Marketing case Essay

Executive summary.

There should be a marketing strategy of the new entrant to the car industry in Wales. The current car industry in Wales is composed of such car models as Citroen, Nissan, Skoda, Vauxhall, Volvo, Volkswagen and Renault. These are sold by the car dealer Slaters.  On the other side of the market, WR Davies Motor Group is offering cars with such big brands like Nissan, Toyota, Citroen and Ford cars.  These are sold in the middle and Northern part of the island of Wales. Another car dealer is Old Furnace Garage which sells cars with brands like Peugeot, Renault and Citroen. This company is based in Gwent, Wales.  Further, the Rydale company is selling cars in Sutton Coldfield, Birmingham and Oldbury. The company is selling BMW cars to the general public. The new entrant can venture in the uncharted territory called Wales by offering the cars that are lower in price but offer the same features and accessories as a BMW.

The survey stated that people of the monthly salaried group would be willing to buy a car if it can be priced lower than the average car today in Wales. Thus, the new entrant will just implement a strategic marketing plan by advertising their car products in the radio, television and newspaper. The new car entrant would consume lower gasoline when compared with the gasoline expenses per kilometer or mile of a BMW or a Renault. Thus, the Wales market can easily be conquered even with the current car dealers are around. For, the new entrant in the car industry in Wales is simply filling a basic need of man. This basic need is giving him safety with the use of a low priced and low gasoline costing car.

 

BODY:

Market / industry overview.

The Demography of Wales, United Kingdom shows that

Demography
Population growing and ageing

Population in Wales
The people of Wales when counted in a Wales – wide census showed that there were about two million nine hundred thousand people in the year 2001. This population count indicates that people had only increased by one percent from the prior year. Even if the population of Wales  had increased slowly and is estimate to increase by the same percentage increase in the years that follow 2001. Also, statistical count shows that the people of Wales had reached two million nine hundred thousand. In fact, there was an increase of three hundred thousand people  in 2001 when contrasted by the population of 1951.

Further, more then sixty –seven percent of the population in Wales lived in the Southern Industrialized part of the country, specifically Cardiff, Swansea and Newport. Many of the population preferred to live in the cities in order to make a living. In the same light, many of the people living Urban centers. Furthermore, Wales has been segregated into many homogenous groups. And the population has increased through the years as shown by the graph above. Ceredigion has the highest population increase with its fourteen percent increase. Next,  Monmouthshire and Powys have population increase  averaging at six percent. On the other hand, the population of Merthyr Tydfil showed a population decrease of six percent which is lowest.

In terms of Age, the average age of the people in Wales is thirty four in 1981. Then it ballooned to thirty six percent in the year 1991 and later to thirty -eight years before the in the year 2001.  Also, the people that had jobs had climbed by two percent between the years 1991 and 2001. Meaning, the children that had ages below sixteen years had dropped by five percent during this same time period. Also, the people belonging to the eighty –five years old and above had increased five times for the past fifty years or simply fifty nine thousand old folks in 2001.  This is a significant factor because as the population increases, then the car sales to the elderly will automatically increase.

In terms of household composition, the year 2001 population census showed that there were one million two hundred thousand homes in Wales, United Kingdom. Also, the home where there was only one father or one mother had reached twenty nine percent in the same 2001 period. This was a sad increase from the twenty five percent group during the year 1991. Also, the homes that had a single parent with a dependent or more  had grown from its 1991 five percent rate to the higher seven percent rate in the year 2001.  This data was taken from the government  website: http://www.statistics.gov.uk/cci/nugget.asp?id=444.

 

Project statement

It is very profitable for a new entrant to the car industry in Wales.

Presentation of the information / activities collected.

 

Apply marketing concepts and do the following:
a.       Prepare product definitions in terms of core, basic, expected, augmented for various product lines etc.

 

The new entrant to the market will produce  Xcape car in the likes of James Bond. The current car brands sold in Wales are Citroen, Nissan, Skoda, Vauxhall, Volvo, Volkswagen and Renault. These are sold by the car dealer Slaters.  On the other side of the market, WR Davies Motor Group is offering cars with such big brands like Nissan, Toyota, Citroen and Ford cars.  These are sold in the middle and Northern part of the island of Wales. Another car dealer is Old Furnace Garage which sells cars with brands like Peugeot, Renault and Citroen. This company is based in Gwent, Wales.  Further, the Rydale company is selling cars in Sutton Coldfield, Birmingham and Oldbury. The company is selling BMW cars to the general public.

 

b.      Make an exhaustive list of products, brands in terms of concepts learnt by you and see if you can develop a comparator.

 

There are many products that would be nice to sell. One of which is food, clothing and shelter. These are the basic needs of man. Thus, there is a strong demand for such products.  On the same plane, people also need cars in order to travel from home to their different destinations like office, customers, suppliers, vacation and other reasons. But, there are already many stores that sell these products. Also, there are only a few car companies in Wales because it is very capital expensive to venture into this type of business. This is found in the link:

http://www.carpages.co.uk/results.asp?search=Citroen+Dealers+Wales

 

c.       Prepare the following in detail:

 

1.      Pricing matrix;

 

The new entrant company that is being hired to research on what should be the selling price of the X Cape.

 

 

 

2004 BMW M3   £20,000. Furthermore, the client is only interested in entering and establish a foothold in the Wales market. The company will be selling types of brands, Make/Model:  BMW 3-Series, Year:

 

http://swanac.local.thesun.co.uk/vehicle/-/make_bmw/

 

 

2.      Distribution channel network;

 

According to some quarters, the cars are well taken care of. For, they are constantly cleaned and canners has been established.  Market parameters in terms of demographics. For the entire working population of Wales are the targeted car clients.

 

3.      work;

 

The sales network is composed of the sales managers and the sales people servicing him or her. Advertising the car products in the radio, television and newspapers should be immediately used.

d.      Prepare a document of your findings and observations

The BMW car in the United Kingdom has set up three of its car manufacturing plants in

the United Kingdom. The remaining fourth manufacturing plant remains  outside of the United Kingdom.  The three plants in the United Kingdom will be producing its mini. The research here shows that the company’s three manufacturing facilities will be implementing its new body in white technique in producing its mini cars. The body in white procedure is used in the painting and final assembly department of BMW.

 

Also, the article Triangle shows as well that Mortimer, J., BMW Creates Production “Triangle” in the UK to manufacture the new Mini, Industrial Robot: an International Journal, Vol. 34, No. 1, 2007; pp. 26-31, Emerald Group Publishing. And, (Mortimer, 2006) For, the Jaguar(ibid) shows that the car manufacturing companies use robots in the manufacture of cars. The Jaguar cars are made in their plant located in castle Bromwich, United Kingdom.

 

In another story, this research shows that there is a significant relationship between the increase in car sales and advertising through the media(Esteve, 2006). The study shows “the existence of long-run equilibrium relationships in all six market segments, although in four of them the relationship is not stable. In another finding, there have been structural changes in the car industry in the 1970s and the 1990s. In another research study, the researchers discovered that the exchange rate fluctuations affects the net cash payments to suppliers or cash receipts.

e.       Analyse using SWOT

 

Strengths:

The new car entrant to Wales car industry would be build like a BMW but it will cost like a Toyota car. The new car would save on gasoline when contrasted with other cars.

 

Weaknesses:

It is still new in the market and thus will have a steep hill to climb because the current competitors will do their best to outmaneuver the new entrant to the Wales car market. A new entrant will always have to double its efforts in order to increase their market share in the nearest possible time.

In addition, The United Kingdom Car Industry in 2002 has been described like walking through  a thorny  uphill climb. The article “ What’s Left of the United Kingdom Car Industry”, March 21, 2002, BBC News London confirmed that such fears were well founded.

 

In fact, Ford has folded up its car manufacturing facilities in Dagenham. Vauxhall has also followed the footsteps of Ford by closing down its Luton car manufacturing facilities.  In another situation, the  business climate in MG Rover’s Longbridge car manufacturing facilities has grown tense.

 

The industry’s slow decline from its 1960s heyday has in recent years been accelerated by a fall in export demand owing to the Euro’s weakness against the pound.  On the other hand, this bleak outlook for the United Kingdom car industry could be pessimistically analyzed. Positively, although the European Car output had decreased by nine percent in 2001, the current 2002 car output had still reached the one million five hundred thousand units that hit the car display centers.

On the side of Ford, it has closed its car manufacturing facilities in Britain even though it still maintains Britain as its number one facility for the production of Ford Engines, specifically in Bridgent. Also, Ford has invested £240,000,000  in its facilities in South Wales to  produce  V6 engines for the very popular Jaguar cars. This will eventually open up five hundred news car manufacturing jobs in South Wales. Also, one thousand new workers were hired in  its  East London facilities before it had to close its doors to stop the continued losses from its day to day operations.  Meanwhile, its Enfield facilities are harnessing the research and development talents of over one thousand employees while its Southampton car manufacturing facilities are putting into full use its Ford Transit Van.

On the other side to coin, Jaguar has been making with its countless success stories in the United Kingdom car industry for the past four strong years.  As proof, the company has been selling units exceeding one hundred cars in the year 2001 alone.  In addition, its Aston Martin has also been a money earner for Ford, United Kingdom. With its purchase of the Land Rover car type from car industry Arch rival BMW, its research and development will continue at a faster pace.

Asian car brands also are eating away at the European and Wales car market.  In fact, Honda has proudly announced that it will increase production of its CR –V four wheel drive cars with a new infusion of  £130 million cash outlay. And, over three thousand workers are producing car spare parts and the cars themselves for the Accord and Civic cars.  Further, Nissan has set up its state of the art car production facilities with the help of over five thousand production workers. This Nissan facility alone can muster its men and machines to produce three hundred thousand cars in one year.  To survive, the company has literally cut car production costs by an average of thirty percent by replacing its current car parts suppliers in order to buy the parts at lower costs. Lastly, the Toyota car brand  has set up its mass production facilities in  Burnaston, United Kingdom and its Deeslide, Flintshire, United Kingdom brand with more than two thousand eight hundred workers to mass produce the company’s Avensis and Corolla car brands. Toyota last year said it would hire an extra 300 workers and increase production by 30%, in an attempt to make better use of idle production facilities. It aims to increase UK production of the Corolla model from the current level of 170,000 cars to 220,000 vehicles a year.

 

 

In addition, Coventry from France is known for its Peugeot 206 models where there are over three thousand five hundred employees working to the tune of making cars the entire twenty four hours in one day and  seven days a week. To reiterate, the Rover car brand  was sold by BMW because it could not make a complete turnaround due to the poor as well as unprofitable demand the Rover cars. Also, the United Kingdom has been known the world over for its very popular cars like Rolls Royce, Rolls Royce has been bought by BMW in order to synergize its car sales and net income.

 

Opportunities:

The new car company will be able to offer its low priced car to people who belong to low salaried people. Normally, cars like BMW can be bought only by the rich people. The new entrant will be able to enter into a joint venture with another company in order to save on building rent costs and other manufacturing, selling and administration expenses.

 

Technologies:

The new car will have state of the art accessories. One such innovation is for automatic driving. Also, another innovation would be tires that are so thick that it would last five times the normal life of an ordinary tire.

 

f.       Porters’ strategies,

 

Porters’  Strategies include the following:

 

Segmentation Strategy.  The company will target clients that belong to the

working class. To achieve this goal, the company will offer a five year

installment car purchase plan. The cost of the new car would definitely

be lower than the prior equipment.

 

Cost Strategy. The company will lessen costs to manufacture the car. This

can be done because the new entrant company hires an expert

determine which costs can be reduced, eliminated or maintained so that

the net income will increase and the researcher do not have to with a

differentiation Strategy. The company will supply the changing client’s

car and car accessory needs.

 

Conduct a field study and do the following:

a.       The Field study is required for checking out or confirming all that was analyzed and closing gaps in information / data collected by you. For this you need to design questionnaires separately for the companies, channel members and the consumers respectively. You need to meet with 3 to 4 companies; 7 to 10 channel members; and 20 to 25 consumers.

 

Field Study:

 

3 companies, 7 channels, 20 consumers. Eighty percent of the people surveyed preferred to buy from the old suppliers (because they were satisfied with the prior car supplier’s job.

 

The BMW car in the United Kingdom has set up three of its car manufacturing plants in the United Kingdom. The remaining fourth manufacturing plant remains  outside of the United Kingdom.  The three plants in the United Kingdom will be producing its mini. The research here shows that the company’s three manufacturing facilities will be implementing its new body in white technique in producing its mini cars. The body in white procedure is used in the painting and final assembly department of BMW.

 

Also, the article Triangle shows as well that Mortimer, J., BMW Creates Production “Triangle” in the UK to manufacture the new Mini, Industrial Robot: an International Journal, Vol. 34, No. 1, 2007; pp. 26-31, Emerald Group Publishing. And, (Mortimer, 2006) For, the Jaguar(ibid) shows that the car manufacturing companies use robots in the manufacture of cars. The Jaguar cars are made in their plant located in castle Bromwich, United Kingdom.

b.      Critically evaluate the products following an outline of the following factors:

c.       Firms’ differentiation of its products/service.

 

The new car entrant to Wale will have a high probability of selling  their low cost car like hotcakes because the customers can save on gasoline money. Likewise,

Recommendations for a new entrant.

The new entrant should forcibly barge into the competitors’ uncharted territories. For our world is a survival of the finished;

 

CONCLUSION.

Market assessment. Based on the above findings, it is best to venture into a car business according is caught ill –equipment to uncharted territories. For, there is a strong need for a new car that will save gasoline. Especially among the poor or average firm

 

g.      Prepare a document of your findings and observations &

 

The BMW car in the United Kingdom has set up three of its car manufacturing plants in

the United Kingdom. The remaining fourth manufacturing plant remains  outside of the United Kingdom.  The three plants in the United Kingdom will be producing its mini. The research here shows that the company’s three manufacturing facilities will be implementing its new body in white technique in producing its mini cars. The body in white procedure is used in the painting and final assembly department of BMW.

 

Also, the article Triangle shows as well that Mortimer, J., BMW Creates Production “Triangle” in the UK to manufacture the new Mini, Industrial Robot: an International Journal, Vol. 34, No. 1, 2007; pp. 26-31, Emerald Group Publishing. And, (Mortimer, 2006) And, the Jaguar cars that are produced  are using robot technology in the production or welding their world famous robots.  The robots “intelligent adaptive metal inert gas (MIG) welding process incorporating laser diode measurement of the gap in the joint between the aluminium C-pillars and the aluminium roof structure of its new XK sports car that is being built in the company’s plant in Castle Bromwich, UK.”

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Furthermore, (Esteve, 2006) stated that  advertising the car products in the tri media increases sales. The Tri media includes advertising through the radio, television and the newspapers. In our jet age, advertising also includes internet advertising.  Further, The Pricing Strategy of the company (Irandoust, 2005). In another venue, Comparing the customers’ readiness can be stressful to the employees.  In another study, the prospective customers of car dealers and manufacturers  were found to be ready for  mass customized cars when they  were surveyed  in Turkey as well as the United Kingdom(Bardakci, 2005) And, the car industry(Donnelly, 2005) in the English West Midlands showed(Donnelly, 2005) shows that the automotive industry is continually changing its course. For one, the car manufacturing facilities had been declining in activity because the economic shift has been to the luxury sector. Meaning, the supplier side of the car industry in the United Kingdom would have to neutralized by new technologies in the car cluster industry.    Also, BMW plans to enter into a mini version of the BMW. This is another competitor’s move to retain its share of the car industry market(Mortimer, 2005).

In conclusion, the new entrant will just implement a strategic marketing plan by advertising their car products in the radio, television and newspaper. The new car entrant would consume lower gasoline when compared with the gasoline expenses per kilometer or mile of a BMW or a Renault. Thus, the Wales market can easily be conquered even with the current car dealers are around. For, the new entrant in the car industry in Wales is simply filling a basic need of man. This basic need is giving him safety with the use of a low priced and low gasoline costing car. And, there is a wide gap between car supply and Wales population demand thereby making it a profitable venture to enter in a new car market territory like Wales.

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BIBLIOGRAPHY:

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Triangle shows as well that Mortimer, J., BMW Creates Production “Triangle” in the UK to manufacture the new Mini, Industrial Robot: an International Journal, Vol. 34, No. 1, 2007; pp. 26-31, Emerald Group Publishing. And, (Mortimer, 2006) For, Mortimer

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Mortimer, J., Jaguar uses adaptive MIG Welding to join C pillars to an aluminum roof section in a new sports car, Sensor Review, Vol. 26, No. 4, 2006;pp. 272-276, Emerald Publishing.

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Esteve, V., Requena, F., A Cointegration Analysis  of Car Advertising and Sales Data in the Presence of Structural Chang, International Journal of Economics of Business, Vol. 13, No. 1, feb 2006; pp. 111-128, Routledge Publishing

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Irandoust, M., Hatemi, A., Pricing Strategy, mark up adjustment and foreign competition in the car industry, International Journal of Automotive Technology and Management, Vol. 5, No. 3, Nov 2005; pp. 305-318, Inderscience.

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Bardakci, A., Whitelock, J., A Comparison of Customers’ readiness for car mass –customisation: Turkisk vs British Customers, European Business Review, Vol. 17, No. 5, 2005, pp. 397 -410, Emerald Publishing.

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Mortimer, J., BMW moves to an integrated solution at Oxford, Industrial Robot: An International Journal, Vol. 32, No. 4, 2005; pp. 312-313, Emerald Publishing

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Morgan et. al., The Multinational Firm, Oxford Press, New York, 2003

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Thompson, A., Strickland A., Strategic Management, McGraw-Hill, N.Y. ; London,  1999

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Hunger, J., Wheelen, T., (1996), Strategic Management, New York, Addison-Wesley

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Hesselbein, F., Conversation with Peter F. Drucker ; Peter Senge, Leading in a Time of Change, Wiley Co., N. Y., 2001

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Papows, J., Enterprise.Com, Perseus Books, N.Y., USA, 2002

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Hughes et al., Transform Your Supply Chain, Thompson Press, London, 1998

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Sussland, W., Connected, A Global Approach to Managing Uncertainty, Thompson London, 2000

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Brooking, A., Intellectual Property, Thompson Press, London, 1998

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Holmes P., Investment Appraisal, Thompson Press, London, 1998

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Campbell, A., Luchs, K., Strategic Synergy, Thompson Press, London, 1998

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Irwin, D., On Target, Achieving Best Business Performance, Thompson Press, London, 2000

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Campbell A., Luchs K., Core Competency-Based Strategy, Thompson Press, London, 1997

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Churchill, G., Peter Paul, J., Marketing, Irwin Press, Massachusetts, 1995

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Berkman, H., Gilson, C., Consumer Behavior Concepts ; Strategies, Kent Publishing, Boston, Mass, 1986

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Etzel et al., Marketing, McGraw-Hill, N.Y. ; London, 2001

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McCarthy, J., Perreault, Basic Marketing, Irwin, Illinois, 1993

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Donnelly et al., Restructuring the automotive industry in the English West Midlands, Local Economy, Vol. 20, No. 3, August 2005 pp. 249-265, Routledge Publishing.

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No author, What’s Left of the United Kingdom Car Industry, March 21, 2002, BBC News London. March 21, 2002, BBC News, London.

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ANNEX:

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BMW

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Statistics Wales

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Wales