Positioning Fiat Stilo

Fiat Stilo: Positioning

Problem Statement

Fiat is doing poorly in the Spanish market due to poor customer perception. The company wishes to launch the new Fiat Stilo with hopes of obtaining profit in Spain. Fiat must choose in which way it should position the new model so that it can reshape the way Spanish consumers perceive their brand.

Situation Analysis

Customers:

• In Spain, the automobile sector is divided into segments depending on the specifics of the vehicle, mainly size and type of bodywork.

o The ideal prospective customers come from the C segment, which is the most important in terms of volume, but also where there is greater competition. In this segment images are created and consolidated. Within this large segment there are four main divisions; after a client study 2 main groups where selected:

 5-door buyer: oriented towards a predominantly male population, brand-loyal, valuing safety and comfort in the mid-high standard of living.

 3-door buyer: younger, mainly male less brand-loyal with higher purchasing power

Competition:

• 6 main competitors currently well-positioned in their respective niche. Within the competition, there are two very marked strategies followed:

o Enter the market by selling very basic versions in order to attract clients by using the price, and then try to sell a superior version.

o Present an image of quality using the price as one of the mayor indicators.

Company:

• Fighting against client perception that Fiat only offered small vehicles

• Has managed to achieve some synergy by unifying Fiat with Alfa Romeo and Lancia in aspects such as after-sale services; as a result, client assistance has reduced in cost and improved in level. The cost reduction has expanded to affect training costs and technical teams for the dealership networks.

• Currently customers in the C segment are mainly the low to mid-income male sector

Context:

• The automobile sector has experienced great increase due to the boom in the economy, aggressive sales policies of the manufactures, and fact that a great number of automobiles are approaching their 10th year and therefore must be renewed.

• This is a crucial moment for Fiat because with the launch of this new model, the company has a chance of changing the image, penetrating the market, and generating profits.

Alternatives

1. Position both Stilo models as to being affordable, therefore attracting the lower-income part of the C segment and gaining necessary market share.

2. Position both models as to being of better