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Case Example. Read the following case and consider how to develop an effective positioning strategy eventually for the introduction of new luxury brand of Cadillac after conducting the STP approach. This task is an example of how to respond to recent declining sales of GM’s old-fashioned brand Cadillac.

Cadillac Reaching For Icon Status in New Positioning

(By David Kiley July 27, 2006 in Business Week)

Cadillac has become a cool brand in the last four years thanks mostly to the embrace of the Escalade SUV by the fashion and hip-hop crowd, and the good reception of CTS sedan by the auto press. But with sales down 9% in the first six months of this year and not enough new buyers coming in, the General Motors brand is shaking up its advertising and marketing to reach more women and young well-heeled luxury car buyers.

When Caddy launched its “Break Through” campaign four years ago with Led Zeppelin music, it was a game-changer at GM and the Caddy brand, which had become associated more with the white-shoe and matching belt crowd than those wearing Dr. Maartens or Gucci. And while four straight years of sales gains is nothing to sneeze at, Caddy recently identified a problem. Beyond the Escalade, young people had no clue about the rest of the lineup. Also, while the average age buyer had come down to 59 from 64, that’s still too old and too few women have been shopping the brand.

Your Mission. In this Case Study #5, students need to implement three steps of segmentation, targeting, and positioning process in the STP approach. First, develop one market structure map as the outcome of the segmentation process. Given the market structure map, next, identify one segment as the target market for the targeting process. As the final outcome, it is necessary to design an effective repositioning strategy for the positioning process. For the details of each stage of the STP approach, refer to the next following section.