Analyse the marketing approach of Skoda Auto from past to future
Group: DW
Student name: Yuanzhi Cai (Celia)
Student No.: 0010896606
Date: 20/4/2017
Contents
a.) The executive summary
b.) Introduction
c.) Main body 1.) Branding and Brand Image 2.) Marketing Mix 3.) Target Market
d.) Conclusion
e.) References
a.) Executive summary As we know that Skoda has a long history and it entered manufacturing market in 1890. It started producing cars in 1905, at that time it was only car making company in Czechoslovakia (now the Czech Republic). In the 1980s the Skoda brand constituted the symbol of cheap and poor quality, so it often formed the basis of many
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Basing on the reasonable price, Skoda could not compete other brands of cars on style. In the early 1980s, company budget was so low for innovations and promotions that somebody has ever said that “trying to sell Skoda was something like trying to sell nuclear waste”. As the reason for these problems, Skoda’s brand image was not very well. There were 60% people who will never buy a Skoda because its looks are out-of-time and out of sync with its product image, according the previous market researches. Due to this brand image, Skoda has been talked in lots of jokes, for example: what do you have to do if your Skoda gets in the way of a swarm of killer bees? and the answer for this question was “stop pushing and take refuge in the car”. 2.) Marketing Mix Marketing mix is the combination of marketing activities in order to promote a particular good or service. There are four elements called 4P: Product (what will the business sell), Price (how much will the business charge), Promotion (how to get people to buy the product), Place (how will the product be distributed). Skoda was a struggling company until the early 1990s, it encountered low productivity, the lack of skilled labour, high debts and low sales etc. It was producing out-of-date and unreliable cars, which led to its brand to be the symbol of unreliability. As the reason for this, Skoda began to
They have specific qualities they search for in cars, like affordability, quality and durability. They are vey conscious about safety and low price, and don’t have brand loyalty.
Marketing mix -The marketing mix is commonly used marketing term. Its elements are basic, strategic components of a marketing plan. Which is mentioned as the four p’s, which include Price, place, product and promotion. More recently 3 more P’S have been added to the marketing mix which are people, process and physical evidence this is known as the extended marketing mix.
Toyota faced a challenge related to the poor visibility and low quality of a supplier for the Suprima model. The Japanese brand, being related to a top quality product and a Just in Time manufacturing scheme could not afford to have stock out problems nor not meeting consumers’ demand for quality.
Although Toyota invented this new hybrid vehicle more than ten years ago, it did not offer the car to the USA consumers immediately. The main reason was that Toyota was aware of the new technology challenges. While Toyota was on the market research and new product development, other companies were focusing on merger and acquisition. Brand recognition, technology changes and improvement take several years to finish and Toyota wanted to launch a product which has cleared all the possible obstacles such as space, efficiency, speed, safety, weight which can meet all consumers ' expectations.
Due to Toyota’s financial greed and unethical practice, vehicles were wrongly equipped with faulty brakes, sticking pedals and poor quality door looks, which caused death of many Toyota customers and hundreds of dollars in damages. When a company like Toyota acts in an ethically questionable manner, it causes the company to lose customers and develop a negative reputation. Customer tend to lose faith in the company and have to look for better service
The marketing mix is a combination of 4 P’s (product, price, place and promotion) that should be used in conjunction with each other to ensure a competitive edge over other companies. ‘The marketing mix is designed to produce mutually satisfying exchanges with a target market’.
Toyota used their own brand name and used “Made in Toyota” as a good remark for them. Toyota vehicles are popular for their longevity and reliability, quality, engineering, and value. Globalization is the process of interaction and integration within people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology on economic development and prosperity and on human physical well-being societies around the world. Incentives are used to generate sales during periods of low economic growth. Over the past five years, there has been a significant increase in the number of automobile financing companies being established in the BRICs. Key success factor in Toyota are Flexibility in determining expenditure, export market, efficient work practices, cost control, technology and technique, capacity utilization, supplier and
Skoda Auto Mobile Company was formed in 1895 in Czechoslovakia when Vaclav Laurin, a mechanic, and Vaclav Klemant, a bookseller, joined together to manufacture the bicycle later a motorcycle and then a four-wheel, 2-cylinder engine motor vehicle. Since then Skoda saw a lot of changes. It has improved its quality and has tried to change its perception in the minds of its clients.
Marketing mix is also called 4P’s of marketing .It can also be used to find existing market strategy. 4P of marketing represents:
Marketing mix is nothing but a critical mix of right amount of efforts and mechanism that is made up of the product that an organisation offers, market segmentation and the marketing strategy, selling the product at the right price and to the right customers through right people.
Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.
Marketing mix refers to the enterprise for their target market needs, control various marketing factors (product, price, place and promotion) to optimize the combination and comprehensive utilization, in order to accomplish better economic and social benefits (Chai, 2009, p.4). Place and product will be attached more importance in this section.
However, due to its unique targeting strategy, it has not win compatible brand recognition among the public. Although Audi enter much earlier than BMW and Benz in the luxury car market, its marketing strategy limited increase of public brand recognition even Audi has over 100 years’ history. Besides, although its styles are highly accepted by the targeting customers, there are a growing number of people who can afford luxury cars for family use in China. Lack of vitality is limit of its further market expansion. On the contrary, its major competitor in China, BMW, has launched a series of marketing strategies to promote its high-performance, manoeuvrability, as well as stylish design to attract young people (BMW, 2009) in order to expand its market share. Therefore, although Audi has achieved success in the targeting market, it may consider further development through diversification in product line and advertising campaign.
Mr. Toyoda, the current President, in fact, has challenged his company's engineers to make less dull cars. With this and other measures, mainly regarding the communication field, they are starting the path towards their reputation's recovering.
One potential threat for Volkswagen is that Toyota may respond strategically by also cutting its prices. However, given Toyota’s quality problems over the past year, they will not be able to lower prices, as this possibly would create the perception of lower quality.. First and foremost, Toyota needs to ensure it handles its quality problems to its customers’ satisfaction. The auto maker needs to ensure the public perception is that Toyota is being upfront, honest, and responsible in dealing with recalls and the