The Role of Marketing in the Success of Businesses: of Aston Martin - Case Study Example

Car manufacturer report – marketing plan of Aston Martin for the next 4 years 1. Introduction Firms that operate in the modern market need to constantly review their marketing practices making sure that their level of competitiveness is high compared to that of other firms that operate in the same industry. The role of marketers in the success of all marketing plans is crucial. In order to understand the role of marketing in the success of businesses around the world it is necessary primarily to present a general description of marketing as part of all business activities worldwide. In accordance with Kline (2005, 141) marketing represents ‘the relationship between sellers and buyers, generally companies and consumers, in a process that can be both cooperative and competitive’. All firms globally need to develop a viable and effective marketing plan that can support the firm’s performance in the long term. The marketing plan of a firm based in UK, Aston Martin, is presented below having put a specific limit to the time period covered: 4 years. The above firm operates in the British automotive industry (the firm was founded in England, London, in 1913) and has a significant presence both in the local and the international market. The marketing policies suggested for the next 4 years are expected to further enhance the firm’s performance improving its position towards its competitors. The main characteristic of the suggested marketing strategy is its co-development with a new strategic plan – the firm’s cars will address not only the very rich people but also the high percentage of consumers worldwide. 2. Mission Statement The firm is dedicated in the production of cars of high quality keeping the customers satisfied and meeting the demands of the market for innovative sports cars with strong cultural characteristics. In the future the expansion in new parts of the market is set as a priority trying to bring the firm’s products closer to the high percentage of consumers worldwide. 3. Overall Strategy adopted Up to now the firm has focused on the design and production of innovative and quite expensive sports cars. Because the automotive market has been differentiated – the market of the luxury cars has remained almost stable while the market of the less expensive cars of all categories - city, medium and large - has been expanded. For this reason, a new marketing strategy is proposed for the specific firm. This marketing strategy will be applied for a primary – trial period of 4 years. New cars will be designed and produced for the following categories: city, medium and large. Their price will be at the same level with the average price of similar models in the British market. The media and the press will be involved in the promotion of these cars while appropriate customizations will be made on the firm’s existing facilities and customer services in order for the new policy to be appropriately supported. Aston Martin currently belongs to Ford; in this context, any suggested organizational restructuring should take into consideration the firm’s position and its dependence on Ford. 4. Corporate and marketing objectives The firm’s overall strategy will be differentiated in accordance with the suggestions made above; in this context, the following issues should be addressed: a) customer services should be improved in order to meet the demands of the customers, b) IT systems have to be accordingly developed in order to be able to handle the increased volume of transactions c) existing facilities have to be expanded – addition of show rooms, storage areas and selling points across the country and d) branding should be incorporated in the firm’s existing marketing policies. The firm’s new marketing objectives will be: a) to reach the high percentage of consumers worldwide no matter their financial strength, b) to increase the volume of production, c) to keep the cost of the cars’ production at average levels (extremely costly materials could be used in the firm’s luxury cars only) and d) to expand the firm’s activities worldwide (establishment of branches and representatives offices or entrance in venture capital schemes). 5. Overall company positioning and targeted segments As noticed above, Aston Martin has been acquired by Ford in 1993. Since then the performance of the firm has been improved – the establishment of a new factory (in the area of Bloxham) helped towards the increase of the firm’s profits (see also Car Show UK, 2008). Especially since 1995 the firm’s production has been increased and today the firm owns a significant part of the specific industrial sector (British luxury cars market). The further expansion of the firm’s activities would be possibly achieved through the differentiation of its overall strategies within the framework described above. 6. Marketing policies and tactics: 6.1. Price The current prices of the firm’s cars are extremely high; after the application of the new strategic scheme the prices are expected to be decreased. The marketing strategy of the firm should then focus on the balance between price and quality that characterizes the firm’s products. As noticed above, the prices of the cars should be at the same level with the cars of similar characteristics in the British market ensuring the ability of a high percentage of the customers to acquire a firm’s car. 6.2. Products The firm’s products should be differentiated both at their quality and at their range covering the needs of consumers at all social levels. Currently, the firm addresses a specific market: this of the luxury sports cars; through the restructuring of its operations and the expansion of the targeted market the firm will address the public in general – a fact that is expected to further enhance its performance worldwide. The balance between the product, the cost of production and the firm’s profit will be achieved through the careful choice of suppliers, the intensive customer research and the application of an effective cost management. As for the promotion of the firm’s products in the British and the international market, this will be based on the general principles of marketing (the use of metaphoric schemes in the relevant advertising plans is possible, see also Thornborrow, 1998) taking into account the firm’s ability to respond to the needs of the specific advertising plans. 6.3. Promotion As noticed above, the promotion of the firm’s products in the market has to be developed in accordance with specific marketing principles. Differentiations could exist because of the particular characteristics of the automotive industry. In any case, the people involved in the above scheme as well as in the various parts of the sales process should be appropriately trained. The specific issue has been examined in the literature and it is suggested that there is a ‘relationship between the design of automotive sales compensation and the types of personalities and behaviors that commonly characterize salespeople in the auto industry’ (Gledinning, 2000, 47). In the case of Aston Martin, the entrance of the firm in new areas of the automotive industry – by producing cars of all sizes – should be highlighted through the advertising plans used for the promotion of the firm’s products. 7. How the tactics will support the overall strategic plan The effects of the proposed marketing tactics in the firm’s overall strategy cannot be precisely measured. In any case, the changes in the global marketing area are expected to influence the effectiveness of the firm’s marketing plans. In modern market, marketing has become customer – centric, a fact that can lead to ‘increased importance of marketing as a "supply management" function, customer outsourcing, cocreation marketing, fixed-cost marketing, and customer-centric organizations’ (Sheth et al., 2000, 55). Under these terms, the suggested marketing tactics are expected to support the improvement of organizational performance but they should be gradually applied making sure that the firm’s employees are appropriately prepared in order to meet the demands of the relevant project. 8. Financial Projections The cost of the attempted strategic plan is expected to be high; the cost of the marketing strategy required should be also high. But the profits that will follow the specific business initiatives are also expected to be significant. Ford can support financially the relevant effort – the profits results will pay back any investment made on the particular plan. 9. SWOT analysis and Porters Five Forces 9a. SWOT analysis The following issues have to be taken into consideration in accordance with the SWOT analysis scheme: a) The firm’s strengths: its position in the market, its brand name, the financial support from Ford b) The firm’s weaknesses: any firm’s initiatives have to be approved by Ford’s managers, lack of experience on the specific market (city, medium and large cars) – specialization of the firm on specific cars c) Opportunities within the local market: high demand for cars of all sizes that have a very good balance between quality and price, potential expansion in other markets (like the Gulf area where the luxury cars market is well developed) d) Threats: existence of strong competition in the specific industrial sector, global political and financial turbulences make any attempted business initiative risky – if there is no appropriate preparation in advance. 9b. Porters Five Forces In accordance with the specific model (see Figure 1, Appendix section) the following forces are expected to have an influence in the firm’s performance: a) the industry, b) the customers, c) the suppliers, d) substitute products and e) new entrants. The application of the above model for the evaluation of the effectiveness of the firm’s strategies could lead to the following assumptions: a) the automotive industry is a demanding one – Aston Martin has the support of Ford and any new strategic plan could be attempted with no particular fear of the risk involved; b) the firm’s customers are expected to be increased through the application of the new strategic plan (production of cars of all sizes), c) the firm should seek for additional suppliers that will be able to respond to the needs of the attempted plans, d) cars of low cost are available in the market – the issue of quality would be taken into consideration by customers before choosing a car and e) there is always the chance of new entrants in the specific industrial sector; the quality of the firm’s products is the criterion for potential customers to remain loyal to the firm’s products. 10. Conclusion In accordance with the issues developed above Aston Martin has a noticeable presence in the British and the international market; however the firm could further improve its performance if the expansion of its activities in other market areas (of cars of all sizes) would be attempted. In this case, the success of this effort would be highly depended on the marketing strategies used for the promotion of the firm’s new products. We could refer to the study of Shrum (2004, 111) who noticed that ‘marketers need to consider the potential danger of a backlash from consumers, especially where highly involved individuals are faced with placements in highly credible media’. On the other hand, Robertson et al. (1995, 547) stated that ‘because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability’. In other words, all business initiatives have many chances to be successful if they are appropriately prepared – the existence of a strong financial support would be proved valuable in case of failure or in case of delay for the realization/ profitability of the relevant strategic plans. In the case of Aston Martin, the marketing plans suggested – as followed by an organizational restructuring – could help towards the increase of the firm’s performance and the increase of profits for both the firm and Ford – under the control of which Aston Martin currently operates. References Car Show UK (2008) Aston Martin, online, available at http://www.carshowuk.com/aston-martin.htm Glendinning, P. (2000) Kicking the Tires of Automotive Sales. Compensation & Benefits Review, 32(5): 47-53 Kline, J. (2005). ‘Ethics for International Business: Decision Making in a Global Political Economy’. Routledge. London Porter, M. (1998) On Competition. Harvard Business School Press Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Sheth, J., Sisodia, R., Sharma, A. (2000) The Antecedents and Consequences of Customer-Centric Marketing. Journal of the Academy of Marketing Science, 28(1): 55-66 Shrum, L. J. (2004). ‘The Psychology of Entertainment Media: Blurring the Lines between Entertainment and Persuasion’. Lawrence Erlbaum Associates. Mahwah, NJ Thornborrow, J. (1998) Playing hard to get: metaphor and representation in the discourse of car advertisements. Language and Literature, 7(3): 254-272 Treise, D., Weigold, M.F., Conna, F., Garrison, H. (1994). Ethics in advertising: ideological correlates of consumer perceptions’, Journal of Advertising, 23(3), 59-70 http://www.astonmartin.com/home Appendix Figure 1 – Porter’s Five Forces model (source: Porter, 1998, 22) Read More