Yes, FGA is not VW. VW can afford to proudly lose so much money on each Veyron, Fiat can't afford to lose a penny or a euro cent on any 500.
General 500 by Gucci in Greece
- Thread starter Chrisilda
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General 500 by Gucci in Greece
OP
OP
And of course they don't do it in purpose... they are just more "capable" to deal with this if happens...
I really don't know who have told you that.....
Branding by definition aims to capture a place in consumer's mind because of it's design, characteristics, name etc. The upper goal of branding is to attract and retain customers (in order to be a customer you should buy something). Obviously, this has nothing to do with fun as Ahmett said or image (There are some PR professionals for this)
Moreover, market share could not occur without sales therefore our main priority is cost and sales.
Regarding what you said about attracting prospect customers at the dealership it may be true but not in this case. If they wanted that there are many other things do than designing and producing a new edition.
All of those above and below the line marketing activities that lead you to the end purchase (your fiat) have a real budgeted cost. 500 byGucci is a brand and in order to sustain its creation and presence it should make some profit which should be considerably more than the costs occurred. (design, production, distribution, advertising, sales promotion etc)
This is the business world!
I totally agree that FIAT and any other company is looking for profit.
You're right about marketing activities. Not all of them are successive.
what I'm trying to say is that Gucci - for example - is one of many activities , a part FIAT's strategy to enter into US market where the big bucks are for example.
In this business world - I live there as well - someone took a panda, transformed it into a 500 and sold it to the world. This action kept the cost down.
Marketing had to push then new 500 to the world. So, they created a story around the product -maybe more than one story - to make the new 500 attractive.
People sometimes buy the story and not the product itself. This is my point of view.
The bottom line is , that FIAT 500 is a winner , the company got into the US market and company is selling more units. Shareholders are happy....
I'm happy with my new fiat - still waiting - so those marketing guys are good!
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... or they are prepared to lose money because it is worth it (like supermarkets selling beer at less than cost price to get customers through the door - or indeed Ford selling the Focus RS at a loss (allegedly) because of the image that was reflected onto the rest of the range, and so increase sales).
The "bottom line" (which in itself is an accounting term!) is that margins are tight for car companies and nothing is done for fun. And if they say it is done for fun, that is just part of the plan - which has been signed off by accountants.
The "bottom line" (which in itself is an accounting term!) is that margins are tight for car companies and nothing is done for fun. And if they say it is done for fun, that is just part of the plan - which has been signed off by accountants.
OP
OP
Your statement is more clear now. You're right - you're having a point of view which really applies to this issue. But besides all of those things that you mentioned the ultimate goal is one, profit!I totally agree that FIAT and any other company is looking for profit.
You're right about marketing activities. Not all of them are successive.
what I'm trying to say is that Gucci - for example - is one of many activities , a part FIAT's strategy to enter into US market where the big bucks are for example.
In this business world - I live there as well - someone took a panda, transformed it into a 500 and sold it to the world. This action kept the cost down.
Marketing had to push then new 500 to the world. So, they created a story around the product -maybe more than one story - to make the new 500 attractive.
People sometimes buy the story and not the product itself. This is my point of view.
The bottom line is , that FIAT 500 is a winner , the company got into the US market and company is selling more units. Shareholders are happy....
I'm happy with my new fiat - still waiting - so those marketing guys are good!
ahmett
Prominent member
Come on maxi, fiat almost made 1,000,000,000 Euro in profit in 2010. I wouldnt call that desperately looking for any penny, would you?
You make hay while the sun shines Ahmett. Look at the past, Fiat have also made big losses too.
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Actually $711m which is about 525m euros. Oh, and as reported in the press, this was mainly down to trucks, construction and farm vehicles.
If you think Fiat do not want to control costs tell me why there is no boot light in a Fiat 500 Sport?
OP
OP
Ok, lets suppose that the profit is that much and not any losses have been made....We have to bare in mind the biggest external threat of these days ( economic crisis which leads to less buying power especially in this market) which makes every company more conservative in terms of spending. Nowadays most of the companies struggle to sustain their presence and have a decent profit margin therefore they are not spending any money with no particular reason.
ahmett
Prominent member
EXACTLY maxi! VW made the Veyron without making money, but for fun and to prove they are the best! They looked at the macro objective of success instead of the micro objective of just profit per car even though in the big picture they are still making money!
This is the example of a HALO car, something so far ahead of its time that it doesnt matter whether it makes money or not, it seals their legend anyway.
OP
OP
I'm bored of this... Ahmett tries to present the new perspective that business launch products for fun.. I will try to contact the dean of the mkt department at college to propose this as something which should be included in every lecture.
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Don't believe everything you read on the internet Ahmett:
http://annualreport2010.fiatspa.com/en/group-glance/2010-summary
OP
OP
Wiki is not reliable. Annual reports are the source!
Guys stop comparing the Veyron with the 500 byGucci... 500 byGucci is a different thing - it's massively produced. .
ahmett
Prominent member
Fair enough! Just got wikied = )
ahmett
Prominent member
Wiki is not reliable. Annual reports are the source!
Guys stop comparing the Veyron with the 500 byGucci... 500 byGucci is a different thing - it's massively produced. .
Chrislida you are right. However, I am saying that marketing does not happen only because of profit. The Veyron lost VW money, they did it for 'fun' and to be the best.
ahmett
Prominent member
Lecturers dont know what they are talking about half the time. The fact that they read a lot does not mean they are right. I am not saying i know more than them, but most things business management and economics related are just theory. It is not an exact science.
Hence the world is in a mess and from what i see to some extent, always will be = )
OP
OP
Oh yes sure.. the business world is not about money but fun! At least what i have studied and learned really helped me in practice! Because we were trying to do things beyond theory and "play" with real case scenarios. Anyway, VW earned money from Veyron but not by selling units... 500 by Gucci is a different story!
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Quite a lot of truth in that. I know of one particular individual (former Taoiseach !)
- he was an academic - who make a decision to 'spend spend spend' when the world economy was in a recession despite our own economy being a 'small open one'.The responsibility of a board of a company to their share holders is to maintain shareholders wealth not profit ! Although profit is ultimately what needs to be made. I'm of the opinion that the Gucci 'adventure' was brought about because the 'brainchild' behind it (Lapo Elkann) is the grandson of the Fiat chairman.
There's a restaurant called Les Amis (near where I live) and the business owners allowed their son some rope to move more ‘upmarket’ using what he had learned in college appealing to more affluent clientele. They renamed the restaurant Tibors and even in the current times have been successful but not without its moments.
The Gucci development is part of a much bigger picture and forms part of a strategy by Fiat to differentiate themselves from all the other 'faceless' models out there. On my previous post the 'international design academy of cars and technology' gives some insight into how are cars will look and how they are 'fitted out'.
http://videos.howstuffworks.com/medialink/14671-cars-and-fashion-video.htm
And if you think that Fiat got it wrong - how about the guy that thought there would be a market for this
...(more money that sense comes to mind)http://www.autoguide.com/auto-news/...ferrari-brooch-makes-a-fashion-statement.html
