Piaggio-Mp3

I. Executive summary

Since the foundation by Rinaldo Piaggio in 1884 the core of the business at Piaggio Group, has been the focus on creativity and innovation. These values have been maintained until today, enriched by a mix of accessibility, freedom, differentiation and equilibrium, which distinguishes all motorcycles, scooters and moped produced by the company and its owned brands. A new scenario of mobility has been created- nowadays together with the increased need of security on the streets, forcing the motor vehicles industry to develop new ideas to satisfy customers' needs.

Piaggio's mission manages to combine innovation with traditional values and created new concepts of motion. This takes best evidence in the newborn three-wheeled scooter MP3, the revolutionary milestone granting active safety in urban mobility.

II. Environmental analysis

A. The marketing environment

1. Competitive forces. Piaggio ranks as one of the world's top four players in its core business. It has consolidated leadership in the European 2-wheel motor vehicles, even though Piaggio should not underestimate its competitors. Competition in the industry is very strong, not only nationally but internationally as well. This is due to two well-established companies in this sector: the Japanese Yamaha and Honda. Their strengths are their long-run experience in the sector and the high quality image of products. Thanks to participations to the motorcycle championships, these companies constantly receive positive feedbacks to their efforts in researching for first class products.

In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to emulate and produce similar products at a highly competitive prices is getting more and more dangerous.

2. Economic forces. Looking at some statistics referred to the first four months of 2007, an increase of + 10,2% has been registered with respect to the past year. Especially the scooter market is showing a drastic increase in numbers of new matriculated vehicles; during year 2006 63,2% of the total were scooters. Only in April 2007, there has been a growth of 13,2% with respect to April 2006. The medium high cylinder capacity segment is the one showing highest growth. These data show the great economic potential of the scooter market reflecting needs, willingness but also the purchasing power consumers detain.

A particular case is represented by the Asiatic market, which documents an increase in sales volume and interest in the motorcycle industry.

3. Political forces. There are no expected political influences or events that could affect the political operations and transactions at Piaggio. The most recent fact that sees Piaggio concerned in political decisions goes back to June 2006.The firm needed new capitals so Unions and Customers suggested that the quotation should be changed from an IPO to an OPS with the intervention of the Government and Consob (given that a lot of the support to the company comes from the public sector)

4. Legal and regulatory forces. The past decade shows an increase in the mobility never seen before. Naturally, this leads to greater risks for the motorists and every other type of riders. The regulation became stricter on this matter, forcing everyone to reconsider his or her driving behaviour. The institutional focus on security suggests the motor industry to give a great attention on the subject too.

5. Technological forces. Piaggio is strongly committed to ongoing improvement of the innovative safety systems (braking systems, suspension, and electronic control) maintaining at the same time comfort and design. The possibilities offered by the development of new technologies represented a great potential in the last decade and the company explolited them all to reach the top in the motor industry.

6. Sociocultural forces. The increase in mobility and number of vehicles (4-wheels but especially 2-wheels vehicles) increased dramatically the number of deaths and injured caused by street accidents. Society is becoming aware that stricter regulations can help on this matter but this is not enough. Therefore, the need of vehicles that offers more protection and security features represent a new challenging opportunity for our industry. Companies such as Piaggio should create a network of customers aware of dangers they can incur while riding their motorbike. Offering a product that can help reducing the risks Piaggio can have an important impact on the market. Often accidents are not only caused by some misbehaviour of the rider but bad streets and climate conditions can give a great contribution, too. (Moreover, these factors can be the starting point for the characteristics of future vehicles.)

B. Target Market

Piaggio has a wide range of segments to satisfy with its differentiated brands present in the two-wheel market. We can divide the market into two major shares: the young and the senior bikers. For both of them not only does the company have an outstanding number of brands (like Aprilia, Gilera, Derbi ...), but every brand is offered a rich variety of products, which pleases any taste. The younger, more dynamic customers from 14 to the early 20 desire a product characterized by agility at the same time as design, as well as feeling of freedom only a scooter can offer. Scarabeo model offered by Aprilia is a perfect example fitting all this features. A distinction should be made between a more sportive and easy young public and those customers who prefer comfort. Derbi offers motorbikes for younger generations, with lower speed power but similar characteristics as the high capacity scooters that can be ridden only at 21. Piaggio instead aims at designing and producing scooters in which technical features and style are bound together without excluding comfort, being it a common must in models Liberty, Carnaby, Zip, Beverly, X8.

Some of Piaggio models are in fact in vogue for a different market segment; the one represented by mid 30 managers, often perceiving a medium- high income, who need a scooter to easily solve their mobility problems in going to work.

Finally we have a market segment represented by people possessing, -or willing to- a motorbike not only for hobby but also for passion. Motoguzzi embodies power, history and determination in highly differentiated models, like the "naked" Griso as the gentile Norge 1200touring explicitly for them. The brand satisfies all the nuances characterizing the sector predominantly made up of over-40.

Last but not least, the jewel of the Group, the national star on two-wheels: Vespa. It is not simply a brand, but it embraces