Introducing the G20 In April 1990, Nissan’s Infiniti division planned to introdu

Question

Introducing the G20

In April 1990, Nissan’s Infiniti division planned to introduce the G20 in the

United States, adding a third model to the existing Infiniti line. The G20 was already available in Europe and Japan under the name Primera. The car, equipped with a four-cylinder engine developing 140 horsepower, would be Infiniti’s entry-level luxury car. Initial market response to the G20 in the United States was disappointing, and management wondered how it might retarget or reposition the car to improve its market performance. Background In 1989, three years after Honda first introduced its Acura line, Toyota and Nissan attacked the U.S. luxury car market, a segment previously dominated by American and German manufacturers. In November 1989, Nissan launched its new luxury Infiniti division with the $40,000 Q45 as its lead car and the $20,000 M30. However, Nissan was somewhat late: in August 1989, three months before Nissan shipped its first

Infiniti, Toyota had introduced Lexus, its luxury brand, with a two-car line comprising the $40,000 LS400 and the entry-level LS250. As the figures for January to September 1990 showed, Lexus outsold Infiniti by 50,000 to 15,000. The reasons for Infiniti’s slow start were threefold:

• First, the Infiniti Q45 came to the market after the Lexus LS400 had established a good market position.

• Second, Lexus had two very good cars, whereas Infiniti’s M30 coupe received poor evaluations from the automobile press and from customers.

• Finally, the eccentric Infiniti advertising campaign that showed scenes of nature, but not the car itself, shared some of the blame. (“Infiniti may not be doing so well, but, hey, at least sales of rocks and trees are skyrocketing,” commented comedian Jay Leno.) Research Data Exhibits 1–4 summarize some of the data that Infiniti had in early 1990. Data in Exhibits 1 and 2 are based on a survey of customers from its target segments, described as people between 25 and 35 with annual household incomes between $50,000 and $100,000 (when the survey was administered, the Lexus LS250 was not yet well known to the respondents to be included in the study). The three subsegments in Exhibit 1 (denoted S1, S2 and S3) are based on information provided by Infiniti managers. Exhibit 3 is derived from sales brochures describing the characteristics of each car. Exhibit 4 summarizes demographic and psychographic information about the three subsegments and was compiled from databases supplied by Claritas, Inc.

POSITIONING THE INFINITI G20 CASE 2/7

EXERCISES

1. Using the data in Exhibit 1 and the associated perceptual mapping software, describe the two (or, if applicable, three) dimensions underlying the perceptual maps that you generated. Based on these maps, how do people in this market perceive the Infiniti G20 compared with its competitors?

2. Infiniti promoted the G20 as a Japanese car (basic version $17,500) with a German feel, basically a car that was like the BMW 318i ($20,000), but lower priced. Is this a credible claim, given the perceptions and preferences of the respondents?

3. Which attributes are most important in influencing preference for these cars in the three segments (S1, S2 and S3) shown on these maps? To which segment(s) would you market the Infiniti G20? How would you reposition the Infiniti G20 to best suit the chosen segment(s)? Briefly describe the marketing program you would use to target the chosen segment(s).

4. What ongoing research program would you recommend to Infiniti to improve its evaluation of its segmentation of the market and positioning of its G20?

5. Summarize the advantages and limitations of the software provided for this application.

Exhibits G20 Ford Audi Toyota EagleHonda Saab Pontiac BMW Capri Tbird 90 5.6 4.0 4.6 6.3 3.65.2 2.9 4.23.7 1.64.22.6 3.65.04.0 4.1 4.9 3.8 Uncomfortable 3.2 4.0 2.4 4.2 3.9 5.3 Easy to Service 4.6 4.93.5 5.43.55.6 3.5 3.63.4 3.6 3.7 3.6 5.3 4.2 5.0 4.3 3.6 3.6 3.4 4.3 4.3 6.3 3.9 6.0 Supra Talon Prelude 900 Firebird318i 3.9 2.8 3.9 Attractive 5.6 5.2 5.7 3.9 5.0 3.3 2.3 4.0 1.8 4.3 3.9 5.2 3.5 4.4 3.6 3.5 Quiet Unreliable Poorly Built Interesting Sporty 2.0 3.2 2.8 2.8 3.9 3.3 6.2 5.7 4.0 3.3 2.8 Roomy 3.6 3.9 3.3 4.9 5.3 2.9 3.2 2.8 3.8 6.4 3.3 High Prestige Common Economical Successful Avant-garde Poor Value Overall 5.4 3.9 5.0 5.6 3.9 2.6 1.9 2.8 3.7 5.9 4.9 4.4 3.7 4.5 3.5 3.6 2.9 3.8 6.8 3.0 6.7 4.0 Segment I (S1) Segment II (S2) Segment III (S3) EXHIBIT 1: Survey results with average perception and average preference ratings on a scale from 1 to 9. 4.3216.0 3.3 6.0 1.2 8.3 1.7 5.9 6.0 7.7 3.5 5.5 2.5 8.4 2.13.4 7.3 3.4 8.3 5.3

Explanation / Answer

Ans;

It is generally classy and the purchase trends support this. In terms of fuel economy, it is not as efficient as its counterpart but its performance is something to marvel about since its horsepower indicators are very healthy. It's a little bit bigger than the average cars and still gives the ultimate performance. It is described as an entry level luxury car and it assures the clients of both performance and class in any time of need.

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