To define the target market, which is ultimately consumers and businesses, a marketing strategy and analysis should be conducted because all elements work together strategically. After evaluating the opportunities presented by market segments and conducting a competitive analysis target, then the target market segment can be selected. The target marketing process goes through 4 stages. Target market is identified, in part, by considering how the product appeals to various demographic categories according to several factors, including: age, marital status, education, income level, occupation, personality, interests, values and lifestyles. Let’s see what are the defining features and advantages of the Fiat 500 and its design. Fiat has several ads, in addition to the Jennifer Lopez promotion that illustrates how they have defined their target market. I consider these ads and the demographics they target. One of the unique advantages of the Fiat 500 is that it has so many options for personalization. If a customer wants to make specific changes to the interior or exterior color as well as several other car features, s/he has a myriad of options. This type of feature is very similar to Dell computers. Just as Dell allowed its consumers to express themselves through their computer’s color and design, Fiat 500 has the same ability. The message for the customer is that, “it is different, like you. It is not only a car but it is your lifestyle”. Also, in several of Fiat 500’s ads, they emphasize the image of the car rather than the product features. The car is more European in style, which is perceived as trendy by some consumers, as well as sleek, small and stylish. This targets consumers who want their car to reflect their personal tastes and image. I agree that this is a feature of the car that should be highlighted and considered in determining the right market segmentation.
Fiat’s market segmentation strategy also includes geographic, demographic, psychographic, behavioristic and benefit segmentation factors. For instance, in August 2011, Fiat 500 was reintroduced to US market in NYC with a two‐day long promotion that culminated in a double‐feature film that viewers watched while sitting in a Fiat 500 or Fiat 500 Cabrio model. It was considered controversial to choose NYC as their demographic segmentation since very few people own or want their own car in this city. While it is a common perception in the US that small cars are not comfortable or spacious and do not have enough features, this campaign showed consumers that the Fiat 500 is a great modern, city car. The Fiat 500 is easy to park, and has an impressively efficient 38 mpg. The campaign was so successful in emphasizing the car’s advantages that they expanded it to Chicago, Miami and Los Angeles. I agree that many of these convenience and efficiency features of the car are marketable, and that a city‐slicker who is also concerned about the size of their vehicle would be an excellent demographic to target.
Several other decision factors are the focus of the current pool of Fiat 500. Various ads are targeting people who are price‐sensitive, and who are attracted to the idea of being adventurous and environmentally responsible. Fiat 500 is marketed as being even better than a green car because it was selected as the car with the lowest CO2 emission car range in Europe. All of these features are qualities I would agree as being distinctive advantages for this model and should help shape who the target customer should be.
Fiat 500 generally uses male figures in ads showing the car, to send the message to men that this is not just woman car. Rather, it is for anyone who likes to be stylish, adventurous or environmentally conscientious. The head of Fiat brand in North America, Laura Soave, redefined her target market more broadly; she stated that the car is a lifestyle choice rather than an age or demographic choice. In addition to that, she said Fiat 500 has both young buyers and buyers over the age of 60. This market segmentation strategy is assuming people of all ages are making their choice of car based on design and personalization. While targeting males and older consumers are included in Fiat’s target demographic, this is not our opinion, as this is too broad a segment to target.
Overall, based on the features mentioned above, the target market for the Fiat 500 is the professional female within the age of 25‐35. This target market is very similar to Mini Cooper’s and Volkswagen’s Beetle target market. The car is not appealed to housewives and mothers who have children. It is also less ideal to market to men. While there are some men who still purchase Mini Coopers and Volkswagen Beetle’s, both of which are similar in style to the 500, they have a tangible stigma of being chick cars, as they are less sporty and not as powerful as other small cars that cater more directly to men. Targeting an older demographic also detracts from the youthful and trendy image of the 500, which leaves them vulnerable to the same problems that plagued the advertising for Oldsmobile. In addition, the older demographic may be less constrained by finances, which would lead them to be more easily influenced by a more expensive version of the small car that has more luxurious options than what the Fiat 500 has to offer. While all of these segments would be welcome customers, they are not the target market for the Fiat 500. In order to be most effective, Fiat should target their marketing dollars in a focused manner towards a very specific market segment, as I have identified.
Executives for the Smart and Mini cars expected that, with the entrance of Fiat 500, the US sub‐compact segment would heat up. Fiat’s marketing objective was to sell 50,000 cars in the US and Canada during its first year. In December 2012, Fiat 500 launched Gucci editions, which are more creative and target luxury lovers, rather than price‐conscious consumers. Laura Soave said the Gucci editions would appeal to North American customers who like Italian style combined with modern technology.