BUS330 Week 4 Discussion 2 Foreign Market Entry Podcast

Identify your mentor marketer and the relevant market

Subaru started in Japan as, Fuji jidosha Kogyo (Fuji JI dausha Kodgio), Co., Ltd in 1950. Their focus was on bodywork for buses, but in 1954, they released the P-1 prototype car. By 1953 the name changed to Fuji Heavy Industries, Ltd, or FHI, which dealt mainly with the airplane industry – manufacturing, maintenance, and sales. 1957 brought about another prototype car – the Subaru 360 – weighing less than 1000 pounds; it got amazing mileage at 66 mpg. The 360, 358cc engine was great for Japan, an island country with small roads. In 1958 the 360 was exported to the United States.

Identify a specific country to analyze your brand’s entry into.

We are going to look at how the Subaru from Japan entered the U.S. market.

First, identify the countries your mentor marketer does or did business in. Check out the corporate website or the latest annual report.

Subaru exports to countries around the world such as in; the Americas, Asia, Europe, Oceana, the Middle East, and Africa. Subaru is a global company but has only two manufacturing plants – one in Gunma Japan and the other in Fayetteville, Indiana.

When did your mentor marketer enter this foreign market?

Subaru entered the U.S. market in 1958 with the 360 – a 2-door air-cooled engine housed in the rear. It took ten years for Subaru of America to establish itself in 1968, and it was the first official Japanese-American subsidiary.

What specific challenges did entering this market present? (e.g., cultural norms, language barriers, local competition, government regulations, economic conditions, etc.). Identify at least three.

The 358cc engine was not big enough for American needs; to export it, Subaru had to increase it to 423cc, which gave more range; it could do up to 60mph, which fit the American need better.

The VW Beetle was also in play in the U.S. and known as a sturdy vehicle. The shape and design were similar, but the 360 beat the Beetle at a price, right around $1300 for the 360 and $1700 for the Beetle.

The Subaru 360 almost dashed the hopes of staying in the U.S. market. The360 was not well-received within the United States, a report by Consumer Reports labeled it as “unacceptable.”  Subaru wanted to pull out of the U.S. market completely but was convinced to stay.

What changes were made to the marketing formula in entering this market? What other changes were needed? Cite at least three examples, linking each one to a marketing P. You can repeat Ps more than once.

The four “P’s” of marketing are price, product, promotion, and place.

The Subaru 360 took advantage of the price when they entered the market with a price point of $1300, Subaru was banking on the idea that the cost, according to White, could lift a product and create a loyal following.

With a product that got 66 mpg, Subaru had hopes that the extended mileage would entice people to purchase and enjoy their product.

Subaru promoted the car as cheap and ugly does it – hoping to make it big with sections of society that could not afford a higher- class car, but still needed to get around.  (let’s remember the slogan for VW at the time; it’s ugly, but it gets you there).

And when Subaru entered the manufacturing market in the US. In 1968, they did it as a joint effort with Isuzu – this is place – it brought jobs to a depressed market and provided reliable transportation. By sharing the space, Subaru could share costs and produce a vehicle that had a great price point, and built-in America was a great promotion to build loyalty and trust.

To meet the needs of American buyers, Subaru created the 1000 series or FF-1 (front motor and front-wheel drive) that did just that, changing the price, product, and promotion. With an increased weight from 993 pounds to the right at 1500 pounds and increased cc’s from 360 to 977 – these changes increased handling, speed. The new Subaru was built for American roads and American drivers, as opposed to the 360 that was built for the Japanese way of life and country

How successful was the entry into this market? Is the brand still in the market?

Subaru is a success in the U.S and exports a percentage of all cars to other countries as well as supplies their home country with vehicles. As of June 2019, Subaru has seen growth for 64 months with 40,000 or more vehicles sold per month. And just FYI – products manufactured are done so on zero-landfill plants. Subaru of Indiana is designated as a backyard wildlife habitat by the National Wildlife Federation and is the only automobile plant to have that distinguished honor. Subaru of America has donated $165 million or more over the last 20 years. Let’s give some love to Subaru.