UK marketing analysis - Assignment Example

? Project Table of Contents Project Table of Contents 2 Introduction 3 Environmental Appraisal analysis – UK market 4 2. Identification of new markets 8 3. Development of differentiated marketing mix for each target market 12 Reference 19 Introduction The world of the 21st century promotes an environment that sponsors rapid development and fast change. The fast emergence of various kinds of modern day technological gadgets along with the faster penetration of the internet in various corners of the world has resulted in the process of emergence of a highly connected single global entity. It has to be said that the single global entity promotes the concept of a connected global marketplace, where markets around the world are easily accessible to the buyers and sellers through a virtual medium. It has to be said that the global market place is largely responsible for the promotion and faster diffusion of various kinds of global trends to various corners of the world. As a result of diffusion of global trends to various markets around the world, demands of various nature are continuously rising from the markets and consumers located in the developing and developed economies. This essentially promotes a significant amount of business opportunity for various organizations around the world. Because of the rise of digitized communication trends, the barriers to accessing information of various markets around the world have become almost nonexistent and redundant. The ease of access of information by organizations around the world, are essentially encouraging them and providing them with the potential to move forward and enter into new markets. This is in return resulting in the process of increase of competition in the business forums of the global marketplace. Companies and organizations around the world are increasingly feeling the pinch of this increase in competition in the marketplace. In order to stay competitive in the marketplace, the organizations are trying their best to inculcate various amounts of change in their daily business processes and thereby generate and increase the efficiency of the business in the marketplace. In order to stay competitive, organizations and business enterprises belonging to various sectors are largely concentrating on entering in to new markets as well as offering their products and services to new customers. For the purpose of appealing to new customers located in existing as well as new markets, the organizations are increasingly trying to concentrate on the lines of product development, market development and even diversification. 1. Environmental Appraisal analysis – UK market It has to be said that the long established and highly popular brand of motorcycles Harley Davidson is facing a slowdown in the US market, which is often recognized as its core market. The reason for the slowdown of the American brand in the domestic and home market is mainly because of the fact of aging of its targeted market segment as well as difficult scenarios in the economic scene of the region. For the purpose of attaining growth in the business in the upcoming future, the US based brand motor cycle brand is focusing on entering into new and emerging markets. Hence, as a part of its strategic move, the brand is focusing on entering the UK market. Before venturing and investing in the development of the UK market, the prospects of the market needs to be studied and analyzed properly. It can be said that for proper analysis of the foreign market of UK, an environmental scanning is very much needed. PEST analysis While analyzing the UK market, the prospects needs to be analyzed from the political, economic, social and technological point of view. It can be said that the PEST framework will be greatly influential in assessing the impact and influence of the various factors of the macroeconomic levels in the automobile market of UK (Birkholz, 2007, p. 7). Political From the political point of view, it can be said that the nation’s automobile industry suffers considerable amount of impact from the power of the political parties. In the recent times, due to the strong focus and awareness in regards to the environmental welfare, various consumer groups of the European region are engaged in lobbying for considerable revising of the emission targets for various vehicles belonging to the automobile sector. It has to be said that the government of the entire European region is actively pursuing various result driven approaches for the purpose of attaining a significant reduction in automobile emission as well as fuel consumption (Topham, 2013). It is relevant to mention that as a result of significant amount of political nudge, the automobile industry of the region is looking forward to roll out more fuel efficient vehicles, which has much lower needs for fuel consumption. Economic While discussing the market prospects of the UK region from the economic point of view, it has to be said that the nation of UK forms a core and vital component of the group of entire Euro zone. The Euro zone which comprises of many small western nations like Greece, Spain, Portugal, Ireland, France, Germany etc has been under constant crisis over the last couple of years because of build-up of huge amounts of government debts in the previous years. The Euro zone was formed in the previous decade to promote economic growth and stability through region wise cooperation of the multiple small western nations. While designing the formation of the euro zone various rules, policies and guidelines of economic and political background were outlaid to form a guiding principle for the nature, method and mode of operations for the nations represented under the Euro zone. However, with the passage of time, most of the laws were overlooked and broken by the participating nations of the Euro zone (BBC News, 2012). It has to be said that some of these nations are almost on the verge of bankruptcy and are looking forward to implementing government spending cuts as well as launching austerity measures to tackle the national crisis spread over multiple regions. It has been realized that after the crisis of the US banking sector the year 2008, the multiple nations of the Euro zone has amassed enormous amounts of debts during the process of conduction of operations. This is playing a major catalytic role in regards to the process of restoring growth and stability within the Euro zone nations (Inman, 2013). With the entry of Cyprus in the Euro zone crisis, the macro economic crisis of the multiple western nations is far from over (Pratley, 2013). As of the recent times, it can be considered that the economy of the UK region may face more troubles in the upcoming days. Data from various newspaper reports hints that the economy of UK may be progressing steadily towards a possible triple dip recession, which may be the first in the history of the nation. There have been several indications in the recent days that have strongly provided extensive support to the fact of re-emergence of the economic slowdown for the third time. The first significant indication is the fact that the GDP estimates from the Office for National Statistics are pointing to the fact of fall in economic productivity and output. The second and more important indication is the fact that the UK economy might have achieved a positive or negative growth of around 0.1 to 0.2 percent. This further outlines the theory that the nation of UK is still looking forward to attain a significant and recommendable growth in its economy (Elliott, 2013). Another very important and contributing factor is that the chilling weather of UK, which has happened because of heavy snow and below zero temperature, has further acted as a catalyst in regards to contributing to fall of significant growth in the economy by dampening the probable possibilities of consumer spending (Elliott, 2013). While discussing on the lines of economic outlook of the UK region, the movements of oil prices for the UK nation also has to be taken into consideration. Data shows that the fall in performance and inability to resolve the crisis of the Euro zone has resulted in the upward spike of oil prices. It was also seen that the prices of oil in the nation has moved upward because of the response to the geopolitical tensions of the Middle East (Thomas, 2013). So, it can be said that the economic outcomes of UK make the economy of the nation look a little apprehensive in regards to the proposition of growth for the automobile sector. Social Talking in regards to the social factor that can be associated with the automobile sector of the region, it has to be said that the response of the masses will be largely on the lines of macro and micro economic developments of the nation. Discussing on the same lines, it can be said that the fluctuations in regards to oil price will seriously hamper the consumer sentiments in regards to acquisition of automobiles. However, the focus and enforcement of new laws in regards to checking down of emission levels of automobiles will create the need for innovative and hybrid models of automobile sector. It also has to be acknowledged that the social factor for the automobile industry is also largely dependent on the lines of the economic prospects of UK in the recent times and share a strong correlation with each other. Hence, the slow economic growth and the possible re-entry of the region of UK in to triple dip recession in the upcoming will promote low consumers sentiments in regards to indulging in purchase of new automobile hardware. Technological The automobile sector of the UK region has undergone tremendous amounts of transformation in recent times. Over the years, it has become the epitome of world class technology in the field of automobile engineering with tremendous amount of developments in design, productivity as well as product reliability. However, the technological prospects of the UK market are supposed to share a strong correlation with the economic and political factors. It has to be said that because of the consumer pressure for the purpose of minimizing the emission levels of automobiles, there will be a push in the automobile sector in regards to designing of more hybrid and ecofriendly automobiles. Also, while taking into account the effect of the economic scenario, it can be said that the continuous fluctuation of oil prices in the recent times, will automatically trigger the need to design more energy efficient vehicles in the upcoming days. Analysis of the Competitive environment Apart from the PEST analysis, which did an in-depth internal and external environmental scanning for the market of UK, it can be said that the market scenario also needs to be analyzed from the competitive point of view. The competitive analysis for the region reveals that the automobile sector is competing in regards to over capacity on the lines of vehicle assembly. The emergence and thriving of business activities in the low cost labour oriented economies of the emerging countries are potentially increasing the pressure for the UK automobile sector (PWC, 2013). 2. Identification of new markets The brand of Harley Davidson is no doubt one of America’s most iconic brands. The brand had been in existence since the early part of the 20th century and has continuously survived over the years. The brand is credited with the survival of the times of the Great Depression, the two world wars as well as the competition that it has faced after the World War II from the emergence of the rival Japanese automobile manufacturers. It is highly relevant to mention that the brand has survived the previously challenging times of the past decades by making significant changes in the lines of its strategy. It has to be said that in order to survive the challenging times of great Depression, the American home grown brand had focused on the process of market development. It has to be said that during this period the popular bike brand of the US focused on catering to the demand of the police as well as the US military. During the times of the World Wars, the company continued with keeping up with its production for the US military. However, the company focused on tackling competition from the European market and thereby shifted its focus from the Asian competition emerging from Japanese bike manufacturers like Suzuki, Yamaha and Kawasaki. This miscalculation on the strategic part of the popular heavyweight bike manufacturing brand of USA resulted in the significant loss of market share and a potential takeover by the American Machine and Foundry Company (Qumeer and Purkayastha, 2012, p. 5). Discussing the challenges faced by the heavyweight bike manufacturing company of the US market in the recent times, the issue of dwindling product sales in the home market needs to be highlighted. Further analysis of the problem has highlighted the fact that the dwindling of sales can be basically attributed to two important factors. The first factor is of macroeconomic nature and it is directly related to the weak economic performance of one of the leading western nations of the world. The second factor is associated with the demographic factor of the target audience who have been the main patrons for the heavy weight motorcycle brand in the United States (Taylor, 2010). Talking in a little descriptive and broad based manner about this particular fact, it has to be said that during the previous decades, the American biking brand has focused on targeting the baby boomers for the purpose of marketing their heavy weight automobile products. Naturally during the previous years and decades, the baby boomers were much younger in age and essentially potential enthusiastic consumers were above the age group of above 35 years. However, their age has increased over the years and this has become a very important which has contributed to the fall of sales based revenue for the company’s products in the year 2009. Hence, the company is looking forward to attain growth factors for the upcoming future by entering in to the newer markets. It is of considerable importance to highlight that the branded company while entering into newer markets has to significantly focus on effective segmentation, targeting and positioning for the purpose of attaining growth. It also has to be said that the process of effective customer segmentation and profiling will lead to better positioning of the branded products and thereby will aid the company in generation of significant amount of product based revenue from the new markets. Before focusing on the process of customer profiling and segmentation for the new markets, it is of considerable importance to better understand and suitably analyze the brand’s positioning in the US markets. It has to be said that the US based heavy weight popular bike brand was highly successful in the process of positioning itself as a lifestyle product rather than a mere automobile product. The Harley Davidson range of bikes that was available exclusively in the US market represented a lifestyle product which stands as a symbol of Freedom as well as the American way of life. It has to be said that over the years the bike brand has focused on selling lifestyle that is powered by individual and personal dreams. It is of high importance to mention the fact that the US based consumers perceived the popular bike brand as a representative of a status symbol which is equivalent to that of a standout attitude and unique lifestyle. It is equally important to mention that though the customers who were mainly enthusiasts for the US based bike brand represented mostly from different segments and professions, there has been a growing trend of female customers also. The heavy weight bike brand has also extended its reach to various Hispanic as well as African – American communities over the past couple of years in order to capitalize on potential sales opportunities. While attempting to segment the potential customers of the UK market, attention has to be given to the fact of the various communities and ethnic groups that are currently residing in the region. The chart reveals the fact that the maximum number of population in the UK is comprised of the white ethnic backgrounds (Easton, 2011). The Asian and black ethnic groups has also gained significant strength in regards to population estimates over the years. Hence, for the purpose of effective identifying of two new and potential target markets within the UK region, the large number of ethnic white population has to be taken into consideration. Another potential target market for the US based heavy weight bike brand in the UK region is the ethnic group which comprises of black British population. Though the presence and spread of Asian British is more in number as compared to the Black British, yet the Black British was given preference for a specific reason. The specific reason is simply the fact that in the US market, the bike brand has already been successful in establishing its connection with the US consumers as well as the African American customers. Hence, the company has gained significant amount of experience in regards to handling their consumer behaviour traits as well as personal attitude towards life. This is bound to promote an edge to the company while trying to position the same brand to the same race of consumers though in a new region altogether. While trying to promote the brand to the English customers, the brand should try to draw inspiration from the successful marketing campaigns that it has designed to gain connectivity with the American masses. However, since the brand focuses on promoting a dream and lifestyle to its customers, hence the positioning should be on the lines of leading the good English way of life. 3. Development of differentiated marketing mix for each target market Marketing is the process of revenue generation for a firm while offering its products and services in the marketplace to the clients and consumers. It has to be said that the entire process of marketing is largely dependent on the 4Ps of marketing which are basically the core components of the marketing mix. The 4P’s of marketing are essentially the features of product, place, promotion and price. It has to be said that the firms and business organizations basically use different combination of these four key variables of the marketing mix to generate revenue from the market and thereby maintain its profitability Talking in an elaborate manner, about the various key variables of the marketing mix, it has to be said that the product talks about value creation for the client and the customers. The place variable talks about value distribution, while promotion discusses on the lines of value communication. Finally, the price highlights the process of value capture. It is of high importance to mention the fact that proper marketing is a well planned activity, where every step and move is being calculated while taking in to account the probable after effects (Kotler & et.al., 2009, p. 4). While focusing on the process of marketing planning, it has to be taken into account that the sole aim is to create value for the customers. Hence, all the relevant activities of marketing has to be planned and lined up in such a way so that there is a perfect synchronizing relationship with each other. While engaging in the various kinds of promotion for the purpose of creating awareness about a particular kind of product and service, it has to be kept in mind that significant amount of demand has to be created in the market. However, it also has to be monitored that during the implementation of the branding and communication strategy, the demand should not exceed the supplying power of the firms and organizations under normal cases. Having said that it also has to be mentioned that the marketing power is largely dependent on the factor of demand creation in some cases. Hence, it also becomes a strategy for some companies to purposefully create a major demand in the market in regards to its products and services, and thereby creating a short supply of it. This particular strategy is largely applicable for the products and services, that attempts to attack itself to the rare class of lifestyle segment. It is highly important to state that while indulging in the process of value creation, value communication, value distribution and value capture, the marketer needs to be highly aware in regards to the environment of marketing that exists in a particular geographic location. It can be said that the marketing environment comprises of various variables that fall in the category of macro and micro level and which have the power to apply significant level of influence (Kotler and Armstrong, 2008, p. 60). While engaging in the process of value communication, to the clients and customers, it is of high importance for the firm to properly identify its target market and target audience. The target audience and target market essentially highlights the section of the audience as well as the geographical location which has the potential of becoming customers and prospective clients for the availing of the product or service. It is a normal and routine activity in the case of marketing to focus on the process of studying the demographic profile as well as the attitude and consumer behaviour of the target market, through the process of conduction of active market research (Lamb & et.al, 2008, p. 44). Talking in regards to this particular case, it has to be said that the US based heavy weight bike brand Harley Davidson is facing challenges in regards to generation of revenue from the domestic market, which has been its original strong point for the past couple of decades. Talking in regards to the issues faced by the popular automobile based lifestyle product brand, it has to be said that the issues are of social as well as economic nature. The US based Harley Davidson has always targeted its customers who were over the average age of 35 years. Essentially this formed the generation of buyers, who are baby boomers. With the passage of time in regards to decades, the aging process has taken a toll on the baby boomers. Though the baby boomer may still be passionate about riding, their physical strength and agility might prevent them to do so. This is the social problem faced by the US based bike brand. Talking in regards to the economic problem, it has to be said that the problem is of macroeconomic nature. The slowdown faced in the US market is also impacting the sales of the product in a significant manner. Thus, the US based lifestyle brand is looking forward to enter into new markets like the UK, by significantly targeting out the right customer segments. In the previous part of the assignment, the population of UK has been analyzed thoroughly in regards to the ethnic presence of various communities in the UK region. The analysis revealed that the largest ethnic community is the White, which is followed closely by the Asians and the Blacks. For the effective marketing of the lifestyle product to the market of the United Kingdom, the ethnic communities of the Whites as well as the Blacks has been taken into consideration. The selection of these two ethnic communities for the purpose of effective marketing is based on two very important clauses. The first clause is the fact that the white English community in the UK is the largest in number. So, naturally, they have their own English way of leading a life. It has to be remembered that the bike brand Harley Davidson prides itself as a life style product but not as an automobile product. Also, the company focuses on selling dreams and lifestyle to its customers. Targeting the large majority of English customers, will help the brand to build on its lifestyle as well as dream selling promises. Also, it will help the brand in a great way in regards to the targeting to a large number of prospective consumers. The second clause which defines the reason for targeting the Black community of the UK is because the brand has experience in handling the consumer behaviour as well as the attitude that is normally shown by the African American communities in the US markets. This provides them with an edge while dealing with the same race of customers, although the geographical setting and location might be different. Now it is necessary to state that the various segments that has be categorized on the basis of ethnicity is bound to differ in regards to each other on the basis of demographic preference, individual choice, and attitude as well as consumer behaviour. So naturally when applying the marketing mix variables for the effective targeting of the various customer segments that have been categorized on the basis of ethnic presence in the UK region, the variables have to be manipulated ad designed in order to suit their choice, preference and style. It has to be said that while developing the marketing mix variables for effective targeting of both the ethnic segments, the region wise spread of the ethnic groups has to be taken into consideration. While talking about the spread of white English communities in the UK region, the regions of North East and North West England has to be given significant importance. With around over 92% and 88% of the population as White, these regions represent the largest number of white people. For the purpose of targeting the black population living in the UK region, it has to be said that the regions of Wales and England has to be targeted. The reason is that in both the regions over 2.5% of the entire population comprises of the Black community. This percentage automatically represents the two regions, which has the largest community spread in the country (Guardian, n.d.). Product While talking in regards to product offering, it has to be said that both the white and black communities, which forms the target audience for the company in the UK region will be initially offered with the traditional heavy weight bikes which are representative of the brand symbol and status. It has to be said that the various niche segments of the heavy weight bikes of Harley Davidson like the customized, touring as well as sporting motorcycles can be offered to the white and black customers of UK. Place Talking in regards to the various places where the products will be launched in the UK markets, it has to be said that the heavy weight bikes needs to be distributed through the dealers who are located in the regions of North East and North West England. Because these regions of UK have the largest number of white ethnic population, it can be said that by making the bikes available through the dealers located in these regions, the US based bike manufacturing company will be able to better cater to the lifestyle demand of the white English population. For the purpose of making the Harley Davidson range of lifestyle automobiles available to the black ethnic consumers of UK, the product needs to be distributed through dealers located in the regions of Wales and England. Promotion From the promotion point of view, the US based Harley Davidson should promote its heavy weight lifestyle products in the traditional US manner. For enhanced value communication and bond building among the Harley Davidson patrons of UK as well as the dealers and company executives, the company should look forward to building a community centric approach which will be similar to the lines of Harley Owners Group (HOG). The company can also promote its brand name in the United Kingdom through the creation of Harley Davidson line of product and lifestyle accessories for the UK market. For the purpose of effective bonding with the female customers of both the white and black communities, the Harley Davidson brand should look forward to replicating its marketing endeavours towards the females from the US market. For the purpose of creating a tremendous level of emotional bonding among the female Harley patrons of UK, the company can look forward to form a group in the ‘The English Ladies of Harley’. Also, in an effort to cater to their individual needs in a better manner, the Harley group should look forward to promoting its products through individual customization as well It can be said that to create an emotional desire among the English population to own a Harley product, the Harley group can also implement two simple tactics of promotion. Firstly, it can slower the production process so as to create the demand, equivalent to a rare item in the market. Secondly, it can look forward to promote the products through various lifestyle magazines. It can be said that the association of the product in various lifestyle segments will help to develop the much needed demand in the UK market. It is of high importance to mention that the company should look forward to subs categorising its products on the basis of targeting of the audience. While the company can focus on promoting the standard heavy weight bikes of Harley Davidson brand to the above 35 years age group, it should market its touring and sports bikes to the much younger generation. This segregation in the lines of product placement and audience targeting will help in a great way in regards to tackling the aging issues of the UK customers at a later stage in the future. Price It is of high relevance to mention that the price of Harley Davidson bike in the US market is normally higher as compared to that of the competitors. Because of long grown dominance in the market of origin along with the factor of strong development of the brand, the Harley Davidson’s high price points did not impact its image. But, in the case of the UK market, these bikes are completely new in nature. 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