“Is the time right for small cars?”-SWATCHMOBILE

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SWATCHMOBILE

“Is the time right for small cars?”





Prepared by:

Fatma Rana KABACAOĞLU 070000004
Cenker ÇAKIN 070000076
Gökhan ERGEN 070000051


















INTRODUCTION

Our discussion and presentation today will be about a different co-branding event which is “the union of two firms for creating a new product in to the market” namely Mercedes and Swiss Corporation for Microelectronics and Watch Making Industries, or just Swatch the way every of us call it. Ok. let’s now get informed about these leading two companies’s background and what their marriage yielded.


SWATCH

Swatch has a background of several decades and is a widely-known disposable watch brand. It wields accumulated knowledge and much expertise about microelectronics and small electrical parts of machinery. Swatch has over 200 types of watches now all of them being sold throughout the world. Having a price span of $35 to $50 for it’s fashion watches Swatch is playing big in the fashion watch market. But, in search of brand line extensions Swatch has made some diversification efforts trying selling pager watches, sunglasses and telephones, all of which were carried out without much success. Putting aside these unsuccesful events Swatch is a well promoted brand almost available everywhere in the world in colorful stores and galleries. Derived from it’s fame throughout the world we can assume that it promotes and markets itself presentably. Similiar facts are also valid for Mercedes, the car company.

MERCEDES

As Cenker informed you on Swatch industries and products, I will talk about the other half of this co-branding activity. Under the Daimler-Chrysler corporation, Mercedes implies a respectful status and undoubtful performance, where the corporation considers Mercedes as a “synonym for the production of high-quality and innovative vehicles”. Beginning from its invention in 1886, Mercedes pulled off the competition successfully in the car market where luxury cars are not highly prefered. Customers mostly visualize a Mercedes user as being a wealthy, middle aged business executive. As every pleasure has its price, Mercedes cars are sold between $25.000 and $130.000 which are mostly not a significant part of its buyers income. The products are not only individual vehicles, there are many alternatives in the span of Mercedes products. They could be categorized as passanger cars, compact vans, recreational vehicles and commercial vehicles. The company chose “Engineered like no other cars in the World” to identify itself in the market and with this very motto, Mercedes are sold in all of the continents excepts Antarctica. There are three significant and professionally designed Mercedes customer centers in Germany, in Rastatt,where A-series of Mercedes are being exhibited, in Bremen and in Sindelfingen. In addition, in their web site, which is identical in every country, there is an excellent option of making up your custom Mercedes with the features you want. While the company has all those positive and respectful image and prestige, what made Mercedes to seek out for something that really out of its way?

JOINT VENTURE

Swatch and Mercedes really differ from each other in many aspects; but why do such different companies join in an adventure, what do they have in common?
What about their reasons for such a joint?

Swatch
 Searches for Something else to put its successful name on
 Unsuccessful trials on telephones, pager watches, sunglasses _which are all on its own size.
 Those upsetting stories may Harm the major brand name and decrease the watch sales of “Swatch”.
 Dominates microelectronics technology
 Since all the competitors work on micro-things in watch industry and the market level is not high enough, Swatch’s extraordinary success and dominance over the subject can Not be noticed.

So, Swatch decided to stretch its line upwards in order to turn its unluckiness down, protect its existing brand, add prestige on it and to prove its success on microelectronics.

Mercedes
 Serves in the luxury car market from a high-end position
 Luxury car market is a typical slow-growth one
 Although the growth rate is low, Japanese automakers attacked to the market and lowered Mercedes’ sales by 11%
 Sells high priced products
 Plays big but Misses the middle class, which involves the majority of people within the total market.
 Its competitors GM, BMW, Rover are already developing their new models for the ones who cannot afford their conventional cars.

So, Mercedes decided to stretch its line downwards in order to plug the middle market hole, compete with other big automakers in the new market and to benefit from the faster growth in the low-end.

To sum up, under the scope of these reasons, Swatch and Mercedes had made a joint venture and introduced an innovative, subcompact and economic car.

PRODUCT

Brand Name

Brand name selection is one of the most difficult decisions a company managerial team has to make. But in this very case Smart Micro Compact Cars seems to pull out the problem very succesfully. Smart, a witful and “smart” combination of the two words “Swatch”, “Mercedes” and “Art” represents the no-limit human creativeness and intelligence.To be counted as an innovative invention in the small car market “smart” acquires a big part of it’s power from it’s name. But yet the product and brand is so new to become famous with much speed. Although brand identification comes along with a brand reputation Smart has the potential to build this reputation in a short time. Trying to get itself a place in the specialty product market, -meaning a product to be identified by special and significant type of customers- smart must have the duty to build effective customer perception and awareness. It is a crop of high-tech engineering and creative design. Classfying it with the other classic car concepts would be a definite insult to the Smart team. All the factors constituting Smart -from the architecture of the galleries to the very design of the automobile- represents a unique specialty. But yet the company has to achieve a bit more to deserve such a status as a specialty product. The two companies united efforts or co-branding namely contributes to the reputation building process. With Mercedes’ knowledge in car safety and design uniting Swatch’s expertise in microelectronics, this brand promises to be assertive.

Design

Think for a moment. Think about the companies that make smart. Mercedes, a performance master, and Swatch, fascinating designs builder. Therefore Smart is been powered by the safety features of Mercedes and funkiness of smart while disposing a $507 million of r&d without regreting. Smart designed to be a two seated car, where all of its competitors are four-seated. The design of a typical smart could be covered in 4 sections:

1)Outside

1)TRIDION. Safety that you can see. In two colours.
2)The body panels

2)Inside

The smart™ has been designed singled-mindedly for two people. With ample space, optimum ergonomics and pleasant materials.

1) Fresh-up interior

The Fresh-up pack includes all door panelling as well as diverse features in the cockpit area. The parts can be exchanged in no time at all in the Smart™ Center.

2) Fan

A breath of fresh air in the interior design. A good arrangement for the best possible atmosphere.

3) Instruments

The Smart™ accommodates everything efficiently and in such a way that it corresponds exactly to your natural movements and senses.

4) Materials

More fabrics, less synthetic materials. Beautiful to look at, beautiful to touch. The fact that everything is up to 95% recyclable is a matter of course for us.


5) Gear lever

Selection instead of clutching and de-clutching.
Change gear via a simple selector, in 6 clutch-free gears.

6) Seats

The seats are very comfortable and safe. Firm upholstery provides good side restraint; integrated headrests.

7) Luggage compartment

Practical - the large split rear flap facilitates access to the boot area, while the upper flap suffices for smaller loads.

8) Feeling of space

Owing to ample room for movement and the logical smart™ design, the feeling of space in the Smart™ is unique.

3)External colors

The span includes jack black to bay grey metallic. All could be seen here

4)Internal colors

Scodic grey to leather black with 6 alternatives.

There is more. The modulation of the car is faboulous! It became from five assembly modules which could be supplied from supplier factories near Hambach and bring together in the factory in only four and a half hour. This not all! The faboulous modulation gives you the chance of changing car’s appearance! With the inspiration of swatch, the panels could be exchanged with the other funky-coloured ones in order to create your own very personal car.

Feature

1. Safety
2. Construction
3. Engines

Safety

1. 10-Point-Safety
 Wheels
 Crashbox
 Doors
 Airbags
 Seats
 Safety Belts
 Transverse Struts And Steering Column
 Position Of The Engine
 TRUST-PLUS
 TRIDION

2. Daimler-Chrysler Experience
3. Crash Conducts
 Head-On Collisions
 Rear Collisions
 Side-On Collisions

Autobild : “ The Smart affords the greatest chances of survival in small cars.”





Construction

Vehicle Data
 Length : 2,500 M
 Width : 1,515 M
 Height : 1,549 M
 Empty Weight : 730 Kg.
 Permissible Total Weight : 980 Kg.
 Tank Volume : 33 Lt.

Engines
 Power Plant
1. Suprex Turbo Engine
 3-Cylinder
 Turbo Charger
 Charge Cooling

• Driving Performance
1. Maximum Speed Of 135 Km Per Hour
2. Gasoline Consumption Of 80 Km Per Gallon

Quality

With these impressive features and design quality already at hand, Smart must offer the customer a satisfactory quality. In this means our smart automobile seems to have no problem in satisfaying it’s users. Because Swatch (the swatch group owning brands like cK and Longines watches) and Mercedes (Daimler Chrsyler holding assets for many car brands) are two big companies having gained worldwide customer quality perception. Without quality none of the quality factors of certain criteria would be achieved. So Mercedes and Swatch, as two partners of Smart offer their quality in Smart. Smart as a customer driven product fulfills the two forms of quality. One of this is performance quality. It might have offered the comfort and speed of a BMW only if it were designed to do so. As a microcompact car, Smart constitutes all the features that such an automobile has to do so. The optimum formation of fuel conservation and speed, makes Smart a well performing product. But it could have offered a better performance quality if it could hold it’s electrical and gasoline fuel source configuration. When providing this effective combination it also preserves the environment. If we consider the factors of customer defined quality consistency, we can see that Smart pulls it out again. It is a car totally created and produced out of today’s energetic young couples’ needs and wants. In means of customer satisfaciton Smart offers effective after-sales service quality. Maintainance stops of this title are to be explained later on. Although Daimler Chrysler now holds all the assets of Smart, Daimler company is not a firm to ignore customer needs. We believe that customer’s Smart quality perception will improve over time and reach further satisfaction levels.


Service

Smart is designed to have mainainance stops to take less than 2 hours, that combines good service and less-need-to-service in one piece. Beside, there is a leasing package that includes rentall of a larger car for two weeks per year, when the customer might need more seats and room for luggage. Smart™ also offers individual leasing contracts. You determine duration, down payment and annual kilometer requirement. In consequence you are able to adapt the instalments to your needs.
The services of Smartmove & more and Smartmove CarSharing are available to you as a smart driver. This provides you with access to AVIS hire cars and a multitude of CarSharing vehicles. You therefore receive precisely the vehicle you require at extremely advantageous conditions. For example, a Mercedes limousine, a hatchback or a van.
The smartmove name summarises all the mobility offers related to the smart. These offers incorporate the smart in other innovative mobility systems and additional benefit accrues to the customer as a complement to his/her vehicle.For example, smartmove offers the smart customer attractive, favourably priced parking spaces, access to other vehicles from AVIS and carsharers , access to other means of transport and economically priced transport of the smart on ferries and trains.
smartmove also makes the smart the ideal vehicle if ever another means of transport is required.
Hire cars are ideal with longer bookings. For shorter durations of use and also by the hour, a CarSharing vehicle is available to you.
In addition, finance, leasing and insurance options are available online, where reduces the purchase time to less than an hour.
This insurance is as unique as the smart itself. Backed by the experience of the Zurich Financial Services Group, a leading, internationally recognized provider of insurance and financial services, smartstart insurance give you everything you would expect from your insurance, and much more. smartstart insurance has been especially designed for the smart and it’s drivers. Apart from accidental damage and liability smartstart includes other attractive additional benefits.

Replacement cost cover

The Smartstart policy covers your smart at replacement value for the first year after registration if damage amounts to more than 80% or if it is stolen. smart body panels are covered at replacement value for the duration of the policy.

Convincing second-car provision

If your Smart is your second car, you benefit from it being classified in the lower-priced no-claim bonus class 2, at 85%, not 140%.

Extended theft coverage

If your Smart is stolen during the first year after registration or if it is damaged more than 80% following a theft, it will be covered at replacement value. After the third day, you can claim a replacement smart for a further 12 days. Immediately after that, the insurance will pay for a new smart.

Mobility accident insurance

Smart is not just another car since it is part of an complete mobility concept. That's why the mobility accident insurance is a very useful addition to the smartstart insurance. The mobility accident insurance gives you cover in case of accidents while driving the smart or using public transport systems, such as

> railways, trams, underground
> busses, taxis
> ships, ferries
> aeroplanes and helicopters

Even as a pedestrian or while riding your bicycle you will be protected by the mobility accident insurance on your way to your workplace or as student on your way to university.

Assistance

In case of accident or breakdown the assistance of smartstart insurance keeps you mobile by providing you with a replacement car. We will also support you in case of personal emergencies (e.g. illness) while travelling. Assistance will be given 24 hours a day, 365 days a year.

The changable part of the cars also available at the smart sale points where would probably make you think you buy a new car from that point.

PLACE

 How And When Will The Smart Be Distributed?
MCC have developed 2 phases for distribution. For the first, which will be in Europe, not including United Kingdom, it began to sign up dealers in 1997. the second phase will cover the United Kingdom, Japan, Other Right-Hand-Drive Countries and United States; but the time of launch for this second phase has not been indicated.
The distributors of “Smart” are dealers; however, it’s not so easy to be a Smart dealer. A Smart “Smart” Dealer Should ;
1. Be A Mercedes Dealer (not an obligation but an important reason to be preferred)
2. Invest about 5 Million $ For The “Smart Center”,
3. Build On Land Located Near Suburban Shopping Centers,
4. Stack The brightly colored Cars Vertically In A Glass Tower,
5. Employ min 15 People for the first year,
6. Pay A Fee Of 72$ Per New Car And 36$ Per Used Car To Support MCC’s Marketing Campaigns,
7. Pay 42000$ To Support Marketing Research,
8. Establish two Information Centers, one of which will have to be in an airport or railway station, and the other to be in a shopping center,
9. Not Violate Provisions In The Aggrement.




If the distribution channel of Smart is the dealerships, then the conditions should be convenient for entrepreneurs. However, such strict provisions may put pressure on dealers from the very beginning. In addition to this, MCC projects a gross profit of $725000 for a 5-year dealer but a “project” may not be satisfying to dealers after investing $ 5,05 million, they may want to have guarantees of return.



PRICE

The price of our new smart car will of course be an affordable number. As Smart targets dual income childless young couples, the price must be low. The core reason lying under this price adjustment that young couples who are in the earlier periods of their life cycle have a limited income. Socio-economic factors which prevent them from buying a mercedes or a Rolls-Royce at the same time causes them to buy such kind of small and affordable cars. The new car’s price is targeted to be between $9.405 and 11.402. Compared to the price of A Series of Mercedes which cost nearly $18.000 the amount one will has to pay for Smart is less.Today’s e-business environment is used to sell any kind of product, why not a car. E-selling might serve suitable price flexibility options. Our smart car is also a super-design for families who need a second car. But the case is diferent for Turkey. The price factor may disturb the lower-middle income people of Turkey. This kind of car may not be very welcome in a country where people are choosing their first car to be small as possible because of the price factor. When an automobile is presented to be a second car it must offer a good price convenience to be broadly accepted.

PROMOTION

The promotion of company products could be done through four basic channels: advertising, personal selling, sales promotion and public relations where MCC used those channels effectively on promoting Smart. In the beginning, the company carried a $50 million “street awareness” campaign in France in October 1997 that featured promotion teams handling out postcards which merely read “Reduce to the Max” without mentioning the name. After the introduction of the car to the market, many attractive ads where published in magazines like the ones behind me. Moreover, as Rana mentioned in the dealer responsibilities part, several information centers are obliged to be established in airports, railway stations and in shopping centers. While targeting relatively young customers, the Web site, where a heavy load of information could be found, designed in a dynamic concept. The site might make you think that it is living and its an undoubtful way of attracting new development-seeker customers.