Perceptual Mapping on Positioning of the Brands - Assignment Example

Marketing Management Table of Contents Introduction 4 Segmentation 4 Based on the Price of the Car 4 Small Car/ Economy cars 4 Mid-Size Car 4 Large Car 5 Premium cars 5 Based on the Length of the Car 5 Target Market 5 Positioning 6 STP Model for the Car Segments 6 Maruti 800 6 Chevrolet Beat 6 Honda City 7 Mercedes Benz 7 Perceptual Mapping on Positioning of the Brands 8 Motivators for Buying Decision 8 The Marketing Mix Tools 9 Maruti 800 10 Chevrolet Beat 10 Honda City 11 Mercedes Benz 11 Conclusion 12 Reference List 13 Introduction The transport system is a symbol of technological and scientific innovation by mankind which fulfils one of the major needs of human in this fast moving world. The automobile industry plays a pivotal role in the financial growth of a country and is the essential element of surface transport. This is the industry that opens avenues for foreign trades, attracts global investments and exposes the country to international trading platform. The study focuses on the marketing activities employed by the automobile brands within the industry to launch of a new brand of car for the automobile sector. Segmentation It is the first step of the STP model where the customers possessing similar set of wants are grouped under a particular segment (Kotler, 2012). The market segments are not created by a marketer instead; it is identified and decided on which consumers to target. Mass marketing is different from segmentation marketing and the later is considered more beneficial in terms of market strategy. The organization can implement a much precise and targeted marketing mix in case of segmentation marketing. The automobile sector is classified into the following: Based on the Price of the Car Small Car/ Economy cars Although most of the developed countries are major hub for the premium cars, the growth rate of the budget car segment is also moving up the ladder as the consumers are becoming more aware of the financial and economic changes in the market leading to cost consciousness. The target customers of this sector are generally young adults and the retired consumers. Car brands which come under the small car segments are Maruti 800 and Tata Nano. The price of this car segment ranges from 2.5 lacs – 3 lacs (Kotler, 2012). Mid-Size Car The mid-size car segment price ranges from 3.5 lakhs - 5lakhs and the brands which are present in this segment are Hyundai Santro, Hyundai I10, Tata Indica and Chevrolet Beat (Kotler, 2012). Large Car The brands in the large car segment are Toyota Camry, Honda City, Nissan Maxima, Mazda 6, Chevrolet caprice, Mahindra Scorpio and Hyundai Verna and ranges from 5.5 lakhs – 15 lakhs (Kotler, 2012). Premium cars This segment constitutes to a very limited market, creating its own niche and the cars are all priced above 15 lakhs. The premium car segment targets the high income group and the elite classes. The car brands are Mercedes, BMW, Audi, Porsche and Jaguar (Kotler, 2012). Based on the Length of the Car A segment- The length of cars is less than 3.5 meters (Maruti 800, omni). B segment- The length of cars is between 3.5 meters to 4 meters (Maruti Zen, Tata Indica, Hyundai Santro). C Segment- The car’s length ranging between 4 meters to 4.5 meters long (Verna, Honda City, Ford Fiesta). D segment- Car length exceeding more than 4.5 meters long (Mercedez, Hyundai Sonata, Honda Accord, Skoda and BMW). Target Market The second stage of the STP model is the selection of the target market. It is the customer bases which are targeted by a company to maximise its profit and revenue. Targeting means analysing different segments of the market and identifying the specific customer group as well as the sub markets where the company should compete. The estimation of the specific segment and the target market is done by comparing the financial attractiveness of the segment with the company’s objectives and capital to invest. Emphasis is given on the size of the segment, the resources required for market penetration, the analysis of the micro environment of the company and external as well as internal competition in the product category. The segments are to be selected on the basis of its profitability, generation of valued customer and long term sustainability. Thus the positioning of a brand is dependent on the target segment (Bradley, 2008). Positioning The final step of the STP model is the positioning of a product or a brand. The product is positioned after the selection of the target market. The most important decision and action initiation taken by the management of the organisation is on positioning its brand and marketing it. The term positioning, is the proceeding of structuring the offerings of the business and its brand image in such a way that it occupies a specific position in the target customer’s mind. It means introducing a brand in a strategic way so that the consumer perceives it as superior and premium as compared to its competitors. Giving more value propositions to the consumers through market differentiation leads to efficient positioning. The organisation should be able to efficiently commune its brand positioning to its customers (Bradley, 2008). STP Model for the Car Segments Maruti 800 Segmentation: Maruti 800 is among the A segment cars and falls under the economic car market segment. Target Market: The target customers are generally the lower income group, middle class families and the retired personnel aged above 60years (Elliott and Percy, 2007). Positioning: It is positioned as the people’s car which is cost effective and fuel efficient with low maintenance cost. Chevrolet Beat Segmentation: The brand comes under the medium car segment and based on the length of the car it is a B segment car. Target Market: Primary targets are middle income professionals specifying on value for money and comfort whereas, secondary targets are college students desiring speed and style. Positioning: The car is fuel efficient diesel car, technologically advanced, having style and speed yet emphasises on a higher degree of safety (Kumar, 2009). Honda City Segmentation: falls under the C- segment, large car market. Target Market: Customers are from the age group 25-40 years looking for class, fashion, speed and style. They are the higher income groups desiring higher mileage, pickup and comfort. The target customers have a high sociological and esteem need (Dayal, 2010). Positioning: It is a semi luxurious car having a strong brand name and rich in technological innovation. I was the first car with hybrid engine (Berry, 2007). Mercedes Benz Segmentation: the premium car segment and grouped under the D segment cars. Target Market: The customers are elite class, CEO and higher management professionals of age group 30-60 years (Adcock, 2010). Positioning: It is the car for the class, highly reliable, rich in brand heritage, higher value proposition, rich in customer experience, stylish and technologically upgraded. Perceptual Mapping on Positioning of the Brands Motivators for Buying Decision The time taken by a consumer to decide on the purchase of a brand may vary. A consumer may not decide on purchasing a product in isolation and might make a buying decision on influence of friends or family. The level of involvement of people in influencing the decision increases, based on the complexity of the purchase decision behavior.The motivators or factors that influence a consumer buying decision are the cultural, social, personal and the psychological factors. A study of these characteristics is important for the marketers in order to plan an effective marketing strategy to position its products and attract target market (Kumar, 2009). Cultural Factors The buying decision is influenced by the culture and subculture of the consumer as well as its social class. These factors are inherent in the customer values, ethics which initiates its decision making behavior (Kumar, 2009). Social Factors These factors include the reference groups, friends and family of a consumer, who takes part in motivating and influencing the consumer buying behavior. It fulfills the sociological and esteem needs of a customer (Kumar, 2009). Personal Factors This denotes the demographics of the customers. The age, income group, lifecycle stage, occupation, opinions, preferences and personality all comes under the personal factor. These demographics initiate the level of consumer needs and satisfaction leading to a purchase decision. It helps in explaining the varied customer preferences in different situations and lifecycle stage (Kumar, 2009). Psychological Factors The psychological motivational factors include customer needs as explained in the Maslows hierarchy of needs, consumer perception, beliefs, attitude and learning. The Marketing Mix Tools It is a tool that is used to implement an effective marketing strategy. The brand is segregated into the 4Ps of marketing that is the product, price, place promotion. By analysing the 4Ps of a brand, the marketer can estimate the value proposition and the brand offers and gain a competitive edge in the market. Product: It is the tangible object or intangible in case of a service that is produced on a mass scale to deliver it to the target market. The intangible services are the hospitality industry or the tourism industry (Clifton and Ahmad, 2009). Price: It is the amount the customer is willing to pay for the particular product. The price is estimated based on its brand image, market share, competition, customer’s perceived value and the production and marketing costs (Clifton and Ahmad, 2009). Place: It represents the demographic location where the product or service is available and can be purchased. The place signifies the point of sales like the stores, shopping malls and virtual stores like E-commerce. Promotion: It leads to the advertising of the product by positioning it on the mind of the customers. Promotion is the form of communication that a marketer uses to promote its product’s brand image and value. The types of promotions are advertising, word of mouth, public relations and point of sales (Kapferer, 2012). Maruti 800 Product: The Maruti 800 is manufactured keeping the common man in mind. It is a low cost car giving value for money to its customers. Highly fuel efficient and has low maintenance cost. The other products of Maruti Suzuki are Alto, A-Star, Ritz, Swift, WagonR, DZire, Zen, Eeco, Ertiga etc (Kapferer, 2012). Price: Maruti 800 is the lowest priced car of Maruti Suzuki and competes with Tata Nano. Wagon R and Alto are also among the low price cars, whereas, the mid price car are the Zen and Esteem. Maruti Suzuki follows both penetrative as well as competitive pricing strategies (Chernev, 2010) Place: The distribution of the car is all over the world concentrating mainly in India, Middle East and East Asian countries. The company uses two level and one level distribution channels for its car. Maruti Suzuki initiates in distributing stores and service stations to remotest of the locations to enhance customer experience and satisfaction (Chernev, 2010). Chevrolet Beat Product: The Chevrolet Beat has established itself in the car segment it belongs. The brand offers differentiated features in order to gain a competitive edge. The car has set a benchmark in the global market by providing space, style, speed, power and safety thereby enhancing customer loyalty and preferences towards itself. The car has both the diesel and petrol versions providing its customers with brand variant. Price: The Company follows the competitive pricing strategy in the global market. The pricing strategies are planned on the basis of the competitive market structure and scenario. Place: Chevrolet has a large distribution network and is channelized all around the world. The car parts are exported to many countries and assembled in the respective countries which reduces operational cost and increases the brand value (Finish, 2008). Honda City Product: The major product features of Honda City that are attributed are its hybrid I-VTEC engine, performance, design, class and speed. Price: The Company follows competitive as well as premium pricing strategies providing its customers a sense of class, style and brand experience (Finish, 2008). Place: Honda is a worldwide brand having distribution channel spread throughout the globe. It has set up production plants in various countries all around the world and has strong sales channel providing complete service to its customers (Czinkota, 2007). Mercedes Benz Product: The Mercedes Benz is a premium car brand having a prestigious brand image and high brand worth. It provides high quality product with high technological up gradation, best quality customer service and a sense of superiority to its consumers. Price: The Company follows the premium pricing strategy for Mercedes Benz as it specifies on its brand value. Place: It has a high brand presence. It is a recognized brand throughout the world and has an integrated distribution channel positioning its brand as a premium brand creating a niche for itself. The company has sufficient production unit around the globe satisfying its customer needs. Mercedes do not go for car distribution dealers as they directly appoint showroom dealers to reduce distribution cost. The company has authorised showroom through which the cars can be purchased and provides customised customer attention. The showrooms are positioned in the most posh locations of the countries. It follows the lean distribution model, providing high margins to showrooms and dealers (Czinkota, 2007). Conclusion The report discussed and compared the marketing strategies of four different car segments in the automobile industry. The segmentation, targeting and positioning of the brands are analysed. The study finally estimated the marketing mix tools used by the car segments to plan its pricing and distribution strategies, to survive in the competitive market and earn higher revenues and profits. Reference List Adcock, D., 2010. Marketing: Principles and practice. London, Thousand Oaks CA: Sage Publication. Berry, L. L., 2007. Cultivating service brand equity. Journal of the Academy of Marketing Science, 28 (1), pp. 128-137. Bradley, F., 2008. International marketing strategy. London: Financial Times, Prentice Hall. Chernev, A., 2010. Strategic marketing management. London: Prentice Hall. Clifton, R. and Ahmad, S., 2009. Brands and Branding. London: Harvester Wheatsheaf. Czinkota, M., 2007. Marketing Management. London: Routledge. Dayal, R., 2010. Marketing Management. London: Thomson. Elliott, R. and Percy, L., 2007. Strategic Brand Management. Huntington, New York: Free Press. Finish, J., 2008. The essentials of marketing principles. Belgium: Peeters Publisher. Kapferer, N. J., 2012. The New Strategic Brand Management: Advanced Insights and Strategic Thinking. Oxford: Butterworth Heinemann. Kotler, P., 2012. Kotler on marketing. USA: Simon and Schuster. Kumar, S. R., 2009. Consumer Behaviour and Branding. New York: Wiley. Read More