Reference no: EM132227830

Customer Value Insight - They Love Their Subarus

The automotive industry was “running on empty” in 2009 as sales plummeted. General Motors and Chrysler needed U.S. government bailouts to survive, Toyota was plagued with product recalls, the recession was in full swing necessitating programs to provide cash for old/junk cars and federal sales tax incentives to stimulate the purchase of new vehicles. One notable exception in this dismal marketplace was Subaru of America.                                                                                 

Subaru has emotionally connected with its highly educated, pet-loving, environmentally conscious and outdoor enthusiast target market by providing well built, reliable vehicles that consistently win “Car of the Year” awards in the U.S. by organizations such as R.L. Polk & Company, Motor Trend, Edmunds, Cars.com, National Highway Traffic Safety Administration, etc. The Subaru customer philosophy is that Subaru will consistently build customer loyalty, create customer advocates and strengthen brand value by providing superior purchase and ownership experiences.                                                                                                                    

Subaru’s promotional theme “Love, It’s What Makes a Subaru a Subaru” has reinforced brand loyalty to meet the company objective of creating lifetime customers. Subaru is a limited product line marketer (Forester, Impreza, Outback, Crosstrek, Legacy and Ascent) which sells more than 600,000 units annually in the U.S. (a three-fold increase since the recession) and more than one million cars worldwide. Sixty-seven percent of their sales are from North America (U.S. 61%, Canada 5%, Mexico 1%); 23% are from Asia (Japan 15%, China 5%); and less than 5% are from both Europe and Australia.                                                                                         

Subaru has one of the highest repurchase rates in the industry. It is not uncommon for owners to keep their cars for ten or more years and get 200,000 or more miles on them before buying another Subaru (more than 95% of Subarus sold in the last decade are still on the road today).

please answer this 2 question

1. How can companies in other business sectors emulate the Subaru experience and create brand advocates?

2. Can Subaru gain traction outside of the U.S. and Japan to become a bigger force in the global automotive industry?