5. The Smart car has a unique design, eye catching and original. It is a tiny car, less than three meters (ten feet) long, with a very high roof. The car has been aimed at the market of upscale urban professionals as a primary car. It has also been positioned as a second car. Neither positioning has generated much volume. Mercedes has had difficulty finding a clientele willing to pay its premium price. Smart dealers are accustomed to curious visitors and have been unable to convert these browsers into buyers.

Smart benefits from high brand awareness due in part to massive advertising featuring the car’s high design and extreme suitability for densely populated cities (Smart is famously easy to park in a fraction of a normal parking space). However, the car is seldom seen outside of cities. It has the power to go on the freeway (where one does occasionally see Smarts passing Mercedes cars!) but is widely perceived as dangerously small for driving at high speed. Indeed, Smart has set up Avis rental counters inside some Smart centers to facilitate customers renting a weekend and vacation vehicle viewed to be more suitable in the country. Given all this, what would you suggest to Smart as its distribution strategy going forward:

• In Europe, where the car has existed since 1998?

• In North America, where it is scheduled to be launched?

In framing your answer, keep in mind that the Smart is somewhat unconventional mechanically. It needs dedicated mechanics, its own parts, and even a specialty body shop (as Smart is made of snap-together fiberglass panels).