Principles Of Marketing In Nissan Company - Case Study Example

 Principles Of Marketing In Nissan Company Executive Summary The report describes the product line offered by Nissan Motors Company Limited in United Kingdom. The report presents the analysis of the environment in which Nissan is operating and identifies its major competitors. The main focus of the report is to review the marketing strategies adopted by Nissan for the promotion of its product line. In this regard, the report explains the market segmentation and product positioning policy of Nissan and continues to describe the selection of marketing communication mix and advertisement channels by the company. It is revealed that Nissan faces tough competition as well as some serious environmental issues that ask the company to redefine its marketing strategies as well as production process to keep these align with the international standards of production and could also help in keeping its market position stable and competitive. Introduction Nissan Motors Company Limited was established in 1933. The head quarter of the company is situated in Japan (Yu, 2000, p50). The company started its operating in America in 1960 and produced first vehicle in 1966. In 1983, it started the global marketing of vehicles using the name tag of Nissan. The company continues to manufacture wide range of vehicles for the customers in different countries and in 1989; it achieved the landmark of manufacturing its one-millionth vehicle (Armstrong, 1997, p132). It has been awarded the title of Best of the Best Company in 1997 by the environmental protection agency. Nissan took the initiative to start its manufacturing business in UK in 1984 when it signed an agreement with the British government that allows building of Nissan’s car plant in United Kingdom. (Emily and Armstrong, 1992, p82) Nissan started its UK operations under the name Nissan Motor Manufacturing UK Limited (NMUK) that is being owned and operated by its European division. In 1986, the construction of its first UK car factory was completed and first Nissan Bluebird was manufactured in that largest and most productive car plant of UK (Maskery and Mary, 2001, p6). The car factory is located in Sunderland, North east England. It also secured the position of largest car exporter in 2004 when 1 in 5 cars exported from the UK was manufactured in the Nissan’s UK car factory (NMUK). Nissan has invested over £2.4 billion in its UK manufacturing unit. The annual production of Nissan UK car factory is approximately 330,000. Almost 60 percent of the vehicles are built to order in the factory and 75 percent of these are exported to different destinations across the globe (Miller et al, 2005, p82). The company faces tough market competition with some strong established automobile companies operating at international level like Honda, Mazda etc. The company use to market its product range using different marketing tools like media advertisement and promotional activities. These steps are organized through a well defined marketing strategy that decides the media selection, budget allocation, market segmentation and promotional strategy for the products introduced by Nissan (Emily, 1999, p54). The following report aims to discuss the marketing strategy of Nissan to understand the use of marketing mix and different communication medium for the promotion of its products. In this regard, the report describes the product range of Nissan in UK and also identifies the market size, market segmentation and positioning of the products of Nissan in UK automobile markets. Moreover, the report points out the significance of establishing the logo of the company to communicate its message in situations where the verbal message is difficult to transmit to the people. Nissan’s Product Range The Nissan group manufactured wide range of products that could be classified in four major product lines including cars, SUVs (Sports Utility Vehicles), Trucks and Hybrids. Nissan has introduced wide range of product line in UK including Bluebird, Primera, Micra, Almera, Note and Qashqai. Nissan started its UK manufacturing operations in 1986 and manufactured first Nissan Bluebird (Yu, 2000, p50). It was the first vehicles being produced by Nissan in UK that continued to around four years. There were total 187,178 units of bluebird manufactured by NMUK by 1990. The manufacturing of Primera was started in 1990 that ended the production of bluebird. Primera (EC) was manufactured in NMUK till 1996 and its total 606,887 united were manufactured in the factory (Maskery and Mary, 2001, p6). The manufacturing of Micra (DC) was stated in 1992 and till 2002 its 1.3 million units were produced by the Nissan UK car factory. The manufacturing of Primera (EQ) was also initiated in 1996 that ended in 2001 with total of 500,000 units built. In 2000, the company started the manufacturing of Almera (HS) and during the next six years its 450,000 units were manufactured in the factory. The manufacturing of Primera (ED) was started in 2001 and lasted in 2006 when its 165,000 units were manufactured. The production of Micra was initiated in 2002 and till now there are more than 250,000 units of this model have been manufactured in the factory. In 2005 and 2006, the company decided to start the manufacturing of Micra C+C and Note respectively whereas in 2007, the manufacturing of Qashqai was started and 190,000 units are already manufactured at the Nissan’s UK car factory. Furthermore, the manufacturing of Qashqai+2 was also started in 2008 and the company has also planned to manufacture Nissan Micra Replacement Qazana. The product line of Nissan is UK could also be classified in four categories including city cars (Mica, Pixar, Note, Cube), crossovers (Moreno, Qashqai), 4X4s (Pathfinder, Navarra, X-trail), sports cars (GT-R, 37OZ, 37OZ roadster) and commercial vehicles (cab star, premaster, inters tar, NV200) The Operating Environment for Nissan Nissan UK has been operating in highly competitive market. It not only faced tough competition from some established car manufacturers but at the same time, it also faces some environmental challenges that ask the company to reformulate and continually modify its manufacturing and marketing strategy (Emily, 1999, p54). The major competitors of Nissan include BMW, Toyota, Ford, Honda, Subaru, General Motor Company (GMC) and Daimler Chrysler. These companies also use to offer wide range of vehicles with innovative designs and features due to which Nissan has to carry on updating its production and marketing plans to successfully survive in the marketplace (Armstrong, 1997, p132). In order to remain stable and competitive in the market place, NMUK uses to strategically emphasize upon its value stream as well as the marketing and promotion of its product line in effective manner (Maskery and Mary, 2001, p6). There are some important challenges faced by Nissan through its operating environment. Nissan Sentra has been named among the greenest cars in 2005 but at the same time, it is also argued that the vehicles produced by Nissan are great source of environmental pollution and climate change (Yu, 2000, p50). Nissan is often criticized on the grounds that uses to escape certain emission rules and employ unfair lending practice. The European federation for transportation and environment has also pledged Nissan to reduce the average CO2 emission from the new cars manufactured by Nissan because it made least progress in the examination of cars with respect to gas emission (Emily, 1999, p54). Market Segmentation The segmentation of market is an important point of concern for the marketing department of Nissan. There are different ways of market segmentation for automobile industry and the market for Nissan could also be segmented in different manner. There is one approach that proposed the segmentation for Nissan market on the basis of demographic features of the customer. Another group of through suggests that the market could be augments according to the behaviours of the customer whereas there is one approach to segment the Nissan market according to the facilities and services. Each of these ways of market segmentation has their own significance. These techniques of market segmentation allow the marketing managers of Nissan to focus upon their potential customers strategically while deciding marketing tactics to address the special needs of each market segment. Some possible ways of segmentation of Nissan market include demographics and behavioural approach. (Maskery and Mary, 2001, p6) Demographic segmentation is the most popular way of market segmentation. The segmentation of the Nissan market on the basis of the demographic features of the customers allow the marketers to classify the market on the basis of age, income group, family size, education level, religious and cultural backgrounds, nationality and occupation. This segmentation allows the marketing managers to adopt strategies to meet the unique requirements of different groups of these segments. For instance, age is an important demographic factor affecting the automobile industry. Nissan uses to put forward different types of appeal to attract the people of different age groups. The young generation looks towards sporty cars with fun type appeals whereas the people of older age group like to see comfort and executive look for their drives. The gender based segmentation allows the Nissan to develop different appeals to attract male and females. Income group is another important base for market segmentation that allows the Nissan to offer products and services to people according to their affordability. The price of the cars play vital role in determining the income based segmentation as Nissan uses to offer high price cars to the executives and business class whereas the low cost cars are meant for low income group people. The market for Nissan could also be segmented according to the behaviours of the people. It allows the marketers to classify the customers in different groups on the basis of the ways they consume or respond towards different products and services. Using the behavioural approach, the holiday market customers could be classified in to different groups like commercial users, sports and fun drives, daily use, executive use and family purpose. These are different types of uses that the customer look in a vehicles and keeping in view these possible uses, Nissan could also segment its marketing according to the unique need of people with above mentioned behaviours. Positioning of Products The product line of Nissan has been positioned in the market according to the demands and features of the product. As Nissan basically offers four categories of product line in UK, it uses to positions all of these products according to the specific requirements of particular consumer groups. The models within the city car product range including Mica, Pixar, Note and Cube have been positioned as family cars that provide luxury and safe drives to people that look for comfortable as well as capacious drives for their families. Similarly, the crossovers aim to meet the needs of almost all the segments of market. The models within this product line have been positioned as stylist and comfortable drives that provide certain unique features to the customer. The 4X4s are meant for the adventure lovers and outside fun seekers. The models of this product line have been positioned as stylish but enthusiastic driving experience completely aligned with the special needs of adventure drivers. On the other hand, there are different models being manufactured by Nissan sports product line that have stylish, sleek and modern looks. These models have been positioned as vehicles for sportsmen that want stylish cars to meet their lifestyles. Marketing Communication Mix The affective and balanced use of marketing communication mix is supposed to be an integral part of the marketing strategy (Kotler Armstrong, 2006, p105). Nissan uses to employ different traditional as well as non-traditional mediums for the production of its products including TV and radio ads, print advertisement, point of sales advertisement, online polls and surveys, direct mail and public relation activities. TV has appeared as the most important medium of marketing for Nissan because the management found that best way to cater their target audience is electronic media. There have been different TV commercials developed by Nissan that promote its different products. Along with TV ads, Nissan also uses to create certain posters that talk about the Nissan vision of providing quality vehicles of the customers. As the companies realize that it has entered in a highly competitive marketplace, it began to formulate and adopt an appropriate marketing strategy. The use of different marketing communication channel by Nissan is clearly visible through the fact that Nissan uses to give proper attention towards the concept of integrated marketing communication. Integrated Marketing Communication (IMC) is a managerial concept that intends to unify different aspects of marketing communication giving them the shape of a joint workforce in order to increase the effectiveness of marketing communication process (Gonring, 1994, p8). It is often regarded as a holistic approach towards the notion of marketing communication that inhibits different marketing communication segments like online and off-line advertising, sales promotion, public relation and direct marketing to work separately in isolation but it proposes their combined effort towards the achievement of marketing objective of the business. (Weinberger et al, 1995, p44). The notion of IMC is basically built upon the philosophy that when all the marketing tool, resources and approaches of a company are integrated, they are likely to have stronger impact upon the mind of the consumers that ultimately cause the companies higher levels of profits and also allows the companies gaining edge over their competitors. The concept of IMC has proved its broader implications in different sectors of businesses. With no exception, the companies operating in the automobile industry have also realized and experienced the implication and effectiveness of IMC and different elements of IMC are commonly used in the industry to market different automobiles. Likewise, Nissan also uses to follow the strategy of integrated marketing communication that allows the company to promote its product using different mediums of advertisement. For instance, Nissan promoted the Santra cars by putting its TV commercials and internet marketing messages at time so that it could reach the customers through these mediums in effective manner. In the same way, Nissan launched Rogue campaign that uses different marketing medium like TV commercials, print advertisement as well as internet advertisement. This strategy resulted in success of Nissan model and it reached the position of top cars of the years with the support of effective marketing strategy. Thus, it is revealed that marketing managers of Nissan are well aware of the use of integrate marketing communication for the promotion of their brands due to which they use to focus upon transmitting their ads and promotional messages at the same time through different channels of marketing. This strategy has proved to be very significant and supportive for Nissan as it has observed increase in public interest and response towards its products. Nissan Marketing Strategy – Celebrity Endorsement and Marketing Cost Nissan uses to adopt different attractive strategies for the promotion of its products and the endorsement of celebrity is also an important marketing tactic being used by Nissan for the marketing of its product line (Garrahan and Stewart, 1992, p45). The marketing experts widely believe that endorsement of celebrity tends to have positive effects upon the promotion of the products and services. Schlecht (2003) explains that celebrities are those people who possess public recognition. Their general attributes such as attractiveness and extraordinary lifestyle are just a few examples. It is observed that within corresponding social group celebrities usually differ from the social norm and possess a high degree of public awareness. These celebrities have great influence on the decision making of the consumers and it is believe that when a celebrity engage him/herself in the promotion of certain brand of the sportswear, the reputation, name and fame of the celebrity is linked with that particular brand and people are convince to look at that particular product brand based on the appealing and admirable qualities of the celebrities the product is supported and promoted among the general public (Schlecht, 2003, p176) At present there are many celebrities that are playing the roles of the brand ambassadors of different brands and it shows the increase in the trend of celebrity endorsement for the marketing purpose. The celebrities now days not only just act as a model to promote a certain product but they adopt well planned strategy so that they can work to maximize the popularity of the product and in this way they also rise their own popularity as well as brand equity because the successful endorsement of a celebrity in the marketing of a product pave new ways for the celebrity in terms of new agreements and deals (Daneshvary et al, 2000, p203) The companies and the marketers now see the celebrities as a vehicle that allows them to easily reach and influence their target consumers. People use to associate the product with certain personality and in this situation the companies are well aware that they must build up an emotional connection of the brand with the consumers and the personalities of the celebrities help the marketers in doing so. In the highly competitive market place of today the companies have the main task of influencing the behaviour of the consumers and for this the image and attractions of the celebrity can help the companies a lot that’s why the markers have assumed that for successful marketing of their products celebrity endorsement is a key strategy that can bring them success in terms of increased sales and brand popularity. (Walker et al, 1992, p69) The trend of using the infamy and reputation of the celebrities to promote particular brand and product is not a new concept but even as far back as 1870s there are some examples where the companies make contracts with the celebrities so that they can promote their product. In 1870 Mark Twain did the publicity for the Remington typewriter by saying that he composed Tom Sawyer using this typewriter and as a result there was increase in the sales of the typewrite. In the same way Henry Ward Beecher appeared in the advertisement of Waltham watches in weekly “Harper”. The trend of endorsing celebrities in the advertising campaigns gets momentum as the time passes. In 1905 comedians Harry Bulgerinitsads and Fatty Arbuckle were enforced in the advertisement of Murad Cigarettes. This marketing strategy proved to be attractive for the consumers and due to the benefits and improved sales of the product due to celebrity endorsement the companies keep on endorsing the celebrities for the marketing of their brands (Ohanian and Roobina, 2006, p53). Keeping in view the significance of celebrity endorsement for the effective promotion of the products, Nissan has also developed its several ads that show the celebrities promoting its product ranges. There are several models manufactured by Nissan that have been promoted by different celebrities. For instance, one of the Nissan ads features Kim Cattral, Sex and the city star. There are certain other TV and print commercials being aired by Nissan that feature different prominent celebrities for the promotion of Nissan product line. It implies that Nissan management has gained complete awareness regarding the role of celebrities in promotion of products. (Garrahan and Stewart, 1992, p45) The endorsement of celebrities for the promotion of Nissan product line generally causes a high budget because the celebrities are being paid considerably higher than the other models. However, the outcome of the celebrity endorsement in terms of product popularity and favourable consumer response covers the cost paid for the celebrities. Along with the celebrities, there are other electronic ads like TV commercials and internet messages that cost Nissan high cost. The cost of advertisement used to be different for different mediums. The electronic ads of Nissan cars are usually mad using advanced technology so that these can show the innovative and unique features of the car in attractive and stylish manner to influence the consumers’ behaviours. Internet Marketing Internet is considered as an efficient medium to access, organize, communicate and share communication. It is drawing unpredictable impacts on the business activities. The marketing strategies of the firms are also much inspired and affected with the emergence of this advance technology and it is widely believed that the growth and spread of internet with an extraordinary pace over the last few decades has resulted in its increased use for marketing purpose and the business organizations perform variety of marketing activities via internet like the advertisement of the products, propagation of promotional material and information about the products and services and consumer research with the help of polls, surveys, emails etc but at the same time that it is not an easy job to measure the impact of internet on the marketing activities and their outcomes because changes occur in the modern business world so fast that considering the speed with which developments and changes take place on the Internet it is almost impossible to predict the impact of Internet Marketing (Kotler Armstrong, 2006, p145). According to the traditional concept, the strategies of marketing must follow some predefined steps like the Marketing strategy must possess eight steps including “market research to understand customer's perceptions and wants; product development along the lines of perceived customer wants; product delivery and customer feedback, market testing etc” (Brassington and Pettitt, 2006, p91) however in the modern era of Internet Marketing there are some major changes occurred in the concept of marketing and Internet seem to be challenging some of the most basic ideas of marketing. This situation has give birth to the concept of internet marketing and at present it has become a common trend for the companies to use internet as marketing tool (Collins et al, 2003, p483). Nissan also shows great awareness regarding the use of internet as marketing tool and it has launched different ads and promotional campaigns for the promotion of its products via internet. Furthermore, Nissan also uses direct mail, internet polls and survey as tools of marketing and keep the customers informed about its product using different electronic newsletter. The website of Nissan provides information about different products of Nissan available for different countries and region. Along with providing information, the company used to facilitate and assist the consumer in selection of the model according to their demands. It implies that Nissan adequately avails the emergence of internet as marketing medium. References Armstrong, L (1998). Can Nissan Regain Its Youth? Business Week, July 13, p. 132. Brassington F and Pettitt S (2006) Principles of Marketing 4th edition FT Prentice Hall Collins, C., Buhalis, D. & Peters, M. (2003) Enhancing SMTE’s business performance through the Internet and e-learning platforms, Education + Training, 45 (8/9): 483 - 494 Daneshvary, Rennae & R. 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