Customer and Social Well Being as the Main Objective of Nissan - Case Study Example

? Fundamentals of Marketing: Case Study Assignment - NISSAN Grade Executive Summary Communication is the verbal or non verbal transmission of information between someone wanting to express an idea and someone else expected or expecting to get that idea. Nissan a Japan based company is a world famous and pioneer brand in car industry. A new brand is being introduced with the name of “Nissan LEAF” by the company. Report builds up on different communication tools that are used to establish and promote this brand. Report also tries to establish and compare the concepts of market orientation, production orientation and sales orientation and clarifies which one of these philosophies are used by Nissan. Contents Fundamentals of Marketing: Case Study Assignment - NISSAN 1 1. Nissan Profile 4 1.1 Company History 4 1.2 Objectives of the company 4 2. Company Orientations toward the Marketplace 5 2.1ntroduction 5 2.2 Comparative Analysis 5 2.3 Nissan Marketing Philosophy 7 2.4. Conclusion 9 3. Branding and Positioning of Nissan Leaf 10 3.1 Introduction 10 3.2 Branding 10 3.4Promotion Mix of Nissan leaf 12 3.5. Conclusion 13 References 14 1. Nissan Profile 1.1 Company History Nissan is established in 1933 with the name of Nissan Motor Co Ltd. Nissan is a pioneer in the manufacturing of automobiles industry. Nearly 70 years later, Nissan is known to be the world’s leading automakers in auto industry. Nissan has annual production of 2.4 million units. Nissan is covering 4.9 percent of the total global auto market. At domestic market Nissan sells around 774,000 vehicles on an annual basis and getting top position placing Toyota Motor Corporation at second rank. About 35 percent of Nissan's vehicles purchaser is Japan, 25 percent sold to United States and 20 percent covered by Europe. 1.2 Objectives of the company “Nissan” is mainly concerned with efficiency to seek the best performance among other auto selling companies and to maintain its long term position. As far as quality is concerned products are provided in accordance to customer’s needs (Holm, 2006). Company object is to provide environmental friendly products. That’s why company believes their cars are not only good for public but for planet as well. Ultimately it results in good profitable business. Another objective is to provide customers with maximum places to buy the products. That’s why the company planned to provide a dealership network of 1,500 outlets to 7,500 points of sale globally which will be achieved by the end of the plan. 2. Company Orientations toward the Marketplace 2.1ntroduction Important thing for any company to consider is to select a philosophy that Guides Company’s marketing efforts. Companies should have to take into account what weights be given to the interests of organisations, what value should be placed to customers and to what extent should the society be considered. Major competing marketing concepts through which organisations design their marketing activities are market orientation, production orientation and sales orientation (Broderick, 2005). 2.2 Comparative Analysis Companies always follow one of these marketing concepts. These are often very conflicting interests. Every organisation can adopt one or more than one concept at a time. 2.2.1 The Production concept It is that approach for designing marketing activities in which companies always tries to continually improve and refine their products on continuous basis. It is one of the oldest concepts existing in marketing and followed by many companies. It specifies the concepts that customers will prefer those products by companies which are easily and widely available in the market and are relatively inexpensive to purchase. Top management of companies that follows this concept will focus on achieving high level of production, more efficiency, low costs, and massive distribution of products (Guenzi, 2003). This strategy is normally adopted to get the maximum share and to dominate the market. Normally this concept is also used to expand the market share held by the company. 2.2.2 The Selling concept Some organisation’s strategy is not to sell maximum products or services in market rather their focus is on how to sell and position existing products by using different sales and selling techniques. Such organisations are known as sales oriented and operate in the way where they have a little focus on what customer wants and what are their interests. They are only concerned about selling. According to this concept if organisation and customer will be left alone, the customer will not buy the company products. So it is necessary for organisations to put in aggressive selling and promotional activities for selling their products. Major aim behind using this strategy is to sell more to customers and to make more money by gaining profits (Periatt & Lemay, 2004). It is more relevant for the companies who are selling unsought products like insurance policies, encyclopaedias etc. This concept is normally utilized by firms who have enough budgets to run such activities. The purpose at the back end is to sell what a company makes rather than what actually customer wants. 2.2.3 The Marketing concept Companies are following this concept and considering it as part of their culture rather than being a single process. It is a combination of organisation structure, norms, belief system and the way employees behave and operate including chain of command. Marketing orientation concept includes the behavior in which organisation’s preferences are their customers focusing mainly on how to make them satisfied. In other words their main objective is to operate their business by keeping customers as an important activity (Mavondo, 2002). Their objective is how to make their customers satisfied and their operations are driven according to this objective. Social issues can be taken into account by companies following this marketing concept. Social marketing is adopted by companies in their marketing efforts. 2.3 Nissan Marketing Philosophy By analysing the case study it is clear that when Nissan started its operations, it was working by taking production concept into its marketing efforts. As Nissan Motor objective was to get big market share by going small. That’s why company first launches cars small in size. Company’s aim is to produce cars that are least expensive and can take less fuel. Nissan made cars which are comfortable to sit, provide safety measures, stylish in looks, and performance was up to the mark meeting high standards (Chen & Hall, 2010). They were keeping the production concept in their mind as customers will surely purchase the products which are inexpensive for them. They tried to achieve maximum production efficiency by utilizing this concept into their marketing system. Nissan also tries to make their distribution system massive by making alliances with other organisations. Nissan did a merger with a company titled Renault in March 1999 and with Auto Company in France who took 37 percent shares of Nissan. Purpose was just to make their production and distribution system efficient. Later on Nissan introduced new marketing plan by keeping production concept into their mind. Their new plan Nissan power 88 was launched with the purpose of selling more to customers and to make more money which ultimately results into more profits. Nissan’s new mid-term plan is to increase profit ratios and their market share up to eight percent till the end of 2016. Plan is to launch new cars for increasing market share and to grab maximum of auto market by introducing new products in the market. 14 new products will be launched in the US and Europe during 2013 and 2014. Mergers are occurring to get the maximum market share. Nissan boss, Carlos Ghosn said, Nissan aims to hold a ten percent share of the massive Chinese market by 2016. The company's premium brand, is also aiming for a ten percent share of the global luxury brand market, while Nissan and its partner Renault are aiming to have 1.5 million electric vehicles on the road. Company is also aiming to become the largest commercial vehicle provider. With the introduction of LEAF, the company has shifted their marketing concept from production to market orientation (Noble & Sinha, 2002). They tried to make cars which are environmental friendly. Nissan is keeping global warming issues into their marketing plan by launching these new cars. As CEO Nissan said, electric cars are not only good for public but for planet as well. Ultimately this results in a good profitable business. Nissan’s new plan is to invest in green technology, to provide customers with such cars which are environmental friendly to drive. Cars are going to be diesel free, equipped with hybrid technology and fuel cell technique. The aim of company is no longer to get maximum market share and profit making in fact goal is to provide the customers the cars that are exactly as per their current needs and also keep environmental factors in mind. As the car has no engine so it will not exhaust any gas. High petroleum price issue will also get solved through this car. So Nissan is keeping today’s problems existing in society before introducing this car. So it can be concluded that company is purely following market orientation concept for launching this new product (Dong, 2009). 2.4. Conclusion Nissan is world’s largest automobile industry. It was following production orientation in their marketing activities initially. As Nissan Motor main objective at that time was to get maximum market share around the globe. Later on Nissan introduced a marketing plan with the name of power 88. Mergers have been done with different companies to grab maximum market share by making maximum sales and ultimate aim is to earn maximum profit. Sales and market share was the major objective. But with the introduction of Nissan leaf, a revolution in car industry has shifted their marketing activities from production orientation to market orientation. 3. Branding and Positioning of Nissan Leaf 3.1 Introduction Company decided to launch a new car watch for their customers to extend market share. It decided to introduce an addition to existing product line. Customer needs are going to be used as the best source for new product idea. Nissan introduced a high powered battery for their LEAF compact. Company decided to hit the targets of 1.5 million in their sales till 2016. For that Nissan is doing a partnership with Renault. 3.2 Branding The Nissan leaf is selected as the brand name. Slogan for positioning the brand will be as said by the CEO “Electric our cars are not only good for public but for planet as well. Ultimately it results in good profitable business. Slogan establishes that the car is appealing primarily to the preferences of customers who are environmental friendly (Sellers, 1993). 3.3 Positioning Nissan has positioned their product as environmental friendly. Nissan LEAF is positioned as the world's first affordable, electric vehicle, which has been launched first in Japan, then in USA and finally in European market. Nissan has been making their brand as environmentally-friendly "green" and including technologies to make it clean diesel, hybrid and fuel cell vehicle. Nissan is making their product as zero-emission. Nissan is positioning their product as environmental friendly through three important factors. 3.3.1 Environmental friendly As Global warming and climate change are the top most important issues of today’s world. It is leading towards increased demand for such cars which have the ability to control and reduce exhaustion of gases from engines. Governmental bodies around the globe have implied legal standards for vehicle industries to tackle with these issues. Nissan has kept all these concerns in their mind and positioned their car as green lover (Levy, 2002). 3.3.2 Solution provider of petroleum crises Today world is relying heavily on oil as sources for transportation. Rice in oil prices is now a common issue around the globe. Fuel which is produced from oil is also becoming expensive and is extremely volatile. It is expected to be sour in the long term. By keeping all these factors in mind Nissan introduced a car which has no engine so does not require fuel consumption. Nissan positioned their brand as car inexpensive and pollution free as no gas will exhaust from it (Chan, 2004). 3.3.3 Technological Advanced and customer friendly Nissan is providing a car which is using latest technology. Nissan car has batteries that are more compact and powerful, have more capacity than before as compared to old batteries used by cars. Nissan introduces new battery by name of lithium-ion, through the joint venture with the NEC Company for this new brand. The car can be driven more than 160km on one full charge. It also has less charging time as compare to other batteries. Batteries get fully charged within 8 hours by using 200V outlet. In fact, ten minutes charging one can drive the car for around 50 km. Car is also providing maximum range just by clicking one button. It also navigates the nearby charging stations with a range which will help the driver immensely. It has a time function as well to control air conditioner to make use at best electricity rates. Driver can even monitor charging status through websites even on their cell phones. It has 5 doors and has ample space for sitting (Takayasu, 2004). As it has no engine it didn’t produce any noise. Nissan has positioned their product as customer friendly through utilizing all these factors. It is also positioned as a car compatible with advances in the world of technology. As it has all the features supported by advanced IT. 3.4 Promotion Mix of Nissan leaf Advertising- Nissan leaf is advertised as world’s first affordable electrical vehicle which is environmental friendly. It is an advertised campaign that is launched by keeping issues of global warming into account. It is advertised as Electric car which is good for the public and what is good for the planet is also a good business. As car has no engine so it will not exhaust any gases and do not produce any voice plus oil prices that are very high. It is becoming out of range. As it an electric car Nissan kept all these factors while advertising to make it customer friendly (Hirschman, 2010). Public Relations- For developing public relations Nissan is providing the facility to launch a website where drivers of leaf can monitor the state of charge for their cars. Plus 24 hours IT support is being provided by Nissan to keep check and control on battery life of the car. Nissan can overcome political disputes regarding petroleum prices and can break dependency on oil by launching this car (Van, 2007). Sales promotion- Nissan is making a joint venture with NEC group to develop such batteries that will give a rise to their sales as well. These new features of battery will attract more customers towards this brand. Nissan also decided to cut their costs by five percent in one year to give rise to sales and to grab the market share to optimum level globally. Company pursues maximum market share as its major objective because of intense competition in the market. Along with that the company wants to maximize their profit. As higher sales volume will lead to lower unit cost and higher long run profit, company will set lower prices because market is price sensitive. Personal Selling- Training will be conducted for sales staff to make them learn how to promote this brand and how to deal with customer at showrooms (Noble and Makwa, 1999). Nissan will conduct special training program in all selling spots. Merchandising- Nissan is planning to open at more places than ever to buy the car, with the dealership network planned to grow by 1,500 outlets to 7,500 points of sale globally by the end of the plan. Nissan decided to make its sales up to 1.5 million by making a merger with Renault Company by 2016. 3.5. Conclusion Customers and society well being are the main objective of Nissan. Goal is to provide cars that can not only provide solutions to customer’s problems but will keep environmental issues into mind. These new environmental and customer friendly cars have changed the way of Nissan marketing activities. These new brands are positioned by keeping “green” technologies into mind. Nissan have diverted promotional mix activities from profit generation to customer specification. References Amanda, Broderick, and Pickton, D., 2005. Integrated Marketing Communication. Financial Times, p.67-72. Chan, C C., 2004. The state of the art of electric vehicles technology. IPMEC conference, 1, p.1-64. Chen, Z. L. & Hall, N. G., 2010. The Coordination of Pricing and Scheduling Decisions. Manufacturing & Service Operations Management, 12(1), p.77-92.  Dong, L. I., 2009. 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