Marketing strategies of automobile companies - Research Paper Example

Marketing strategies of automobile companies Background Challenges witnessed in marketing management within the context of the modern day phenomenon have been a major concern for organizations of the 21st century. Based on a similar aspect, the article titled as “BMW, Audi, Mercedes Bring More Diesels to US Market” by Clothier (2013) reveals the marketing strategies currently being practiced by few of the globally renowned automotive brands. For instance, as revealed by Clothier (2013), BMW, Audi and Mercedes have been currently focused on the expansion of Diesel cars in the US automotive market. Contextually, it has been observed that BMW is focusing on its expansion strategy by offering different innovative models of diesel cars, namely the 3 Series and S series in 2013, in its targeted markets with the intention to raise customer demands for diesel cars as well as for controlling the prices of gasoline to obtain cost efficiency. Similarly, Audi has also been focused on selling its diesel car models, such as A3 hatchback, Q7 sport-utility vehicle and A8 Sedan over the past few years in the global markets and further intends to launch more innovative and energy efficient car models, including A6 and A7 Sedans and Q5 SUV in 2014. Mercedes, another renowned brand in the global automotive industry has also been offering diesel cars in its SUV, E class and S Class Sedan models. The company is also reported to be planning for introducing four diesel models in its C-class product line, in order for enhance fuel efficiency along with maintaining performance and power of the automotives (Clothier, 2013). Therefore, the article empirically depicts that marketing strategies are aimed at rewarding companies with competitive advantages and better profit gaining scope along with offering sustainability to the firm. Analysis According to Clothier (2013), as assessing the recent marketing strategies of Mercedes Benz, it can be stated that the company is currently focusing on expansion of product lines in the US as its marketing strategy. Moreover, the company is also focusing on market penetration strategies which it plans to be implemented with the introduction of a diesel based product in order to enhance the performance of cars, simultaneously, countering raising prices of gasoline. In this context, it can also be stated that when applying its penetration strategy, the company plans to launch its products at higher prices to the prevalent high income group customers, in order to attract them in the US luxury car markets (Basuki, 2008). Moreover, the organization is also focusing on product line development through design differentiation and fuel efficiency strategies, which would be beneficial for the organization in obtaining better sales revenue and environmental competence, thus obtaining both profit and sustainable growth (Clothier, 2013). Similarly, BMW is also planning for developing and expanding its product line as well as technology efficiency strategies by launching various luxurious models in the US market by the year end 2013. Furthermore, it is also planning for continuous expansion in its future marketing performances. This would also facilitate the organization to gain greater profits by delivering quality assurance to the customers in terms of fuel efficiency and environmental accountability. Another globally reputed automotive brand, Audi is also reported to be focusing on technology efficiency strategies in its marketing plans. As revealed in the article, the company plans to implement this particular strategy by introducing various models such as A6 and A7 Sedans along with Q5 SUV by 2014. The implementation of these marketing strategies would facilitate customers in purchasing quality cars according to their demands owing to the wide variety of the company’s product line, which, in turn, shall ultimately lead towards its better profits and sustainability for the organizations (Clothier, 2013). In reference to marketing strategies identified in Clothier (2013), it can be observed that most of the automobile companies are emphasizing on innovative marketing through technology advancements, brand positioning through customer oriented planning as well as competitive promotion of the planned launches (Lokhande & Rana, 2012). For instance, most of the leading car companies such as Mercedes, BMW and Audi are focusing on innovative product designing with due significance rendered towards fuel efficiency and customer convenience, which would enable the companies to generate effective revenues through better sustainable performances in the targeted market of the US. Undoubtedly, with the utilization of these strategies, the organizations shall be more competitive in widening the customer base in automotive US markets. Furthermore, with due significance towards the effective positioning of the brands, planned to be launched in the US market, the companies are expected to obtain greater competitive advantages in terms of enlarged customer base and also in terms of stabilization in the global market context. Stating precisely, the adopted marketing strategies are likely to assist the global automobile companies in gaining higher profitability and sustainability in the global market scenario and thus benefit it with certain monopolistic competitive advantages (Clothier, 2013). Furthermore, technology efficiency and product line strategies, as adopted by the automobile companies, it can be stated that there are various benefits categorized in terms of financial or economic, social as well as environmental aspects. For instance, the financial benefits for these global companies can be obtained by lowering the prices of the products for business execution. On the other hand, environmental and social benefits can be further depicted as the reduction of emission rates from automobiles, thus reducing the risk of governmental as well as community interventions within the organizational performances (Lusch & Vargo, 2006; United Nations Industrial Development Organization, 2000). However, from a long run perspective, these strategies can also be observed to raise certain disadvantages for the companies in terms of quality. It has often been observed in past performances, that in order to enhance profits through cost efficiency and sustainability through fuel efficiency as well as emission control, most of the leading car companies attempt to manufacture products in large volumes compromising with quality aspects demanded by the customers. This in turn hampered the organizational competencies in maintaining competitive a leadership position in global markets causing the failure of previously launch diesel and fuel efficient car models. Another disadvantage can be identified as the loss of managerial control in this context. Correspondingly, it can be further noted that with excessive production of cars by various leading companies, controlling the production process becomes a challenging task for the management, often resulting in cost increment and time inefficiency in delivering the product as per the demand of the customers. These limitations further cause the reduction of market share of the companies (Maine.Gov, 2012). Results In the current phenomenon, various leading car companies have been aiming at better productivity through sales and promotion of green automotive cars, particularly in the US market. Based on the past instances, it can be affirmed in this context that despite of innovative technologies adopted by various leading car companies, it might be quite pious to confirm these marketing strategies as successful. Although it was expected that the rate of growth would be enhanced with the rising demands for energy efficient vehicles in the US markets, it was not achieved due to the recessionary effects imposing drastic influences on the sales of automotive products in the global periphery. Hence, it can be affirmed that these strategies are quite vulnerable to economic ups and downs and other external business environment factors owing to which, these marketing plans cannot be deemed as highly reliable. Moreover, higher growth rate does not look like coming in the future due to the weak customer knowledge regarding fuel efficient cars and quality concerns. Consequently, the organizations will require investing significant amounts of their funds in advertising and promotional initiatives to generate awareness among customers which may also increase its financial obligations to obtain higher sales revenue and thus create pressure to rethink quality aspects to retrench costs in the production process. Additionally, continuous technology innovations require huge investments and thus companies might have to face severe financial pressure on the company’s portfolio (Center for Automotive Research, 2013). References Basuki, S. S. (2008). QSEAL market penetration strategy. Retrieved from http://pdf.usaid.gov/pdf_docs/PNADQ700.pdf Clothier, M. (2013). BMW, Audi, Mercedes bring more diesels to US market. Retrieved from http://www.bloomberg.com/news/2013-03-27/bmw-audi-bring-more-diesels-to-u-s-as-demand-rises.html Center for Automotive Research. (2013). After the bailout: future prospects for the US auto industry. Retrieved from http://www.cargroup.org/?module=Publications&event=View&pubID=98 Lusch, R. F. & Vargo, S. L. (2006). The service-dominant logic of marketing: Dialog, debate, and directions. New York: M.E. Sharpe. Lokhande, M.A. & Rana, V.S. (2012). Marketing strategies of automobile companies in India: A case study of hyundai motors India limited. Retrieved from http://www.zenithresearch.org.in/images/stories/pdf/2012/NOV/33_ZIJMR_VOL2_ISSUE11_NOV_2012.pdf Maine. Gov. (2012). Loss control and safety. Retrieved from http://maine.gov/bgs/riskmanage/losscontrol/ United Nations Industrial Development Organization. (2000). Energy efficiency technologies and benefits. Retrieved from http://africa-toolkit.reeep.org/modules/Module12.pdf Read More