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Market Segmentation Spurs Resurrection of Datsun Brand

customer segemntation

by Kenneth Rudich

The first car I ever bought was a Datsun B210 back in 1980.  It was the 1974 version, and I got it for $1400 from a used car dealer in eastern New Mexico.  In retrospect, I probably paid too much.

With a gaudy orange exterior and cheap black vinyl interior, it was anything but aesthetically pleasing.  Plus, the engine suffered from a severe power deficiency.  Freeway entry ramps and uphill climbs would stir anxiety as the little peanut under the hood strained to overcome them.  There was always an inclination to help it along with extra body English.

But it also had some good qualities, too.  Despite the appearance of dangerously flimsy construction, it was amazingly durable.  During my four years of ownership, it rarely went to the shop in need of repair.  Weigh that idea against the knowledge it carried me back-and-forth across the U.S. at least four times, and it survived the tortuous heat of three blistering summers in Phoenix.

Best of all, the B210 could run forever on one tank of gas.  Given the financial reality of being fresh out of college and seeking a first job in the work-a-day world, this alone compensated for the many shortcomings it had.

It was a sad day really, but I eventually sold the B210 to someone else for $400.

He probably paid too much.

Datsun Lost Foothold

Datsun had a good run during the 1970’s, but the brand was officially discontinued in 1981.  This was after the parent company, Nissan, decided to pursue a higher end market segment in North America.  No doubt they realized the Datsun brand could no longer compete with Honda’s quality at the low end of the market, and the potentially harmful halo effect of keeping it going would have run the risk of holding the carmaker back from achieving a new, loftier Nissan brand image.

Datsun Redux

But now, in a move that summoned my own fond recollection of that cheesy but durable Datsun, the carmaker is bringing back the brand some thirty years later.  Prompted by the prospect of increasing sales in emerging markets such as Russia, India and Indonesia, it has announced plans to roll out several Datsun models in each of those markets.  The aspiration is to have the brand account for as much as half the company’s sales in those markets by March 2017.

Market Segmentation DNA

If you think about it, they’re after a similar market segment DNA as the one that got them a first foothold in North America.

During the 1970’s the economy writhed under the burden of an oil crisis.  According to Wikipedia, gasoline was rationed in many countries.  In the U.S., customers with a license plate ending in an odd number were only allowed to buy gasoline on odd-numbered days, while even-numbered plate-holders could only purchase gasoline on even-numbered days.

Despite America’s historical love for big gas-guzzling automobiles, sales of small cars soared as a way to confront this challenge.  By offering affordable performance with simple reliable mechanics, Datsun had the right product at the right place at the right time.

This same formula seems to fit well with what the market will bear in Russia, India and Indonesia today.  If you look at the table at the top of this post, the Product-Market Schedule, you can see Nissan has picked a strategy that coincides with Quadrant II – that is, same product, new market segments.

It took 30 years for these segments to mature enough to make this a viable option – or at least, worthy of consideration.  It’ll be interesting to see how well Datsun does now that it has a new lease on life.  

All in all, this is a sterling example of marketing-strategy-management – at least, the way we view it here at MSM.   

Source: http://www.bloomberg.com/news/2012-03-20/nissan-to-revive-datsun-brand-after-three-decades-to-boost-sales.html

Twitter: http://twitter.com/KenRudich
LinkedIn: LinkedIn: http://www.linkedin.com/in/KenRudich
Email: ken@marketing-strategy-management.com

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