With car makers around the world targeting Generation Y, the average age of car buyers is expected to decrease a lot; in fact it is hoped to decrease. The reason for this targeting is because this market is made up of 71 million Americans. With such numbers to play with, every company in this industry will want to capture these potential customers early so that they can turn them into loyal customer. As a result, Honda launched the Element, Toyota launched the Scion, and Hyundai started Hyundai Investigative Teams to conduct surveys of potential young car buyers.
Honda, in an effort to attract the young crowd, is selling the Element for a mere value of $18,300. It is designed to look ‘hip’ and ‘cool’ by looking very out of the ordinary; another feature that is expected to attract young buyers. The Scion was launched as a direct competition by Toyota and was similarly priced and designed. It was found that for both brands sales figures topped the target set easily, showing that the general strategy was more or less sound.
Unlike General Motors, whose philosophy is to sell the youth used cars, the Japanese companies came in with the view that the Gen Yers desired more than just that – they wanted quality, and they wanted something ‘cool’; and for young people, ‘cool’ is not often old and used. Hyundai still has to make a mark in this category, but in the meantime the Scion and the Element are hammering it out in the streets of America. Implications for a Global Marketer
The Toyota Scion decided to switch from its low key, limited marketing strategy, to a more edgy, more broad strategy; mostly because of the success of the car in attracting new buyers. Although an old design – the car was already available in Japan – the Scion became a symbol of differentiation for the youth. Its design prompted young buyers to stop and consider the car, and thus created a hype that marketers have been able to tap. The marketers have shifted to a more youth oriented plan, where advertising is using more youth oriented mediums and flavours.
Rock bands and an increased online presence on social networking sites – two of the most important meeting points of the youth today – are being used to promote the box-like ‘youthmobile’. The current strategy seems to be working well for the relevant companies as both Honda and Toyota have done well in their sales of this car category, and it seems that they should expect more competition from companies like Hyundai who have been eyeing their progress in their field before they jump in as well.
Recommendations and Additional Thoughts More famously known for their run-of-the-mill cars and trucks, Toyota and Honda have stepped outside the box and created something new and daring. It worked to the extent that both crossed their expected sales amounts, as mentioned in the case. However, more successful companies in this effort were not those that completely changed their construction strategy, instead they were those that focused more on better marketing than on building a new car (Maynard, 2003).
Mitsubishi offers very flexible payment terms, and more youth centered ads, and Hyundai offers a cheap alternative that also promises a 10 year, 10,000 mile warranty. It seems that young car owners prefer cheaper vehicles that they can customize later as they want, rather than standardized and more expensive cars that will make them the same as everyone else – personal style is most important (Maynard, 2003). MTV Situation Analysis Since 1981 MTV has changed the face of the music industry, which makes the title of their first music video played all the more ironic, ‘Video Killed the Radio Star’.
So while it changed the face of the industry, itself the channel has changed little. MTV has always focused on the youth, and to maintain this focus they addressed the one thing that is a very common trait of Gen Yers – the desire for individualism. This is the reason that its channels, although played globally, are regionally designed to cater to the needs and wants of the region; its not just American Pop Music for all, some countries running MTV play more local than global music videos.
All of this explains how MTV can reach a total of 125 million households today. The company already has a global face, with regional designs, and it is now looking to use cost effective methods to tap the infrastructure it has built so far. Since designing and running new shows can cost between $200,000 to $350,000 for every 30 minute episode, MTV is now trying to design new programs that will be acceptable worldwide; sort of the success achieved by the hit tv show, F. R. I. E. N. D. S.
Unfortunately for MTV, the introduction of the internet into the world brought about a dramatic change similar to the one that MTV itself brought about so many years ago. With social networking sites that allow video postings, and video playing sites like YouTube that allow users to upload any video content they feel like (within limits), the market has become more and more divided. MTV is now viewed less as a necessary medium of information to remain ‘cool’, and more of a has-been that is slowly fading away from the attention of the Gen Yers.
Implications for a Global Marketer MTV has played on the youth and their attracton to individual style in every country it started operations in. A regional flavour has allowed it to enjoy success in each case that it was tried; so that, for example, the Indian MTV is more colourful and upbeat. In addition to this, it also relies on local ads that are generated because of MTV’s promotion of local talent, since each country has its own particular tastes in music which its local artists can better capture.
However, MTV now needs to focus more on the web as a means of showing videos, since most of its target audience spends a far greater time here as evidenced by the values received during acquisitions of companies like YouTube and MySpace. The sub heading is not indented but the body of the sub heading is indented. Recommendations and Additional Thoughts Starting off as a music channel, MTV now hardly plays any at all. The main channel is more famous for its reality TV shows that are the stars of its programs. The strategy has shifted to stay in line with the change in tastes of its target market – the youth.
It has to deal with several problems for focusing on this market, most of which are related to the increasing diversification of the original market. Therefore, it has diversified in its presentation along with its target, through the introduction of several different channels that cater to the different types of youth (Haig, 2004). It is interesting to note that when it first started off in India, MTV failed due to its switch to a completely localized format. It had to leave and come back with its original Western format; the one for which it is famous (Lin & Atkin, 2007).
This just goes to show how a strategy of acting local needs to be mixed with a strategy of thinking global in order for a company to maintain its familiarity with its audience. References Book Haig, M. (2004). Brand royalty: how the world’s top 100 brands thrive and survive. Kogan Page Publishers. Lin, C. A. ; Atkin, D. J. (2007). Communication technology and social change: theory and implications. Routledge. Website Maynard, M. (2003, Jan 16). Carmakers Design For Generation Y. Retrieved July 15, 2009, from http://www. nytimes. com/2003/01/16/business/carmakers-design-for-generation-y. html? pagewanted=all