Primo Motors Company - Essay Example

?Primo Motors Company: Hybrid Table of Contents Table of Contents 2 Introduction 3 Competitive Advantage 4 Segmentation 4 Targeting 5 Positioning 6 Conclusion 9 References 10 Bibliography 13 Introduction In present days, the customers are quite selective in their requirements and varied in making purchase decision of any product. It is impossible for any vehicle manufacturing organisation to successfully serve all customer segments in the extensive market. Therefore, there is need to segment the market into various parts where the company can perform effectively and compete with other rivals. On the basis of market segments, a company selects their target customer groups where it will position its products (Friedman, 2010). The paper will examine the extent to which an organisation can segment the vehicle market on the basis of customer requirements. In order to analyse the competitive advantages the marketing concepts of segmentation, targeting and positioning have been analysed in the paper. The objective of the paper is to develop a marketing plan for a vehicle manufacturing organisation in Midlands of the UK named Primo Motor Company, about how it can segment the small saloon and hatchback cars’ market and position the product. Competitive Advantage Segmentation The reason for segmentation of market is to understand the customers, their behaviours, their purchasing patterns and the criteria that are beneficial for gaining competitive advantage (The McGraw-Hill Companies, 2011). In the automobile industry, segmentation can provide benefit to manifest the requirements of target customers. It also assists in creating a correct forecast of possible reactions from every segment of the target buyers. As a result, it can help an organisation to develop promotional deals which are most appropriate for every customer group. Through proper market segmentation, Primo Motor Company can concentrate on the product, delivery, promotion and pricing system that satisfy the customer group. In the early phase there was no particular segmentation in the vehicle market. As the automobile industry has moved towards maturity phase the idea of segmentation has evolved for organisations. Now-a-days, sellers plan new techniques and variables to segment the automobile market (Deloitte Development LLC, 2011). There are four divisions in the manufacturing segment of the UK which are sports cars, small saloon and hatchback cars, medium and luxury saloon cars and commercial vehicles. The vehicle market is dominated by small saloon and hatchback cars which is suitable for family customer segment. In the UK market, it can be seen that different families possess different kinds of cars. The small saloon and hatchback cars are generally crazed by family customer segment. Thus, whole family takes part in choosing the type of vehicle they desire. The major determinants of small saloon and hatchback cars are the family size, cost of maintenance, brand, and price of vehicle. The type of family can determine the purchasing pattern of small saloon and hatchback cars. The flexible economy in the UK and existence of rich class families had changed the market for small saloon and hatchback cars. In present days, several middle class families can also afford those cars (Mitchell, 2008). Targeting Once an organisation classifies the market segmentation prospect, it needs to select how many segment it should target. Primo Motor Company can target those customer segments where it can compete with potential competitors. Primo Motor Company can consider five patterns of target market which are: Single Segment Concentration Through concentrating on single market Primo Motor Company can acquire a strong understanding of the target segment’s requirements and attain a strong market position. Besides, the company can also enjoy functional advantages through specialising in production, supply and promotion. If Primo Motor Company captures a leading position in the small saloon and hatchback cars segment, it can gain a high return. The hatchbacks are considered as best selling vehicles in the UK. These vehicles are designed in such a way so that they can satisfy the requirements of buying consumers (Trader Publishing Limited, 2011). Market Specialisation Primo Motor Company can focus on specialising in the small saloon and hatchback cars’ segment by serving several requirements of a specific target segment. In this way, it can achieve a strong status in serving that particular segment and thus this can become a passage to provide additional products which can be used by that specific section. Complete Market Coverage As a big vehicle manufacturing corporation, it is beneficial for Primo Motor Company to serve more than one customer groups. The company can use differentiated marketing which can generate more sales. To cover the market of small saloon and hatchback cars, Primo Motor Company will have to bear the following expenses: Product modification expenses Production expenses Administrative expenses Inventory expenses, and Promotion expenses The differentiated marketing can result in higher returns as well as higher expenses. (Badar & Rizvi, 2011). Positioning After deciding the targeting strategy, Primo Motor Company needs to define the positioning strategy which can allow the company to compete in the chosen target segments. When deciding the products for specific target markets, it is better to go through data regarding the brands before determining whether it is perfect for any segment to purchase or not (Social Enterprise London, n.d.). Perceptual Mapping The perceptual map is useful tool for positioning a product. Positioning is a managerial action to encourage customers’ insights and to secure a strong and unique position in the mind of target segment. Perceptual map offers a visual image of positioning movement (Oxford University Press, 2011). If Primo Motor Company is displeased with the accomplished position in the market, it can reposition the product. The objective of reposition is to shift customer’s opinion from a particular place to a new anticipated place. In order to generate a perceptual map, it is vital for Primo Motor Company to first describe the variety of competitive products. The perceptual map for small saloon and hatchback cars’ market in the UK can be divided as affordability and appearance. Source: (Rekettye & Liu, 2000). In the UK automobile market, several western vehicle manufacturing enterprises have established their regional industrial and assembly lines and others have developed a strong franchisee network. Almost every vehicle brand is available in the small saloon and hatchback vehicle market (Rekettye & Liu, 2000). The above perceptual map describes the changes in customer awareness of various models on the basis of affordability and appearance. These vehicles have higher market share in the UK and are common as well as affordable by majority of family customer segments. The target customers of small saloon and hatchback cars seek for lower maintenance cost, safety, price and convenience while purchasing vehicles (Scribd Inc, 2011). Conclusion To ensure that the marketing plan is effective, and makes the best utilisation of organisational resources, it is necessary to split the market into segments by customers who have similar preferences. Through proper segmentation, Promo Motor Company can understand clearly the requirements of the target customers. In order to increase the sales, the company should design the product offering which is suited for the middle level family customer segments. There are several other competitors in the small saloon and hatchback vehicle market and in order to survive, Primo Motor Company needs to decide appropriate marketing strategies for the specific segment for conquering over them. References Badar, U. & Rizvi, K., 2011. Identifying Market Segments And Selecting Target Markets. Scribd Inc. [Online] Available at: http://www.scribd.com/doc/3701196/Market-Segmentation-1 [Accessed December 03, 2011]. Deloitte Development LLC, 2011. A New Era Accelerating Toward 2020—An Automotive Industry Transformed. Documents. [Online] Available at: http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/A%20New%20Era_Online_final.pdf [Accessed December 03, 2011]. Friedman, H. H., 2010. Advertising, Publicity, and Sales Promotions. Economic. [Online] Available at: http://academic.brooklyn.cuny.edu/economic/friedman/mmadvertising.htm [Accessed December 03, 2011]. Mitchell, J., 2008. Ten Best Cars For Families. Forbes. [Online] Available at: http://www.forbes.com/2008/06/30/best-cars-families-forbeslife-cx_jm_0630cars.html [Accessed December 03, 2011]. Oxford University Press, 2011. Market Segmentation and Positioning. Principles of Marketing Management. [Online] Available at: http://www.oup.com/uk/orc/bin/9780199290437/baines_ch06.pdf [Accessed December 03, 2011]. Rekettye, G. & Liu, J., 2000. Segmenting The Hungarian Automobile Market Brand Using Perceptual and Value Mapping. 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Consumer Behaviour of Luxury Automobiles: A Comparative Study between Thai and UK Customers’ Perceptions. Essays. [Online] Available at: http://www.economicswebinstitute.org/essays/carthai.pdf [Accessed December 03, 2011]. Competition Commission, 1999. The UK Car Market. Reports. [Online] Available at: http://www.competition-commission.org.uk/rep_pub/reports/2000/fulltext/439c5.pdf [Accessed December 03, 2011]. Garling, A., 2000. Market Segmentation, marketing Communication Strategies and Electric Vehicle Drive. Chalmers University of Technology. [Online] Available at: http://www.kfb.se/pdfer/R-00-18.pdf [Accessed December 03, 2011]. The Stationery Office Limited, 2007. Success and failure in the UK Car Manufacturing Industry. House of Commons Trade and Industry Committee. [Online] Available at: http://www.publications.parliament.uk/pa/cm200607/cmselect/cmtrdind/399/399.pdf [Accessed December 03, 2011]. Read More