Sanger & Vf Brands: Questions (Coursework Sample)
Look at the case and answer the questionsource..
Sanger & Vf Brands
In 2011, the electric passenger car industry in the US was at infancy due to the new concept to buyers (Keller & Elias, 2014). However, the car industry has recorded growth signs since 2011-2015. Buyers fail to consider the travel range, the car price and vehicle size as well as diverse secondary concerns.
Based on sales to date, the US buyers’ segmentation is a niche market as it is split to a large income, middle-aged, suburban or warm urban climates. The US consumers lack familiarity with the new technology, thus fearing to purchase the cars especially at high prices (Pisano & Adams, 2009).In essence the US citizens’ lack full awareness of technology value addition to the car, thus the customers lack certainty on whether the cars are sold at fair prices.
The customers’ proposition for BEVs includes driving electric which is deemed as a luxury way to drive economically. The customer proposition for and PHEVs incorporates environmental friendliness collaboratively with luxury power and comfort, all while using friendly energy.
The Fisker Karma sedan ideal marketplace is linked with the slightly more wealthy individuals that already have families. Notably, the sedan being priced over a 100000 makes it a luxury item that is attainable to wealthier demographic consumers only. This implies that the target marketing should not be oriented to the one car a family needs rather to the next family addition that tags along economics and luxury to the fleet of cars an individual owns. This is due to the concern amongst clients about the offers range of electric cars. Appealing to social goodness sense of the carbon footprint awareness the consumers are probable to purchase these cars to participate in the social goodness (Hartikainen, Roininen, Katajajuuri & Pulkkinen, 2014) Sanger Automotive dealership covers Collier and Lee county market.
Factoring Fisker Karma Sedan luxury vehicle high retail price and electric passenger cars buyers prospective behaviors Sanger Automotive dealership market is defined as people inhabiting in Collier and Lee counties with annualized HH income that exceeds $100000.Therefore, the Sanger dealership potential market =Lee with HH &HH of Collier annualized income exceeding $100000 x new passenger vehicle annual purchase rate = 1.2%x (270,485x18.3% +133,640 x20.2%) =918 units
Service manager and service bay technician $90,250
Sales commission, %of retail sales 1%
Marketing expenditures $66,000
Delivered cost (min) $86,400
Delivered cost (max) 98,100
Delivered cost, % MSRP 90%
Upfront investment $200,000
Fisker Karma Sedan MSRP $96000, $109 000
In order to achieve the breakeven point the minimal quantity of cars to be sold at the average retail price $102,500($96,000+$109,000)/2 for the initial year is (79,500+85,000+102,500x 1%+66,000+90,250+102,500x90%) =102,500x or round up x=57 .Taking into consideration the Sanger’s area market potential and 15% of newly sold cars are luxury brands, 57 units equivalent to 6.2%(57/918*100% of the market share, are probable to approach.
The decision for Sanger Automotive to pursue an exclusive franchise agreement with Fiaker Automotive is tough due to the newness of electric car technology, market demographics and overhead involved. An increase for the electric car market will trigger an early entry agreement with Fisker allowing Sanger to be the first one to the market. The agreement would be ideal for Sanger as it permits t...
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