The Marketing Mix for Holden Captiva - Case Study Example

Marketing Mix (Authors Name) (Institutional Affiliation) Marketing mix Introduction Marketing mix is as a framework that a manager uses in decision making to make their products suit the consumer needs. It is defined as a set of factors, actions and tactics that are used by a company to promote the brand and the products of the company. The traditional marketing mix is comprised of a set of controllable elements referred to as the 4P’s they include the product, the price, the promotion and the place. The mix however nowadays includes factors such as packaging and positioning (Moller 2006). The 4P’s are combined to form a situation that meets the needs of the customers. The marketing mix is important because if successfully applied it is a source of great success to the company in terms of returns. The purpose of this report thus is to assess the marketing mix Holden Captiva. Product strategy The product strategy is described by the attributes and the features that are designed to satisfy consumer wants. It is a diverse concept that includes factors such as positioning, branding, service, packaging and product life cycle (Palmer 2004). Holden is a SUV that was produce in 2006 by General Motors. Holden derived its name from its sale in the Australian Market from the South Korean Division of General Motors. The SUV sells two brand names which are Opel Antra also referred to us Holden Captiva 5 and the Chevrolet Captiva also referred to as Captiva 7. The Captiva 5 is referred to by the name “Captiva Maxx”. It has many feature that range from interior designs, efficiency, safety and comfort. The cars cabin is full of stylish features such as the USB port with iPod compatibility, Mp3 player, air conditioning and leather wrapped steering wheels. Captiva 5 also offers safety features such as the electric park brake that is positioned in the centre console of the car and eliminates the struggle of pulling the hand break in risky cases. Moreover the vehicle offers high driving positions that allow you to properly see the road, cruise control features and also 6 airbags that easily deploy in the event of a head on collision. The captiva 7 offers more technological, safety and comfort features. The safety features include an electronic stability control feature that reduces engine power and applies brake pressure on individual wheels when it is about to skid thus ensuring the safety of the driver. It also contains the hill assist feature that prevents it from rolling backwards or forward on a hill. This feature works automatically keeping the vehicle stationary when the driver lets go of the brakes. The SUV also has six airbags that protect the driver in the cases of frontal collisions. It has the ability to release side impact airbags for the drivers and passengers as well. Captiva 7 also offers abundance of technological feature including MP3 compatible music players, touch screen malfunction color display, USB ports, Bluetooth connectivity for hands-free calling and music streaming, cruise control and rear packing assist feature. Captiva 7 also has a strong engine that ensures high performance. It has a 2.4liter 4 cylinder petrol engine and is also a 4 wheel drive. Holden continues to advance its manufacturing, design and engineering in Australia. It has spent up to $231 million on R&D in 2011 which was an increase from $179 million in 2010. Holden has also greatly increased its production to cater for the high demand for its cars. In 2011 its production was up 36.8 percent with over 90,424 cars produced. There was also a significant rise in engine production with over 101,019 engines produced which was a 2.9 percent increase from 2010. Common Holden Captiva features: Comfortable, stylish and Spacious interior Front and side airbags for saftey Electronic stability control system Positioning Positioning is similar to segmentation and its main aim is to target a certain group of customers. Positioning is characterized by the marketers emphasizing certain aspects of the product and ignoring those that are not appealing to its target audience. Holden has positioned itself as the leading car manufacturer in safety and power systems. Holden has thus developed a variety of superior engines and transmission lines that include the FII, the V6 engine and the advanced HFV6. Holden Captiva has invested in the various engines due to the rising demand of safety and performance in automotives in the Australian Market. Holden has also increased the comfort of its cars by increasing its interior space. It has five seats instead of the seven seats that is common of other SUV’s a) Branding A brand can be defined as the name, the symbol and the design that is used to identify and differentiate a product in the market. The brand is used by the consumers to distinguish between different products being offered in the market. Branding is therefore important to a company because consumers relate to brands and thus it becomes an effective advertising tool. Holden has for the past 26 years been sponsoring the Central District Football Club. The football club participates in the Australian National Football league thus Holden has successfully been able to strengthen the brand through the team. The fans that support the team also strongly prefer Holden vehicles rather than foreign vehicles Packaging Originally packaging was aimed towards protect the product against the risk of damage but over the years marketers have realized the importance of packaging to marketing. Packages have been used as an attraction tool to customers. Packages are now designed to be appealing and it is because of this that the marketers are greatly concerned about the perception of the package to the consumer (Wang 2005). Holden Captiva 5 design has been built to stand out from the other European SUV’s. It is bolder in the front with faster lines sweeping across its bonnet giving it a sporty athletic look. Its wheels are made of distinctive alloy wheels that give it a sporty look with front fog lamps and satin silver roof rails that allow you to carry extra luggage. The interior design is built to be spacious and comfortable. It is able to carry heavy and bulky cargo during vocational trips. The Captiva 5 also includes innovative passive and active safety features for example the front and rear parking assist that have audible warnings that allows you to park in tight parking spots. Figure 1.1: Captiva 5 Holden Captiva 7 on the other hand has a compact exterior with sedan-like manoeuvrability and is comprised rear fog lamps and a power side. It also has the rear park assist and a high ride height that allows it to get out of tight spots very easily. The interior has plenty of room with three rows of easily adjustable seats that allows it to accommodate for up to seven people Figure 1.2: Captiva 7 Product life cycle The product life cycle is defined as the period from which a product is launched into the market to its final withdrawal from the market. The evaluation and analysis of product life cycle is important because it enables the company to be aware of when to introduce a product in the market and when to withdraw it. The product life cycle is comprised of five stages. They include the product development stage, the product introduction, the product growth stage the product maturity and finally the product withdrawal stage (William 2004). The product development stage occurs when the company identifies and develops a new product in the market. This stage is time consuming and costly and is characterized by the company performing market analysis before the actual launch of the product in the market. The introduction stage involves the actual product launch. A successful introduction stage is characteristic of massive advertising and marketing. It is during this stage that the company develops distribution channels. Pricing the product is also reviewed during this stage. The growth stage is the take-off of the product in the market. Product differentiation is practiced during this stage as the company is focused in increasing its market share. The growth stage involves massive advertising and promotional activities with an aim of attracting a large customer base. The maturity stage is characterized by high returns from the product. The company at this stage has achieved its market share objective and is thus enjoying huge profits from its sales. This stage offers an avenue for extending the product‘s life by introducing new brands or altering the model of the existing brand. Advertising and promotional techniques in this stage are focused on communicating quality and reliability rather than attracting new customers. The withdrawal stage is the last and hardest stage of any company’s product. The company is faced with the decision of covering the market gap. The stage is characterized by declining market sales and the company narrowing its distribution channels. Holden is currently at the growth stage. This is evident by the increase in its sales and the fact that there has been a huge rise in the competitors in the market. Holden’s SUV sales volume increased by 7.5 percent in 2010 and stood at 244,136 units in 2011. There has also been a great increase in SUV’s in the market with Toyota and Ford producing cheaper and almost similar vehicles. Price Pricing is an important issue in marketing due to its close relationship with the product positioning (Avlonitis 2003). Holden prices include $27,990 and $33,990 for Captiva 5 and Captiva 7 respectively. Holden prices however are higher than those of its competitors. Ford which is Holden’s main competitor in the manufacturing of SUV is sold at around $27,000. This simply means that Holden does not hold any price advantage against its competitors. Holden sales however have been supported by the patriotic nature of its customers. Most customers consider Holden as a national brand and thus they prefer it over Ford. The main reason behind Holden high prices is because of the additional technological, safety and performance features that it has improved on. The various features that have been developed include the electronic stability control, hill assist feature, electric park brake and the rear park assist. All this features have been costly, however they have increased Holden’s competitive advantage. Promotion A promotional mix is a collection of factors that managers use to relay the benefits that a product has to its target market. A promotional mix is comprised of advertising, public relations, sales promotions, direct marketing, online advertising and personal selling (Larry 2009). Holden in 20th December 2013 launched an advertisement campaign titled “We’re Here to Stay” with the aim of assuring the Australian customers that the Holden Brand will remain in Australia. The campaign employed the employed the services of real customers, dealer principals, sales personnel and Holden employees as well as famous personalities. The campaign was launched in 20th December 2013 and ran all through to 30th December. It was advertised on TV, radio, outdoor, print and also through the internet via Holden channel on YouTube. Figure 2.1: We are here to stay campaign poster Holden recently employed a unique and innovative social media campaign to promote its vehicles. The activity involved unsuspected customers test driving Holden vehicles. Cameras were placed inside the vehicles and the actors played the role of dealership sales people. Each video was from a different Holden SUV that had different features. The campaign focused on real life usage of the SUV for example picking the kids from practice. The video collected more than half a million views on social media that is from Facebook, YouTube, Twitter and Google Plus. Distribution After successful production and pricing of a product the next step is distribution. Distribution is important because it avails the product to the consumers at the right time and place the consumer wants to buy it. There are two components to a distribution strategy they include distribution channels and physical distribution. Distribution channels are defined as the paths that a product passes through from the producer to the consumer. The channels are comprised of persons or smaller firms that function between the consumer and the producer otherwise referred to us market intermediaries. Holden has over 270 dealerships and service centers that are autonomous. Besides their independent dealers Holden has authorized stores that sell their product. These stores are geographically placed in 201 places. Marketing intermediaries perform multiple functions that include buying and selling the product and storing and transporting the product. Intermediaries are important to consumers because they provide them with the finances that are necessary to pay their employees and to buy new equipment. Budget Fixed costs are easily identifiable and can be easily controlled by the company. They include things like rent, transportation and management fees. Variable costs on the other hand include factors that are necessary for the production of the overall product of the company. They include factors such as ingredients and components (Harry 2003). Breakeven analysis in budgeting is an assessment used by financial managers in making pricing decisions for the company. Break even is calculated by dividing the total fixed costs by the unit contribution to the fixed costs. By comparing the market research estimates to the break even volumes the company is able to determine the final price of the product. Break even points can be calculated, by the formula Breakeven Point = Total Fixed Cost/ 1-Variable Cost per Unit/ Price Marketers use the breakeven costs to identify the losses and profits that would result from the final price. References Moller, K. (2006). The Marketing Mix Revisited: Towards the 21st Century Marketing by E. Constantinides. Journal of Marketing Management Palmer, A. (2004). Introduction to Marketing - Theory and Practice, UK: Oxford University Press. Wang, K. L., Wang, Y. & Yao, J. T. (2005). A Comparative Study on Marketing Mix Models for Digital Products, Proceedings of the First International Workshop on Internet and Network Economics (WINE'05), Hong Kong, China, Larry Steven Londre (2009) Marketing, IMC, Advertising, Promotion, Media and More Avlonitis G. (2003) Strategic Industrial Marketing, Stanoulis. William D. & McCarthy J. E. (2004). Product Life Cycle: Essentials of Marketing, Richard D Irwin Company, Harry F. Campbell (2003) Benefit Cost Analysis: Financial and Economic Appraisal Using Spreadsheets, Cambridge University Press. Read More