Mix for Consumer Vehicle Brands in the UK - Assignment Example

Mix for Consumer Vehicle Brands in the UK Introduction Marketing communication mix consists of a mix of five elements namely, direct marketing, advertising, Public relations, personal selling and sales promotion. In order to undertake a successful marketing communications plan the strengths and weakness of each element must be taken into consideration. The strengths and weakness of each element would give an idea as to find out the best possible channel of marketing communication. The company selected in this study is Skoda motors Ltd. Skoda motors is engaged in production of a number of products ranging from bicycles to cars. The company was headquartered in Europe and was the state carmaker in Czech Republic until it was acquired by the Volkswagen group. The company is engaged in the manufacture of three models namely, Fabia, Superb and Octavia. (Skoda, n.d.). Ford motors have been chosen as the competitor for Skoda. The choice of the competitor has been made on the basis that both the firms target the same audience. Literature Review Integrated marketing communication is an effective tool that is used for enhancing the brand image of a firm or a product. Philip Kotler (2006) defines marketing communications as a communication tool whose aim is to persuade, educate or to remind the customer segments about the company and its products. Gould et.al (1993) defined the term as a collective word which encompasses all types of communication that are utilized for brand building. These range from advertisement to customer service. Fill (2005) conducted a study on marketing communications and concluded that the marketing communications are mostly directed towards persuading people to try and use the company’s products and services. This is done using multiple sources like television, internet etc. Xavier, Larkin, Mehta (No Date) conducted a study to find out the effect of integrated marketing communications strategy on the consumer behavior of students which they make while making a decision to select an educational institution. (Xavier, Larkin, Mehta. n.d.). Petit and Brassington (2005) conducted a study on the promotional mix items. They concluded that marketing communication involves using all mediums of marketing communication tools towards conveying the message of the company to its potential customers. The designing of a marketing communication strategy requires a proper understanding of the targeted audience. This is important as the company is using its promotional tools to induce an interest into the consumer’s mindset. Hence a proper understanding of the consumer psychology and buying behavior is very important. Keller and Kotler (2006) studied the relationship between the consumer’s psyche and marketing communication strategies. They concluded that the efficiency of a marketing communication program is directly related to the level of understanding of the customer’s minds and attitudes that a firm has taken into account. Malik (2008) conducted a study on the marketing communication strategy of multinational soft drinks giants in Pakistan. The author concluded that the success of the brands in the country was largely due to the fact that they employed an effective marketing communication strategy. The success of this strategy was due to the fact that both these companies effectively studied the mindset of the customer while framing the marketing communication strategy. (Malik, 2008). Research Methods In order to understand the dimensions of the concept of marketing communications, a comparative analysis of the marketing communication strategy has been conducted. The companies selected for this study are Skoda Motors and Ford motors. The choice of the companies has been done on the basis of the targeted customer base of both the firms. The choice of Skoda motors has been deliberately done as the company used an effective marketing communication program to shed its image of being a low quality car manufacturer. Ford on the contrary has a good brand image and its marketing communication is targeted mainly towards enhancing its market share and reinforcing its brand image. The target market for this study is UK. The choice of UK assumes significance as it is one of the largest economies of the world and has a good market for cars. The study has been carried out using secondary data sources, consisting of research reports and other research work done on the topic. The study has the limitations of not conducting any primary research hence there is no account of the first hand market data. Moreover statistical analysis cannot be carried out due to lack of primary data over the topic. Analysis and Discussion Skoda was perceived as one of Europe’s most prestigious car makers until the outbreak of the Second World War. The communist regime and other political changes had a negative effect on the company. Skoda came to be perceived as a company that was engaged in the manufacture of poor and inferior quality of cars. The company’s strategic unit had to determine a strategy that would change the perception of the company. The company’s strategic unit decided to run an effective promotional program that would seek to change the positioning of the firm. The strategists believed that an effective promotional campaign would help the company shed its tag of being a low quality car maker. The promotional campaign was highly successful which could be verified from the fact that with a miniscule budget the firm achieved a high level of sales. In order to design an effective marketing campaign the company stressed equal importance on three elements of promotion namely, Direct marketing, Public relations and Advertising. These three elements formed the medium for the integrated marketing communication strategy of the company. The company was faced with the arduous task of shedding its tag of being a low quality car manufacturer. Moreover with a cut throat competition in the UK car market the problem assumes a more severe nature. The company decided to embark upon a four pronged marketing communication strategy. The strategists decided that the topmost priority of their advertisement campaign would be to shed the company’s image of a being a low grade producer of cars. The company decided to launch a promotional campaign which would carry a similar theme of promotion throughout all the geographies. The company announced a marketing tagline of “We Know What You Think about Skoda, but think again”. This tagline aroused the customers to think about the company in a different way. This was also strategically different from the strategy of one of its top competitors, Ford Motors, whose advertisement campaigns were directed towards product specifications. Their ad campaigns were directed towards displaying their strengths such as the traditions of the Ford family who were known as the makers of the “People’s Car”. (Ford Motors, n.d.). The second major strategic decision of Skoda motors was that the promotional campaigns of the firm were targeted not only amongst the present but also the perspective customers. Ford Motors on the contrary developed a web based advertising campaign which was designed by the company officials itself. These web pages highlighted the relative strengths of the different brand of cars in its product line. The third major strategic decision of the firm was that every campaign of the firm would be directed towards changing the perception of the company. The firm highlights the product as a central theme in its advertisement campaigns. Budgeting plays a very important role in deciding the effectiveness of a promotional campaign. It has often been reported that a higher advertising budget has a better effect on the target audience. This holds true for premium segment products like a motor car. Skoda had a comparatively low advertising budget by the industry standards. Its advertising budget was a meager four million pounds a year. The company decided that it would use the public relations channel to reach its targeted audience. This would also help the company is shedding off its low profile image in the business market. Ford on the contrary had a large advertising budget which was effectively presented to its targeted audience. It also had a high Public relations rating as the company featured prominently in various events. A high public relations rating meant that the company had a decent profile in the business market. Skoda also decided to manage its dealership networks effectively so that they are motivated to sell the company’s products. The company organized stage shows depicting the present stage of the company’s positioning and its planned marketing campaign to shed its tag of being a low quality producer of cars. This strategy worked effectively and the dealers started selling the products at a renewed vigor. Ford on the other had had a well established and motivated network of dealers across UK. The company’s policies were aimed at strengthening its existing dealer network to expand its reach into the market. Skoda also used the direct marketing communication to bolster its image in the minds of the target audience. Skoda used its Felicia brand in its advertisement campaigns. The selection of Felicia was based on the fact that it had the highest sales figure amongst the other brands of the Skoda product line. The company tied up with reputed advertisement firms to develop the ad content of the firm. The firm had three major aims namely, targeting customers to Skoda, reinforcing the brand loyalty of the firm to retain the existing customers and finally make an attempt to capture new customers. (Mixed Media, n.d.). The company maintained the idea and the advertising style of the ad campaign same throughout. The company tied many innovations in its marketing campaigns by adding new and creative content. Skoda came up with its new advertising campaign in the latter half of 2001. These campaigns were also aimed at bolstering the positioning of the company in the minds of the target customer. Ford Motors had a good brand appeal in UK. Its advertisement campaigns were mostly targeted towards strengthening its brand image and to take away a slice of its competitor’s market share. Conclusions The study shows the effect and the role of integrated marketing communications towards changing the perceptions of a company and its products. The sales volumes of Skoda’s products increased by about 33% after the implementation of the new marketing campaign. The company was faced with a problem of being positioned as a manufacturer of low quality cars. In addition the dealership network of the company was also facing problems. The company took up the use of integrated marketing communications to address its problems. They employed a three pronged strategy of using three components of the promotional mix. The advertisement campaigns of the company were mostly directed towards three objectives. The first was to address the issue of positioning of the company. The second objective was to strengthen the brand image of the company amongst its existing customers, and finally the last objective was to draw new customers towards the company and its products. It can be concluded that in order to change the perception of a firm in the minds of the customer, marketing communications and promotion plays an important part. It can also be concluded form the comparative study that the marketing communication objectives are not same for all businesses or organizations. Hence, while designing a promotional plan, organizations need to be highly specific while designing their promotional plan. Recommendations The company having succeeded in its promotional plans now faces many other issues like the promotion of a new class of luxury vehicles. The company now has to compete in a highly niche environment. In order to achieve growth in this segment the company must reinforce its brand image as it is the most important fact that customers take into account while making a purchase in this customer segment. The company must increase its advertising expenses so as to strengthen its brand image. It should also start venturing into the other elements of the marketing mix so as to take up full leverage of the other elements. Internet marketing is one area which has attracted considerable attention. This channel offers tremendous reach, and has a huge appeal and popularity especially in the developed and the developing countries. The company must also start towards increasing its footsteps beyond its traditional markets. It can venture into new and emerging markets like China, India to enhance its market share. In order to take up the advantage of low cost it can set up production units in those low cost destinations which would increase its operational profits. The company must strive towards applying innovations in production techniques like the application of six sigma in its production process. This would not only create operational excellence but would also create a sustainable competitive advantage of the firm. It must also apply ERP tools for proper integration in its supply chain mechanism. The company having shed off its tag of being a low quality manufacturer is faced with other challenges like strengthening its brand image. The company should conduct market surveys to find out the effectiveness of its marketing campaigns. It should remove the ads that are low in popularity with new ones that seek to promote the favorable image of the company and its products in the minds of the customer. References Ford Motors. 2009. Current Promotions. [Online]. Available at http://www.ford.co.uk/CurrentPromo. [Accessed on November 11, 2009]. Malik, O M. 2008. Marketing communication of Pepsi and Coca Cola in Pakistan!. [Online]. Available at http://74.125.153.132/search?q=cache:EpErBtNM24EJ:www.diva-portal.org/smash/get/diva2:37418/FULLTEXT01+Marketing+Communications+literature+review+site:org&cd=8&hl=en&ct=clnk&gl=in&client=firefox-a. [Accessed on November 11, 2009]. Mixed Media. 2003. How Skoda Used Creativity to increase sales by 27%. [Online]. Available at http://www.dandad.org/inspiration/creativityworks/pdf/skoda.pdf. [Accessed on November 11, 2009]. Skoda. 2009. About us. [Online]. Available at http://www.skoda.co.uk/aboutskoda.aspx. [Accessed on November 11, 2009]. Xavier, R, Larkin, I, Mehta, A. No Date. Selecting an IMC Career: Influences, Choices and Destinations. [Online]. Available at http://conferences.anzmac.org/ANZMAC2006/documents/Xavier_Robina.pdf. [Accessed on November 11, 2009]. Bibliography Kurtz, D L. 2008. Contemporary Marketing. Cengage Learning. Shimp, AT. 2008. Advertising Promotion, and Other Aspects of Integrated Marketing Communications. Cengage Learning. Read More