt concept vehicle, an extended range electrically driven vehicle based on E-Flex technology with a pure electric vehicle range of 40 city miles, E85 ethanol/gasoline fuel economy of 150 miles per gallon, and gasoline fuel economy of 50 miles per gallon. The Volt can also travel at 100 miles per hour and reach 60 miles per hour in 8 seconds. The large lithium-ion battery necessary to power the Volt could be ready for production beginning between 2010 and 2012. The Volt is expected to be priced at $30,000 and sell 60,000 units in the first year of introduction, which is 4 times the amount of Toyota Prius’ sold in its first year. GM continues to increase their spending on alternative technologies and have intensified their efforts to displace traditional petroleum-based fuels. Overall, we believe that this industry is on the threshold of a major transformation in propulsion fuels and technologies –a transformation that can help GM accelerate industry growth in a sustainable way, mitigate and ultimately solve the energy and environmental challenges of the automobile, and create vehicles that are fundamentally better than their predecessors. Competitive Situation The Chevrolet Volt is unlike any previous electric vehicle, thanks to its innovative rechargeable electric drive system and range-extending power source.