Introduction
Technological advancement in the 21st century has caused an unprecedented growth in many industries. Companies in the manufacturing industry have gone to great lengths to ensure that they deliver state-of-art products to their customers. This clamor for esteem by the customer has been compounded by the advent of global climatic change. The adverse effects of global warming have prompted manufacturers to opt for designs that do not heighten the scourge.
In light of this development, companies have gradually embraced the idea of ‘green technology’, which is a term coined by environmentalists to refer to environmentally friendly designs. Technophiles have been obliged to tow along this line of thought by warming up to designs that incorporate green technology. In the automotive industry, manufacturers have expended a great deal of resources and time to roll out designs that measure up to the increasingly sophisticated desires of their customers, while at the same time incorporating elements of green technology. The Fisker Karma is a prime example of this trend.
While its features embody a modern luxury car, its designers delved deep into their design repertoire to ensure that the car incorporated every practically conceivable element of green technology. This essay seeks to examine the Fisker Karma critically in order to develop a clear concept of its standing as a product in the automotive market.
A Synopsis
The Fisker Karma is a plug-in hybrid (Leftlane, 2013) car that is touted as the best among the green car generation that is quickly taking its place on the automotive market. It is the “first model in Fisker’s line of production, which is a coupe-like four-door sedan that boasts of a range extending gas engine and electric motor” (Leftlane, 2013, Para.6). These features set it apart from its competitors in the green car generation of which most are either purely electric or hybrid in configuration. The Fisker Karma, although it uses gasoline, is always electrically driven because the gasoline only serves to power a generator, which produces the power to run the engine (Sherman, 2011). The machine is capable of accelerating from zero to sixty miles within about seven seconds, an attribute that is commensurate with modern day sports cars (Leftlane, 2013).
The car was engineered in Los Angels by a team of high profile experts headed by Henrik Fisker, hence its name (Cropley, 2013). The lead designer is a man who has been touted to be among the best car designers of modern time, as attested by the fact that he is the man behind the gorgeous BMW Z8 and Aston Martin Vantage car models (Cropley, 2013). The car was built at the former Porsche Boxter plant in Finland as the foremost of the Fisker car brands (Cropley, 2013). It is relatively new on the scene because Fisker entered into the automotive scene in 2007. The Fisker Karma, which is the only model that the company ever delivered to the market, made its debut at an auto show in 2008 (Bennet, 2013). Since then, mixed reactions and reviews have plagued the automotive scene concerning the car model.
The Karma in Perspective
Fisker Automotive
The Karma is an embodiment of modern day green vehicle technology, which focuses on environmental conservation in all aspects including its design, manufacture, and its functioning. Its builder, Fisker Automotive, is relatively new on the scene. It began its operations in the year 2007 with its first car appearing in an auto show in 2008 (Bennet, 2013). Fisker Automotive is an American company whose founders intended to start a revolution in the transition towards green cars by rolling out luxury plug-in hybrid car that had never hit the motor industry before. Its headquarters are in California and their main plant is situated in Delaware (Bennet, 2013). Fisker was able to deliver its first orders to the market within three years on a budget of about a billion U.S. dollars (Sherman, 2011).
The figure was much less than what General Motors invested in the production of the Chevy Volt, which is among the leading electric cars in the auto scene (Sherman, 2011). Fisker’s entry into the automotive scene was almost immediately plagued by a series of undesirable events that eroded peoples’ confidence in the company. Karma buyers reported a plethora of faults in their cars within months of purchase, its prime supplier of batteries A123 moved out of business, and the U.S. government cut off its major source of funding Bennet, 2013). This move left the company with a bleak future to look forward to and unfortunately, these events transpired before the company could achieve a notable presence internationally leaving it mostly in the U.S. and probably in Europe.
Product Configuration (Fisker Karma)
The Karma’s debut seems to have been well timed. It came at a time when developed economies were drumming up support for electric cars in an effort to reduce environmentally harmful emissions from cars. In light of these, Fisker was lining up its products for environmentally conscious individuals who hold a soft spot for luxury automobiles. Going by its initial offering price, the Karma seems to have been destined for the higher social class. The selling price range of $87,000 to $100,000 per unit is a clear indicator that Fisker targeted higher socioeconomic class individuals including celebrities, government officials, and members of the public commensurate with this class (Bennet, 2013). The design and features contained in this product clearly attest to the fact that it was meant for the person who has a keen eye for the beauty in a car.
Fisker makers approached the design of the Karma with a clear-cut idea of what they wanted to deliver to their customers, which is evident in the state-of-the- art technologies incorporated in the karma. The designers went to the extent of incorporating technology that had not yet found its way into the automotive industry. The Karma features the “world’s largest spherically curved monolithic solar panel integrated into its roof” (Cropley, 2013, Para.11).
This aspect gives the car an extra 5 miles per week source of power besides its advanced lithium- ion battery, which has the capability to propel it for up to 50 miles without using gasoline (Leftlane, 2013). The approach to the design of the Karma is entirely environmentally conscious in every detail. None of the parts are crafted to hoodwink the customer, as they are truly what they are alleged to be. There was no compromise with any detail of its features. Its breaks are power generators in themselves and any time the car brakes are applied, it replenishes its supply of electric power reserves.
A lithium-ion battery powers the engine of the Fisker Karma until its stored charge is depleted before reverting to its gasoline reserves. The gasoline reserves, as mentioned earlier, simply power a 175 kW generator, which then drives the Karma’s 2.0-liter four-cylinder engine that incorporates turbo charging and direct injection technologies (Cropley, 2013). At normal operation, the Karma’s power system is capable of delivering about 400 horsepower, which gives it a 95 m/h top speed when in electric mode (Cropley, 2013). It is worth noting that for normal short drives, the car may not have to switch to its gasoline-powered system at all.
The Karma’s interior design is just as elaborate as its other features. Every inch of its interior is covered with natural or recyclable materials (Cropley, 2013). This attribute of its interior design adds to the fact that Fisker was out to deliver a green car like no other to its customers. This ‘Eco’ approach to its design is compounded by the fact that in its entire design, the car employs an advanced animal free approach (Cropley, 2013). Instead, high-grade textile has been used in place of leather and high quality wood reclaimed from dead trees that have survived up to 300 years, which give beauty and form in an environmentally conscious manner (Cropley, 2013). The inside of Karma gives a customer the feel of a luxury car and the customer can enjoy this comfort fully aware of the fact that no life was harmed to deliver the comfort.
The dashboard of the Karma is awash with LCD screens with the central command center that monitors all the processes of the car (Cropley, 2013). The screens are in place of the traditional gauges that one would expect to come across in a normal car. The central command controls the audio, navigation, and telephone among other processes (Cropley, 2013). These features give the drive a central point from which most of the major processes of the vehicle can be controlled. In addition to such features, the car also has both interior and exterior speakers, which generate a sound aimed at warning pedestrians of the Karma’s approach (Cropley, 2013). This feature is vital for purposes of safety because when the car is running on electricity only, it technically produces no sound.
In anticipation of such features by prospective customers, they started placing orders for the Karma immediately after its debut in a 2008 auto show. The clamor for the car seemed to overwhelm Fisker Automotive because a good number of deliveries were made after the delivery dates were long overdue. This car is clearly a consumer product that was sought after by many. The unfortunate events that plagued Fisker in its early life can be entirely blamed for the purported drop in value for the car. Most clients panicked when they realized the likelihood of closure or sale of Fisker Automotive due to its financial woes. This element is adversely affecting the performance of the Karma on the market since customers were not certain of getting a support provider when they needed one.
The Karma is a typical example of the more-for-less philosophy. The features it places at the disposal of its users coupled with its Eco friendly design approach gives the customer so much more for their money. The manufacturer attended to the problems that were realized by customers who had purchased the car. Several recalls that were also made by the company was to correct an issue or two. This move shows that the company was committed to ensuring that its customers’ needs were fully taken care of. Reports indicate that the manufacturer lost a considerable amount of funds with the sale of each unit that was successfully delivered. This loss is undesirable in business, but the fact that these extra production costs could not push the manufacturer to place a higher price tag is the strongest indicator of the philosophy Fisker adopted.
The Fisker Karma is still in the introductory stage of the product life cycle where the manufacture is still immersed in efforts to ensure that the car is reputed globally as a green car, but is commensurate with sports luxury in every respect. Fortunes changed for the automotive manufacturer at a critical stage. Perhaps if the Department of Energy did not halt its financial support, the Karma model would take off with slight adjustments to its initial features and specifications. Negative publicity continues to damage the reputation of the Karma forcing it into a position from which it may require lots of effort and resources to recover in order to move on to the next phase of the product life cycle. This kind of publicity does not do the Karma any justice owing to the fact that the introductory stage of the product life cycle should be characterized by massive advertisement, which creates awareness in the potential buyer (Perreault et al., 2009).
Competitors of the Karma
Fisker Automotive made a bold attempt to cut out a market niche that would have been very difficult for its rivals to permeate. This assertion is evident in the fact that most preceding electric cars were relatively smaller to offer better use of the electric power. Some manufacturers, such as General Motors, had explored the path of the bigger green car, but their models fell short of the passion and aesthetic value offered by modern day luxury cars. The designer of the Karma seems to have carefully considered all these aspects and incorporated the model. This aspect was a head start for the Auto manufacturer especially when given the fact that the green car market is largely unutilized. There was a need to correct just a few issues with the car’s operation to place abreast of all competition.
The Fisker Karma hit the market at a time when several electric cars were up and running. Almost all major car manufacturers across the globe have rolled out a green car to capture that section of the market too. Like the Karma, such cars have faced heavy criticism in their evolution from the initially unattractive performance potential to the current reasonable levels. The electric cars that currently exist in the market can be categorized into pure-electrics such as the Tesla model, hybrids such as the Prius model, and plug-in hybrids such as the Karma (Zang & Cooke, 2013). Among the different categories, the Karma only faced stiff competition from a few.
The Karma is the only full-size hybrid luxury sedan that exists in the market today (Cropley, 2013). It only faces competition from other non-similar electric cars because of their incorporation of green technology. Some of the cars, which are seen as the closest competitors of the Karma include “the BMW ActiveHybrid 7, Lexus LS 600h L, and the Mercedes-Benz S400 Hybrid” (Cropley, 2013, Para.12). Though seen as the closest competitors of the Karma, it lacks a true competitor that features all its technologies, appearance, and size. This aspect places Karma in a position where it would have almost monopolized the market. However, even as things stand currently, the Karma is still the greenest of all electric cars due to its carefully considered approach to Eco friendly design.
Pricing Strategy
The approach that a company gives to pricing has the potential to make or break a product or service. The approach taken should make the customers feel that the value that they give in order to enjoy the benefits of a given product is commensurate with the benefits (Kotler & Armstrong, 2010). Companies can use several pricing approaches to place reasonable price tags on their products. One such example is the customer value-based pricing in which the manufacturer prices a product based on the value that customers attach to the product rather than the cost of production (Kotler & Armstrong, 2010). There are other pricing strategies used by companies such as cost-based pricing in which a company considers all costs incurred during the entire production process and makes uses them to come up with a strategy.
Fisker Automotive adopted a value based strategy in which they priced the Karma based on what they believed was right value for the product. Reviews show that with every sale of the Karma, Fisker lost a substantial amount of money, but they kept on operating with such a price. The auto manufacturer was likely aiming at long term goals of drawing on the economies of scale to run profitably later on in its operations. The Karma’s retail price projection was at $87,000. However, the actual retail price varied between this and $100,000, which can be attributed to the fact that the company used two approaches within the value-base pricing strategy to price and sell the Karma.
The Karma has the potential to fetch much more beyond its price tag. If the company’s future was assured, it was capable of eliminating the bugs that riddled the Karma’s performance and present it as a flawless model that is unequaled in the market. However, it is unfortunate that this dream may never come to be after the withdrawal of funding by the major funder of the auto manufacturer.
Promotion mix employed by Fisker Automotive
The Fisker Karma, being the first brand produced by Fisker Automotive, received the attention it deserved. The details incorporated in the car’s design clearly testify that the experts at the plant expended great efforts to come up with the model. The company, like many others, first unveiled a car that would show the world what they intended to produce. About two years later, they were able to deliver the car to the market with features surpassing what they had showed the world. The company then engaged in an awareness campaign that incorporates most of the elements of the promotion mix. The campaign was so heavy that critics of the model later viewed it as part of the reason the company could not take off.
Elements of the promotional mix are easily identifiable in Fisker’s effort to make a mark in the automotive market. Some of the most prominent elements of the promotion mix that were employed by the company include advertising, sales promotion, public relations, and direct selling. Advertising was done via several media including television, magazines, newspapers, and the Internet. Since advertising involves a non-personal presentation of a product (Kotler & Armstrong, 2010), featuring the Karma in an auto show before it went into production does not qualify as part of the advertising campaign. However, through it, potential customers became aware of the impending production of a new state-of-the-art green car that would hit the market and started placing orders.
In addition to advertising, the company also employed the sales promotion approach to the marketing mix. The cars that were successfully delivered had warranties on them. The manufacturer dealt with all repair and maintenance of requirements of the cars and even recalled some cars to its plant to improve on areas, which did not meet expectations. The company was out to ensure that its car stayed on the road successfully in order to pave the way for the future, which it had already planned for adequately.
Besides the two promotion mix approaches, the company also added public relations to its repertoire of marketing options including several avenues of which a good example is the Karma website. The website incorporates interactive features, which can adequately attend to the needs of anyone who accesses it. It also features a direct assistance option, which when chosen gives the customer or potential customer room to make inquiries about the product. The head of the plant, Henrik Fisker, also availed himself for interviews with media companies. These moves were all intended to ensure success for the Karma.
After the auto show that unveiled the Fisker Karma, it is reported that orders started flowing in. Fisker then immediately embarked on production to deliver the orders before producing more for the general market. The fact that Fisker personnel took orders directly from customers and dealt with their concerns until the orders were delivered qualifies this process to be direct selling. The orders were barely completed before the company was engulfed in unending woes ranging from trouble with its suppliers to withdrawal of funding by the department of Energy.
Conclusion
This analysis has shown that the Fisker Karma was a noble idea that lacked sustained support for its benefits to be realized. Its power potential and handling efficiency coupled with the stunning looks qualify this car for its status. The manufacturer approached the Karma’s design from a perspective that would have proved elusive to many green car designers for quite a long time. The car is a revolutionary model for the green car niche.
Although many electric cars came before it, the designer of the Karma ensured that their model had no real competition in the marketplace. Although Fisker Automotive was almost immediately forced to halt its operations due to lack of funds, their first model, the Fisker Karma, was a clear indicator of how far they could go to ensure that customers’ needs were met and even exceeded. The Fisker Karma may die or live on but either way, it shall go down in the annals of the automotive industry as one of the most progressive green cars of its time.
Reference List
Bennet, D. (2013). The Real Lesson of Fisker Auto’s Failure. Web.
Cropley, S. (2013). Fisker Karma review. Web.
Kotler, P., & Armstrong, G. (2010). Principles of Marketing. Upper Saddle River, NJ: Prentice Hall.
Leftlane: 2013 Fisker Karma. (2013). Web.
Perreault, D., Cannon, P., & McCarthy, J. (2009). Basic Marketing. New York, NY: McGraw Hill.
Sherman, D. (2011). 2012 Fisker Karma. Web.
Zang, F., & Cooke, P. (2009). The Green Vehicle Trend: Electric, Plug-in hybrid or Hydrogen fuel cell? Web.