Driving Forces in a New Car Market Assignment Help
Introduction
Competitive edge and maximum profitability is the focus of the market operations. It fosters innovation in productivity and growth, which ultimately creates market brand and value. To remain competitive in market, companies always try and reinvent themselves at changing dynamics of the market (Teece, 2009). The case describes two companies Subaru and Toyota from the viewpoint of two consumers and their reasons for choosing them.
Subaru and Toyota- The necessity to launch different models over different time periods
Subaru, over the years have launched around 40-45 car models out of which the successful ones are 360, 1500, Baja, Leone, Sumo, Vivio and Libero. On the other hand, Toyota, has launched about 100 odd vehicles in the four-wheeler market, and around 70 vehicles in the car segment, the famous ones being Yaris, Camry, Corolla, etc. (Toyota, 2015). These car companies come up with different car models and brands periodically to stay fresh in the memories of the customers. Today generation gap is not about 15-20 years of void in thinking, it is more frequent these days. A new generation become legal every year for driving and they pursue various available options in the market. So, it is important for these automobile companies to keep re-inventing themselves by branding and launching new products every once in a while to avoid getting fade away from the minds of their loyal as well as the new customers (Pauwels et al., 2004; Eisenhardt & Zbaracki,1992). As given in the case, Jim stayed loyal to Subaru, but evolved according to the models launched by them periodically. Had Subaru stopped after launching few automobile options, Jim would have been forced to consider options from other companies.
Market Segmentation by Subaru and Toyota
The market segments targeted by Subaru and Toyota are:
Geographic segmentation
It is a vital ground of segmentation in the automotive domain, especially in populated and diverse countries like USA and India, where the conditions vary from region to region. Luxury car manufacturers like Subaru most definitely target the metropolitan regions for the majority of the sales, whereas Toyota considers big cities, developing cities and suburbs as their priority during the process of segmenting their cars.
Demographic segmentation
Demographic segmentation segregates the product and automobile marketing according to the income, status, age, etc. (Goi, 2009). Toyota focuses the people belonging to the upper middle class and middle class. Subaru on the other hand, focuses mainly on sport oriented and outdoor activities consumers, including sponsored athletes and ski teams (Dilworth, 2006). According to the age group of the target market group, automobile manufacturers introduce different color variants, for instance bright and flashy colors for the youth and vice versa.
Psychological segmentation
This segmentation is seen primarily in the case of cars, where automobile companies come up with two or three different variants of the same car model. It has been observed by industry analysts and experts that the medium variant of the model has the maximum sales. Manufacturers of luxury automobiles like Subaru generally target the population with a huge disposable income and high status while Toyota targets both high and middle class, and this can very well be achieved through psychological segmentation (Toyota, 2013).
Behavioral segmentation
Behavioral segmentation is done mostly on the basis of the benefits, loyalty, etc. (Kotler and Keller, 2009). This is another vital means for segmentation in the automobile sector, and both Toyota and Subaru uses it (Toyota, 2013).
Market advantage automobile companies get by participating in Racing and Rallying Competitions
Manufacturers run race teams for a wide array of reasons. It is not just limited to advertising, competition, and testing. When a company’s car wins a race it can cause people to believe more on their product. And that eventually makes people want to buy their cars. Also, it promotes their company logo and name to a wider outreach. On the competitive side, companies like competition just like everyone else. Finally, testing is done. The races put the technology through a variety of situations and it proves to be efficient litmus of the durability considering the longevity of the races. Also, it helps in building fan loyalty. Jim, for example, became a loyal fan of Subaru after seeing their performances in the racing and rallying competitions.
Pricing and Promotional Strategies of Subaru Forester and Toyota Yaris
Pricing
Subaru Forester’s and Toyota Yaris’ prices are made variable, and it is market dependent. In the market-oriented valuation and pricing, the goal is mainly to set prices that are appropriate to marketing environment, with appropriate consideration for market competition, product demand, consumer perception and other important variables. Toyota implements this strategy for majority of its automobiles, such as sedans and trucks. On the other hand, it applies the premium pricing to set higher prices for its luxury products (Subaru, 2015; Toyota, 2015).
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Promotional strategies
Both Subaru’s and Toyota’s television, online and offline advertisements are prominent. They effectively apply all of the possible marketing and promotional tactics to promote its services and goods. To supplement its already high performance in the marketplace, these companies also transport the queries and problems of the customers via social networking mediums like Facebook or Twitter. Further, if they can create a mobile platform based app for effective communication, they would eventually improve their feedback system and consumer problem solving (Dominici, 2009).
Product Quality Maintenance strategy of Subaru and Toyota
Product Quality strategy of these companies are much modernized when compared to their competitors.
Providing chain association
It is a very basic and too critical reason in any automobile company, because the customers of automobile are more concerned about the authorization and the time period in which the industry is going to convey the vehicle. Subaru and Toyota healthy supply series which exists in more than ten odd countries allows them to deliver their automobiles well before delivery date.
Product Transpiration
Subaru is dispensing the customer to alter the car and its demands. So they have attained a chance to launch a fresh vehicle depending on the consumer`s choice and inclinations. The Toyota vehicles production will also be affected depending on the customer alteration demands (Subaru, 2015; Toyota, 2015).
Conclusion
Subaru and Toyota have worked hard and smart to sustain the competitive advantage in the ever-changing market dynamics. Their customers contain both the loyal ones as well as the new car population who are looking out to buy their first vehicle, as mentioned in the case. There are numerous people like Jim and Kevin who encounter similar dilemma when they go out to buy. The cases of these companies essentially reasons customer satisfaction as one of the prime factors of their success.
References
Dilworth, D. (2006). Subaru targets segments to drive business. Direct marketing. Retrieved from: http://www.dmnews.com/digital-marketing/subaru-targets-segments-to-drive-business/article/93277/
Dominici, G. (2009). From marketing mix to e-marketing mix: a literature overview and classification. International Journal of Business and Management, 4(9), pp. 17-24.
Eisenhardt, K. & Zbaracki, M. (1992). Strategic Decision Making. Strategic Management Journal, 13, pp. 17-37.
Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International Journal of Marketing Studies, 1(1), pp. 2.
Gundlach, G. T., Bolumole, Y. A., Eltantawy, R. A., & Frankel, R. (2006). The changing landscape of supply chain management, marketing channels of distribution, logistics and purchasing. Journal of Business & Industrial Marketing, pp.428-438.
Kotler, P., & Keller, K (2009). Marketing Management. 13th ed. US: Prentice Hall. pp. 11–20.
Pauwels, K.; Silva-Risso, J.; Srinivasan, S. and Hanssen, D.M (2004). New Products, Sales Promotions and Firm Value, With Application to the Automobile Industry. Journal of Marketing, September, pp. 1-55.
Onditi, A.A. (2012), An evaluation of promotional elements influencing sales of an organization: A case study of sales of Agricultural and Non-Agricultural products among women groups. International Journal of Business and Social Science, 3(5).
Subaru, (2015). Subaru Cars, Sedans, SUVs, Crossovers, Wagons | Subaru of America. Retrieved from: http://www.subaru.com/ on 14 Nov, 2015].
Teece, D. J. (2009). Business Models, Business Strategy and Innovation. Long Range Planning, 43, pp. 172-194.
Toyota, (2015). New Cars, Trucks, SUVs & Hybrids | Toyota Official Site. Retrieved from: http://www.toyota.com/ on 14 Nov, 2015].
Toyota (2013). Tahg.com. Retrieved from: http://www.tahg.org/research/Moyo_billing_A%20Billing%20Moyo%20Publication_Billing%20Moyo.pdf
