Citroën DS3 Marketing Mix Analysis: Australian Market

Introduction

The Citroën DS3 is a small car marketed by the French automaker Citroën. The DS3 was originally launched in 2010 and comes in two main variants: the regular DS3 and the Cabrio. The car belongs to the supermini class, where it competes with the likes of the Mini Cooper, the Smart Fortwo, and other very small passenger cars. This paper examines the marketing of the DS3 with particular reference to the Australian context. The analysis covers the 4Ps of marketing — price, promotion, place, and product — and also determines the target market and market segmentation for this car. The core value proposition and other key marketing elements are discussed as well. The analysis is based on the marketing materials provided by Citroën online, with analysis rooted in marketing theory.

The automobile industry uses extensive segmentation of its products. Most companies in the industry operate globally and typically offer vehicles across most segments of the market. These segments are based on vehicle type, and each type will generally appeal to a specific portion of the overall automobile market. Because of this, products are designed specifically to appeal to certain consumers. The ideal situation for the manufacturer is that the target market's characteristics do not differ significantly around the world, so that the product can fit the broadest possible segment. For example, if Citroën sells the DS3 around the world, ideally the target customer in Australia, North America, and Europe will have roughly the same characteristics, so that the design of the car remains appealing across countries and continents. In some cases, automakers will not market a given vehicle in a particular country if the market characteristics do not fit the vehicle's design and features.

There are some themes in automobile marketing that are relatively universal, and these provide the framework for understanding the marketing of a product like the DS3. The first is that there is only ever a limited amount of customisation available on a given vehicle. This is partly why there are so many product segments within the private consumer automobile market. The cost of developing a vehicle is very high, as are the fixed costs associated with automobile manufacturing. A high degree of product standardisation is therefore necessary in order to take advantage of economies of scale in production. Standardisation creates some challenges in meeting consumer needs, but it supports the ability of companies to offer vehicles at prices middle-class consumers can afford.

Another generic feature of automobile marketing is that cars are typically sold through dealer networks, with few exceptions. Dealers are often franchised and sell only the vehicles of one company or a stable of related companies. As a smaller manufacturer, Citroën may need to share dealers in certain smaller markets rather than maintaining its own exclusive dealerships. Dealers are responsible for vehicle sales, but the manufacturer is ultimately responsible for the other elements of marketing, including the product, setting the base price, all promotion, and determining which markets to enter. The manufacturer must therefore have a strong sense of the target market, even if it is not the final seller of the vehicle.

Market Segmentation and Target Market

The first point of segmentation is geographic. Citroën markets the DS3 in a number of different countries, and this paper focuses on Australia. Within Australia, the marketing of the DS3 is governed by the location of the Citroën dealer network. Dealers in a given territory are expected to serve that entire area. Citroën typically markets nationwide, or at the very least focuses on the large cities, which contain most of the Australian population.

The second point of segmentation is demographic. Demographic features include age, race, gender, and other such characteristics. Typically, a vehicle category will appeal to a certain demographic profile, and the vehicles within that category seek to differentiate slightly within that demographic. The supermini category is targeted towards a younger, urban demographic. Buyers are typically in their 20s or 30s — educated, living in cities or inner suburbs. The ad copy highlights values that are important to the younger car buyer. Consider the following copy from the DS3 web page:

"DS 3 gives you impressive freedom of expression through elegant design, advanced technology and a huge range of personalised options. Each DS 3 is unique and you can design yours to suit your individual style."

Key phrases in this text include "freedom of expression" and "individual style." A mass-produced vehicle can never truly be an expression of individualism, but the text conveys these values for a couple of reasons. The DS3 is positioned as a first vehicle, or at least a first new vehicle for the buyer, giving the buyer a sense of mobility and freedom they did not previously have. The younger buyer views a car as an expression to the world of who they are, much as their clothes, their phone, and other consumption choices do. Citroën is a niche vehicle brand, and the DS3 therefore offers a unique value proposition to the young buyer as a distinctive car that their friends may not already own.

The buyer is also likely to have some post-secondary education, given that he or she is in a position to purchase a new car. This is someone who is starting to establish their identity as an adult, and the car is part of that process. The DS3 buyer is therefore beginning a career in the workplace. This person has probably also travelled overseas during a gap year and has some broader experience of the world. The small size of the car makes it most appealing to urban dwellers — people who need a car for everyday activities such as getting to the beach, but who also value fuel efficiency and ease of parking in an urban environment.

The third method of segmentation is psychographic. Psychographic segmentation helps to build a deeper understanding of the customer. The DS3 customer is a young, urban Australian with an education, starting a career and earning a salary typical of their generation. The car is positioned as gender-neutral. Australians of any background, if they otherwise fit the demographic, are targeted for the DS3. The psychographic characteristics of this demographic include a high value placed on independence and on expressing oneself through the choice of vehicle. The brand is also positioned as a creative alternative, differentiating itself from an otherwise conventional category and thereby appealing more effectively to millennials. Citroën's ads for this vehicle have been likened to Apple's marketing approach in terms of their style and execution (Kay, 2013).

The company seeks consumers who value creativity and modernity, as evidenced by the brand endline "Creative Technologie" — a call to people who value creativity and inhabit a world in which it is a core value. The focus on technology, with advertising featuring ample visuals of the product, is also an appeal to the millennial generation: consumers who were raised with technology and for whom it is a critical element of daily life. Citroën's approach is aligned with the values of its demographic, particularly the educated, urban millennial. This consumer is also worldly, and this high degree of worldliness and interconnectivity means that consumers in this market are relatively similar in terms of their demographic and psychographic composition across different countries. This fits with the distinctiveness for which the Citroën brand has historically been known (Meiners, 2014).

Product

The DS brand is a supermini, which appeals to younger, urban consumers as a first new vehicle — something that gives them greater independence and freedom. Style is a key feature of the vehicle. Citroën has historically had a quirky sense of style (Meiners, 2014), and the DS represents a return to that after years of following German and Japanese style innovations (Kay, 2013). The DS3 is small, which allows it to reach a price point that appeals to this market, while its distinctive styling attracts specifically urban, younger consumers. This consumer typically does not yet have children, making a small car entirely appropriate. The styling is unique, which appeals to the creative, technology-focused segment of the broader demographic. The product has won praise for its ability to meet the needs of this market through its emphasis on styling.

Where style is the primary consideration, reliability becomes less central. The DS3 is not a car intended for long daily drives, and a market that prioritises style is less concerned with long-term reliability. As a relatively new brand, there is also limited historical data available on its reliability, and this is not a key message in Citroën's advertising. To further appeal to this market, the car offers a higher level of customisation than many others in its class, which reinforces the individuality dimension of the marketing by giving customers a genuinely personalised experience.

The customisation element raises interesting challenges from a product perspective, because it means a customer is unlikely to drive away with a car immediately upon making the purchase decision. This creates complications on the manufacturing side. Typically, an automobile will be produced with a range of popular options pre-configured, but this is only viable when dealers are required to hold large inventories and when the number of options is limited. The greater the degree of customisation on offer, the more complex the manufacturing process becomes. Citroën does not have a factory in Australia; its nearest production facilities are in China, with some DS models produced in Shenzhen, while the remainder are shipped from France. This could mean a substantial lead time for an Australian consumer, mitigated only by dealers carrying significant inventory. Nevertheless, whatever logistical challenges exist, the high degree of customisation remains one of the major selling points for the product.

Conclusion

The DS line from Citroën has been a critical success, and these vehicles are now sold in Australia. The DS line is targeted towards a younger demographic in their 20s and 30s — the millennial generation — typically as their first new car. The vehicle's small size fits within the target buyer's budget and suits urban dwellers without children. The DS line also emphasises styling, a trait common to many competitors in the supermini category, and it offers a high degree of customisation as a key selling feature.

The core values for the brand include freedom, independence, and creativity, each of which resonates strongly with the target market. While the line has earned critical praise, this is not a focal point of the company's promotions. Instead, the advertising copy emphasises these core values and seeks to align with the young, urban mindset of the target audience.

In Australia, the DS line is distributed through the Citroën dealer network, which provides fairly comprehensive national coverage. Dealers are responsible for sales while the company is responsible for marketing. The DS line has a starting price just over $30,000, with added features capable of pushing the price to around $40,000 — a price point that fits well with the chosen target market. Overall, there is a high level of cohesion between the different elements of the marketing mix and the target market for the DS line.

References

Ad copy from http://www.Citroen.co.uk/new-cars-and-vans/ds-range/ds-3

Kay, B. (2013). Citroën DS3: The French car brand is sending mixed messages with this Apple-esque execution. Marketing Magazine. Retrieved September 22, 2015 from http://www.marketingmagazine.co.uk/article/1174915/Citroen-ds3-french-car-brand-sending-mixed-messages-apple-esque-execution

Meiners, J. (2014). French invasion: Citroën ponders U.S. return using stylish DS brand. Car and Driver. Retrieved September 22, 2015 from http://www.marketingmagazine.co.uk/article/1174915/Citroen-ds3-french-car-brand-sending-mixed-messages-apple-esque-execution

MindTools (2015). The marketing mix and the 4Ps of marketing. Mindtools.com. Retrieved September 22, 2015 from https://www.mindtools.com/pages/article/newSTR_94.htm