UW Hybrid Vehicle Team



UW Hybrid Vehicle Team

Marketing Strategy

Outreach Coordinator: Lehla Vakili

Phone number and email of Coordinator: (608)206-3066, vakili@wisc.edu

Business Faculty Advisor: James Beal

Posted on: October 19, 2007

Contents Page

Title Page.........................................................................................................................1

Table of Contents..............................................................................................................2

Summary………………………………………….................................................................3

Product Overview.............................................................................................................3

Environmental Scan..........................................................................................................4

Market Analysis................................................................................................................5

Vehicle and Challenge X Promotion..................................................................................8

Branding…………………………………………………………………………………………12

Evaluation Techniques....................................................................................................13

Budget............................................................................................................................15

Conclusions....................................................................................................................16

Appendix A....................................................................................................................17

Appendix B………………………………………………………………………………...……21

SUMMARY

The University of Wisconsin Hybrid Vehicle Team is marketing a very exciting crossover hybrid vehicle, the Moovada. With superior performance, exceptional fuel economy, low emissions and world class interior features, the Moovada is a great vehicle targeted towards outdoorsy, technologically savvy and environmentally minded individuals. This group has an age range of 25 to 54 years old with an annual median household income of $48,620 to $69,380.

After identifying the demographic groups most likely to be interested in the vehicle, events and advertisements where then planned to address these audiences. A starting budget of $2,500 has been allocated for advertising projects as well as devising and gauging strategies that target these audiences.

PRODUCT OVERVIEW

The Moovada is a crossover vehicle based on the popular Chevrolet Equinox. In addition to the excellent fuel economy achieved by its hybrid powertrain, it boasts increased performance, ample cargo room, and 5-star ratings in the frontal and side impact crash tests.

The vehicle is an all wheel drive, through-the-road parallel hybrid. The front wheels are powered by a General Motors (GM) F-40 six speed manual transmission and a turbocharged 1.9 liter GM diesel engine rated at 110 kW (150 hp). The rear wheels will be powered by a 65 kW (90 hp) electric motor manufactured by Siemens VDO Electric Drives. The two power sources have a combined output of 175 kW (240 hp). This power (available at the wheels instead of the battery) makes for a quick and responsive vehicle that “gets the groceries” and can also tow a trailer.

The vehicle achieves up to 38 mpg (averaged city and highway) and more than meets current emissions standards. It features a hybrid function display, DVD player, CD player, 110V power plugs, an onboard navigation system, an aluminum hood, lithium ion batteries, electric steering, XM satellite radio, Onstar, Michelin run-flat tires, optional blind-spot detection and all of the standard options on the Chevrolet Equinox.

ENVIRONMENTAL SCAN

Social factors-

The city of Madison is a hotbed for both biofuels and hybrid vehicles. Every summer thousands descend on the city of 200,000 for a celebration of hybrid vehicles, with visitors coming from as far away as California and Florida. Hybridfest promotes awareness and understanding of hybrid vehicles as well as vehicles that achieve above average fuel economy. The event is run by volunteers, and called "A Hybrid Electric Car Show and More." The interest in hybrid vehicles does not stop at personal transportation. Hybrids from Oshkosh Truck (military and industrial) have been on display. More recently, the city of Madison has partnered with the University of Wisconsin to bring practical hybrid technology to fruition; five new GM-Allison hybrid-powered buses for the campus and community.

Additionally, there has been a big move towards social responsibility concerning both green house gas output and environmental sustainability. In a recent speech Madison Mayor Dave Cieslewicz said “this is part of a broader citywide initiative to improve sustainability and protect our air quality[i].” This initiative has expanded to heavy duty vehicles. There is now a policy of using B20 in all diesel vehicles on the University of Wisconsin campus. This policy has caused an increased interest in biofuels including new investments in biofuel production. Biofuels are also available to the public, if one is not capable of ordering large quantities from wholesale producers biodiesel is still available through the PraireFire biofuel Co-Op. There, normal citizens of Madison can buy locally made biodiesel by the gallon and purchase diesel vehicles if they don’t already own one.

Political and Legislative factors-

Mirroring the public interest in hybrid vehicles, state legislators have begun the process of creating a tax credit for hybrid owners. At this early stage, the proposed law would grant a $1000 tax exemption for the purchase of a hybrid vehicle that gets 40 mpg or better.

More access to biofuels is also an issue local politicians have championed. “The federal DOE grant announced by the Governor provides $285,000 for installation of retail pumps that dispense biodiesel and E-85.”[ii] Also, through the federal government, $9.97 million in biofuel research funding has been appropriated to the University of Wisconsin. These efforts are part of a broader legislative goal of achieving a 100,000 ton CO2 output reduction by 2011 for the city of Madison.

At our university, GM has established a center of excellence for diesel combustion at the engine research center (ERC). They continue to expand the knowledge on the formation and reduction of diesel emissions. This research has helped make today’s diesel engines cleaner than ever. Additionally, the ERC hosts the Wisconsin Small Engine Consortium: a group of small engine manufacturers that fund mutually beneficial emission-reducing or efficiency-gaining research.

MARKET ANALYSIS

The Nielsen group, a major marketing company, has developed a software package (PRIZM NE) to determine key demographic groups that can be used in a wide variety of marketing endeavors. PRIZM categorizes every American household into one of 66 distinct groups, based on a variety of criteria, including: age, income, education, and neighborhood location.

Wisconsin selected the PRIZM model for two reasons. First, it used a next generation proprietary statistical model developed specifically for market research. Second, the model utilized close to a million data points (households) collected from the census bureau as well as private marketing tools.

Three marketing segments presented by PRIZM were selected as demographic targets for the Moovada. It was then necessary to determine how many people in each demographic group existed in Madison. To determine this data from the US Census Bureau specific to Madison was utilized.  Appendix A includes descriptions of all demographic groups, in addition to reasons why some were not selected for the Moovada.

Target Market:

Up-and-Comers

“Up-and-Comers is a stopover for young, midscale singles before they marry, have families and establish more deskbound lifestyles. Found in second-tier cities, these mobile, twenty-somethings include a disproportionate number of recent college graduates who are into athletic activities, the latest technology and nightlife entertainment.”[iii]

2006 Statistics:

US Households: 1,360,611 (1.21%)

Madison Households: 1,077

Median Household Income: $48,620 

Lifestyle Traits

· Travel to South Pacific, past 3 yrs

· Go in-line skating

· Maxim magazine

· Blind Date TV

· Drive Mitsubishi Eclipse Spyder

Demographics Traits:

Ethnic Diversity: White, Asian, Hispanic, Mix

Presence of Kids: Household w/o Kids

Age Ranges: Age 25-44

Education Levels: College Grad

Employment Levels: Professional

Homeownership: Mix, Renters

Urbanicity: Second City

Income: Midscale Income

Producing Assets: Moderate

Brite Lites, Li'l City

“Not all of the America's chic sophisticates live in major metros. Brite Lights, Li'l City is a group of well-off, middle-aged couples settled in the nation's satellite cities. Residents of these typical DINK (double income, no kids) households have college educations, well-paying business and professional careers and swank homes filled with the latest technology.”[iv]

2006 Statistics:

US Households: 1,684,994 (1.5%)

Madison Households: 1,335

Median Household Income: $69,380 

Lifestyle Traits

· Go to college sports events

· Eat at Bennigan's

· Macworld magazine

· Independent Film Channel

· Drive Volkswagen Passat

Demographics Traits:

Ethnic Diversity: White, Asian, Mix

Presence of Kids: Household w/o Kids

Age Ranges: Age 35-54

Education Levels: College Grad

Employment Levels: Professional

Homeownership: Mostly Owners

Urbanicity: Second City

Income: Upscale Income

Producing Assets: Above Avg.

Greenbelt Sports

“Greenbelt Sports is known for its active lifestyle. This is a segment of middle-class exurban couples who are middle-aged and college-educated. They own new homes, and about a third of them have children. Few segments have higher rates for pursuing outdoor activities such as skiing, canoeing, backpacking, boating, and mountain biking.”[v]

2006 Statistics:

US Households: 11,865,449 (10.6%)

Madison Households: 9,436

Median Household Income: $55,641.00

Lifestyle Traits

· Go snowboarding

· Go horseback riding

· North American Hunter magazine

· American Experience TV

· Subaru Impreza

Demographic Traits:

Ethnic Diversity: Mostly White

Presence of Kids: Household w/o Kids

Age Ranges: Age 35-54

Education Levels: College Graduate

Employment Levels: White Collar, Mix

Homeownership: Mostly Owners

Urbanicity: Town/Rural

Income: Upper-Mid Income

Producing Assets: Above Average

|Madison Ethnic Diversity |Number |Percent |

|White |174,689 |83.96% |

|Asian |12,065 |5.80% |

|Hispanic |8,512 |4.09% |

|Two or More Races |4,835 |2.32% |

|Madison Presence of Kids |  |  |

|Married-couple families with children under 18 years |15,073 |  |

| | | |

|Households with one or more people under 18 years |21,350 |  |

| | | |

|Madison Educational Attainment |  |  |

| |  |  |

|Associate's degree |11,770 |  |

|Bachelor's degree |38,618 |  |

|Graduate or professional degree |32,727 |  |

|Home ownership in Madison |  |  |

|25 to 34 years |37,054 |17.81% |

|35 to 44 years |29,925 |14.38% |

|45 to 54 years |26,553 |12.76% |

|Housing Occupancy in Madison |  |  |

| |  |  |

|Occupied housing units |89,019 |100.00% |

|Owner-occupied housing units |42,496 |47.74% |

|Renter-occupied housing units |46,523 |52.26% |

*See Appendix A for complete census statistics for the Madison area

VEHICLE AND CHALLENGE X PROMOTION

Events which our team plans are strategically designed to educate the public, youth, decision makers, and opinion leaders about Challenge X, alternative vehicle technologies, DOE’s efficiency programs, and refueling systems for alternative vehicle technologies.

Plans for achieving the goals mentioned above include:

Appearing on radio and television broadcasts - There are local radio stations that do community services and may be interested in conducting a blood drive around our garage. Wisconsin will display our vehicle prior to home football games; we will try to couple with a local country music radio station which hosts a pre-game party within a block of our facility that broadcasts several live segments. We will also submit Press Releases about our team to local TV and radio talk shows periodically throughout the year.

Sending mass e-mails to students-If there are any events around campus that involve promoting a “greener” America we can send an informational email out to students which include our team name, link, slogan, and logo.

Attending tradeshows which are applicable to the team’s promotional strategies- Several of our sponsors hold tradeshows that would allow us to reach out to companies that could adjust their practices for a cleaner environment.

Holding community/campus events- There is several opportunities for events on campus such as student appreciation day, engineering bash, or student festivals, which provide great opportunity to show off our vehicle. These campus events would target our ‘up and comers’ target audience who are soon to be graduating and may begin to think about how they are going to spend their new incomes.

Adding a blog to our homepage- Blogs are a great way to interact with the community and exchange ideas.

Adding a recommend this site link to webpage- This provides a convenient way for visitor’s to browse other environmentally informative site.

Joining networking websites and submitting webpage info to a search engine- Joining websites such as Web Ring, Bravenet, or Digg are great ways to get our homepage noticed by web surfers. Also, by paying for our website, such as Google, to be displayed at the top of the page of a search engine when certain words are entered, our website has a higher chance of being viewed. In addition there are free search engines that will take keywords for desired web searching results such as ‘Submit it!’ or ‘Scrub the Web’.

Giving lessons or a seminar about what our team does- This is a great way to give back to the community while promoting our vehicle, Challenge X, and alternative fuel technologies. Specific ideas include events such as a car maintenance lesson or a seminar on diesel engines that includes information on new after-treatment technologies that ‘milk the pollutants’ out of the Moovada.

Giving handout at events- Free pins, pencils, stickers, brochures, or tire pressure gauges will assure that our audience walks away from our events with a piece of the hybrid team. By customizing our handouts with energy saving hints for the average consumer along with our contact information, we will increase the likelihood of our literature being retained.

Doing community service and joining local environmental organizations- Getting our team together for a community event will get the attention of people in the community and they will see that we are giving to them. One local organization that assists the production and selling of biodiesel in Madison is PrairieFire BioFuels Co-op. The organization also lists diesel vehicles for sale around the Madison area.

Gathering local hybrid owners and environmental organizations for a parade around Madison- This exposes a wide variety of people to organizations that they may not have known about such as PrairieFire BiodFuels Co-op and shows the pride hybrid owners have for their vehicles.

Cross marketing with other Challenge X teams- By cross marketing it may be possible to advertise on a larger scale than we would have been able to do with our budget alone. Also, having more than one team at an event generates more interest from the public and reporters. We have already established plans to work with the Mississippi State team and Michigan Tech on events.

Displaying our vehicle at football games- There are 80,321 sold out seats at Camp Randall Stadium for Badger games each game day and even more people walking around for partying and watching the game at nearby bars. Displaying our vehicle around Camp Randall stadium could be cross linked with an appearance on a radio station; since there is a station that produces a show nearby.

Getting government officials involved in team events- There are opportunities to organize events associated with the political and legislative factors under the environmental scan in this report. The new hybrid buses have generated a lot of interest from the press. Also, Governor Doyle has joined our team in previous outreach events so we have established a good relationship with his contacts. In addition, the UW’s Engine Research Center is closely linked with our team, since several of our members have worked in the center and are familiar with its inner workings.

Updating website- Our team has begun work on a new website that uses different web design software then our current website is based from. This new website will have several interactive features such as webcams, surveys, FAQs, video footage, and a blog. Also, the aesthetics of our website will be updated including flash and new graphics. In addition we would like to create a section of our website dedicated to children learning.

Creating a Wikipedia page, submitting Youtube videos, and creating a public Facebook group- This is a way of free advertising that is effective because of the wide usage these sites get. There is already an official Challenge X Wikipedia page, but we will create a link from this page to a UW Hybrid Vehicle Team Wikipedia page with in depth information about the Wisconsin team. For submission to Youtube we have our skit from last year’s competition and we will be making an informational video on our team. On Facebook, groups are easily created and can increase in the size of membership very rapidly, even into the thousands.

Displaying our vehicle at the Alliant Energy Center- This is a location where concerts, expositions, and community events are held. Events that we might display at include the Cirque Du Soleil, Blue Man Group, John Mellencamp, Dane County Fair, Brat Fest, Go Green Wisconsin Expo, Motor Sports Thrill and Monster Trucks, Toys for Tots and the Kids Expo).

Currently the events that we have scheduled for the near future are:

• Girl Scout Badge Day-Together with the Society of Women in Engineering there will be a tour through the Engineering Centers building garage and we will conduct activities involving their new found knowledge of alternative fuel technologies and hybrid vehicles

• Badger football games-We will be displaying the Moovada near Camp Randall stadium with the country radio station “96.3 star country” against Northern Illinois, Indiana, Michigan, and the Homecoming Parade

• Clarion pr event at their world headquarters-with the help of the Clarion marketing representatives there will be media attending a ride and drive with Clarion executives.

• Team blood donations-The UW team will be donating blood at the blood drive coming up this next Thursday.

Strategies for addressing obstacles that may be present in order to “commercialize” our vehicle

There are many misconceptions about hybrid vehicles that may present a barrier to getting our messages across to the public.

• Consumers believe the battery will not last and they are expensive to replace. This belief was once a truth; however today companies such as Johnson Controls have developed lithium ion batteries that will last up to 10 years with a warranty to receive a new battery if the current one fails.

• Many people do not think of hybrids as a "performance machine".  They have the stigma of being slow, “hippie mobiles”.  Users that demand high performance will not be buying a hybrid simply because it has the stigma of not being as fast as their non-hybrid brethren. This is not completely accurate as our hybrid vehicle has proven to accelerate faster than the stock Equinox in the Challenge X competition.

• People compare our hybrid with well known brands such as the Toyota Prius as well as the performance of these vehicles to our re-engineered Equinox. These hybrid powertrains are fundamentally different and there are some features that are better or worse in each of the vehicles i.e. we have a faster acceleration then the Prius but the Prius has a better fuel economy than the Moovada.

• There is a lack of biodiesel pumps at commercial filling stations and because of this lack of availability may detour consumers from purchasing a biodiesel running vehicles. This belief can be mitigated by letting people know about the nearest pumping stations.

• The lack of awareness about the stop-start feature in the Moovada leads people to think that the vehicle stalls when they stop at a stop sign. The reason the vehicle turns off at the stop sign is because it saves on the fuel economy and as a bonus there is no noise coming from the vehicle during this time.

• There has been wide spread publication of the Li-Ion Sony laptop battery fiasco. When consumers hear that the Li-Ion batteries have been integrated into the Moovada, they may think about Sony’s exploding batteries. To help mitigate consumers concerns, GM has done force analysis on the new Tahoe two mode hybrid. They have determined the area of the vehicle that will incur the least amount of force upon impact, thereby protecting the batteries from explosion.

• Hybrids will not hold their value as much when compared to their non-hybrid counterparts.  This is due in-part to the degradation of the battery pack.  The solution to this issue is already being tackled by Daimler-Chrysler, GM and Ford. These American automakers are offering warranties that range from 100,000 miles to the lifetime of the vehicle. Also, an argument can be made when taking a look at the Honda Insight. It is the only hybrid that has been on the market for 8 years, and so far the battery packs are holding up to Honda’s claim of the 10 year lifespan.

BRANDING

Our brand is our team’s identity; it is how people perceive our team and decide if they will take interest in what we have to offer. It will also inspire team loyalty in our audience. Our brand portrays our team’s environmental consciousness to the public, our caring for the welfare of the community and our technological forward thinking.

There were a few considerations we took into account went designing a logo for our team. First we wanted the design of our logo to be simple and eye catching. Also, we wanted it to look good in both color and black and white. This image is expressed in our logo as seen below.

The image of the earth in our logo gives the impression of a group interested in the quality of the world’s environment. The use of green in the lines orbiting the Earth represents our efforts to change the behavior of the world to be more “green”. The picture of our vehicle ties the Equinox and GM in with the University of Wisconsin, because Wisconsin is printed on the side of the vehicle and the colors of the vehicle are red and black. Our slogan is written below our vehicle and represents actions toward sustainability. Our team chose Sustainability Today as a slogan because the word sustainability encompasses our brand goals and the word today evokes a feeling of activeness.

EVALUATION TECHNIQUES

Knowing the results of our marketing tactics we can make intelligent decisions about how to better allocate our marketing budget. In addition, we can figure out how to double the response rate without spending money on unproductive tactics. Once we have this information we will be better able to think like our target audience and cater our marketing material to their needs and generate more leads.

The following is a list of our current techniques for evaluating our marketing efforts:

• Submit the UW Hybrid Vehicle Team website to . is one of the top 25 most visited websites in which people discover and share content from anywhere on the web. The content that is submitted by users of Digg is voted on by other Digg users and the number of “Diggs” or positive feedback is displayed and promoted to the front page for millions of visitors to see.

[pic]An example of a Digg submission

• Conduct focus groups to gain feedback on our website and other marketing tactics and use the feedback to make educated changes to our marketing strategy.

• Write an evaluation form for people who drive our vehicle so they can rate the consumer acceptability.

• Add a counter on our website to find the number of people visiting it to determine whether the website is generating outreach.

• Design an outreach database to keep track of individual marketing efforts and the leads they generate. Also, include fields to track the dates of your campaigns, campaign descriptions, the number of leads generated and sales made. Once we have a central storage location for this information we will be able to make queries to glean the information we need to make wise marketing decisions.

• Ask Questions. When we speak with prospects on the phone make sure we ask how they heard of our team; was it word of mouth or an ad in the local newspaper? The idea is to gather as much information as we can about which marketing mechanisms generate the best (and worst) response, who is responding and why they chose to respond.

• Develop Criteria for what are acceptable marketing results and compare to what results currently are. This way we know when to change something about our marketing campaign.

BUDGET

|Item Comprisals |

Give Away: creative business cards (pencils/pens, sticky pads, magnets, stickers, pins) food to serve at events, tire pressure gauges, Inflatable (“Bessie”) cows with logo printed on them, and games for children focused events

Traveling Expenses: For PR events outside of the city there are hotel, car rental, gas, or food costs.

Advertisement: Submitting our website to search engines such as Google’s “adwords”, banner ads with Federated Media, Flyers, video taping equipment rental, brochures, or radio advertisements

Display: Banner sign for events, Safety Strobe Light

PR Events: Rental space for “Battle of the Bands”, Band Bookings, Permit

for Parade, Radio Spots

Highlighting Public Displays

Percent Break Down of First $2500 Budget

|Items |Percent of $2500 |Portions in Cash |

|Give Away |30 % |$750 |

|Traveling Expenses |25% |$625 |

|Advertisement |15% |$375 |

|Display |10% |$250 |

|PR Events |20% |$500 |

CONCLUSION

Wisconsin has developed a multifaceted approach to informing the general public about its new exciting crossover hybrid vehicle, the Moovada. Three specific segments have been identified, “Up-and Comers”, “Brite Lites, li’l City” and “Greenbelt Sports”. These outdoorsy, technologically savvy and environmentally minded individuals have an annual median household income ranging from $48,620 to $69,380.

With superior performance, exceptional fuel economy, low emissions and world class interior features, the Moovada will sell itself. To jump-start sales, Wisconsin has devised a grass-roots approach to marketing this vehicle such as displaying the vehicle at many smaller community events, distributing ‘handouts’ and ‘give-aways’ that highlight our environmentally friendly efforts and our goal to remove the vehicle from the environmental debate.

APPENDIX A: CLARITAS MARKET SEGMENT BREAKDOWN- REJECTED GROUPS

01 - Upper Crust- Moovada is not a luxury vehicle

02 - Blue Blood Estates- Moovada is not a luxury vehicle

03 - Movers & Shakers- Moovada is not a luxury vehicle

04 - Young Digerati- Not Techy enough, would go for a Tesela is green oriented, need more gadgets onboared

05 - Country Squires- Not designed for off road, rural application, not luxury enough

06 - Winner's Circle- Moovada is not a luxury vehicle

07 - Money & Brains- Moovada is not a luxury vehicle

08 - Executive Suites- Moovada is not a luxury vehicle

09 - Big Fish, Small Pond- Moovada is not a luxury vehicle

10 - Second City Elite- Moovada is not a luxury vehicle

11 - God's Country- Moovada is not a luxury vehicle

12 - Brite Lites, Li'l City

Brite Lites, Li'l City is a group of well-off, middle-aged couples settled in the nation's satellite cities. Typical residents include DINK (double-income, no kids) households, with college educations, well-paying business and professional careers, and swank homes filled with the latest technology.

Social Group: Second City Society  

Lifestage Group: Midlife Success  

Age Group: 25–54  

Race/Ethnicity: White, High Asian

13 - Upward Bound- Moovada is not a luxury vehicle

14 - New Empty Nests- Moovada is not a luxury vehicle

15 - Pools & Patios- Moovada is not a luxury vehicle

16 - Bohemian Mix- Too green, would go for an Insight or Prius

17 - Beltway Boomers- 2-mode Tahoe buyers, need the space

18 - Kids & Cul-de-Sacs- Need more space-mini van or suburban

19- Home Sweet Home- Will opt for a smaller car, probably luxury Lexus GS 

20 - Fast-Track Families- Need something more Flashy, would go for 2-Mode Tahoe

21 - Gray Power- Will opt for a smaller car, probably luxury Lexus GS

22 - Young Influentials- Need something more Flashy, would go for 2-Mode Tahoe/Lexus RX hybrid

23 - Greenbelt Sports

Greenbelt Sports is known for its active lifestyle. This is a segment of middle-class exurban couples who are middle-aged and college-educated. They own new homes, and about a third of them have children. Few segments have higher rates for pursuing outdoor activities such as skiing, canoeing, backpacking, boating, and mountain biking.

Social Group: Country Comfort  

Lifestage Group: Young Achievers  

Age Group: 25–54 

Race/Ethnicity: Mostly White

24 - Up-and-Comers

Up-and-Comers is a stopover for young, midscale singles before they marry, have families, and establish more deskbound lifestyles. This segment includes twentysomethings who are recent college graduates and into athletic activities, the latest technology, and nightlife entertainment.

Social Group: City Centers  

Lifestage Group: Young Achievers  

Age Group: ................
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