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Market penetration strategy case study
Market penetration strategy
The impact of pricing strategies on the marketing of consumer goods
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Problem This Case describes the entry of 18th Car Brand in India i.e Volkswagen in India. It also describes the important role played of the team Volkswagen in India to achieve their market achievement. After its entry in Indian market it has reached to a total market share of 3.6% and planning to reach 5% by 2015 according to the Head sales of the company. The Company major problem is to how to market their cars to customers and with new Models and strategies in order to achieve more market gain in terms of their sales and market capturing in India among all the 18 Car Making brands available in India. It ranges from marketing of the Product, Competitors pricing, challenges towards their vehicles sales and services, New technology as per Innovations led by other competitors and adding features in their cars at lowers costs which cannot be matched by VW due to its import of vehicles in india 2. Costs of Fuel can play an important role 3. Government Rules and regulations may affect VW a lot Strategic Alternatives 1. VW should focus more on Pricing and after sales and services 2. Currently Maruti and TATA are having the best after sales services in india and the motor parts are easily available in india of these brands. 3. VW Should also focus more on adding more dealers and more car brands in order to capture more market segment 4. VW should focus on all categories ranging from low segment cars to high segment cards 5. VW Falls in Premium market segment, They can focus on other segments as well, by doing so they will have access of large pool of new customers Recommendations 1. Should focus on Make in India more. Manufacturing cars of all the brands in India will give access to more customers, more government subsidies as their manufacturing units will generate lot of employment in India and it will be a win win situation for both the company and local government 2. Indian car market is the 10th largest car market in the world with the annual sales of around 14,00,000 cars annually and it expect to grow till 4 Millon by end of Keeping their Marketing Campaigns as it is and keep creating the brand awareness through the print and electronic media in India. 4. VW should target smart users from Urban areas which has a high spending powers Conclusion Although VW was a late entry in Indian market but it still has a lot of opportunities in india. Being an German Brand it has acquired a lot of brand awareness among the customers in india. It’s new launch of cars and relaunch of cars, proper marketing of the brand has reached to consumers and can increase the sales
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
Perhaps the CAR could be initially launched in a small selected test market, stressing the dialogue with the customers about the value of the product and service. Afterwards, target pricing in pace with to the company’s strategic objective of a deft market penetration can beacon engineers to rebalance the technological features of the CAR. This also accommodates better for investors’ expectations of a fixed return. Moreover, it allows AUDI’s management to concert its pricing strategy and counteract unforeseen changes in the all too sensitive demand, as the link between customer value perception and product’s cost becomes alive. After all, relying solely on a forecast is not advised, as it cannot possibly capture all the dynamics of a fairly unknown market for a project which needs to age in the years to come.
Porsche came out with the models of 914 and 944 because they take the consumers with lower income into account during the recession of 1970s. They redesign, reposition and reprice the vehicles so that it is allow the consumers to purchase the product for the purpose of social class, family needs or status. With this, Porsche still able to create loyal customers even if the economic situation did affected their business when they have considered their customers’ personal income, savings and interest
It is no doubt that automobiles have become a way of life in the current society besides the transport sector contributing immensely to the economic growth of every cou...
Market Segmentation, Positioning and targeting for BMW 1.1 Introduction This report aims to examine the market segmentation, positioning and targeting of BMW (automobile company). BMW will be examined giving information about the company and where it is now and any recommendations that we feel are appropriate. 1.2 BMW Company Profile BMW was formed in 1917, from the merger of two small aero engine makers. Their famous blue and white symbol stems from the colours of the Bavarian Luftwaffe and is said to resemble the view of the one of their plane through a propeller. BMW is renowned for its sporty, sophisticated & luxury image which has been built up since the 1970's with many motor sport victories ranging from Touring Car to Formula 1.
Since the beginning of 2000, FAW-Volkswagen has grown rapidly in the face of international competition. Before 2004, the company used the traditional value-chain model, which is based on sales’ production (Mazen, 2010). This is a risky model for a company to follow in a volatile market. Use of the forecasting model provides, no analytical evidence to support different options. Both marketing people and financial management people are under great pressure to balance costs and profits. As a Chinese automaker, FAW-Volkswagen didn’t want to have a passive and disadvantaged position in the industry, so the R& D department began to analyze the build-to-order model of foreign auto manufacturers, and adopted a new value-chain model on this
The new business model proposed by Maruti Suzuki (BSE: 532500) will eventually lead to a case wherein the listen Indian entity will play key role in Marketing, Sales and after sales service of the cars manufactured by the new Indian subsidiary. On the face of it, the decision leads to zero capital investment for Maruti Suzuki in the new Gujrat plant which is expected to run to the tune of Rs.3000 crore till FY2017, and generate higher sales and profits in the current capital structure. The arrangement will lead to buying vehicles on a cost plus basis from the new subsidiary and the cost will be added with the cost of capital invested and reserve for expansion by the manufacturing entity. As Maruti Suzuki is the leading player in the segment the return on investment for Suzuki Motor Corporation will be higher compared to the royalty of 5.87% of the sales that is shared with the parent company currently. This new model will add up the dividend factor from the new ...
Audi is majorly owned subsidiary of the Volkswagen (VW) Group and is headquartered in Germany and operation in more than 100 countries. With the commitment the implement progressive technology and its technological ingenuity, by late 1990’s Audi became globally respected brand among luxury automakers. After its entry in luxury sector in early 1990’s, Audi leveraged its ingenuity and gained the competitive edge over the industry parameters of innovative design, safety and performance. Today, Audi remains focused on satisfying on customer needs by building a brand that exemplifies individuality, exclusivity and excellence.
With the global crisis and changing cultural, environmental views Porsche might need to move their products to different markets in order to hold their line. World is asking for less fuel consuming sports cars rather than fuel swallowing v12 monsters. Porsche customers we can say rather fans are moving for different brands with the change of views. Porsche has taken many actions by launching new products to the market recently but in order to market analysis they are lagging behind in sales. Porsche needs big boom in innovation like 1940's model 356 to battle the sports car
To explain the barriers of entry, let us take the example of America's best-selling SUV in 2014 which was the Honda CR-V, for the third consecutive year followed by Ford Escape. These two companies with their immense economies of scale are posing a high barrier to entry for their share of the market. Honda CRV is able to offer the better fuel economy and safety rating without incurring a loss and maintaining the majority of the market share. This makes it difficult for firms like Volkswagen who are leaders in Europe to enter this market.
All people around the world have made automobile as one of their most basic needs in their lives and automobile proves to be the most effective medium of transportation. In recent decades, either personal or public transportation have become more prevalent and more important for people to go to from one place to another which directly facilitate people to live in easy and convenient life. In addition, the fast development of the economy and the high obtaining power of its populace have made Malaysia the biggest traveler car market in South-East Asian Nations (Malaysian Industrial Development Authority, 2010). For that reason, the automotive industry has become one of the major industrial and economic
As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.
With today’s society being the new age of social media, Mercedes Benz has now reached a new high demographically. Websites such as Facebook, YouTube, twitter, and Instagram has jumped on the advertisement bandwagon. Mercedes Benz is now connecting with amazon also to create a whole new experience for the future. Their strategy is to aim for younger buyers through social and digital media influences. Its prestige and revolutionary approach is an example of how their marketing strategy has been very successful. The technology, safety, performance, and interior set its brand far away from other vehicles. Dating back to 1886 Mercedes Benz has a history of making history. Its motor trend has expanded from several different classes and the consumers love them all. These vehicles were designed to be very distinguished with high quality all across the
Schmidt, J. (2010, September 29). Strategy and targets of mercedes-benz cars sales and marketing. Retrieved from http://www.daimler.com/Projects/c2c/channel/documents/1931898_Daimler_UBS_Paris_DJSchmidt_Handout.pdf