Promotional and Advertising Strategies - Assignment Example

Promotional and Advertising Strategies of the The of the submitted Table of Contents Table of Contents 2 Introduction 4 Marketing and Promotional Strategies of Maruti Suzuki 4 Advertisements 5 Showroom Displays and Financing 5 SBI Maruti Car Loans 6 Maruti True Value 6 Pricing Strategy 6 Marketing and Promotional Strategies of Hyundai 7 Advertisements 7 Free Checkups 7 Events in Corporate offices and Banks 8 Displays 8 Pricing Strategies 8 Recommendation on the Use Marketing Information to Differentiate in the Marketplace  8 Product Differentiation 8 Price Differentiation 9 Consumer-Oriented Promotions for Competitive Advantages 9 In-film Branding 9 Profit Oriented Pricing Objective 10 Status-Quo Pricing Objective 10 Recommendation of Actions to Gain a Competitive Advantage 11 Experiential marketing 11 Digital Marketing 11 Effective Advertising Medium for Automobile Company 11 Conclusion 12 References 13 Introduction Marketing strategy is a process that enables a company to allocate and utilizes its limited resources to maximize its revenue and profit sharing thereby sustaining in the competitive market. It is a structured framework combining product development, promotional strategies, retailing and distribution of the product and pricing strategies (Lee, Abosag & Kwak, 2012). The structure enables the firm to classify its marketing goals by explaining the step to achieve it within the specified time frame. The study would compare the marketing strategies, promotion and pricing of the two major automobile companies Maruti Suzuki and Hyundai Motors. It further recommends ways in which the automobile companies can differentiate its product in the market to gain a competitive edge by approaching to different consumer oriented promotional and pricing strategies. It further illustrates the need of advertising medium to promote the product to attain maximum customer reach. Marketing and Promotional Strategies of Maruti Suzuki The company is frequently referred to as Maruti previously known as Maruti Udyog Limited. It is an automobile manufacturer in India. It operates in joint collaboration with Japanese automobile and motorcycle company Suzuki. Its market share as on November 2012 was 37% of the passenger car market in India. Maruti Suzuki manufactures varied range of car from low range passenger car Maruti 800, Alto to hatch back cars like Maruti Ritz, Swift and sedan cars like DZire, Ciaz and SX4. It is into manufacturing of ‘C’ segment cars like Eeco, Omni to MUV like Suzuki Ertiga and SUV Grand Vitara (Maruti Suzuki, 2015). Advertisements Maruti Suzuki adopts promotional strategies to transfer its vision in the mind of the customers through television advertisements, radio ads, print media and newspaper. They follow the pull marketing strategy where they attract potential customers through quiz contests in radio and on winning the contests they would be eligible for lucky draw coupons of Maruti Suzuki cars or a discount coupons on car service for its existing customers. Through the television advertisements, they try to connect with the consumer sentimental values and thereby linking their car utility values and comfort level. For example, “My Daddy’s Big Car” showcases a daughter’s sentimental attachment with her dad and that she is proud to show off her father’s car to her friends. Through this Maruti tries to align its car brand Esteem as the comfortable mid size car which is durable and efficient enough to take care of its passenger (Maruti Suzuki, 2015). Showroom Displays and Financing Maruti Suzuki is selective about the display of their cars in the showroom. They would only exhibit 2-3 cars as their strategy is to make the customers aware and to concentrate on fewer cars to avoid distraction and confusion. Their goal is to acquire one customer at a time (Maruti Suzuki, 2015). To uplift the bottom line growth, Maruti collaborated with banks and launched the Maruti Finance in June 2002 to provide loan and insurance coverage to the low income group segment which increased their sales. Maruti initiated joint ventures with City Group and GE countrywide by launching Citicorp Maruti and Maruti countrywide. Presently, Maruti has joint collaboration with HDFC bank, ICICI bank, Kotak Mahindra, Standard Chartered Bank etc (Maruti Suzuki, 2015). SBI Maruti Car Loans Maruti, the largest car manufacturers in India collaborated with the largest bank of India SBI (State Bank of India) to provide affordable car loans to a wider segment of customers at lowest interest rates, by maintaining the most transparent policies possible which made it affordable to all section of consumers wanting to purchase a Maruti car. There were no processing fees and hidden costs involved in applying for the loan with special facilities and discounts for government officials and agriculturist (Maruti Suzuki, 2015). Maruti True Value Maruti Suzuki came up with the marketing strategy where they transacted 2nd hand cars ensuring the most transparent, fair and accurate value deals and they operated by the name Maruti True value. Each vehicle purchased under Maruti True Value were reengineered with Maruti genuine parts, certified by them and then sold through the True value outlets with three free maintenance service and one year warranty (Maruti Suzuki, 2015). Pricing Strategy Maruti follows both the penetrative pricing strategy and the competitive pricing strategies. Their pricing strategies depend on many factors like the income level, the consumer’s ability to pay for a car and the customer need. It has its own research and development team who performs survey based on these factors and analyses the marketing trend, competition, value of raw material, macro economic factors, the cost of distribution, promotional expenditures and the expected profit returns before setting their car prices. Maruti concentrates more on volume sales than on prices which has resulted to their huge success (Maruti Suzuki, 2015). Marketing and Promotional Strategies of Hyundai Hyundai is an automobile manufacturer from South Korea founded in the year 1967 and is the world’s fourth largest car manufacturer. It has the world’s largest integrated automobile manufacturing facility in South Korea having a capacity of 1.6 million unit production annually (Hyundai, 2015). Advertisements Hyundai focuses on the celebrity endorsement strategy to promote its car. They tend to attract customer by building a brand image for itself and positioning itself as a car for the class. It mainly targets middle income and high income customer segments and not only offers a car for transportation but also a brand for value. The company uses newspapers and business magazines as the mode of promotion advertising detailed features of the car which increases the brand identity among its higher income segment customers. The print ads also promote its dealers by giving their addresses as well as contact details. It implements direct marketing by promoting its cars in shopping malls and events to ensure direct contact with the customers which contribute in its brand building (Hyundai, 2015). Free Checkups Marketing strategy implemented by Hyundai that turned out to be a huge success by increasing customer experience and loyalty is the free check facility for its cars. The company employed service representative who visits the customer’s house for maintenance checkup and on detecting problem, suggested to visit the nearest service stations. It ensures a better image of the company in the market by enhancing long term relationship with its client (Hyundai, 2015). Events in Corporate offices and Banks Hyundai tries to attract customers through corporate events in banks and multinational companies. It attracts the middle age segments and increases its client referrals (Hyundai, 2015). Displays Hyundai showcases attractive displays, decorates their cars and even displays their car accessories in the special counters to enable its customer’s attention towards its showrooms (Hyundai, 2015). Pricing Strategies Hyundai follows both the competitive pricing and value pricing strategies. Their pricing strategies depend on many factors like the car segment, brand image, inclusive features like LED head lamp, alloy wheels etc. Hyundai concentrates more on value proposition and brand equity in setting its price. It positions itself as a car for the class and the mass providing comfort safety and affordability depending on its car line (Hyundai, 2015). Recommendation on the Use Marketing Information to Differentiate in the Marketplace  Product Differentiation An automobile company can expand and introduce new product in its product line as well as upgrade its technologies and features in its categories of product to differentiate itself from its competitors in the market. The market information on the strategies employed by the completive companies like enhancement of its product features or upgrading its technological advances can be analyzed and utilized by the company for its product line and marketing strategies development. For example, Maruti introduced Wagon R having similar car features as Hyundai Santro and both fall under the Hatchback car segment (Wilson & Gilligan, 2012). Price Differentiation The automobile company can differentiate itself from its competitors by gathering its market information on price and policies implemented by them and accordingly develop its pricing strategies to understand the customer preferences and gain potential customers. For example, the strategy implemented by Maruti to target lower income segment by selling affordable car was followed by Hyundai as they introduced the affordable car, Eon which also targeted the same segment as its competitor. It also tied up with banks to provide loan and insurance coverage to this customer segment (Reza & Samiei, 2012). Consumer-Oriented Promotions for Competitive Advantages In-film Branding The automobile company can feature its car in movies which would attract a large customer base and the promotional reach would increase. For example, the movie “Mere Dad Ki Maruti” promoted the Maruti Ertiga which turned out to be a huge promotional success as the movie was a Box office hit and garnered positive reviews (Danias & Kavoura, 2013). Sponsoring Reality Shows The reality television shows are the most popular in terms of TRP and garnering viewer’s interest in the entertainment and television industry globally. Therefore, in order to gain greater visibility in terms of global reach, due to its worldwide telecast and larger audience base automobile companies can promote its product through these shows. For example, Maruti sponsored the show ‘India’s Got Talent’, where the winner was gifted Maruti Ritz and has achieved high visibility (Danias & Kavoura, 2013). Strategic Manner of Pricing in terms of Pricing Objectives Profit Oriented Pricing Objective This pricing objective determines that the product price is set by the company in accordance to its reputation and value in the market. The pricing strategies are implemented by the automobile company in such a way that it results in an increase in revenue thereby leading to profit maximization. For example, automobile manufacturing companies can implement the target pricing method where the selling price of the car is determined by estimating the return on investment from manufacturing a specific volume of cars. This method of pricing would give a competitive edge to the company (Wilson & Gilligan, 2012). Status-Quo Pricing Objective A status quo price objective is a planned objective that supports competition on factors other than price. It concentrates on sustaining in the competitive market by maintaining its market share. The objective determines company sales and stabilization. For example, automobile companies on launching a car similar to its competitive brand, focuses on the price skimming strategy which follows the status-quo objective. This automobile company launches the car at a higher price but eventually stabilizes its pricing strategies and policies as per its competitors (Jha, et.al., 2014). Recommendation of Actions to Gain a Competitive Advantage Experiential marketing It is a form of marketing strategy where the goal is to achieve higher customer experience over a brand. It enables a customer to form an emotional connect with the brand which increases customer loyalty and influences buying decision. Therefore, competitive automobile company can implement this strategy to gain competitive advantage. For example, Hyundai Motors India Limited associated with the International Cricket Council and had created Hyundai ICC Fan Park by putting up screen for fans to watch live ICC World T20 matches (Bok, 2014). Digital Marketing The automobile company can make use of digital marketing for its promotion to gain edge over its competitors. Through pop up cookies in web pages in digital marketing estimates can be made on the potential consumer needs and requirements, hence, customizing its products according to their preferences (Bok, 2014). Effective Advertising Medium for Automobile Company Television is the most effective medium for advertising and promotion of the automobile company. It has the high visibility and customer reach, therefore, creating awareness of the product to a larger customer or audience base. It helps in promoting products to target audiences by buying ad slots of a particular program based on the demographic segments likely to be watching the show (Jha, et.al., 2014). For example, companies like Hyundai motors or Toyota promote their cars through celebrity endorsements. This helps the company to connect with mass audiences creating a brand image as the viewers connect with the celebrities who gives an identity to the brand like Shahrukh Khan endorsing Hyundai cars which turned out to be a huge success for the company in terms of its sales and customer base (Hyundai, 2015). On the other hand, Maruti Suzuki endorsing a film and even its brand name on the title of the movie “Mere Dad Ki Maruti” as resulted in a successful brand image building for its car Ertiga featured in the movie, where the story revolved around the car. This resulted in a huge promotion of the brand increasing its sales for Ertiga (Maruti Suzuki, 2015). Conclusion The entire discussion of this report estimated various promotional and marketing strategies of the automobile manufacturing industry. The study compared the different strategies implemented in terms of promotion, marketing and pricing by the two companies Maruti Suzuki and Hyundai Motors. The analysis evaluated and recommended pricing differentiation, product diversification and strategies in compliance to pricing objectives to an automobile company in order to survive in the competitive market. This study suggested consumer-oriented promotional strategies and recommended actions for gaining competitive advantages. Finally, it emphasizes on television to be the most effective advertising and promotional medium for the automobile industry. References Bok, H. J. (2014). An Empirical Study on Factors influencing Internet Advertising Effects. Advances in Management, 7(9), 6. Danias, K., & Kavoura, A. (2013). The role of social media as a tool of a company’s innovative communication activities. Zeszyty Naukowe Małopolskiej Wyższej Szkoły Ekonomicznej w Tarnowie, (2 (23)), 75-83. Hyundai. (2015). About Hyundai. Retrieved from http://www.hyundai.com/in/en/AboutUs/AboutHyundai/index.html. Jha, H. M., Srivastava, A. K., Bokad, P. V., Deshmukh, L. B., & Mishra, S. M. (2014). Countering Disruptive Innovation Strategy in Indian Passenger Car Industry: A Case of Maruti Suzuki India Limited. South Asian Journal of Business and Management Cases, 3(2), 119-128. Lee, J. W., Abosag, I., & Kwak, J. (2012). The role of networking and commitment in foreign market entry process: Multinational corporations in the Chinese automobile industry. International Business Review, 21(1), 27-39. Maruti Suzuki. (2015). Company at a Glance. Retrieved from http://www.marutisuzuki.com/company-at-a-glance.aspx. Reza, J. M., & Samiei, N. (2012). The effect of electronic word of mouth on brand image and purchase intention: An empirical study in the automobile industry in Iran. Marketing Intelligence & Planning, 30(4), 460-476. Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. London: Routledge. Read More