3.09.2003-The Economics of Automobiles

It was another weekend steeped in academics and as promised I'll attempt to convey some of the knowledge I've gained over the past 4 days by drawing analogies to Alfas, or Alfa restoration.

The basic theory of free-market capitalism is that in a given market different suppliers or manufacturers will differentiate their products through different value propositions.  Product, Pricing, Placement and Promotion are the "four Ps of the Marketing Mix" that are used by firms to sell their products. 

Looking back at Alfa Romeo it's pretty clear to see that the company was focused on building a brand that had a very specific target customer.  Ads for products from the 60s are always interesting to me, but those of Alfa Romeo are particularly fun.  As we all know, Alfa was a company born of racing and the red cars from Milan virtually owned Gran Prix racing during the series formative years.  As it turned out, some of the very characteristics that made them so successful on the race track were both benefits and liabilities on the streets and highways of America.

Their engines, drive train and suspension were robust, stout and elegantly engineered.   Some of their less "performance critical" part's light weight sometimes gave the cars a reputation for being cheap.  Just look at the dash board of a 66 GTV.   It's made of pressed composite cardboard and covered in fake wood grain vinyl tape.   Yet, aluminum abounds in the engine, door hinges and other areas.  These cars were made to be driven, and when it came time to sell the cars, this is inevitably the message the marketing mavens sought to communicate.

My favorite Alfa ad I've seen to date is one in which two young women are talking about a date.  The woman says something to the effect of "he's talking like he's Fangio and then asks what kind of car I drove.  I said 'Alfa' and that shut him right up."  To me this is hilarious, and if the women were supposed to be Italian I'd find it completely plausible.  As we all know, the Italians love their racing.

With school over for another couple of weeks and some decent weather hopefully in the forecast I'm hoping to get back to playing with the car.  I'm really hoping to get the car inside the garage at some point so I can start stripping it in preparation for media blasting.

Ciao!

TJ