Week 4: Groups submit the issue they will be investigating and the topic (chapter) in the book

referred to

Referencing-Topic 9 segmentation of business

Nissan Product – “LEAF” electric vehicle

Investigation of issue

- Electric vehicle will become the future transportation because petroleum resource is
limited.
- LEAF electric vehicle are design affordably, based on the company idea of taking the
analysis of demographic segmentation into consideration.
- Environmental awareness has become a crucial issue, reaching to the state of trend
where consumers will take concern on their purchasing habit.
- Simplicity of design and functions are today trend, consumers have been living in a busy
life, and product simplicity may position consumer personality or desire to seek for
seclusion.
- Vehicle thrilling speed and sporty engine cannot be neglected, consumers with the top
most hierarchy of needs required something superior, luxurious entertainment that
symbolize status and wealth. using psychographic segmentation
- Getting a whole system of managing the supply of electric injection for electric vehicle
is complicated as heavy funds collections are dependent on government capabilities.

1. How company evaluate and select target market(segment size and growth, segment
structural attractiveness, company objective and resources)…..undifferentiated
marketing, differentiated marketing. (page 279)
2. Market coverage strategy(positioning strategy-product position, )
3. Effective segmentation has to be Measurable, accessible, substantial, differentiable,
actionable
4. Geographic ,demographic, age and life cycle stage, gender, income, multivariate,
psychographic ( socioeconomic status, personality), behavioral(purchase occasions,
benefit sought, user status, usage rate( heavy user small percent), loyalty status,
buyer readiness stage, attitude towards product.)
EVs:Shifting the Relationship between People and Vehicle

Hideaki Watanabe corporate vice president, Global Zero Emission Vehicle Business Unit

An All-New Mission for an Automaker

In March 2009, Hideaki Watanabe stood in the office of Nissan's Chief Executive Officer. Carlos
Ghosn looked him in the eye and spoke: "We need a leader for the Renault-Nissan Alliance's
zero emission business. I want it to be you. This is an all-new mission—one that no automaker
has ever taken on before. You'll need to make strategic moves going forward, while building on
synergies between Nissan and Renault."

The challenge was tall, but the CEO's words thrilled Watanabe.

Tama Electric Car

Nissan had in fact built up more than a half-century of technical experience and know-how in
EVs, ever since the 1947 début of the Tama Electric Car. But this time was different. By setting
up a dedicated Zero Emission Business Unit, Nissan was undertaking a historic step, putting the
pedal to the floor in its preparations for the launch of the Nissan LEAF, the world's first truly
mass-produced fully electric vehicle.

The mission assigned to Watanabe was at first sight daunting. His brief went beyond
development, production and sales, the traditional domains of automakers, to encompass creation
of a societal environment in which zero-emission mobility could become an integral part of
people's lives. As he says: "I see this task as a way of displaying Nissan's total commitment to a
zero-emission future. We aren't going to sit back and wait for the world to change. We're
proposing a new form of society and blazing a trail toward it. I was shaken by the magnitude of
this responsibility."

Nissan LEAF
The new business unit ended up being responsible for a considerably diverse set of tasks. First on
the list were the partnerships to be forged with national and local governments, electric power
companies and other entities. Next came production and sales of quick-charging units, the
preparation of needed electric infrastructure and the standardization of charging methods
together with other automakers and electricity industry players. Watanabe found himself in
charge of any number of never-before-faced tasks. He and his team had to dig deep and go
beyond the knowledge, methods and values that they had learned in their work to date.

"Nobody had any finalized plan to shoot for," says Watanabe. "It was like putting together a
jigsaw puzzle a little at a time while we cut the pieces out ourselves. We couldn't have done it
without the full support of the EC."

Nissan's Executive Committee, the company's top decision-making organ, stood behind
everything the business unit did. The CEO, who heads the committee, placed all authority for
this project in the hands of the Zero Emission Business Unit. "Mr. Ghosn's instructions were to
the point," says Watanabe. "He told me, 'Do everything you feel is necessary to create a new
lifestyle with EVs as a part of it.' Thanks to this support from the top, we've been able to
optimize our project by creating a team drawing on all divisions of the company, and to go
beyond organizational boundaries to develop solutions much more quickly. One good example
of this is our 4R Business approach."

The four Rs here stand for reuse, refabrication, recycling and reselling. Before bringing the
LEAF to market, Nissan joined forces with Sumitomo Corp. to launch a joint venture aimed at
secondary use of batteries. The creation of a business around ancillary recycling and reuse
systems—even before the launch of the main product—was a most unusual move for any
industry, not just auto manufacturing.

Partnership with Sumimoto Corporation

Watanabe describes what happened: "In the course of our discussions with the technical staff, we
learned that used batteries, while no longer useful in an EV, can still hold a charge and be put to
work in other applications. But if we'd had to work within existing systems and ways of thinking,
there wouldn't have been any way to move forward. We were able to come up with the idea of
creating a secondary battery-use business, and pour our passion into it, because our overarching
zero-emission business goal was so clear. In the end, turning reuse and recycling operations into
a business opportunity will help us hold down battery costs and bring our EVs to market at more
competitive prices. All the pieces of the puzzle fall right into place."
Watanabe was beginning to see a more complete picture of the zero-emission society of the
future.

A Key Nissan Asset: Experience In Tackling tall challenges

Not everyone is so certain about this zero-emission future, though. Many see the limited distance
an EV can travel on a single charge and the hurdle of building out the charging infrastructure as
reasons to doubt that electric mobility will become the mainstream. Watanabe, though, has a sure
answer for the naysayers.

"There are people out there who say, 'How can you call it zero-emission when electricity comes
from thermal and nuclear power plants that also produce emissions?' Does that mean automakers
should just sit on their hands, doing nothing until a hundred-percent clean form of energy
becomes available? I don't think so. In the grand scheme of things, our energy sources will
certainly become cleaner over time. So the important thing is for us to begin work ahead of
everyone else to create cars that run on the cleanest energy available to us today. This is the most
meaningful challenge we're taking on.

"At Nissan we've got a culture of striving for breakthroughs. The things you gain by breaking
through the walls holding you back are always the most valuable."

For example, when neighborhood commercial associations said that quick-charging facilities
were too expensive to purchase and install in local shopping arcades, Nissan brought more of the
development process in house, slashing the quick charger's price by more than half. Other efforts
focused on minimizing customer concerns about the short driving range of EVs by creating
intelligent navigation systems to deliver information like the locations of the nearest charging
stations.

Quick charger
The onboard navigation system shows the current driving range and where to charge next.

There is no way for Nissan to achieve a zero-emission society on its own, of course. Since 2008
the company has been negotiating with national and local governments around the world,
exploring the various cooperative relationships that can be forged. Watanabe was one of Nissan’s
emissaries on these globetrotting journeys, passionately describing his vision of the coming zero-
emission future to officials at each of his stops.

It was not an easy task. In 2008 Nissan exchanged MOUs, or memoranda of understanding, with
just 10 counterparties, with the total rising to 30 the following year. However, the announcement
of the Nissan LEAF rapidly pushed this number higher.

"At last we had something concrete to show people," says Watanabe. "This made them realize
that EVs could be a real solution. We were suddenly swamped with inquiries: 'Come talk to us
about what you've got,' they said. 'How can we work with you to make use of these vehicles in
new ways?'"

As of January 2011, Nissan has exchanged 90 MOUs with governments and other partners
around the world. With the aim of increasing the number of quick-charging facilities, a must to
expand the use of EVs, and standardizing charging systems, it has also joined four other
Japanese firms—Toyota Motor Corp., Mitsubishi Motors Corp., Fuji Heavy Industries Ltd. and
Tokyo Electric Power Co.—as executive members of the CHAdeMO Association. This
association has 158 members worldwide, including manufacturers of charging units, providers of
charging services, companies supporting these players and administrative agencies. Preparation
for the advent of a new EV age have taken on a truly global nature.

Partnership with Wuhan Government

Watanabe faced a punishing schedule, jetting around the world and organizing Nissan's zero-
emission efforts at the Japan headquarters. But as these moves gained momentum, he felt his
own personal conviction changing to a confident belief that Nissan was on the right track. There
was no stopping the momentum that had built up.
Aiming for Global Leadership in Zero-Emission Mobility

The Nissan LEAF was developed from the start on an EV-specific platform and aimed squarely
at the "C-segment" compact market. By positioning the new vehicle right in the middle of one of
the most popular global car classes, Nissan aimed from the gate to make it a flagship
highlighting its position as the global leader in zero-emission mobility.

"EVs can't be just a niche product," stresses Watanabe. "Our aim is to put out highly competitive
cars in the mass-market zone, get our mass-production systems in place and lower costs through
economy of scale. In the end this will lead to widespread adoption of EVs. At the same time, our
cooperation with governments and other companies will put more infrastructure in place. As we
make progress on that front, costs will keep coming down, making the technology easier to get
into the hands of consumers. Our fundamental strategy is to get this positive chain reaction in
motion on a global scale."

A major factor underpinning Watanabe's confidence is the Renault-Nissan Alliance. "We've got
Nissan, with its strengths in Japan and the United States, and Renault, a major player in Europe.
The Alliance lets us cover the entire world and carry out more efficient investment. Renault's EV
development has made great leaps forward thanks to battery technology from Nissan, for
example. By 2013, Nissan and Renault will have a total of seven EV production bases
worldwide, along with five lithium-ion battery plants. The Alliance will be capable of putting
half a million new EVs on the road annually by 2015."

Preparing for large-scale manufacturing will let Nissan bring EVs to customers at reasonable
prices. "For this to succeed we've first of all got to make sure our cars are attractive," notes
Watanabe. He says this has been achieved with the LEAF.

A Nissan LEAF on the production line

Nissan's innovative lithium-ion battery

From his confident excitement it is clear that Nissan's EV technology has not just caught up to
gasoline-powered cars, but ventured into an entirely new zero-emission territory.

"As zero-emission cars go mainstream, they have the potential to change completely the way we
use cars in our daily lives. The LEAF comes with an onboard IT system we designed just for it.
You can check on the car's status and control some of its functions even when you aren't in it.
You can see how fully charged your battery is from your computer or mobile phone. You can
turn on the air conditioner while getting ready to walk to the car."

Watanabe says all conventional industry bets are off as zero-emission mobility gains even
greater traction. "Who knows? One day we might see homes with a parking space in the living
room. Imagine your father sitting in the car to enjoy its stereo system while the car sits right
there in the room! I believe the automobile will become a more integral part of our lives. A
friendlier, approachable presence. And this process of change will continue indefinitely—there's
no finish line in this race we're running."

Indeed, there are already three more EV models in the pipeline to join the company's lineup by
2014. Nissan is drawing on all its ingenuity and its questing spirit as it charts a course to the
zero-emission society of tomorrow.