ALFA ROMEO RETURNSA PLAN FOR SUCCESS

PREPARED FOR HARVARD GROUP INTERNATIONAL

2010 8C Spider

A George Ayres Planning Overview - SAMPLE ONLY

G e o r g e Ay r e s • 8 4 R e e d R d , Wa r r e n , C T 0 6 7 5 4 • t e l e p h o n e : 8 6 0 6 7 1 - 9 4 0 0 • e - m a i l : g e o r g e . a y r e s @ m e . c o m

A Modern and Compelling Italian Brand Story

After a product-led revival in Europe, Alfa Romeo is now poised to re-conquer the United States market and plans to do so within the next 24 months. If volume brands like Hyundai can make a comeback after initial low quality issues Alfa certainly has a chance given the latent passion for the brand among premium car buyers, Baby Boomers in par-ticular. There is still much love in the US among this still affluent and large demographic group for all things Italian, especially mechanical things like motorcycles (Ducati), Cappuccino machines (Bennoti) and even refrigerators (Smeg). And all these brand’s command premium prices for their products. Alfa Romeo should be confident that eventually the global recession will end, and people will return to these products again as before.

These other Italian brand stories are built around craftsmanship, passionate design, and traditional ideas. Ducati for example has had a resurgence in the last few years not only due to the performance and design of its bikes, but also from a combination of innovation (e.g., under seat exhausts) and tradition (e.g., desmodromic valves). This will be the secret of Alfa’s success as well. If Alfa Romeo can continue to combine innovative exterior and interior design and modern technology, with some traditional approaches “just because it is Italian” then it will be a successful return. Newly passionate American Alfa drivers will want to tell their friends about the quirks their car has, the things un-conventional, because it demonstrates why no compromises were made to make the car do what it does best - deliver an exhilarating driving experience with style and flourish.

Alfa can also continue it long benefit of good brand associations. For example, in the 1960’s, the Alfa Spider Dustin Hoffman drove in “The Graduate” symbolized for an entire generation the college-age angst and longing to be un-conventional that many baby boomers felt. Many of these people are now mature, affluent premium car buyers . Alfa Romeo should continue this valuable approach by finding compelling current personalities and people that represent the modern Alfa Romeo driver. Actors like Ewan McGregor or Liam Neeson would be good choices to represent Alfa in the US, for example, since they are smart, globally savvy modern celebrities who confidently express a personal style of their own.

Alfa owners have always wanted to be part of a club, a special group, an “Alfisti” clique. They can then together not only celebrate the passionate feedback that driving an Alfa Romeo provides them but also the quirks and complica-tions only those “in the know” can truly appreciate. It is exclusivity though knowledge, not just price, and is longer lasting and build more loyalty for the long term.

The Product Portfolio in the US Market

The current Alfa Romeo European product portfolio of small city cars through to sporty sedans and coupes and on up to luxury sports cars is more than wide enough to provide dealers with an adequate model range.

The smallest car, the MiTo is a supermini like the Honda Fit or Mini Cooper, and has been very well-received in Europe for its performance. If equipped with the right small turbo engine like the 1.4 liter Multiair it could provide the kind of performance expected of an Alfa Romeo for US buyers. Contrary to plans already announced, Alfa should consider selling the MiTo in the US, positioning it against the Mini Cooper S and similar premium small cars, but only in Quadrifoglio and GTA trim levels which would provide the most premium content and highest pricing power. In this configuration, it would be a popular car among young, urban premium buyers. Below is a quote re-ceived recently from a friend on my own Facebook site when I told her Alfa was coming to the US:

“Yes! Love it! And, I will be one of the first people to buy one!!! After living in Rome, my new car that I'd buy in a heartbeat if they offered them here is a MiTo. Gorgeous. SO wish they had them Stateside!!!”

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The larger Milano is ideal competition for the small premium market and should be sold with the 1.4 and 1.8 Multiair engines only. The 159 replacement, the full size Giulia will easily compete with German and Japanese luxury brands in the US if priced properly. The plan for the 169 replacement (internally the Progetto 941) should be considered care-fully, as the size and pricing of this car could push it too deeply into the Maserati range when fully equipped for the US market. It should top out at least 15% below the Maserati GranTurismo. It should also be the highest quality car Alfa makes as it will get extra scrutiny at this price level. And since American buyers will overwhelmingly choose convertibles over coupes in premium cars, the sporty Brera Spider and 8C Spider will be adequate to lend brand per-formance credibility. The 8C coupe should only be sold in very limited quantities.

Milano

Giulia Progetto

Customer Targeting

Alfa Romeo should not have to work hard to sell its initial volume in the US as long as it does a fantastic job reaching out to the latent brand-loving “Alfisti” that are already waiting for these cars. And many Alfa intenders between 35-65 will be global professionals and entrepreneurs, frequent Euro-travelers that have seen Alfa’s current European line-up and know its history. They will only need to be activated. Still, these prospects will want to know more about modern Alfa Romeo technology like the “Multiair” engine and the “SeleSpeed” gearbox. But they will also be very interested in the Alfa driving experience, so video’s and footage of current European cars can be re-purposed for the US market, and communicated in a low cost way through the web in order to win them.

Existing Alfa Owners clubs need to be tapped into, but care should be taken not to get too close to the “old school” flat-cap types that tend to dominate these organizations. Alfa needs to be modern, hip, and cool to succeed again in the US market, so starting some all-new factory supported non-traditional Alfa clubs may be a focus strategy. The company should concentrate these efforts in cities like New York, San Francisco, and LA to help create ways for younger prospects to form their own Alfa fan clubs on their own first, and then design brand events these prospects can attend helping turn their new product interest into buying behaviors and floor traffic for dealers.

MiTo GTA edition

Novitec Rosso - MiTo

8C - Benchmark Performance

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Communications Approach

Alfa Romeo doesn’t need to spend a great deal of advertising dollars on traditional media. A reasonable print pres-ence of carefully selected publications, stronger social media programs, and a strong and building series of event programs will work well during the initial first year launch phase. The key will be to get started early, especially with social media and building interest among prospects and leveraging their individual ability to re-communicate the Alfa brand message. For example, currently just on the social media site Facebook alone there are more than 100,000 “fans” of Alfa Romeo. By starting up the brand story now, long before launch, and providing these potential custom-ers with content for their own re-circulation, Alfa Romeo can leverage the power of social media to help build aware-ness.

Alfa Style Italian Flair Global Professionals

Having the Alfa brand be active and present at certain events will also be important. For example, traditional vintage events like the Monterey Historic Races can connect the older Alfisti to the new since this is an event that not only draws the older affluent, but increasingly now draws the younger affluent too. As the featured marque there in 2008, Alfa should still have a strong list of attendees it can call upon for the upcoming launch events for the new cars. Spe-cially staged large city events will be particularly critical, since this is where the majority of Alfa buyers are located. But prospects will need to be communicated with individually and locally, not nationally. By using online tools like “meet-up” groups, key local communicators, and other awareness-building techniques at a local level, Alfa prospects will find out about the brand if they have their “ear to the ground.” This will reinforce that Alfa is a cool brand to be associated with. Getting the younger opinion-leaders to get excited about Alfa Romeo, to “tweet” and “text” about the brand, and actually ask for information from dealers will be the key to early brand credibility among this group and to initial sales success.

Measuring Success

Alfa Romeo needs to ensure that it measures and captures information about its target customers every step of the way....from initial brand interactions, through to initial inquiry and final purchase, and on to follow-up and loyalty. With the array of tools available today to modern marketer’s, a complete knowledge management system can easily be set up that will track customers carefully, and nurturing them correctly at each point. Using database techniques which allow one-to-one marketing, through direct contact, and even within smaller “fan” or local groups, Alfa can let people know about events, product details, and brand insights. All of the communications traffic generated by this brand stimulation can be tracked, and increasing levels of brand and product details can be shared. Alfa can even measure its “cool” factor by following mentions (like “Tweets”) and not just overall web-traffic.

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Conclusions

Alfa Romeo will ultimately be successful when the brand returns to the US market. The only question is how success-ful can the brand be? Launching the brand in the US again in a traditional automotive way will get weak results. But launching the brand using modern marketing tools, and with modern messaging, will not only rekindle the most passionate old “Alfisti” that still remember the past, but will also capture new brand loyalists who can establish the success of the brand over many years to come. Getting younger affluent buyers into the brand at the entry point and giving them reasons to become the new passionate loyalists, means that over time the larger cars will find higher volumes than they otherwise would.

Alfa Romeo combines a very modern Italian aesthetic with compelling tradition. The American customer will realize this quickly and put the brand on it’s shopping list if Alfa Romeo communication is focused and current. But Alfa needs to be seen by target buyers as much as possible. Early brand visibility with the right audience will be the key.

ACTIVITY PLAN

2010

FIRST HALF

2010

SECOND HALF

2011

FIRST HALF

2011

SECOND HALF

2012

FIRST HALF

Brand Prospecting Social Media and Fan sites

Activation of Alfa Clubs

Create New Brand Events

Activate Dealers

Product Press Events

Print Advertising Begins

Web Campaigns Launch

Retailer Programs

(Sample Activity Plan - Author has not been informed of actual timing of vehicle launches)

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