It does not sound usual the idea of a mini Alfa. This Italian brand has been always associated to sportiness, performance and premium cars, and therefore a small citycar with Biscione logo does not fulfil quite well those values. Nevertheless I would like to share with you a project I made with some colleagues in which we explore the posibility of launching an A-Segment car for Alfa, and analyse the way they could do it always keeping in mind the brand’s main values and image. At the end it was just an academic exercise to understand some Marketing basics, but the research showed us interesting things about the segment, the brand and what users of this kind of cars think their car should be. As the presentation is in Italian I will make a quick overview of it here for non Italian speakers.
First of all we analyzed the situation of Alfa Romeo as a brand, ant the future of it. We took some information from the teacher, who works in Fiat Auto in Turin, and there we had access to some statistics about future sales of the segment and general market. The outlook to the brand showed us the bad situation it is facing now with only 2 models available, and sales figures dropping considerably i both, Europe and Italy. But we found also that the brand has a strong image among buyers and a very good awareness. People can identify an Alfa, something that is really good especially now when all cars are becoming similar. Besides its history is perhaps one of most interesting ones among car makers. Those good aspects could work very well in its expansion plan in the US and China markets, and could be the base for positionating the brand as the unique Italian touch brand for premium sporty sedans. In the other hand there are Alfa’s known problems: quality problems in the past, no hybrid engines, no trully sporty cars and just 2 models available. While competition from Germany and Korea is getting really strong everywhere.
Then, after looking at Alfa’s range with its Giulietta and MiTo’s versions, we made an outlook to A-Segment in Europe. In terms of characteristics of the car is more or less the same for the rest of markets. The segment has positively evolved to keep a total market share around 9% thanks to more offer (in the last 10 years the options available in the market doubled) and due to higher gasoline prices. Of course Fiat is the absolute king of the segment with its Panda and 500. And when it is about the future of the segment there are certainly some things to clarify. First of all the tables showed in the presentation are based in a specific file given by the professor for the exercise. But as it is evident, those numbers are excessively positive as they consider the crisis would be finish in the coming months and for the next 10 years both, total European car and A-Segment sales would grow up. Maybe the segment could have an even larger share but I personaly think the bad situation of today will last for at least 2 more years and the sales figures we saw 5 years ago won’t be seen in a while.
After that we began to describe the type of client for our Alfa after taking into account more information given by the teacher about customers description for each A-Segment car offered in 2007. Their economic situation, age, social life and they interaction with their cars was a key information for us to visualize the type of client we could find. And we found it. Unlike most of Marketing analysis in which they target young people, we found a possible kind of consumer between 50-60 years old, already retired that is looking for emotions in a car just to move in the city. This person would have a second and larger car driven by his spouse and he would like to have a small car only for him, no kids and with the advantage of being compact enough to go wherever in the city and feel high performance sensations with the latest technology. If we see what the market offers now we could only find the Smart fortwo Brabus and Abarth 500 starting at 18.000 euro. But the Smart is really small and not fun to drive, while the Abarth is more for young people to go on the road as in a circuit. There is no other small car to offer dynamic drive, good performance and luxury at the same time, with a strong personality. And that’s where we think there might be an opportunity for Alfa.
Therefore we developed the ‘Sparo’. A 2 seats, 3.3 m long citycar with a strong personality and a large variety of efficient hybrid engines. Alfa could make use of Fiat’s latest technologies with small TwinAir engines and mix them with electric ones to create the first Hybrid Italian car, especially now when Italian government said they will help low emissions cars with less taxes. We arrived to some design shapes to see how the car would look (strongly based on MiTo) with a very unique interior (to repeat the success of Fiat 500). All these characteristics should be the base to positionate the car as the unique trully sporty citycar that offers dynamic sensations, practicality and Alfa personality. It should be know as the car to ‘live the city’. But the car would not be cheaper than the MiTo, though it would be smaller. We think Alfa can’t offer a more basic option than MiTo as the brand is to be known as a premium one. In this vein, the ‘Sparo’ (which means gunshot in Italian for small, fast and efficient to arrive wherever we want) should be positionated between the MiTo and Giulietta starting at 16.000 euro for the basic version up to 23.000 euro for the best one. The high prices are due to local production (for image reasons the car could not be produced outside Italy), and hybrid engines. Eventhough the automotive crisis would affect its sales numbers we believe this kind of target is not really suffering a lot in these days as they have a medium-high income which is practically fixed (retirement). Of course, as the target is really especific, Alfa could reach it through BTL ad such as social networks or blogs, that are highly used by this people as they have a lot of free time and they want always to be updated about the latest trends and technologies.
Although we concluded there was an opportunity for Alfa only if they focused on that kind of client and positionate the car as said before, I personally think Alfa Romeo should first develop its larger model range (D and E segment besides sporty cars) and then focus on a car like the ‘Sparo’. They can not say they are a premium brand when they do not even offer a sedan. Actually I believe the MiTo should not exist as it affects negatively the image of a premium and sporty Alfa (especially the version with 70 and 78 hp). Audi has done it with the A1 but after positionating their larger models and telling the market they are really premium. But doing it in the opposite way would only create more confusion about Alfa’s real values. Below you can find the link to see the whole presentation (in Italian):
This exercise was made for Marketing Auto subject with my classmates: Jung-kyu Park, Alberto Roncalli and Rahul Sadwelkar.