Sidra Darzi Renee Gibson Alec Valdes

Opel has been a brand of reliability, durability, and innovation ever since it was founded by Adam Opel in 1862. Opel has stood the test of time and adversity. After going through two devastating world wars, Opel knows what it is like to have its situation look dim. Every time though, they have roared back with a vengeance. If two wars could not shut the company down and keep it from turning a profit, then the economic crisis of 2008 is another challenge that they can successfully face, as they did before. As of today, Opel’s product is better than ever before, however the problem lies in the brand’s current image and the fierce competition that exists in the vehicular market today.

Opel’s vision for the future is a bright one and they are confident they will rise to the top of the market share once again. New models and engines are being worked on for a total revamping of the company. New marketing strategies are being developed along with targeting different markets all inclusively. Also, penetrating new markets that have never been reached before to reel in new and loyal customers, is a key component for breaking even by 2015. Above all, the end goal is to make money and Opel sees the greatest opportunity lying not within a certain nation or ethnicity, but a generation. Generation Y is the generation of the future. The men and women that will run this world 20-30 years down the road, are right in the classrooms today struggling for their futures. Opel intends to target these consumers while they are young to build a relationship of reliability, durability, cost-effectiveness, and green efficiency. Opel is hard at work to see this plan come into fruition, and are working tirelessly with the new, fresh and brilliant minds of today to establish an image and brand that will shake Generation Y and help push Opel to market dominance.

1. 
   File break-even results by 2015
   
2. 
   Significantly increase revenue and variable profit by greater cost-efficiency, as well as:
   
   1. 
      re-focusing go-to-market strategy
      
   2. 
      improving image of Opel brand
      
   3. 
      strengthening market share
      
   4. 
      entering new markets and segments
      
3. 
   Launching 23 new models and 13 new engines between 2012 and 2016
   
4. 
   Opel expects that they can grow significantly in Russia and Turkey, as well as expanding outside of Europe, Australia and Chile
   

1. 
   GM will introduce Opel also in Argentina and Brasil.
   
2. 
   GM disposed of the inconsistent brand policies, where Opel developed cars could be badge-engineered as Chevrolet, Saturn, Holden, and even Cadillac.
   
3. 
   The separation of Opel and Chevrolet is very visible in Brazil
   
4. 
   Opel developed cars could be badge-engineered as Chevrolet, Saturn, Holden, and even Cadillac.
   

1. 
   Revamp Opel’s image and reputation completely to allow the company to fulfill its goal of breaking-even by 2015.
   
2. 
   Establish a new marketing strategy to aid Opel in their product differentiation and allowing them to enter into new markets
   
3. 
   Allow Opel with these new ideas to re-establish its strength on the vehicle market in Europe and other parts of the world.
   

OPEL was founded in Russelsheim, Hesse, Germany, on January 21, 1862, by Adam Opel. Opel started by just producing sewing machines in a cowshed in Russelsheim. The first cars were eventually produced in 1899 after Opel's sons entered into a partnership with Friedrich Lutzmann.These cars were not very successful and so the partnership failed after two years. As a result, Adam Opel's sons signed a licensing agreement in 1901 with the French automobiles company Darracq S.A., to manufacture vehicles under the brand name "Opel Darracq". The company first showed cars of its own design at the 1902 Hamburg Motor Show. They started manufacturing their designs in 1906, with Opel Darracq production being discontinued in 1907. In the early 1920s, Opel became the first German car manufacturer to establish a mass production assembly line in the building of their automobiles. Opel pioneered the way for motorized transportation to become a reliable way for people of all classes to travel. Opel had a 37.5% market share in Germany and was also the country's largest automobile exporter in 1928.

In March 1929, General Motors , was impressed by Opel's modern production facilities, and decided to buy 80% of the company, and but the remaining 20% in 1931. In 1935, Opel became the first German car manufacturer to produce over 100,000 vehicles a year. Opel also produced the first mass-production vehicle with a self-supporting all steel body. Due to its small weight and aerodynamics, it became a significant improvement in both performance and fuel consumption. Opel received a patent for this innovation which was considered one of the most important innovations in automotive history. On November 1948, GM resumed executive control of Opel after some years in which Opel started to produce trucks and introduced new passengar car models. Changes in the Opel cars under GM's management didn't appear until January 1950. Opel found itself in the middle-priced bracket in Germany's postwar auto market, a familiar position to both GM and Opel. In 1953, production rose above 100,000 cars for the first time since WWII. In 1954, 167,650 vehicles were built, and Opel actually fully recovered from the devastations of the postwar era.


Environmental scan; identify problem(s)
Following the 2008 global financial crisis, with ongoing plans to restructure the company, Opel announced the closure of its Antwerp plant in Belgium. On February 29 2012, Opel formally announced the creation of a major alliance with PSA, as part of which GM became PSA's second-largest shareholder, after the Peugeot family, with a holding of 7%. The alliance is intended to enable $2 billion per year of cost savings through platform sharing, common purchasing and cost efficiency.

After having a 20% share of the German car market, Opel has gone down due to a variety of reasons. These have been responsible for the problematic situation that the company has been suffering during the past years. We believe that tackling the following problems would allow the company to improve and be what they were before.

1. 
   2008-2009 economic recession
   
   1. 
      Due to the fact that Opel is a daughter company of General Motors (GM), it suffered through the same struggles as GM, who filed for bankruptcy in the year 2009. Opel has not been able to fully recover from this recession, even though the German government intervened to save the company. The times of a 20% share and the entrance to the premium segment of the market were very far away.
      
2. 
   Market saturation
   
   1. 
      One of the main problems that Opel faces is that there is market saturation in the European vehicle industry. There was a decrease in the amount of new cars sold annually, from 16 million to the current 12 million. This data clearly demonstrates that there are many cars available in the market and for a variety of reasons the new purchases are done to companies that have an excellent reputation and image, unlike Opel.
      
3. 
   Image problems
   
   1. 
      Opel currently has a terrible reputation and image. Their strong, powerful image that they had, even for malicious lampoons in Germany during the 90’s, when Til Schweiger was drove an Opel Manta, has disappeared. Their lack of authenticity and product differentiation does not allow them to have a strong image. They are now seen as retrograde and their vehicles are constant subjects of jokes, despite the fact that they are good quality vehicles.
      
4. 
   Brand differentiation
   
   1. 
      Besides the fact of dealing with a saturated market and a terrible image and reputation, Opel is also affected by a lack of brand differentiation. Their parent company General Motors does not differentiate a Chevrolet from an Opel car, neither the Opel dealerships that offer a Chevrolet, a similar car that is a few thousand euros cheaper. They have to deal with competing with lower prices, added to their already lacking image and a saturated market.
      

The target market for the project is Generation Y, people that were born between 1977 and 1994. However, we are focusing on those born between 1988 and 1993, which live in Miami, Florida and are college students. Generation Y is one of the fastest growing generations as of right now. They are the generation that will out spend all other generations that came before them. Some of the traits of Generation Y are that they are in advanced in technology, thinking about the environment, focused on their family, and socially responsible. Some of the core values of Generation Y are being optimistic, confident and having a diverse background. Many Generation Y consumers have cell phones that they use on a normal basis. They grew up having internet access and being associated with Facebook, Google and other social media. They tend to be close with their parents as well help in the purchase of products in the household. One of the most important characteristics of the members of Generation Y is that they are mostly financially dependent of their parents, even if they have a job.

• 
  Strengths
  
  • 
    Opel is flexible with their cars, such as making more room for large loads.
    
  • 
    They provide comfort and convenience to their cars as well. They make sure to have easy access with their doors.
    
  • 
    Opel has taken the time to make their cars safer for drivers and passengers. They have added a system called Forward Lighting, it helps drivers to see further in a distant with their light. There is a parking assistant that will help you.
    
  • 
    Good quality vehicles, gas-efficient, and constant innovation to reduce CO₂ emmissions.
    
• 
  Weaknesses
  
  • 
    Opel has not done any marketing in the United States. Being GM their parent company, they can use their strong influence as an aid to their strategies.
    
  • 
    Has a bad image and reputation
    
• 
  Opportunities
  
  • 
    Opel has been given the opportunity to work with one of the top selling car company GM. They need to work with GM and figure out ways to market their cars or their image for people to see that are someone they can trust.
    
  • 
    Market to new group of consumers in different countries to expand their business
    
• 
  Threats
  
  • 
    Opel can go bankrupt if they do not work on their marketing image.
    
  • 
    Since Opel and General Motors (GM) have collaborated together, GM can probably out sell their cars over Opel cars.
    
  • 
    The strong competition in the market can make their share be reduced even more and lead them to exiting the industry.
    

Opel corporate responsibility consists of taking care of the environment; they know how important the environment is to people and how much waste and contamination can go into making a car. Opel has taken the time to make their cars out of more recycled products, so that there is less waste created and reuse what had once been used. They have made the effort to make recyclable products from the start of producing the car. Opel has come up some guidelines called 'Recyclability/Recoverability’; to make sure they meet their recycling objectives. Many of the recycled parts they use have different uses all over the car, whether it is visible or hidden.

Opel is trying to find ways to use less CO₂-emissions in their car. They are using smaller engines in their vehicles and adapting new technology to monitor the useful life of the engine. They have their cars using liquefied petroleum gas to make it cheaper and cleaner to use. They even have alternatives to gas, like using electricity and hydrogen reacting with the oxygen in the air. Even if they have not established all of these options, the company has a clear idea on the future and the impact their vehicles will have on the environment. They have been doing socially responsible activities and implementing them in their vehicles for many years. It is clear that they are dedicated to be sustainable, constantly reinventing their ideas and generating new ones to help reduce waste, emissions, and contamination in general.

Marketing plan and strategy

The marketing plan and strategy that has been used by Opel in the recent years has been proven to be ineffective due to their poor image and reputation. Our main goal is to establish a new plan, with a new strategy that will enable them to reinstate their position as market leaders in Germany and if possible in other parts of the world, such as Miami.

The primary information utilized on this project was obtained from a survey done to 50 individuals that fit under our targeted demographics. Our main goal was to determine the reaction of these specific consumers when the brand Opel is introduced into the market here in Miami as itself, not under General Motor’s Buick. Precisely due to this issue, we did not mention the brand Opel until the last question of the survey, due to the fact that it is a mostly unknown company. This was proven by our results.

Our main goal for this survey was to determine if whether or not the US market would be a good-fit for Opel, a company that has undergone losses in the last years and requires an overhaul to be able to change this issue. Our target market, college students in Miami ranging from 18-25 years, represents a good sample since we are concerned with modern issues like global warming that determine if whether or not we would purchase a car that follows our beliefs.

The first question in our survey gave us a general idea of the consumers’ perspective of German-engineered cars. The majority of the answers we were given show that consumers would purchase a German car. This shows that these cars have a reputation of being reliable cars that would not fail in a short period of time. Nonetheless, the answers did not provide us with a price range in which the consumers would buy a German car.

The next question in our survey tackled an important factor that is considered while taking many of the decisions on vehicle purchases. Our goal was to determine if quality or cost-effectiveness is the most important factor considered for these decisions. We came up with this question because referring to one of them does not necessarily imply that the other factor is met. Our results show that consumers from our target market have cost-effectiveness as the primary factor on decision-making vehicle purchases. This shows that the new generations are more concerned about the rising life expenses than on purchasing a good-quality product that is very expensive. College students in Miami prefer to have a vehicle that is cost-effective, which means that it does not consume a lot of gas and helps them with transportation than having an excellent quality vehicle that is very expensive to maintain.

We decided to base the next question on a comparison with other vehicle brands that have the reputation of producing excellent quality cars, Honda and Toyota. We utilized the price for an Opel vehicle, $23,000, as the base to determine if consumers would buy a Honda or Toyota quality vehicle for that same price. A vast majority of the answers show that the price for the vehicle is reasonable if the quality of the vehicle is assured to be great. We also asked the same question, but rather used a German car sold at that price. The answers of the consumers varied drastically, showing that the majority of them would not buy a German car at that price. The possible reasons are that they might think that it would be a poor quality German vehicle, or that it is unlikely that a German vehicle could be sold at that price.

We then asked to the consumers we surveyed if they knew the brand Opel. We asked this question last in order to get to know the consumers’ likes and beliefs before we introduced them to the brand Opel. If the consumers we surveyed did not know what the brand Opel is, as most of them did not, then it would allow us to have a better idea of what are the actions that the company can take and show them that a German-engineered, good quality vehicle can be purchased at a reasonable price of $23,000.



Proposed solutions

There are many possibilities for Opel to improve their overall condition as a company. Nonetheless, we believe that the company should focus on three of their most important problems: market saturation, image problems and brand differentiation. With the following solutions, we believe that Opel will be able to recover successfully as a well-established vehicle manufacturer and once again have an important role in the vehicle industry worldwide.

1. 
   Market saturation
   
   1. 
      Due to the fact that the European market is saturated, we propose the idea of expanding into other markets, especially the Miami area in Florida. The target market discussed previously shows that there would be acceptance of the product after an initial doubt and questioning regarding the product. Nonetheless, the qualities and strengths of the product, such as the quality, its relatively-low price compared to other German-engineered vehicles and its fuel efficiency, will allow Opel vehicles to grow in a market as demanding as Miami.
      
2. 
   Image problems
   
   1. 
      The most important solution we propose is to change dramatically the image of Opel and make it strong. The emphasis should be placed on the high-quality vehicles manufactured and use as a main point the reliability on every vehicle they offer as a brand. One of the ways we propose this change to be made is by establishing the already existent ECO Driving program, which allows consumers to test drive Opel vehicles, in a new market such as Miami. We would encourage a focus group done by these testers to identify more of their likes, dislikes and further improvements that could be done to the cars. This way, the company would take these suggestions and use them in their cars; the transmission of the qualities and strengths of the cars via word of mouth of the focus group participants towards their friends and family, as well as live transmission through social media, would allow Opel to improve their image consistently. Another of the possibilities we consider can help revamp Opel’s image is by using a celebrity, such as David Hasselhoff, that is known both in Germany and in the USA in a campaign that involves him with the car and the company. There would be a TV commercial with him and the car, so people are able to understand that Opel is a good quality vehicle that is used by celebrities.
      
3. 
   Brand differentiation
   
   1. 
      The proposed solution for this problem comes hand in hand with the previous two. As Opel enters a less-saturated market and reinvents its image, its brand differentiation is key to the success of these solutions. We propose a complete separation of Opel and other GM brands of vehicles. Despite the similarities in these vehicles, Opel should separate and establish itself as an individual company. It would be easier to establish an image and be a key player in the market.
      

Our primary goal is that this new marketing strategy will revamp the image of the company Opel so it regains its strength in the vehicle market in Germany and in the USA, especially in Miami as our project focuses on. We believe that the introduction of their products in a completely new market, as a differentiated brand and separating themselves from other brands such as Buick, is key for the success of our plan to make Opel a powerful company as it once was. The market research that we performed demonstrates that the Miami market is a viable option to start introducing the vehicles, due to the characteristics of the consumers and the different possibilities that the environment of the city as a whole brings to the company. We want our marketing plans to run smoothly to be able to start introducing the vehicles with a market familiar with the new image of the company. Generation Y consumers are characterized for trying new products and innovations, so by focusing on their behavior and appealing to their likes, our marketing strategies can be successful.

Opel has been a company that has successfully adapted and gone through struggling times. They have the history and the possibilities of regaining that power that they used to have. Being partners with GM and other powerful vehicle manufacturers in Europe, allows them to have the resources to change their situation and adapt to the changes we have proposed in the project. As their slogan states, they live cars and a company with such a rich vehicle history will not be reluctant to the changes and will once again have a strong market share and overall position in the worldwide car market.


References/Bibliography

Business Owners Must Understand Generation Y Marketing Psychographics. (n.d.). Business Owners Must Understand Generation Y Marketing Psychographics. Retrieved from http://www.expertclick.com/NRWire/Releasedetails.aspx?id=17095

GM's plans for the Epsilon II platform. (n.d.). Motor Authority. Retrieved from http://www.motorauthority.com/news/1030328_gms-plans-for-the-epsilon-ii-platform

SAFETY. (n.d.). Http://www.opel.com. Retrieved from http://www.opel.com/experience_opel/innovation/safety.html

THE FUTURE OF MOBILITY HAS BEGUN. (n.d.). Http://www.opel.com. Retrieved from http://www.opel.com/experience_opel/innovation/pioneering-technologies.html

Survey

1. 
   Would you buy a German-engineered car?
   

2. 
   Cost-effective or quality?
   

3. 
   Would you pay $23,000 for a Toyota/Honda based quality of a car?
   

4. 
   Would you pay $23,000 for a German car?
   

5. 
   Do you know the brand Opel?