Marketing Channel for Saturn Motor Corporation - Case Study Example

Introduction Most corporations utilize different means of attracting a larger customer base where one exists and encroaching new lands where none exists. To maintain a solid base of customers, different corporations devise means and ways of ensuring that their customer base remains undisturbed. In this regard, the different corporations use various market strategies and devise marketing channels that are designed to offer maximum consumer satisfaction. Below is a case of Saturn and how it maintains its marketing strategy. Overview of Marketing Strategy In order to market their products, Saturn targeted the working group of people, i.e. 18-49 year old graduates from college; white collar job workers whose salaries exceeded $35,000 annually; and older women. It adopted an innovative approach to its marketing strategy by integrating technology, consumer ideas and business systems into making quality low cost vehicles that satisfied the customers (Freyssenet 2007pp19-24). It’s pricing policy of non haggle; and marketing strategy of bonding consumers to the company, and extensive advertisements, ensured a steady consumer supply due to its friendly approach (McGahan 2001pp23-30) Utilizing the “market area approach” to assign geographical supply areas to retailers and promotion of brand loyalty through use of names of cities helped to cultivate consumer specific approaches that reflected the needs of consumers from different environmental areas. SWOT Strengths Allowing dealers to devise customer specific strategies to attract and retain customers helps them to adjust to the needs of the customers at all times (Raspa 2004 pp8-11). Empowering the dealers to relate their suggestions into important decisions of the company assists the company to make important decisions for consumer satisfaction and dealer effectiveness. (Freyssenet 2007p18) All dealers are trained on leadership in transacting, resolution of conflicts, listening assertively and organizational behaviour on recruitment to enable maintenance of dealer organization whose aim is customer satisfaction (McGahan 2001pp23-33). Weaknesses Fixation of prices gave the consumers the feeling that they did not have control on the product prices set. (Raspa 2004 p19). Creation of company set standards for dealers to strictly comply with condones rigidity that may close out some customers since creativity is curtailed. (McGahan 2001pp30-37) Restricting owner’s name from appearing in the dealership may also place a huddle in the marketing channel since some of the dealers might have big names that some of the customers may wish to relate to (Cooke 2006pp57-63). Opportunities Saturn can relax their strategy of no haggle to incorporate bargaining to cater for the customers who may be more attracted to this strategy hence attract more customers. They can increase their customer base and target other people outside their age limiting brackets (Raspa 2004 pp8-15) thus increase the number of their customers. They can apply some of the channeling strategies used by other successful auto dealers in their own strategies in order to compete effectively (Rubinstein 2001pp40-42) Threats Competition from the Japanese; foreign manufacturers and other automobile companies especially those whose standards are flexible to accommodate various customer and dealer preferences (Rubinstein 2001pp38-41) Banks may require a great deal of conditions before they can offer loans to the company. These conditions may prove hard for the company to meet thus banks may end up delaying money to be used in market channeling or refuse to loan it at all thus causing great inconveniences (Hammer 2003pp24-34). Misrepresentation of Saturn’s products by the media companies may threaten the reception of the products by the people. Marketing Channel Strategy The target markets usually adopts ways through which they would wish products to be sold hence, designing consumer friendly strategies involves giving an ear to the demands of the consumers, and giving their suggestions as inputs in the design of pricing and location policies. Seasonality is also put into consideration here so that products that sell well in different occasions are availed in large numbers at such times (Sherman J 1999pp23-25). The place or location a product is found determines the accessibility of that product by the consumers thus it has to be placed strategically so that the consumers can easily and conveniently access it (Hammer 2003pp20-29). Use of the market area approach by Saturn has ensured that consumers have ready access to their automobile products. The channel members should be in a position to reflect the company in all its marketing undertakings such that objectives and marketing strategies of the firm are realized consistently. Saturn has ensured this through adoption of set standards for their retailers (Cooke 2006pp52-56). To motivate channel members, use of better attractive commissions or standardization of the percentage to be offered to the channel members, and offering attractive working packages should be encouraged to get channel members cooperation (Sherman J 1999p27). Managers of the marketing channels are charged with the responsibility of ensuring that organizational provisions have been made during the management and design of the channel through which products are sold. This helps with effective evaluation of channel members’ performance. The Saturn team designed a set of dealer rules that reflected how Saturn expected its retailers to conduct their transactions (Sherman J 1999pp23-31). Saturn has adopted an organizationally ordered strategy that encompasses location, and rules for dealers in order to meet its target market demands (Toole 1999pp67-71) Marketing Channel Design From the channels and strategies that Saturn employs in its marketing, we can get three possible objectives which include: To build Saturn’s brand name through creation of consumers’ relation to the product as well as the company. To adopt the no haggle pricing policy in the sale of the company’s product in order to ensure consumers are maintained (Freyssenet 2007 pp16-22) To deviate from the regular commercial advertisements that emphasizes vehicles only and concentrates on images, owning, perceptions and purchasing. Saturn retailers had several various distribution tasks they are expected to undertake as discussed below: they have to conform to a set of standards that the Saturn team had come up with, undertake their distribution through market area approach, give suggestions on how to improve the channel strategy, devise specific customer systems and order allotments, and undergo training to ensure standard compliance. The set standard by Saturn team outlines all the requirements, including location specifications, the dealer must comply with to become eligible for the dealership (Freyssene 2007 pp17-23). From the large size of its market, non perishability nature of their products, the large size of the company and its financial base, its capability to maintain intermediaries and its geographical closeness to the consumers, the length of channel Saturn can use can be relatively short (Wright 2002pp29-35) Conclusion Basing my argument from the Saturn’s catching marketing strategy of identifying potentially capable market for its products; and designing means and ways that involve consideration of market mix dynamics, retail compliance, and accessibility of products; seeking customers’ opinion; and extensive advertisement through which consumers are offered satisfying products, it is acceptable to conclude that the Saturn corporation has managed, to a great extend, to meet the expectations of its customers. References Freyssenet, M. 2007 “One best way? Trajectories and industrial models of the world's automobile producers” Collins pub. Pp16-24 Hammer, M., Champy J. 2003 “Reengineering the corporation: A manifesto for business revolution” Collinspp17-37 McGahan, A., Keller, G. 2001 “Saturn a Different Kind of Car Company” Harvard Business School Corp. pp23-38 Raspa, R. 2004 “The Emergence of the Saturn Corporation at General Motors” Antibes pp7-19 Rubinstein, S. Kochan A. 2001 “Learning from Saturn: possibilities for corporate governance and employee relations books” Prentice Hall pp34-41 Sherman J 1999 “In the rings of Saturn books” Prentice Hall pp23-31 Toole J. 1999 “Forming the future: Lessons from the Saturn Corporation” Blackwell Pub pp67-73 Wright, P. Kroll, J., Parnell A 2002 Strategic management: concepts and cases Prentice Hall pp29-37 P Cooke 2006 “Flexible integration, scope economies, and strategic alliances: social and spatial mediations” Blackwell Pub pp52-63 Read More