The product includes various models of cars, which are introduced in the market in order to satisfy different customers’ preferences. In their turn, these models can be classified into several types, including 2-door cars, 4-door cars, 4x4, etc. Different models and types of Iuvenis cars are intended to satisfy particular customer segments. For example, large 4x4 or hatchbacks are preferred by the buyers who have children or large families, while smaller 2-door cars can be chosen by couples or the customers who are single. Furthermore, car models can be divided with regard to their prices for consumers with different income levels. On this basis, the following categories are distinguished: budget cars, mostly intended for students or unskilled employees, medium-price cars, and premium cars preferred by skilled employees or managers. Apart from that, hybrid cars and gasoline cars are also recognized.
Warranties are important to consider, since customers are not likely to buy a car with an unreliable warranty. Therefore, Iuvenis Motors can offer several types of warranties. Basic warranties and dealership warranties are available for all customers. In addition, company can offer the extended warranty for extra pay (Different Types of Car Warranties, n.d.) which guarantees an insurance for additional period or further services that are not included in basic and dealership warranties, and promise particular repairs or help for customers (Federal Trade Commission, n.d.).
Cars do not usually have a package, but it is possible to decorate them in car dealerships in order to attract customers. With this respect, Iuvenis Motors can use branding opportunities. For instance, several car brands with different features can be introduced, such as green cars brand, family cars brand, small cars brand, and so on.
The company has competitive advantage as regards the product. It is due to the wide choice of cars and warranties, the number of green cars models on offer, and the cars designed especially for the youth, which is not offered by most rivals.
As in the beginning the volume of production will not be large, there is no need to use difficult distribution channels. Therefore, it is possible to introduce a simple channel by which car distributors can buy cars directly from the manufacturer, Iuvenis Motors. It is also necessary to align the channel with the overall logistics and the location of the physical facility. In the beginning, Iuvenis Motors is likely to have only one or several plants, which means that it will not be convenient for all distributors from the US to move cars to their locations. Thus, the company can introduce regional physical facilities where cars brought from a single plant will be stored and sold to the local dealers. It will be convenient for the dealers because they will not be forced to buy cars from a distant plant. At the same time, there is a benefit for Iuvenis Motors because the company will not use the services of wholesalers and will not pay fees to them. Thus, dealers will buy cars form local facilities and sell them in their car dealerships to the local customers.
Iuvenis Motors seems to have a competitive advantage with respect to a place. Firstly, it does not have wholesale buyers, which helps to save time and money in selling cars to the customers. Secondly, local physical facilities are convenient for retailers, who are likely to be interested in buying cars there.
The pricing strategies and tactics used by Iuvenis Motors can vary in different periods, for instance, penetration pricing, competition-based pricing and option pricing (Spann, Fischer, & Tellis, 20115). Initially, when the products are introduced in the market, the company can use penetration pricing strategy. According to this strategy, the prices for products are lower than the average prices for competitive products. Iuvenis Motors is a company that specializes in inexpensive cars for youth. Therefore, it will prove its image by selling cars for lower prices than the average price in the market. This will help to attract customers and make them loyal to the brand.
Later, when the company becomes popular and is trusted by the customers, it will be possible to change pricing strategy for most models into competition-based. This means that most models of Iuvenis cars will have the prices similar to the competitive models sold by other car producers. Thus, the higher profits can be received and the possible losses that might have occurred when the prices were lower can be covered. However, competition-based pricing should not be applied for all models. As Iuvenis Motors is positioned as the car producer for youth, prices should remain low to keep loyal customers with the company. Therefore, competition-based pricing should be used for premium models exceptionally. All the other models require to use option pricing, which means that the prices for cars remain low, but the company receives additional profits by selling additional goods or services. They may include extended warranties and auto service contracts mentioned above. Thus, Iuvenis Motors will be able to keep to its policy of reasonable prices and receive additional profits from additional services.
Iuvenis Motors has a competitive advantage with respect to pricing. Due to the low prices, it can win the market segment that includes youth and where the competitors have higher prices. Low prices will attract consumers’ loyalty, especially among those with low income, including youth. Moreover, with low prices, the company will still have normal profits by selling additional services.