Marketing Report on Land Rover & Land Cruiser - Case Study Example

Business Report Marketing Report on Land Rover & Land Cruiser Type your name EXECUTIVE SUMMARY This report highlights the complete marketing strategy analysis including external and internal factors along with SWOT analysis, target markets and STP strategy of two products from the automobile industry which are Land Cruiser and Land Rover manufactured by Toyota and Land Rover Companies respectively. Land Cruiser has also already made its presence in the SUV car segment however the company is more focused on only the upper segment group of customer. The company adopts a price-quality strategy and should look to target the middle income group as well. This can be well achieved by adding new variants to their existing product and price their product based on competitive pricing and price penetration strategies. Land Rover emerges as the primary competitor to its counterpart Land Cruiser. The company still has huge market share vacant in Asian countries like India, Japan, China etc and design products accordingly to cover this market. The company should also increase it share by targeting the middle income and semi-middle income group. Since the company already has a brand reputation it should look to redesign its existing product category and follow a price penetration strategy to create a larger market share and generate higher profits. TABLE OF CONTENTS 1.0 Introduction 3 2.0 Company Background 3 3.0 Product overview 4 3.1 Land Cruiser 4 3.2 Land Rover 5 4.0 Strategic Marketing 5 5.0 Macro Environmental Factors 6 5.1 PESTEL Analysis 5 6.0 Micro Environmental Factors 7 7.0 SWOT Analysis 9 9.0 Market Segmentation 11 9.0 Target Market 11 9.1 Target Market of Land Cruiser 12 9.2 Target Market of Land Rover 12 10.0 Targeting Strategy 13 11.0 Positioning Strategy 14 11.1 Positioning Strategy of Land Cruiser 14 11.2 Positioning Strategy of Land Rover 14 12.0 Recommendations 15 13.0 References 16 1.0 Introduction The automobile has enabled people to travel from one place to another however in recent times automobile has captured a larger market segment ranging from necessity to luxury. The first automobile was invented and designed in Germany during the 1880’s which was powered by an internal combustion engine. Large number of competitors has emerged capturing different automobile segments like Toyota, The Land Rover Company, General Motors, Mercedes and many others. Asian market has emerged as global leaders in automobile manufacturing with major companies being located in Japan and China. Modern automobile manufacturing companies are more focused on developing products and providing services as per customer needs and requirements. This report looks to evaluate a complete marketing strategy for Land Rover & Land Cruiser which includes both external and internal factors affecting business, the targeted market and strategies implemented by two renowned companies. This is supported by an analysis of the positioning strategy and the manner the organization uses the different resources. The Toyota Land Cruiser is a four wheel drive vehicle manufactured by Toyota Company. It is one of the oldest products of Toyota and still is widely used and has immense vacant market yet to be tapped by the company. Similar to Land Cruiser this set of cars are very common worldwide and is manufactured by the Land Rover Company. It has been able to create a successful market of its own owing to its great navigation abilities both on road and off road (Jaguar Land Rover Limited, 2013). The car comes is different models and series meant for different market needs and aims at complete satisfaction of customer requirements in terms of mileage, luxury and price. The car is a part of Jaguar Land Rover group and a subsidiary of Tata Motors in India. 2.0 COMPANY BACKGROUND 2.1 Toyota Car Manufacturing Company Toyota Motor Corporation is of the largest car manufacturing company in the world with its headquarters in Aichi, Japan and several assembly plants all round the globe. It provides employment to over 3.25 lakh people worldwide and is the eleventh largest company in the world by revenue. The company was founded in the year 1937 and launched Toyota AA its first passenger car in 1937. The organization makes use of the latest technology and designs products as per specific target market keeping in mind consumer needs and demands. 2.2 The Land Rover Company The Land Rover Company has its headquarters in The Great Britain. The company has most reputed products in automobile industry of Range Rovers. The company is a part of Jaguar Land Rover group. Land Rover as a company only existed since 1978 prior to which it was a product line of the Rover Company. The company’s main objective is to deliver the highest quality of premium SUV cars worldwide and satisfy diverse range of customer needs. The company strives to become the leading manufacturer for off-road cars. 3.0 PRODUCT OVERVIEW 3.1 Land Cruiser The Toyota Land Cruiser is a four wheel drive vehicle manufactured by Toyota Company. It is one of the oldest products of Toyota and still is widely used and has immense vacant market yet to be tapped by the company. Production of first generation Land Cruiser began as early as 1951 as a version of jeep like vehicle. It is the Land Cruiser’s reliability and longevity that has made it very popular in the automobile industry. It is best suited car for both on and off road that makes it one the best vehicle for cruising in the terrain (Toyota Car Manufacturing Company, 2013). 3.2 Land Rover Similar to Land Cruiser this set of cars are very common worldwide and is manufactured by the Land Rover Company. It has been able to create a successful market of its own owing to its great navigation abilities both on road and off road (Jaguar Land Rover Limited, 2013). The car comes is different models and series meant for different market needs and aims at complete satisfaction of customer requirements in terms of mileage, luxury and price. The car is a part of Jaguar Land Rover group and a subsidiary of Tata Motors in India. 4.0 STRATEGIC MARKETING Strategic marketing is a process usually devised by the top management of the organization to concentrate on its available resources and develop strategies accordingly in order to optimize its production with a goal off increasing sales and achieving a sustainable competitive advantage over its other counterparts (Chrisan, 2001). The decision making team designs the best business practices to communicate with its targeted market and possibly attracting customers towards purchasing decision of a specific product offered by the organization.. Toyota car manufacturing company for its land cruiser variant of products follows a leadership strategy. A network of suppliers and subsidiaries along with partly owned companies are characteristics of the company to provide them with high quality components (Chrisan, 2001). The company has successfully moved its Land Cruiser from domestic walls to exports all round the globe. Customer satisfaction is the key element for the organization and the company spends huge funds to uplift and maintain the quality and performance of its products offered. The Land Rover Company has its own set of marketing strategies. It faces intense competition from Japanese company like Land Cruiser. The company has to re-design its marketing strategy to boost up the sales of its existing product to cover a larger market share. The company follows a market segmentation strategy and design product as per the specific targeted market. Availability of the product to every corner of the world is rightly considered and the top management makes marketing strategies accordingly to cover a larger market base and generate higher returns. 5.0 MACRO ENVIRONMENTAL FORCES Macroeconomic forces are forces which exist in the external environment and affect the business to a considerable extent and are usually beyond the control of any business. Not much can be done by an organization to eliminate these factors but to comply with the same. 5.1 PESTEL Analysis Political and legal: Government has great significance and influence on the character of a general business through its policies and regulations (Brassington and Pettit, 2006). Car vehicle taxes for instant are usually based on either engine size or fuel type and CO2 emission. Economic: The effects of economic and competitive environment are felt by organizations as it has a profound effect on both the business and its customers (Brassington and Pettit, 2006). Prices of Land Rover and Land Cruiser thus have to according to current economic climate, keeping in mind the demand and supply forces along with value for money. Socio-cultural: These elements require higher qualitative assessments and are difficult to measure and interpret since they are subjected to unpredictable changes (Brassington and Pettit, 2006). It is a true fact that cars are have become a necessity for majority of the population to travel from one destination to other, however automobile companies have to design products as per both necessity and luxury. Technological: In a rapid changing environmental world, companies at no cost afford to ignore the technological advancements. Technology indeed helps a product to be differentiated from others. Automobile industry constantly seeks to improve features of their product by changing from combustion fuel cars to fully automatically electric cars. Environmental: Consumers today look for eco friendly cars and it is important for car manufacturers to make products as per customer needs 6.0 MICRO ENVIRONMENTAL FACTORS Micro economic factors are forces which exist within an organization and it differs from business to business. Further these factors are under the control of an organization and it solely depends on management to identify such internal factors and optimize maximum efficiency through the same. A value chain analysis is discussed as under to highlight the micro environmental factors of both the company. Primary Objectives: Inbound logistics: Toyota has developed its services and products as per customer requirements. The company has installed a JIT technique which has helped the organization to achieve competitive pricing and determine minimum level of inventory (Cook & Dave, 2004). Whereas Land Rover has not installed a JIT technique owing to which the company faces huge blockage of funds in maintaining higher inventory level. Operations: Land Cruiser cars are meant for both off road and on road, which gives it a value added advantage. Both companies use a dual outsourcing technique of both outsourcing and in house mechanism (Czinkota & Ronkainen, 2004) Outbound logistics: Land Cruiser cars are manufactured in Japan and assembled in various other small assembly plants. Land Rover on the other hand are fully developed in house and transported to various parts of the world by means of heavy truck vehicles. Marketing & Sales: Both Toyota and Land Rover uses variety of promotional techniques to attract customers. Free test drive facilities are available. Further, customers can buy products on EMI through various authorized banks. Secondary Objectives Infrastructure Facility: Toyota has equipped itself with best set of machinery and entered into contracts with governments for smooth running of the business. Land Rover has recently announced to come up with new factory in Britain to ensure higher production and cover larger market (Czinkota & Ronkainen, 2004). Human resource management: Toyota employs over 3.25 employees for smooth running of the business. Land Rover has a separate HR department to hire the best from the market. Technology: Land Cruiser car are equipped with latest technology and comes in different variants from semi- automatic to fully automatic. Land Rover similar to Land Cruiser comes in different variants ranging from electric cars to fully automatic and semi-automatic cars. 7.0 SWOT ANALYSIS: SWOT analysis evaluates the strength, weakness, opportunities and threats of a specific organization. It helps an organization to access its position and convert and develop strategies to convert its weaknesses and threats into strengths and opportunities. 7.1 SWOT analysis of Land Cruiser (Toyota) Strengths Provides best features in class for an off- roader Amazingly spacious and provide better features for driver. Robust and muscular styling Huge demand of product in Japan, Australia, UK Weaknesses Limited availability of the product in American and European market. Strong competition in the SUV market means a lower market share. Opportunities Higher price SUV in expanding. Huge distribution and servicing network. Acquiring collaborations with automobile business entities to increase market share. Threats Intense competition with German manufacturers. New entrants in the same segment with new features at reduced price. 7.2 SWOT Analysis of Land Rover Strengths New ED4 2WD diesel engine to optimize fuel efficiency. Environment friendly features added. Great designs and variants appeal to a wide range of customers. Weaknesses Higher prices of Land Rover and varying with different colors. Lesser spacious when compared to other SUV’s in the market. Opportunities Bringing new celebrities such as Victoria Beckham, will spark an interest in more fashion-conscious consumers. Demand of SUV’s are increasing at a rapid pace. Increasing collaborations with new business entities to expand the existing market. Threats Tough competition from other existing brands. Changing consumer taste in the automobile industry from more fuel efficiency to stylish cars. 8.0 MARKET SEGMENTATION Market segmentation is the process of dividing the market into smaller fragments with respect to specific needs of the customers. It helps the organization to develop products as per the requirement of consumers in a specific market (Czinkota & Ronkainen, 2004). Markets can be subdivided on basis of various characteristics like demography, geography, demand and supply, consumer taste and preferences etc. Both Toyota Company and Land Rover targets the upper class segment or semi-middle class segment. Their products are more focused on luxury then on necessity. Land Cruiser and Land Rover are often regarded as signs of higher standard of living in the society. Automobile companies like Toyota and Land Rover also makes segmentation on basis of geography as their products are specially meant for higher performance in the terrain region on the world (Cateora, Mary & Graham, 2009). Further segmentation is done by the organization on basis of specific needs of the consumers. 9.0 TARGET MARKET Target market are the consumers which an organization specifically target and considers consumers of such market as potential consumers and make strategies and develop products accordingly to convert such potential customers into real customers. 9.1 Target market of Land Rover Traditionally the Land Rover Company targets the male upper class farmers customers to look around their estates. Land Rover is often recognized as the leading vehicle in the terrain regions of the world. This meant that the company itself has restricted its market share this is why there has been a large increase in the variants of Land Rover (Cateora, Mary & Graham, 2009). The company still has huge untapped market in the Asian market specifically countries like Japan, China, India etc. the company should look to target the semi-middle and middle class segment to boost up its sales and generate higher revenue. 9.2 Target market of Land Cruiser by Toyota Toyota is often recognized as a reputed brand. It has huge market share and covers a larger market. It has its presence in the Asian markets of India, Japan, China etc. however the company has a very limited market of Land Cruiser owing to lower price SUV’s in the targeted market. The company should try to bring more variants in Land Cruiser and target the middle class and semi-middle class segment rather than only concentrating on upper class group (Bateman & Snell, 2004). Land Cruiser are best suited for Terrain regions and the company should definitely try to make the car more suitable with advanced features to capture larger geographical region and ensure higher revenue and profits. 10.0 TARGETING STRATEGY Targeting strategy is the process of how an organization makes policies and strategies in order to tap its targeted market. These strategies are based on the nature of product, the industry being operated and competitors move. Targeting strategy may be undifferentiated, differentiated or concentrated based on specific needs of the consumers including other macro and micro economic forces like demand and supply, competitors move etc. Land Cruiser cars of Toyota focus on the needs and wants of consumers and compete on differentiation (price flexibility via the product, good quality vehicles with advanced features and brand management). A research says that that Land Cruiser was beaten by Hyundai Santa Fe which was more sleek in appearance and with better driving capabilities and on a market at a lower price is always rated as better value for money (Berkman & Gilson, 2001). Land Cruiser cars are more specifically designed for upper segments of the customer pyramid however the management in order to make its presence felt in the market and boost up sales should come up with a lower variant targeting the semi-middle class and middle class segment of the customer pyramid. Land Rover uses a mix of penetration and prestige pricing technique to target its upper class segment group of customers who are looking for a good value, appearance, greater fuel efficiency, high comfort and also appropriate cars. The company will keep on using penetration pricing for its Pure version of car targeting the elite group and use price differentiation strategy to create a new market in the semi-middle segment and middle segment group of customers in the customer pyramid. 11.0 POSITIONING STRATEGY Positioning strategy is the process of how an organization successfully places itself in its targeted market. It involves many different processes like branding, promotion etc to increase the loyalty of the existing and creating new customers towards the available products available in a specific targeted market. There are different types of positioning strategy like leveraging on existing brand, corporate brand positioning strategy, competitive positioning strategy, price-quality positioning strategy where fair value of price is matched with quality of the products. 11.1 Positioning Strategy of Land Cruiser Toyota for its Land Cruiser car uses price-quality positioning strategy with equal importance being given to brand reputation to increase the loyalty of its customers. Prices are fixed on basis of quality of the products keeping in mind competitors pricing policy and adding brand reputation pricing to the same. 11.2 Positioning Strategy of Land Rover Land Rover for its upper class segment uses brand image positioning strategy along with price-quality positioning strategy. However the company comes up with different variants like the base model being designed to target its new segment of salary classed middle income group of customers. The company provides facilities like EMI to make the product available to a larger segment of the market. 12.0 RECOMMENDATIONS Both the companies have been successful enough to create a brand equity of their own which indeed helps the organization to position their products in an easier way. Land Cruiser from Toyota has already made its presence in SUV segment however the company should come up with lower variants of the same to target the middle income group and boost up sales. The company should continue to follow its price-quality strategy and offer best product at fair price. Advanced features should be added to the existing Land Cruiser to get a competitive advantage over its rivals. Land Rover has still ample of market in the Asian countries. The company should stick to its policies of delivering premium products but should also target the middle and semi- middle income group of customer. The company should look to re-design its existing products and launch the same as the company already has brand reputation and customer loyalty will help the organization to achieve higher market share and increase profit to a considerable extent. 13.0 REFERENCES Berkman, H. & Gilson, C. (2001). Consumer Behavior Concepts and Strategies, Kent, Boston Brassingto, F. and Pettitt, S. (2006). Principles Of Marketing, Fourth Edition. Essex: Pearson Education Limited Bateman, T. & Snell, S. (2004). Management: The New Competitive Landscape. 6th Edition, McGraw Hill, New York Cook, D. & Dave, D. (2004). Structural element of service quality product. International Journal of Business Performance Management, 6 (2), 189-207 Chrisan, P. (2001). Marketing: A Behavioral Analysis, McGraw – Hill. New York Czinkota, M.R. & Ronkainen, I. A. (2004). International Marketing, 7th edn. South-WesternPublishing:Australia. Cateora, P.R. & Mary, C. G. & Graham, J.L. 2009. International Marketing, 14th edn. Irwin: McGraw-Hill. Land Rover. (2013). Jaguar Land Rover. Retrieved on August 1 2013 from http://www.landrover.com/gb/en/rr/about-land-rover/sustainability/ Read More