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Q1.The auto mobile industry is very competitive as the technology is changing on a daily basis. The companies indicated below are among the premier auto manufacturing industries in the global market. They offer different automobiles from mini vehicles to huge transportation vehicles. The companies are Toyota Corporation Limited and Ford auto industry they both embrace the culture of mass production and advancement in technology as their strategies and will be discussed later on (Cho, 2004).
Toyota has developed dynamic capabilities and its consistent has made it the most profitable automobile manufacturer in the world. It mainly focuses on product launching simultaneously and this shortens the time to market. Its promotional strategies are wide and vast ranging from simple newspaper advertisements to TV adverts. The main reason Toyota is so common its unique promotional strategy. This is mainly done through its trademark motto the car in front is always a Toyota. Toyota has invested millions of shillings in advertising using their vehicles in popular TV shows that help keep the reputation of the company strong. This also reaches a wide target audience as more individuals are intrigued by things they see on the social media or movies (Toyota, 2005). The prius is an example of a model that was widely used in TV shows such as CSI Miami this is an example of a focused segmentation, targeting and position in United States alone. The other most common promotional strategy they use is sales promotions through road shows or show rooms. Toyota has over sixty plants all over the world this makes it easier to obtain a model without constraints of delivery. The company uses Product placement or embedded marketing in various sites including social media sites, constant blogs and general news in all industries (Cho, 2004) . The constantly have car wrapping campaigns that get employees to get a new automobile if they return or resell the new one.
Ford is a premier in automobile industry in terms of innovation, reliability and product quality. They have similar strategies as Toyota but are result driven and are capitalizing on awareness and interest in producing hybrid vehicles to get more customers. They rely on some levels in their strategic promotions. They tend to rely on manufacturers to promote the products directly from the industry this is done through internet advertising or interactive marketing or common way of advertising through television and news papers. The next level is by dealers to market the vehicles through sales promotions, conducting event shows, hand to hand pamphlets and in this entire strategies ford gives the customers prices of the products at discounts.
This are the basic strategies implemented by ford agents globally but there are other promotional strategies that give Ford an edge over rivals .They include :Hoarding which includes road side views of special features of a car to enlighten the non readers. Maintaining data bank, which dealers collect personal information of clients and potential clients and offer free updates on new items (Porter, 1980). Relationship marketing this is by giving clients a chance to speak freely on the dislikes or likes of a car. Through sales promotion or giving new clients free insurance and also show room sales where customers can get details on certain product. The sales promotion includes corporate sales where a company is given a personal meet and given the details of a product in person or Field sales where sales representatives look for clients through door to door or business to business sale of vehicles.
Q2. Competitive advantage is only gained when competitors cannot imitate or benefit off the companies strategies. It should also be able to maintain value to customers, not easily obtained, it cannot be easily imitate and no substitute good can easily be obtained. Marketing information is essential within the automobile industry as most industries are competing to get a competitive advantage over each other. Recently most Automobile companies are detaching themselves from the Australian market since it’s costly to establish a plant. They say information is the key to all knowledge and most automobile companies cannot risk having a financial crisis.
Cost differentiation strategy as defined by Michael Potter is a generic strategy that can give a great competitive advantage (Porter, 1980). A strategy that has helped Toyota to dominate the global market is pricing strategy as they saw demand for hybrid cars is on the increase because quantity might increase but prices decline and this will gain customers faster(Jones , 2009 ). This strategy is also implemented by wall mart which recommends it over skimmed pricing strategy. This can be done by building low cost manufacturing industries in several places to reduce cost and increase production.
Through mass production the company can generate funds from other plants outside the headquarters. This strategy enables a company to synergize demand due to spread plants all over .This helps a manufacturing industry to manufacture a number of models at low cost but increase market awareness. It is usually vital for a company to compete for consumer sales since like Ford industry economic conditions can deliver a hard burden to financial reports. Cost is almost everything and this has enabled Toyota to take 16% of market share in the USA because it has found an alternatively cheap method of transporting individuals. Cost competitiveness with General motors and Ford in their own territory (D, 2005). Although it is known that Ford main strategy is to use low cost to consumers and produce great leadership and development, Toyota embraced its strategy and used it against them.
Quality of a product determines if customers will be satisfied or not. Recently Toyota experienced change in sales due to recalls that made the loose 9% in the year between 2009 and 2010.This was mainly because the cars were not doing the job they were designed for and have faults that could cause harm. Quality is essential as the image of the company is mainly shown through the products they produce such is the case for automobiles. This year Chevrolet has recalled over half a million vehicles due to changes or faults, this will reduce their sales and it will put a negative image on clients. Scrutinize should be done on products material so as not to get negative publicity (Porter, 1980).
The product quality should also change annually because taste preference changes according to season. The product innovation gives a better competitive advantage. In recent years Toyota has become an imitator of products that include the Mark X the, SUVs and other models. This has not gone well for the other companies as it offers the same type of car at a relatively lower cost. This creates a competitive advantage mot in a positive way but it increases the profit ratio. It is also estimated that the greater the quality of a product the less the expenses when they are returned.
Q3. Consumer oriented promotions include retail promotions and consumer promotions. Its main purpose is to help build transactional sales promotion and brand sales promotion. The growth of consumer oriented sales promotion is vital in a company’s marketing strategy and programs. Its main objectives are to repeat purchase, introduce new brand, combat or disrupt competitor’s strategy, make larger purchases and contribute to marketing communications. Tools of consumer oriented sales promotion coupons such as manufacturer coupons which are used for transactional building. Sampling which are used for both transactional building and brand building and then there are premiums which are basically gifts awarded by companies to help an individual purchase a product or build brand name.
Transactional building in sales promotion is designed for short term productivity in the increase in product sales. Due to increase in consumer promotions it was established that competitors may increase consumer promotions because of its increased distribution channels. A company like Toyota uses its showrooms more frequently by holding events to sway in customers on a periodic basis. In this process retailers may counteract competitors who are aimed at one’s own customer by making special offer to retain consumers. In the year 2009 General motors’ reduced their prices and had a promotion to counter the move by Toyota in the industry this was only for a short while but general motors’ increased sales and Toyota reduced consumer sales.
Short term sales increases value of offers to consumers and temporarily increase product sales. Retailers may be forced to change price to make room for other product. Consumers tend to transact when they see a promotional offer. They are price oriented in both short term and long term in that they can wait until a promotion to purchase a product or randomly purchase a product due to a certain promotion. Inducements make a product attractive and transactional building depends on the need of the customer as per the promotion this has a short term effect as buy is on a limited period of time. Consumers do not purchase what they need but what attracts them in the promotion since price is always a factor.
Brand building sales promotion works to build brand loyalty which will eventually build brand values. This is a long-term strategy that strengthens relationships between consumers and the brands (Porter, 1980). They include long term brand building which is the sole purpose of the promotion. This is critical in automobile industries such as ford which has to retain is classy models and create a good brand image to its clients. Ford may use such a strategy to develop an attachment of consumers to fords brands. Ford has been in the automobile industry for a very long time. Such promotions will also assist general motors’ who have similarly be in the industry for a long time and this would create a long term orientation of brand. This can be done by offering promotional accumulating rewards to customers (Jones, 2009). The use of shopper cards might be useful as many individuals carry cards to shopping which is effective and efficient. These cards create loyalty and it can be used to retain customers over a long period of time. This is only applicable if the process is done over a long period of time .They may also use other brand building strategies such as free services to clienteles. It is important to keep customers happy by identifying their needs, by offering free service after purchase for a specific mile clients would swarm into your organization. Ford is one such company that has implemented a similar strategy by giving free insurance to new customers. This has enabled it to create a name in which clients are happy to be a part of.
Q4. Toyota has used cost advantage resulting from efficiency as used in Michael porter’s generic strategies. Toyota has also used low cost to gain competitive advantage in the automobile industry. It is estimated Toyota is the lowest producer and adopts the cost leadership strategy, to control suppliers and has the lowest cost service strategy. In terms of price Toyota has a price range in every country it sells to depending on the economic condition and strength of the dollar. Toyota cars are way expensive in France as opposed to USA .This price strategy helps identify the markets which will reap greater profits and help increase consumer sales. Example is SUVS are frequently bought in the USA as opposed to France this strategy enables a balance in the books of accounts providing an equilibrium (Cho, 2004).
Toyota adapts its price as per the economic situation and is always closer to the expectations of the consumers (D, 2005). It also sells its products to automobile dealers around the world this encourages sales and promotes product in host country. Automobile companies such as Ford and general motors’ could improve Toyotas strategy concerning the price they could offer similar products to other regions at a standard rate as opposed to the strategy implementation of Toyota. Toyota sells more vehicles to countries with higher GDP so as to increase profit through mass sale. The company also increases prices to developing countries so as to reach the minority who are wealthy. Ford can enter the developing markets and offer lower prices to the majority community increasing its mass sale and also standardizing its prices in developed nations. This would increase its profit tremendously because they would become adaptable to the local demand production.
Q5. The best medium of advertising depends on the region a company is to reach an audience. In less developed countries the newspapers and the radio are the most effective as they reach a majority of listeners and readers. In developing countries the Television, radio and newspaper are more common and in developed countries the internet, television and magazines (direct mail).Advertising requires on to reach a larger audience and market a product such a Toyota car model. This would require one to create an image for the product, give a price and when you want to get an immediate response. Toyota is based on promoting a product in the developing countries by encouraging price competitiveness (Porter, 1980).
The best medium to use for automobile would therefore be through Television. This will help a company create brand and product awareness within a short period of time. This will reach a wider range of audience and would be used as a medium of advertisement to all as TVs are in reach in developed nations including the less privileged. The visual action allows viewers to feel involved in both local service advertising and business to business advertising. This is an expensive medium of advertising but it is a high impact medium and through broadcast television one can purchase a product on the spot upon advertisement (Jones, 2009).
Reference
Soderquist, D. (2005). The wall-mart way: The inside story of the success of the world’s largest company. (pp. 152-160). Illinois: Thomas Nelson Inc
Hill, Jones, G. (2009). Strategic management theory: An integrated approach strategic management series. (9 ed., p. 41). Cengage Learning.
Porter, M. E. (1980). Competitive strategy: techniques for analyzing industries and competitors. Michigan: the University of Michigan.
Toyota (2005), HTTP;/Toyotacorporation.financialreport.co
