Marketing Mix of Fiat Chrysler : An Introduction
Fiat Chrysler is a leading global auto brand with a large product portfolio and operations in more than 40 countries. Its head office is in London, United Kingdom. However, the sales and distribution network of the company is spread across more than 135 countries. It sells its products directly as well as through local distributors and dealers. Fiat Chrysler Automobiles N.V. was incorporated in 2014, formed after the merger of Fiat and Chrysler. The product portfolio of Fiat includes brands like Fiat, Dodge, Fiat Professional, Jeep, Lancia, Alfa Romeo, Ram and Abarth brands.
In the last several years, the company has been performing consistently. Net Revenue of FCA group grew to the highest in fiscal 2018 reaching $110.4 billion. The automobile industry has entered a difficult phase in 2019 and FIAT has focused its strategy on building strong brands and investing in strengthening its position in the Chinese market. The company has organized its business into five reportable segments based on geographical regions. FCA’s main strengths are its large product portfolio and global presence. To strengthen its business model, the company is investing in research and development, studying customer trends, market dynamics and growing its product portfolio of white space products.
China is now the largest market for automobiles and the company is investing in this market due to its strategically higher importance. Around the world, the automotive industry has experienced a decline in demand. However, China is still a very large market for automobiles. Most brands including FCA are betting upon this market for faster growth. The product portfolio of FCA is large and varied which includes passenger cars, SUVS, CUVs, mini vans, light and heavy duty trucks as well as light commercial vehicles and luxury cars. However, as time passed, the demands of customers has changed leading to higher focus upon quality, design, passenger safety and technology. Digital technology has become a source of competitive advantage for most brands and also a leading factor driving higher growth. FCA grew its focus upon research and development in light of changing market dynamics. While the company has mainly invested in reducing fuel consumption and bringing low emission vehicles, it is also investing in connected and autonomous cars. One important benefit of autonomous technology is higher passenger safety as well as reduced pressure on drivers. However, customers also want vehicles that are environmentally safe. In 2018, the demand for electric vehicles shot high due to increased inclination of customers towards emissions free vehicles. As customers around the world are growing increasingly conscious of the benefits of electric mobility, the sales of electric cars are also growing. By 2022, FCA intends to grow its portfolio of electric vehicles a lot wider.
More about FCA in this marketing mix including its four P’s – product, place, price and promotion.
FCA’s portfolio includes Fiat, Dodge, Fiat Professional, Jeep, Lancia, Alfa Romeo, Ram, Abarth and Macerati brands. The company makes and sells a large range of SUVs and CUVs under the Jeep, Dodge and Alfa Romeo brands. The complete range of products by FCA includes passenger cars, SUVs, trucks and light commercial vehicles as well as luxury vehicles. SUVs and CUVs made by FCA include Jeep Cherokee, Jeep Grand Cherokee, Jeep Wrangler, Jeep Renegade, Jeep Compass, Jeep Grand Commander, Dodge Durango, Dodge Journey and Alfa Romeo Stelvio. The company has also brought a large range of passenger cars to the market that include Fiat 500, Alfa Romeo Giulia, Dodge Challenger and Charger as well as minivans like Chrysler Pacifica.
Here is a short introduction to each of the brands in the portfolio of Fiat Chrysler Automobiles.
Karl Abarth founded the Aparth brand in 1949 whose main specialization is performance modification for on road sports cars. Since its relaunch in 2007, the brand has mainly brought performance kits and production touring and racing versions of Fiat cars. Millions of small super car lovers around the world love Abarth.
Alfa Romeo :
Alfa Romeo was founded in 1910 in MIlan, Italy and the brand symbolizes pure Italian creative excellence. After Giulia, Alfa Romeo has brought Stelvio. The brand was absent from the racetrack for nearly thirty years and then returned to the racetrack in 2018.
Chrysler’s foundation was laid in 1925 and the brand is today focused primarily upon minivans and full size cars in the North American market. Having invented the idea of minivans in 1980, the brand has produced more than 14 million minivans till date, thus setting a new standard in an area which it has led for more than 30 years.
Dodge was founded in 1914 and the brand has been making bold and aggressive cars since then which set themselves apart from the competition. The Dodge brand is known for innovation performance and efficiency. Its complete lineup of cars includes the muscle cars, SUVs and crossovers which are known for their best in class horsepower as well as technology and capability that is matchless. In 2018, Dodge has introduced two models with extraordinary power and capability – 840 Horsepower Dodge Challenger SRT Demon and Dodge Durango SRT.
Fiat was founded in Italy in 1899. This brand is focussed primarily on the small and compact car segment with a distinctive Italian style. Among the most popular models by Fiat is the Fiat 500. Its core markets are Europe and Latin America. However, the brand is also developing in Asia Pacific. Fiat sells more than 1.3 million units each year and its primary focus are small, mini and medium vehicle segments
Fiat Professional :
Fiat professional is focussed on the light commercial vehicle market. The brand offers a full line of light commercial vehicles which is recently updated. It entered the pickup market in 2016 with the launch of fullback in 2016 and fullback cross in 2017.
Jeep is a global brand of SUVs which was founded in 1941. SUVs by Jeep sell across more than 140 countries. Jeep sold around 1.6 million vehicle units in 2018 and for the last five years it has been selling more than a million vehicles each year.
Lancia was founded in 1906 and is known for its style and design. The brand is sold only in Italian markets and most famous among Lancia cars in the Lancia Ypsilon. The entire range of Ypsilon small cars includes five different models.
Founded in Bologna, Italy in 1914, Maserati brand is a blend of style, luxury and sportiness. In september 2019, Maserati announced its plans for production innovations, electrification and autonomous driving. Now its new models will be made fully in Italy and upcoming models will adopt hybrid and battery electric propulsion systems.
Mopar has been around for more than 80 years. The name is a contraction of MOtor and PARts. The brand was established in 1937 and is the official provider of service, parts and customer care for the FCA brand vehicles globally. Every year, it distributes more than half a million parts in more than 150 countries around the globe. During the last decade Mopar has successfully brought several industry leading innovations including the first smartphone vehicle information apps, in-vehicle wireless charging and factory-connected tablet technology at service centers via Mopar wiADVISOR.
RAM was launched as a standalone division separate from Dodge in the year 2009. It sells a full range of light commercial vans and heavy duty trucks. Apart from its core North American markets, RAM is also growing its presence internationally.
The Dodge SRT brand makes high performance and innovative vehicles. SRT is a part of the Dodge brand. However, it has a unique and distinctive identity. Dodge Durango SRT is America’s fastest, most powerful and most capable three-row SUV whereas Dodge challenger SRT Demon is the fastest quarter-mile production car in the world and the most powerful muscle car ever.
The automobile industry is undergoing transition and the demand for electric cars is anticipated to increase. Consider the changing market and consumer dynamics, FCA is also planning to add more electric and hybrid versions of its existing cars. The proposed merger of FCA and PSA, once it materializes will give birth to the fourth largest automaker in the world and will grow the product mix of the resulting organization larger adding more brands to it like peugeot and Vauxhall.
The head office of FCA is in London, United Kingdom. However, Fiat the predecessor of FCA is an Italian brand and Chrysler an American brand. Fiat Chrysler Automobiles operates in 40 countries. However, it has a large sales and distribution network through which it sells its products in more than 135 countries around the world. The company produces cars in more than 102 manufacturing facilities located around the globe. Of the total manufacturing facilities of FCA, 27 are located in Italy, 13 in the rest of Europe, 26 in the US, 12 in Brazil, 9 in Mexico, 6 in Canada, 3 in Argentina and the rest in other nations. The other significant properties that the company owns include parts distribution centers, research laboratories, test tracks, warehouses and office buildings. Apart from that the company has 46 research and development facilities where R&D teams develop new technologies or make improvements to existing products. Around 18,000 employees are currently a part of the research and development efforts at FCA. In order to reduce operational costs and cater to local demand more efficiently the company has localized production in several important markets including Italy, China, India and Brazil.
There are several brands in the portfolio of FCA which employ different pricing strategies. Apart from competitively priced sedans and SUVs as well as light commercial vehicles, the large product portfolio of FCA also includes luxury brands and products. The pricing strategy used by the various brands in the product portfolio of FCA depends on various factors including product type and quality, market size and market position as well as the level of demand. Fiat and Chrysler have brought crs for the lower and middle tier of customers. Jeep has a large range of SUVs, most of which are premium priced products. Dodge Challenger and Durango cars are priced within the affordable $30000 to $50,000 range whereas the Dodge SRT models are priced higher than the regular Dodge models starting above $60,000. Chrysler 300 models are priced at around $30,000 in the US market whereas Chrysler Pacifica Hybrid at around $40,000. Fiat has also brought a large range of cars in the affordable range for middle class consumers. So, the pricing strategy of FCA is a mix of value based pricing and competitive pricing. This has helped the company acquire a large market share and grow a customer base.
Rising competition in the auto industry has led to brands growing their focus upon marketing and their use of digital channels for promotions. FCA has some iconic brands in its product portfolio which are well known brands globally like Jeep. Apart from that the other promotional techniques used by the brand include seasonal promotional campaigns as well as other forms of digital promotion and auto shows as well as races. In the summer of 2018, the company launched a digital music campaign to attract customers. The campaign highlighted how Apple car play fit into the FCA driving experience. The company also uses its global and regional websites for the promotion of its products and brands. It mixes its digital marketing efforts with social media for promotions and customer engagement. Videos are an important part of the marketing efforts of the brand and it has several accounts on YouTube dedicated to each of the brand in the portfolio of FCA. Other common methods of promotion utilized by the company include race sponsorships and auto shows. Dodge SRT brand is known for making muscle cars and participating in drag races. Recently, FCA showcased its seven brands at the North American International Auto show in Detroit. The company also invests in CSR projects and partners with other organizåtions dedicated to serving communities where FCA operates. For example Chrysler has partnered with ‘No Kid Hungry‘ to address the problem of hunger among children. Investing into communities and CSR projects helps the company and its brands maintain a strong image in the society.