Marketing, Case Study, and SLP

Marketing, Case Study, and SLP

Discussion

Marketing is a fundamental process both in organizational and personal settings. Marketing ensures that an individual or an organization creates awareness of their competencies, skills, and value they can offer. In particular, in an organization setting, marketing entails creating, maintaining, and enhancing relationships with customers and other partners in a bid to achieve mutual exchange and fulfillment of promises. In support of this assertion, Iyamabo and Otujambo (2013) recognize marketing as an act of maintaining and sustaining a lasting relationship between the firm and the customers that are rewarding to both sides. The achievability of this paradigm is underpinned by the definition of marketing that encompasses the aspects of creating, communicating, and delivering value to the customers in a manner that espouses mutual satisfaction (Wilkie & Moore, 2007). Therefore, marketing entails mutual dependence in terms of creation and sharing value in a way that facilitates achievement between the organization and the customer.

Traditionally, marketing was considered a business activity, but nowadays, it can be done on a personal level. Illustratively, a Toyota car retail outlet, can incorporate marketing as analyzing, organizing, planning, and controlling activities that are incidental and necessary to occasion an exchange of relationship. Brunswick (2014) recognizes marketing as an exchange of value for both the organization and individuals. As such, marketing activities are founded on the assertion that they encompass the transaction conducted by individuals and organizations to satisfy human wants. The anticipation, stimulation, and satisfaction of human needs are solidified by the exchanges of value between organizations and individuals in a dynamic environment. Finally, marketing has transitioned from the traditional definition as a business activity to the contemporary application in organizational and individual context as an exchange of value to achieve mutual satisfaction.

Case Study: Auto Industry

The global automotive industry works with some of the most prominent car manufactures such as Toyota, General Motors, Honda, and Volkswagen, among other renowned industry players. Each of the automakers mentioned above utilizes marketing to create brand awareness and monetize leads through consumer purchase decisions.

Global sales of passenger cars were projected to have exponential growth. However, with the current epidemic of the Coronavirus, the forecasted auto market growth will slow down since China is the largest car market in the globe, and it has been named the epicenter of the virus. In retrospect, the rapidly expanding markets of Brazil, India, and China there has been the establishment of new plants as local market growth due to an increase in disposable incomes (Bailey, Ruyter, Michie & Tyler, 2010). In the year 2018, the Chinese market dipped, and the market had not recovered, and hence the global auto market will rely on how fast production will be ramped up following the outbreak of COVID-19 in the winter of 2019. Ideally, the global car industry is driven by mass production and consumption. Mainly, this is attributable to the reduction in trade barriers that as an occasioned wave of investment in the emerging economies. In light of the emerging challenges in the auto industry, marketing will play a critical in creating the value proposition and converting potential customers into buyers. Multiple environmental factors impact on product marketing and its performance in the target segment. Specifically, political, technology and economic factors comprise the ecological elements that influence the auto market in both retail and manufacturing realms. According to Dragnic (2014), external factors such as environmental, economic, and technological factors can impact the performance of the product or business.

Illustratively, the ecological factors can impact on the production and retail of cars because of the emerging regulations to promote environmental sustainability. Carbon emission limits, recycling of materials, and the use of biodegradable materials are some of the rules affecting the car industry around the globe. Also, sourcing of raw material and air pollution by plants has elicited criticisms from environmental lobby groups forcing the automakers to reorganize their operations. Increased carbon print due to emission from fossil fuel vehicles has been cited as one of the major contributors to global warming. In response, governments and lobby groups have formulated new environmental laws that promote green energy, and thus automakers are in earnest to innovate alternative methods in the production processes.

Technological factors also affect car production. Tied to the environmental factors, technology has revolutionized the manufacturing process by improving efficiency and effectiveness. Consequently, automakers are moving from fossil fuel cars to electric cars in adherence to environmental regulations (Dragnic, 2014). Technology has advanced innovation within the automobile industry; for example, fuel cleaning technology towards reducing the emission of carbon monoxide has become a game-changer. However, the production of an electric car is one of the most significant representations of technological applications in the auto industry.

Finally, economic factors influence the production and marketing of passenger and commercial cars. For example, Tesla manufactures electric vehicles targeting the affluent while Toyota manufactures cars targeting the average buyer. In the market, Toyota cars are accessible, affordable, and safe for customers in both developed and emerging economies. In contrast, the sport utility vehicles target economically empowered buyers because they are premium priced. In this regard, therefore, the purchasing power, demographics, and availability of disposable income within the targeted market influence the marketing strategy applied by the organization.

In conclusion, environmental factors such as political, economic, socio-cultural, technology, environmental, and legal elements impact the product or service. In this context, ecological, governmental, and technological factors have a significant impact on car manufacturing and retail in the global market.

SLP

Effect of Marketing Environmental Factors in the Auto Industry

In the case study, three marketing environmental factors were identified and discussed. Each of the environmental factors manifests different impacts on the sale of cars in the global market. Economic, ecological, and technological factors influence marketing strategies that are applied in the auto industry. Analysis of how each marketing environmental factors will affect vehicle production is critical in determining the strategy change to address the threat realized.

The ecological environment is one of the most impactful marketing environmental factors in the auto industry. Mainly, this is because automakers, as Original Equipment Manufacturers (OEMs), are required to adhere to strict environmental protection standards that aim at curbing carbon emission. Specifically, contemporary cars are supposed to meet set criteria by different ecological regulatory bodies to reign on the carbon print around the globe. Engine emission control, plant emission reduction, raw materials shortage are some of the environmental threats that carmakers must deal with (Nunes & Bennet, 2008). The impact of these threats include a change in the manufacturing processes, car recalls to fit new and improved parts and reorganization of the processes in the plants to incorporate legal guidelines provided by the regulators.

Economic factors, such as financial conditions, public purchasing power, economic globalization, and equity of development, impact marketing strategies in the auto industry. Marketing decisions are made based on the factor prevailing in the target market. For example, the production of sport utility vehicles targets consumers with high purchasing power parity. Besides, economic growth in emerging countries also influences the marketing decision made by carmakers (Susilo, 2018). Moreover, improved economic outlook within the target market also changes the strategies employed by the marketing teams. Increasing awareness in the fast-growing economies promote diversification into the high potential areas. Increased disposable income supports business to consumer transactions (Dragnic, 2014); thus influencing both upwards and downward value chain decisions.

Technology has also influenced how marketing decisions are made in the contemporary auto industry. For example, digital marketing, market analysis, and intelligence, as well as the use of predictive analytics to determine consumer needs and preferences, have improved decision making within the marketing process.

Different strategies can be used to overcome threats facing the auto industry by creating brand awareness. For example, establishing retail outlets and manufacturing plants in different countries will facilitate the adoption of national environmental protection policies. Notably, this is because exporting fully assembled units can attract strict guidelines. Exploiting the growth stage, automakers can expand into the emerging economies because they have profit margins and resources to invest (Sharma, 2016). Using promotional activities of this growth stage will help in creating brand awareness within the developing countries. More importantly, developing countries emerging middle class that has high purchasing power due to technology diffusion and development, exploitation of talents and innovation which can support operations of the auto car makers in those host countries.

References

Bailey, D., Ruyter, A., Michie, J., & Tyler, P. (2010). Global restructuring and the auto industry. Cambridge Journal of Regions, Economy, and Society, 3, 311–318. DOI:10.1093/cjres/rsq029.

Brunswick, G.J. (2014). A chronology of the definition of marketing. Journal of Business & Economics Research, 12(2), 105-114.

Dragnic, D. (2014). Impact of internal and external factors on the performance of fast-growing small and medium businesses. Management, 19(1), 119-159.

Iyamabo, J., & Otubanjo, O. (2013). A three-component definition of strategic marketing. International Journal of Marketing Studies, 5(1), 16-33.

Nunes, B., & Bennet, D. (2008). Environmental threats and their impacts on the automobile industry. International Association for Management of Technology: IAMOT 2008 Proceedings.

Sharma, S.H. (2016). Product life-cycle management: concept and stages. Indian Journal of Research, 5(10), 252-253.

Susilo, D. (2018). Macro environment analysis of automotive industry in Indonesia. Journal Pendidikan Bisnis dan Ekonomi, 4(2), 65-73.

Wilkie, M.M., & Moore, E.S. (2007). What does the definition of marketing tell us about ourselves?. Journal of Public Policy & Marketing, 26 (2), 269–276.