END-OF-CHAPTER CASE BRINGING A NEW PRODUCT TO MARKET: THE STORY OF THE NISSAN LEAF In August 2009, the Nissan Motor Company unveiled the The electric motor that powers the Nissan LEAF has Nissan LEAF, the world's first affordable, zero-emission more than one mile of copper wiring inside. It takes more car powered by a lithium-ion battery. Three years later the time to assemble an electric motor than it does a gas LEAF became the best-selling electric vehicle of all time. engine, and Nissan says it takes about 25 people per shift How did this revolutionary new car become so successful to ensure that an electric motor is made properly. At first so quickly? The secret lies in the years of careful planning the motors were assembled only in Japan, but today they're that went into bringing the LEAF to market. also produced in Decherd, Tennessee, about 100 kilome- The name itself makes a significant statement about tres from Smyrna. Adam Reed, Nissan's globally certified the car. Just as leaves purify the air in nature, so the Nissan trainer for eMotor production, spent two three-month LEAF purifies mobility by taking emissions out of the stints at Nissan's global headquarters in Japan learning how driving experience. This medium-sized hatchback has to sculpt these motors. He now supports the team in ample cargo space and seating for five adults. Its battery, Decherd that began building the motors for the 2013 Nis- which generates 107 horsepower and 207 Ib-ft of torque, san LEAF, which was assembled in Smyrna. can be fully charged in seven hours with a 240-volt home Another key requirement of bringing the Nissan charging dock-although with a quick charger, it can LEAF to market was to develop charging systems-and to achieve 80 percent capacity in only 26 minutes. And when continually improve on them. A year after production on fully charged, the LEAF has a range of 160 kilometres. the LEAF began, Nissan and 4R Energy Corporation Let's start with the story of how this new product was itself a joint venture established by Nissan and Sumitomo built. Corporation) began testing a new charging system that combines a solar power generation system with high- PRODUCTION BEGINS capacity lithium-ion batteries. With the new charging sys- Production of the Nissan LEAF began in October 2010 at a tem, electricity is generated through solar cells installed at vehicle assembly plant in Oppama, Japan. The LEAF's lith- Nissan's global headquarters, and is stored in lithium-ion ium-ion battery modules are manufactured at the Automo- batteries. With seven charging stations (three quick tive Energy Supply Corporation (AESC) operation in Zama, charge, four normal charge) located on headquarter Japan-a joint venture of Nissan Motor Co., Led. and NEC grounds, the total electricity that can be generated and Corporation. The battery modules, which contain four bat- stored is equivalent to fully charging about 1800 Nissan tery cells, are assembled at Zama and then shipped to the LEAFs annually. This new system will enable electric Oppama facility, where 48 of them are assembled into the vehicles, which don't emit any CO, when driven, to be electric car's battery pack. The LEAF's batteries are also pro- charged through a completely renewable energy source, duced in Portugal, France, the U.K., and the U.S. Nissan resulting in a cycle whose total CO2 emissions is zero. began construction of a manufacturing facility in Smyrna, A quick charger is also available for sale at Nissan parts Tennessee, in early 2010. It is now one of the largest vehicle companies throughout Japan. The quick-charging unit battery manufacturing plants in North America, capable of retains the high performance of the current quick charger producing 200 000 advanced-technology batteries annually. manufactured by Nissan, but its smaller size takes up less The battery plant is located adjacent to Nissan's exist- space and enables easier installation. The quick charger ing vehicle assembly plant in Tennessee, which was costs less than 1 million yen (about $11 000), which is retooled to accommodate production of the LEAF. Part of actually less than the "regular" charging unit. The charg- the assembly line had to be modified to mount battery ing units are marketed both to individual customers and to modules at the stage of production where fuel tanks are buildings and other public facilities, such as rental car traditionally installed; motors and inverters, meanwhile, operations. are mounted at the point where engines are installed in Because there's no traditional engine, the LEAF is gasoline-powered vehicles. The Tennessee vehicle assem- ultra-quiet (for safety reasons, a sound had to be added so bly plant builds LEAFs for North America, and has the that pedestrians could hear the car coming). The car is ability to produce 150 000 electric cars each year. also ultra-high tech. The instrument panel provides the 314CHAPTER 8 . Developing and Managing Products and Services 315 driver with regular updates on range and driving effi- technicians, are required to service the car. Still, with no ciency, and using a system called CARWINGS, the driver engine, no oil, and very few moving parts, the Nissan can communicate with the car via smartphone and the LEAF requires much less maintenance and service than a LEAF app. With the app, drivers can check the state of the vehicle with an internal combustion engine. Eventually, battery charge, begin charging, and check when the bat- all Nissan dealers across Canada will be EV-certified. tery charge is complete. They can also see the estimated One of the most important marketing programs for the has driving range and turn the climate control system on or LEAF in Canada is the online reservation system. Electric more off. The car includes an IT system complete with an on- cars aren't for everyone-they're just for most people-but gas board remote-controlled timer that can be programmed to until charging systems are as common as gas stations, con- shift recharge batteries. Nissan views the IT system as a partner sumers who want a Nissan LEAF must live in the vicinity of first for the driver and an enhancement for the passengers. It's a certified dealer, and in a municipality whose government y're also an important aspect of the new product's positioning. and utilities are making preparations for electric vehicles. me- Interested prospective customers must register online at nis- fied MARKET POSITIONING san.ca/leaf and answer a few basic questions to make sure nith The LEAF is positioned in the Canadian market as the they're eligible to own a LEAF. Once qualified, these cus- LOW first mass market, affordable, fully electric car that offers tomers are given a "reservation" to purchase the car. Nissan 1 in environmentally conscious drivers a zero-emission option prepared to release around 600 Nissan LEAFs on the Cana- Jis- for real environmental impact. It provides 90 percent of dian market through several waves of such reservations. Canadians with the range needed for their daily com- san mutes, and at the same time it offers plenty of room, com- THE LEAF DEBUTS fort, and style, and an uncompromising driving experience. In October 2009 the LEAF made its North American on The environmentally friendly theme is communicated debut in Los Angeles. Nissan announced a 22-city promo- on through the car's name, the "Aqua Globe" body colour of tional tour that included a stop in Vancouver, and so that no the introductory model, and the interior blue dashboard December, the first Nissan LEAF rolled into Canada for a highlights and instrument illumination. brief visit. Nissan Canada executives and representatives While the product developers in Japan worked on from the Province of British Columbia, the City of Van- producing the LEAF, the marketing team at Nissan Canada couver, and BC Hydro were all present to commemorate focused on preparing the Canadian market for its first fully the occasion-and to establish a partnership agreement electric car. The first step was to establish relationships that would see British Columbia as the initial launch point with energy producers such as Hydro-Quebec and gov- for the Nissan LEAF in Canada when it was rolled out to ernments such as the City of Toronto and the Government the market two years later. of Manitoba, so that all could work together to plan for the The finished, market-ready LEAF was first viewed at necessary charging infrastructure and otherwise pave the the Montreal Auto Show in January 2011. Shortly after- way for the arrival of electric vehicles on Canada's streets. ward, details about Canadian pricing, models, and trim Nissan Canada lobbied governments to put incentives in availability were announced. In Canada, the 2011 LEAF place to promote the adoption of electric cars. A year started at $38 395 and was available in two trim levels: the before the first LEAF was sold in Canada, Kathleen Wynne, SV base model with a cold-weather package, 16-inch at the time Ontario's transportation minister, announced alloy wheels, LED headlights, Bluetooth, XM Satellite provincial incentives between $5000 and $8500 (depend- radio, and USB ports; and the upgraded SL model, priced ing on battery size) to promote electric vehicles in Ontario. about $2000 higher, with a rear spoiler, solar panel char- In all, Nissan formed partnerships with approximately 100 ger, and fog lights. That April, at the Green Living Show governments, cities, and other organizations to advance the in Toronto, Canadians were allowed to test-drive the car deployment of electric vehicles worldwide. for the first time. Throughout the fall of 2011 Nissan Then there was the task of getting Nissan dealers Canada orchestrated a cross-Canada tour, allowing Cana- ready to sell and service the LEAF. The project began with dians to test-drive and learn more about the LEAF at cer- the certification of 27 selected retailers located in regions tified dealer locations. The Drive Electric Tour began in where Nissan had established partnerships with local gov- Montreal and ended in Vancouver in late October, stop- ernments. In order to be certified, these dealers had to ping at all 27 LEAF certified dealers across the country for pass a rigorous training process and complete modifica one or two days each. tions to their sales and service departments. Special lifts The first Canadian sales happened in the summer of and pallets to handle the battery, along with EV-skilled 2011, when PowerStream, an electricity distribution316 PART 3 . Designing a Customer-Driven Marketing Strategy and Marketing Mix company in Ontario, purchased two of the vehicles for its tally friendly, and economical to run, with the range fleet. Two months later the first Canadian consumer took between charges being easily sufficient for the vast majority possession of a LEAF. Ricardo Borba of Ottawa, a 44-year of daily trips. At the end of the campaign, the city with the old electric engineer and software developer with IBM, most drivers turned on to electric vehicles was given 30 was the first person in Canada to place a Nissan LEAF Nissan quick chargers, while the individual who encour- order. "My family and I were starting to look for a new aged the most people to turn on won a Nissan LEAF. car last year when the Deepwater Horizon oil spill Many promotional events were held in Europe in occurred and prompted us to think about alternatives to conjunction with The Big Turn On. In theory, the LEAF gas-powered vehicles," said Borba. "We considered several goes just as fast backward as it does forward because of the options, and the Nissan LEAF was the one that best fits direct drive from the electric motor to its wheels. That our needs. It's all-electric and looks and drives just like a theory was tested and proven at the U.K.'s Goodwood regular car with five seats, ample cargo space, and loaded Festival of Speed, where professional stunt driver Terry with high-tech features. It's smooth, quiet, and has incred- Grant raced the LEAF backward up the famous Hill ible acceleration. In other words, it's fun to drive!" Climb course, covering the distance in 1 minute and The promotions didn't end with the first sales, how- 37.02 seconds at an average speed of 88.5 kilometres per ever. In 2012 Nissan Canada sponsored the second annual hour, and setting a new Guinness World Record for the National Tree Day, awarding a 2012 Nissan LEAF SL as fastest time over a distance of one mile in reverse. the grand prize for a new "Tree Canada" contest that asked Canadians to "Get Treemotional" by submitting an CUSTOMER SATISFACTION image of their favourite tree and explaining what makes By February 2013, 50 000 cars had been sold worldwide. that tree special in 50 words or less. Nissan Canada par- Within a year the LEAF was available in 17 European coun- ticipated in the kick-off ceremonies, tree-planting events tries, with more than 7000 cars on the road. In the U.S., across the country, and Nissan LEAF test drives. And that after Hurricane Sandy devastated the east coast and made fall, Toronto International Film Festival attendees were gasoline a rare commodity, LEAF owners were able to offered free rides in two Nissan LEAF taxis based in the charge their cars and keep moving. A LEAF owner in Spain Entertainment District. The taxis were driven by profes- clocked up over 43 000 kilometres in one year, far beyond sional drivers, and winners of free rides were chosen at an average annual mileage and a testament to the car's reli- random from tweets sent with the hashtag #LEAFTAXI. ability. The LEAF has an extraordinary customer satisfac Social media played a role as well. Nissan Canada had tion rating of over 95 percent, the highest of any Nissan launched its LEAF consumer website in April 2010, pro- vehicle. And it's quiet: Portuguese criminals need to take moting it with a 60-second commercial that aired in movie extra care if they want to avoid being caught red-handed- theatres across Canada. A year later, the Canadian LEAF because Portugal's PSP (Policia de Seguranca Publica), the Facebook page opened with a promotion that saw 40 lucky security force responsible for policing the large urban areas fans invited to a ride-and-drive event held at Nissan Cana- of the country, has a fleet of LEAFs that will allow them to da's head office in Mississauga. Around the same time, the arrive at the scene of a crime in near silence. LEAF Twitter account (@NissanLEAF_CAN) began to Not only do consumers worldwide seem to be loving share up-to-date news and information on all things related their LEAFs, but the car has also won numerous awards to the LEAF's arrival in Canada. A dedicated moderator and accolades. The LEAF was recognized as the most fuel- from Nissan was assigned to manage the Facebook and efficient vehicle in the mid-size class for 2012, 2013, 2014, Twitter accounts and to engage in conversation with and and 2015 by Natural Resources Canada. It was named answer questions from fans across Canada. 2011 European Car of the Year and World Car of the Year. Perhaps the largest social media promotion was 2012's Also in 2011, the European New Car Assessment Pro- "The Big Turn On," Nissan's ambitious online campaign gramme (Euro NCAP) awarded the LEAF the highest level designed to get 1 million people worldwide "turned on" to of car safety following its performance in the independent electric vehicles. The initial plan was to reach the 1 million organization's stringent crash tests. The zero-emission mark in 100 days, but the campaign so captured the imagi- vehicle received a five-star rating, the first electric vehicle nation of the public that the milestone was reached 15 days ever to earn this distinction. Similarly, in the U.S., the ahead of schedule. As well as encouraging car drivers from LEAF earned a five-star overall vehicle rating for safety as France, Germany, the Netherlands, and the U.K. to con- part of the National Highway Traffic Safety Administra- sider the benefits of zero-emission driving, the campaign tion's New Car Assessment Program (NCAP)-the first demonstrated that the Nissan LEAF is safe, environment electric vehicle to earn this distinction from the program-CHAPTER 8 . Developing and Managing Products and Services 317 and was also awarded a "Top Safety Pick" rating from the car is available in. How do you think automobile Insurance Institute for Highway Safety. All of this allows marketers decide which colours to offer? marketers to add a new element to the car's positioning: 2. Describe the core, actual, and augmented product. The LEAF isn't just the most innovative car on the planet; it's also one of the safest. 3. Which stage of the product life cycle is the Nissan LEAF in right now? Explain. Source: All information provided by Nissan Canada. 4. Make a list of all the countries where the Nissan QUESTIONS FOR DISCUSSION LEAF is available. How have marketers adapted the product to suit these markets? Research the latest news about the Nissan LEAF in the Canadian market. Have any new features been 5. When the LEAF first came to market it was promot- added since the car was launched as a new product? ed as the world's first affordable zero-emission car. Is Has the style changed? Find out what colours the this still the product's point of differentiation today? HE RAKED