Marketing of Kingsway Group of Companies - Essay Example

? Marketing Report Word Count: 3005 Executive summary This report on Kingsway group of companies is to evaluatethe current position of the group and deliberate on the ways and methodologies to improve on the performance of the business in order to increase the global market share of the company against its competitors. In analysing the various areas of the business, the company uses the SWOT analysis model. This is as agreed by the board members who perceived it as the best method to give an accurate and precise view of the business standing currently and how best to drive the business towards it target of 30 per cent market share in the world. Some of the major findings from the report were that the business was not as aggressive in marketing as some of the competitor companies, hence leading to the small market share of the global market that the company has. The staff motivation was poor and most of them did not feel appreciated enough for their efforts in the company. Introduction The Kingsway group of company is an organisation that deals with imports and exports of new and used motor vehicles from Japan and Germany. For the past five years, the company has grown from exporting only used Toyota and Mercedes models of vehicles to exporting of all makes of vehicles that the two countries makes, in addition, the market has grown from Europe to almost all the six continents with Africa being the most competitive market in the last quarter. However, these statics fall below the projected market share, which necessitated this report to review on our weak point and the opportunities and strengths in which we can capitalise on. Procedure In coming up with situation analysis of the company, the report undertook to analyse several dimensions that may have an effect on the performance of the company; this was to ensure that no factor that may have effect on performance was not analysed. Some of the areas that were analysed include competitor, market, environmental, customer, internal and SWOT analysis. the first step in conducting the situation analysis was to lay down the type of data that was needed in every factor that was to be analysed, after getting these, we had to look for the contact people who were conversant in our competitor firms and how their companies were organised both in their internal and external market approach. Findings Competitor analysis The main competitors in the Japan and Germany cars export and import business are Global Motors LTD, Motor World Services and the Kiyosaki Group. These companies have an almost similar approach to the market for vehicles globally and most of their strategies are largely similar. Current and future objectives 1. Global Motors Global Motors has two objectives that include the increasing the variety of the motor vehicles that they sell to their clients, the second is providing quality vehicles to their clients. This organisation has several agents in the regions it operates, which are mainly in the American market; a group of business tycoons from North America are the main financiers of the group who have many connections in the business circles globally. 2. Motor World services This group of companies has their main objective as exporting all models of vehicles in the motor vehicle industry and making them accessible to their clients especially the high-end consumers. This group has a base in Finland and its strategy as selling the luxurious vehicles at an affordable price, most of the sport utility vehicles manufacturers supply the company with spare parts for their products making it easier for clients who buy these vehicles to access spare parts or customise their second hand vehicles. 3. Kiyosaki Group This group, which is from Japan, has put its objectives as supplying the need of customers for second hand Japanese vehicles; the second objective of the company is to provide a cheaper way of becoming a motor vehicle owner through offering competitive prices for their Japanese vehicles. The strategy that this company has put in place to achieve its objectives include sourcing for cheaper vehicles from the Japanese car owners then service them before exporting them. One of the strengths of this company is that it is the government of Japan has 46 per cent stake and therefore it can use the political mechanisms to increase its reach and lower the costs of its products. Market analysis a. Industry size and growth The market for used cars in the world is a large sector with an annual turnover approaching 1.5 trillion dollars with the potential to reach 2trillion dollars in the next two years. b. Profitability Market for used cars is one of the profitable industries with companies making a net profit of up to 100 per cent on a vehicle depending on destination country and the maker of the vehicle; cars from Asia are the most profitable. c. Distribution systems Market for used cars is mainly through direct delivery where the buyer buys directly from the seller; in the recent years, this trend has spread to the internet where all transactions are online. d. Key success factors Currently, one of the key success factors in this industry is the ability to deliver vehicles to the buyers at the lowest price possible and within the shortest time, however in future, the trend will be more likely the quality of products that will ensure the competitiveness of the companies. Internal Analysis The organisation has one of the best distribution capabilities, with representatives in almost all the regions of the world. In addition, the German car manufacturing industry has recognised our group as one of the top exporters of their brands and has therefore collaborated with us to export low cost sport utility vehicles to the developing world. The company financial resources are not restrictive as the good credit rating it has with most of the German and Japanese banks ensure there is ease of access to credit. Human resource strength in the organisation is not encouraging as there is usually a huge exodus of employees with most employees spending an average of 2 years in the organisation. SWOT Analysis strengths Weaknesses Opportunities Threats An efficient distribution channel Adequate financial resources Human resource mismanagement Most of the emerging markets in Africa are largely unexploited Recommendations by the German motor industry as the best distributor of the I products Economic recession Germany Entrance of new makes of vehicles that are very cheap. Customer analysis Customers of used vehicles that the company deals with are mostly from the emerging markets in the developing world, who are keen on the pricing of the vehicles and the mileage. Phase II Executive Summary The second phase of the marketing report will be a follow up on the first phase, this phase will dwell on the ways in which to improve our sales and spread our network even further to the target markets in the various regions of the world. In this phase, the methodology will include determination of marketing objectives, market targeting and positioning, strategies for growth and the marketing mix that will produce the best results. The report found out that the various regions have different needs to depending on the economic factors in the region, the levels of technological advancement and infrastructure. In attaining the marketing objectives, the company will be better using several strategies depending on the regions that the company will sell the vehicles. Findings Marketing Objectives The main marketing objective of the company is to increase the market share of the company from the current 12 per cent to 30 per cent in the next five years; this will in essence boost the sales of the vehicles to the expanded markets Market Targeting and Positioning In market targeting, the buyers’ preferences and the structure and organisation of the market will inform the organisation on the strategies of marketing that the company will use. In view of this, the strategies that are most likely to be useful and effective will be the differentiated strategies due to the wide variety of preferences of the customers for used vehicles. In positioning ourselves in the global market as the market leaders in used cars, our marketing strategy will dwell on the quality of the vehicles that we export to customers. This is because of the origin of those vehicles since most of the consumers of vehicles perceive vehicles from Germany and Japan as of highest quality standards and there is ease of access of spare parts. Growth strategies In order to increase our market share of second hand cars, the marketing strategy several factors will inform our marketing strategies, 1. price Since most of the customers are in the developing countries or the lower and middle classes in developing countries, the amount that a car costs will determine whether they will buy it or not. In Africa, where most of our target markets are, the population is generally poor and therefore cannot afford vehicles above a certain price range, therefore, the vehicles sold in Africa will be for the low-end consumers with few sport utility vehicles that are expensive. In the American market, the demand for sport utility vehicles is increasing therefore in order to capture that market we will have to channel out marketing to the demand for cheap sport utility vehicles. 2. Focus The focus of the organisation will be the quality of the vehicles and the availability of spare parts of those vehicles in the regions that our products are available. Most of the roads in Africa are generally poor with a large proportion of them having no tarmac, this makes driving in these tough terrains a challenge therefore vehicles specially designed for the rough terrain will find a huge market in Africa. As an organisation, our main goal of marketing will be to convince the customers from Africa of our potential and capabilities to deliver tough and durable second hand vehicles to them at affordable prices. 3. Market development The aim of the growth strategies will be to create new markets especially in Africa where there is a huge potential for sales since most of the large population there have been in the recent past lifting themselves from poverty to middle class citizens, they are therefore finding it increasingly difficult to commute to their places of work without vehicles. According statistics, the economic development that Africa is experiencing has led to increased demand for vehicles for either transport business or salon cars for personal use. In growing this market, our organisation will have captured a part of a market that will not be slowing in growth any time in the near future. In the recent global financial crisis and global recession, economic growth of African countries has relatively remained stable and the global crisis did not affect the markets in this region (Madani, Mas-Guix & World Bank 2011). Most of the vehicle manufacturers and dealers have not been enthusiastic of setting up big markets in Africa due to poor markets that did not guarantee the returns on investments as earlier thought. 4. Market penetration Marketing in the developed markets will be to ensure penetration as our competitor firms have a solid customer base in most of those markets. The easiest way to capture the markets, especially the developed ones will be through the joint ventures with other companies that deal in imports and exports of second hand motor vehicles. Since most of the rival firms engage in direct sales in the developed markets, forming joint ventures with the car importing companies in the home countries will give us an advantage of penetrating to the previously unreachable market that only the local companies have access to them. This in return will save the organisation on costs since the two companies will share all the expenses thereby reducing the costs hence cheaper prices for the vehicles. 5. Diversification In order to meet the various needs of the clients, the organisation will have to diversify on its products and consider including other models and makes of vehicles from different manufacturers, vehicles from countries such as England, India and the United States of America will help in meeting all our consumer needs. Most of the clients in our target markets have different perception of products from different countries or by different manufacturers, this leads to the preferences and tastes of those customers who prefer vehicles from the makers or countries we do not export from remaining unexploited as most of our competitors also export vehicles from Japan and Germany. Exporting vehicles from other manufacturers that our rival companies do not export from will enable exploit that unexploited markets with minimal competition thereby maximising our sales. 6. Acquisition In the developed markets, increasing our market share will be a challenge since the almost the whole of the market is segmented between the various firms that operate in those regions. In order for the organisation to be able to establish a substantial market share in the region, the company will target at acquiring the small firms that deal with imports of motor vehicles thereby increasing the market share in these regions. This however will depend on the volume of business that the firms have with the firms that have a large volume of business transactions, which in essence means a bigger market share being preferred to those firms with smaller market share. Selection of Competitive Advantage The organisation, to ensure it has a competitive edge in the markets for second hand vehicles, will capitalise on the area it has competitive edge over Motor world, Global motors and Kiyosaki group. In phase I of the marketing report, the strength of this organisation is that it has agents in almost all regions in the world; this is where we have competitive advantage, as our distribution channels are more efficient than those of our competing firms are. The time it takes for us to export a car to the intended customer is usually about 3 weeks while it takes our competitors up to two months for the vehicle to reach the client. The firm should therefore aim at making the distribution channels more effective and portraying that image to the customers in order to gain trust and market from them. Marketing Mix Programme In the African markets, the product-oriented model is the most appropriate as the markets are developing and the life cycle of the product will be long, the speed with which the African markets will get saturated with vehicles will be slow bearing in mind more than 90 percent of the population in the countries of Africa do not own vehicles. With the current levels of growth in the continent, the growth phase of the motor vehicle industry is set to last for at least 50 years, which is a long growth phase for any product. The terrain of roads in Africa is rough which require regular maintenance of the vehicles, availing the spare parts of the vehicles in these regions will be an advantage to us sine the consumers will prefer to buy the vehicles which have readily available spare parts. The pricing of the vehicles in Africa will require our company to use the market penetration pricing to attract new customers to buy our price and then increase the price over time after winning the confidence of the customers in this region. Promotion of our brand of vehicles will be a key influencing factor on the amount of sales we make since most of the Africa market is unexploited and does not have a specific preference, therefore the strength of our marketing strategies that involve product promotion will determine the level of our market share. In addition, promotion of the products will also magnify our reach since Africans are close in their social interactions therefore information reaches people rather first and to a large number of people. Distribution in Africa should be mainly using the franchising model with the agent in the region being the supervisor of the franchisees to ensure they meet the objectives of the organisation; this method of distribution is encouraged in Africa due to the vastness of the area and the markets. The developed markets in America would require a consumer based model in marketing the second hand vehicles, this is because they have more information about their choices and what they want and most of them would be buying the products to replace an old one. Most of the consumers will be sensitive to price variations in between our vehicles and those that our competitors have imported, therefore in this market there is need to ensure that the cost of the product and other associated costs of our vehicles remain competitive. Since the market in America is a developed one with almost all makes and models of the cars present, advertising and product promotion will be an important factor in deciding which model the consumers will buy. Therefore the advertisement of the organisation’s vehicles would be in such a way that the consumers is convinced that they we are the best in importing second-hand cars. With the technological advancements in America, most of the customers opt to import vehicles online where all transactions are online thus making all them easier, as an organisation therefore allowing our clients to order their preferred vehicles and pay for them online will increase the market share of our products. Conclusion Diversifying our markets in to various regions in the world will ensure that the threats in sales that can be brought about by global economic crisis will be mitigated, this is especially so with the continent of Africa which has shown resilience in dealing with these economic crisis. Exploiting the untapped markets in the continent of Africa will ensure that the introduction of cheaper models of new vehicles will find the market already saturated with our imported vehicles therefore it will be a challenge for the new brands to make a negative impact on our market share. References Madani, D., Mas-Guix, N., & World Bank. (2011). The impact of export tax incentives on export performance: Evidence from the automotive sector in South Africa. Washington, D.C: World Bank. Read More