------------------------------------------------- SHANGHAI VOLKSWAGEN Prepared for: Global Marketing – Sam Guo Prepared by: Mario Marra Date: February 15th, 2012 ------------------------------------------------- Shanghai Volkswagen is loosing market share. Since we arrived to Chinese market we had a continuous growth, but in 1997 the market participation started to decrease. Today, in 2004, we have a market share of 16% substantially lower of the 51% that we used to have eight years ago. We also are loosing our position of leadership in the market. There are many causes why this is happening. First, China is growing but we are not. In the last years many of Chinese move from the lower class to the medium class. The …show more content…
Price is an important factor that consumers take into consideration before buy a car. We must to maintain our prices in the same line of our competitors. Our most important target in the next years will be young people who are having more income. We need to show our products in places where young people usually attend, like universities, young and fashion neighborhoods and in streets where youth used to frequent. Another important factor to succeed with our “Start from Zero” strategy is the promotion. Considering our target will be young people, is necessary to promote in the most popular TV shows that young people used to watch. Also we can advertise in fashion magazines and billboards in fashionable areas. Our recommendation to address this new strategy is: * Decrease our structure costs. We need to renegotiate with our suppliers. They need to understand that if we do not reduce our costs we are not going to increase our sales. This is important for them to maintain our commercial relationship. * Hire new creative and capable people to design the new cars. They need to work in team with SAIC because they know more the culture of the country. We also need to train in design issues our current employees that are working in manufacturing. * We recommend launch new models of cars, especially for young people. We need to design new, young and fashion models for our target as
This pricing strategy is notable in the vast majority of Toyota products, such as sedans and trucks. However, the firm also uses the value-based pricing strategy, which sets prices based on the actual and perceived value of the product. The company uses value-based pricing for high-end or more expensive products, such as the Prius and Lexus cars. This part of Toyota’s marketing mix shows that the company determines price levels based on market conditions and customers’ perceptions.
Chrysler has a small number of rivals in its market (Ford, GM, Toyota, Honda and Nissan) and as such will compete aggressively with others in the market and set their own prices in the process. They tailor their strategies towards their competitor’s reaction. Chrysler has done well with their branding which sets them aside from others in the same industry.
By promoting our quality, affordable cars we would be able to establish our name into the market as a key competitor.
The liberalisation of their markets and the mobilisation of 1 billion workers allowed huge wealth to be generated and huge disparities to develop. The biggest differences in China are between rural and urban areas, particularly between the megacities of the East and the ethnic rural areas of the East (Including Tibet), culturally there are huge differences with the Han Chinese having far more opportunities and wealth. The restrictions in China on rural to urban migration mean that rural dwellers do not have the same opportunities as those in the cities. China as a result has the largest disparity between its citizens, both economically and socially, It’s not just NIC’s that have huge disparities in wealth, MEDC’s such as the USA also suffer from widespread disparity, this was clearly seen during Hurricane Katrina where the majority of the dead were poorer Afro Caribbean communities who did not have access to education, information or basic transport. This is a problem across America where those who can engage with ‘The American Dream’ have access to huge wealth and opportunity but those born into poor areas statistically stay poor. The world’s largest economy should not have hundreds of thousands of homeless people on their streets.
By knowing the exact price to build each auto, they can then D’Antonio (2012) determine the profit margin they want and, that price is then referred to as dealer invoice. Moreover, Ford can then use a higher profit margin and publish that amount on the sticker and refer to it as Manufacture Suggested Retail Price (MSRP). Good-value pricing is not a good match for the auto manufactures, considering the fair price Pearson Learning Solutions (2014) method, this would not work for an auto manufacture as consumers are very loyal to brand. Some consumers would pay great amounts of money for a Ford F-150 and would not be willing to pay more than a couple thousand dollars for a Dodge or Chevrolet. Unlike the price of an everyday item such as a television used by consumer; there maybe be more than one in the home and different brands, most consumers prefer to drive one brand of automobile just different
In retrospect, luxury automobile makers advertising to youth may be a seemingly harmless alternative to gaining future customers. But on closer inspection, the problem may lie deeper. By luxury models creating brand loyalty so early one, it gives the impression that any person can own an Audi or BMW, when in fact that is not the case. Many people will never be able to afford this type of vehicle, but by instilling a desire so early on, may cause some to live beyond their means, meaning going into debt to own an Audi, and have a false sense of accomplishment. On the other hand, a teen may desire these cars, and dedicate themselves to working hard so that one day they be able to afford one. There is no way to tell whether this will have a positive or negative effect of the consumer, as the campaign is only a start to the reinvention of two brands that
Global COMPETITION in the industry: Global competition has expended in the auto industry because of an increase in global trade. This has resulted in the decline of sales in the American auto industry whilst sales in the Asian industry especially China has increased. In 2009 sales in the U.S. hit their lowest point meanwhile, it doubled in Asia generally, especially in China. (loc.gov. 2014). One of the reason for this decline in the American Auto sales is because the Japanese automakers have altered the U.S. manufacturing models and are selling it in the global market at a less expensive rate. The price and innovation is attracting a lot of customers’ to this part of the world leaving the American industry to suffer.
Promotion: The target market is young working professionals, the Toronto Star is the city’s most popular newspaper consisting of 10% to 20% of their readers being aged 25 to 35. As a result of the target market being working professionals most of them will read the newspaper, the ROM should run an advertisement in the business section for one week. This links to the target market since the advertisement would be in the business section of the newspaper, and they are most likely will read the business section over other
3) Environmental issues are also a main concern within the industry. This issues stems from two areas Gasoline and CO2 emissions. Gasoline a major factor pertaining not only to the consumption of cars but also the type of car that is demanded by consumers. While the United States gasoline prices are relatively lower than other nations, car producers world-wide are still producing different cars in the wake of high gas prices. The low emission car is the new fad in the industry and has jointly led to the production of the alternative resources cars. The combination of high gas prices and threat of damaging the environment from combustible engines has increased the consumer’s demands for automobiles to run off of alternative resources. This new development plays well into the strengths of GM because General Motors is already heavily devoted to R&D.
In early January 2012, Joseph Wierda, BMW’s X3 Product Manager, reviewed the latest sales numbers of the popular X3 Series compact SUV. He was, in particular, interested in the effects of BMW’s customization program called “Dream It. Build It. Drive It.” on both unit sales and overall profitability. This new integrated sales and marketing program allowed customers to create a fully customized BMW X3 SUV and have it delivered to their driveway in only a few weeks. The program scored some important points with the media. For example,
* To cut expenses in production and supply chain and making these processes more efficient
Yet, the car manufacturer was unable to strengthen its extremely weak technological capabilities. In order to do so, a joint venture between Volkswagen (VW) and SAIC, SVW, was founded in 1985 providing market access to VW and learning opportunities for SAIC. According to Thun, the Chinese manufacturer was operating with decrepit assembly plants, outdated equipment based on highly labor intensive procedures. Furthermore, it was embedded in an unfavorable environment lacking competitiveness and supplier (Thun, 2006). The government of Shanghai initiated a localization drive through tax methods, subsidized credits and monitoring (Nam, 2015). Nevertheless, it supported SVW through relaxed foreign exchange constraints and put effort into solving the problem of lacking suppliers (Nam,
Volkswagen Group, one of the leading automobile manufacturers in the world, has been on an impressive incline in the market with a continuous rapid international expansion. Unlike other reigning companies such as Toyota Motor Corporation
-Revenue growth and profits-Reduce the book cost-Increase direct cost efficiency-Implementation of new concepts-Establishment of new competent marketing-Achieve financial sustainability-Meet shareholders expectations
Although China is a growing country with increasing growth in per capita income and growth in the population, it cannot escape the huge changes from the outside world. The sub-prime crisis in USA and the world wide recession have made many countries including China slow down in growth.