Marketing Communications Strategies for Consumer Vehicle Brands in the UK

Introduction

The success of the business in the present world has largely depended on the marketing activities of that business. Marketing refers to the procedure and implementation of that processes to plan and execute the conception, pricing, promotion, and distribution of goods, services, or ideas creating exchanges, which will meet any individual and organizational objectives. Belch & Belch (2004, p. 7) argued that the success of a basic marketing program depends on the proper planning for conceptualizing, pricing, and distribution but the most important factor is a Marketing communication. As technological advancement has changed the nature of marketing communication worldwide, unique marketing communications became a key differentiating factor for many organizations.

In the automobile industry of the UK, critically in the case of consumer vehicles, brand plays a major role. Most of the customers prefer to buy a branded car though the price of the cars is high. Marketing in such a case is the driver for the success of the firms. As the car has considered a luxury product to some extent, the marketing or promotion of the cars must be attractive. Thus, the marketing mix and the marketing communication can serve as a success factor for any firm. This report will discuss the effect of marketing communication and mix of the consumer vehicle manufacturer of UK and compare their activities regarding these. Two consumer vehicle brands would have taken as a symbol of the total automobile industry. Significant literature review, analysis, and discussion will provide along with the help of the proper research methodology, which will end with the key recommendations and conclusion.

Literature review

Griffith (1999, p. 2, 33) argued some significant aspects of the UK automobile industry. The industry experienced some rapid growth in the 1980s as the per-worker output has risen. He stated that the UK car industry has been dominated by foreign firms in the mean of higher levels of output, value addition, and a higher level of factor usage. The cause behind the domination is having high capital and intermediate inputs. Again, the foreign firms offer high wages to get better outcomes, which attracts the labor.

The present economic crisis created an enormous disturbance to the marketing as well as the entire operations of the automobile industry. HCBSEC (2009, p. 3-15) argued that the government recently launched an assistance program to support the automobile industry to overcome the recessionary effects. The automobile industry directly employs almost 180,000 people and if the indirect users would count the number is more than 384,000 and some organizations related with the industry claimed it was around 570,000. It has an annual turnover of 14 billion pounds. The industry has now shifted to inward investment dependence. Though the UK automobile industry is the second largest in the world, it is still foreign-dominated. In addition, it has threats in its engine manufacturing and vehicle assembling operations. The House of Commons stated that, the consequence of the collapse of the industry would result in high unemployment, which will further cause some serious social problems.

To ensure the future of the UK economy, the stability of the automobile industry has ensured as healthy industry. Therefore, the government introduced the automotive assistance programme, which will support the package of about 2.3 billion pounds as loans for the UK automotive sector. Government give the benefit by extending the maturity time up to 2010. Here the plan is to use government guarantees to release up to 1.3 billion pounds and to take loan from the European Investment Bank (EIB). Additional 1 billion pounds have loaned from other lenders.

However, to get this benefit the companies require some characteristics. To get the loans, a company must have a turnover of at least 25 million pound annually. Along with this, the company must invest at least 5 million pounds in further criteria. These conditions pose some barriers, which can affect the purpose of the scheme at a large. As a result, the scheme was been slow to produce expected results. However, government is still trying to facilitate the industry with many other supports with automobile interventions like EFG¹, automotive access to Finance and the Trade Credit Insurance Top-up scheme.

All the effort would fail if the lowered brand imagery and the lowered brand awareness related to the automobile companies cannot retain. To this, the marketing communication can play an important role. Kotler & Keller (2006, p. 283) termed the marketing communication as the ways by which the organisations are attempting to notify, convince and remind consumers about the brands through direct and indirect means. Marketing communication acts as the voice of a brand and makes a way to communicate with the consumers. The ultimate purpose of the marketing communication is to build the brand equity. There are many possible options to do marketing communication. Advertising is a widely used media of present days, which used the television, radio, internet, newspaper, magazines, banners, and other means.

Kotler & Keller (2006, p. 538) stated many ways of communications consisting advertising, sales promotion, events and experience, public relation and publicity, direct marketing and personal selling. They argued different models of marketing communication, which leads to purchase behaviour finally. The managing and coordinating the entire communication process introduced an advance theory termed as integrated marketing communication, which recognizes the value addition of the entire communication program. Thus, this advanced communication studies can help to improve the automobile industry of UK.

Research methods

In this report, the descriptive research has applied. Zikmund (2003, p. 55, 736) said that descriptive research is one where the raw data collected from various sources will transferred in to a structured, easy, and meaningful way to give a description of a certain phenomenon’s characteristics. Here the raw data would collect primarily from the secondary sources. The research will be depended on the published journals and websites available in the internet. Along with this report will be used the observation techniques to notice many situations and their consequences regarding to the topic of interest.

This report will compare the marketing communication of two major consumer vehicle producers in UK. The annual reports and other related materials will used also. The focus of the research will be to assess the communications strategies and tactics used by the two firms to get competitive advantage in the market and to notice the marketing programs and their contents of the two firms along with featuring the effectiveness of programs. The observational technique would use to see the advertisements of the companies in the television, radio, print media, websites, and internets. The Descriptive research method has used to clarify the meanings of these observations.

Analysis and Discussion

Company Overview

Skoda is a large automobile manufacturer in Czech Republic, which is become a group of Volkswagen in 1991. The total sales of this company have reached at $10,045.90 by selling 674,530 cars in 2008. It is also using 23,622 employees in 2008 to compete in the automobile market (Hoovers, 2009). Skoda is competing in markets in terms of sales, profitability, valuation, and financial conditions in competitive landscape. The top most competitors of Skoda in market are Adam Opel, Daimler, and Peugeot etc. The customers of Skoda are being most satisfied because of reliability in building quality and costs of run in lower rates. The company is also looking to luxury brand of Skoda for delighting customers in design and quality (Leach, 2009). On the other hand, Ford Motor is an international automobile industry as manufacturer and distributor of automobiles with 213,000 employees worldwide. It has famous brands of Ford, Lincoln, Mercury, and Volvo to offer customers in fuel-efficient vehicles as hybrid vehicles. The company is also focusing on technological solutions delivery to million consumers as affordable fuel economy. In 2008, because of deep recession, United States and Europe has faced financial crisis in global markets. Ford is also facing the economic trouble, though it easily handles operation under “ONE Ford” for assuring future success. It is also maintaining manufacture system by transformation of Michigan Truck Plant to small cars production of multiple models in market. By 2013, it is targeting to become number one automobile industry in the international market in manufacturing, selling, and distributing automobiles (Ford motor 2008).

Comparative Analysis of Marketing Communications Strategies

When Skoda and Ford is informing, persuading, and reminding consumers according to marketing communications for brands and company itself has known as marketing strategies taken by these companies. As Skoda is meaningful brand in Europe and Ford is in United States, so customers are aware about brand associations of these two brands. For developing marketing communications strategies, there are mainly some effective stages to have fulfilled by each of these companies, which are:

The strategies of Communications of theses companies have described in below: Skoda is developing integrated marketing communications strategies not only in target market, but also for its employees:

• Identifying Target Market: As Skoda is representing luxurious automobiles in its brand, so in terms of income group, it is focusing on higher level and higher-mid level income group as its target market. As communication strategies, it is trying to remove negative impressions of customers to meet up the gap between image of brand and reality of customers’ position in market. In this task, the company is trying to extend target market with existing owners from wider population of Europe and other markets worldwide.
• Determining Objectives: Marketing objectives of Skoda is maximizing effectiveness and cost effectiveness in manufacturing and communicating with target audiences (Spong 2003).
• Designing Communications: Skoda is maintaining great communication design with great results with brand issues and dealers’ network. The company is developing four principles to design marketing communications, which are:

  • To confront negative perceptions of customers about brand messages over product specifications in communication campaigns.
  • To redefine target audiences focusing on past communications in broader populations;
  • To make central focus of the products in communications
  • To have limited budget in brand spend and communications campaign in market (Spong 2003).
  • Selecting Channels: Skoda is selecting various sorts of channels, which are:

• Budgets: Spong (2003) said that to maintain marketing communication campaign, Skoda has generated £4 billion, which is very smaller in terms of removing negative impressions of customers.
• Measuring Results: From the new strategy of Skoda in marketing campaign in 2000, favour of market and honesty of brand is removed negative perceptions of Skoda brand to customers. The company is also emphasising on direct marketing with combinations of other channels. The success of communication strategy is measured by its results, which are:

  • To grow sales by 33% in 2000 in flatcar market
  • To grow sales by 27% in 2001, though Felicia has ended in market
  • To achieve 40,000 annual sales of cars and consumers have increased about 40%.

Managing Marketing Communications: To develop marketing communications, the company is managing on internal and external elements, which are: (Skoda Minotti, 2009)

• Internal:

  • To focus on company’s employees and professionals, it is developing IBDP (Individual Business Development Plans).
  • To improve internal communications by e-newsletter;
  • To reinforce brand by annual meeting of employees;
  • To promote rand enhancers, like- mugs, pens, shirts etc.
• External:

  • To plan marketing of Niche industry;
  • To plan e-communications;
  • To promote print advertising campaign programme;
  • To promote online advertising programmes.
  • To capture Google advertising words;
  • To update website rapidly;
  • To focus online recruitment videos and photo audit game.
  • To promote blogs of firm’s experts;
  • To make media relationship;
  • To enter in local and national business awards.

For making comparative analysis, marketing communications strategies of Ford Motor has to develop in terms of same steps, which would discuss below:

• Identification of Target Market: As marketing communication is audience centred activities, so defining target market is important for Ford also. Ford is capturing all groups of customers, with Volkswagen, it is focusing on high income customers, and with Volvo, it is focusing on below average group of income customers.
• Determination of Objectives: The marketing goal of Ford is to stimulate brands and communications according to quality of products and satisfaction of customers.
• Designing Communications: To design marketing communications, Ford is developing some designs, which are: (Ford, 2008)

  • New pull advertisements for focusing fuel economy and safety leadership of automobiles of Ford.
  • Designing TV advertising, print and radio ads.
  • Developing digital segments launches in motor cars for their life cycles.
• Selecting Channels: Ford Motor is selecting various channels for communications strategies, such as Interactive Media, Internet, Advertising, Public Relations, Media, Global Sponsorship, Event Programmes etc (Simpson 2009).
• Budgets for communication: Gazdik (1997) argued that ford spends a lot of money for marketing communications, for example, $550 million in a year.
• Measurement of Results: Ford is managing communications strategies by the measurement of results, marketing programmes, campaigns, advertisements, sponsorships and other activities in global market. The company is mainly focusing on dealership relations and style of communication activities in European markets, also considering interactive communications. (Future TV Ads, 2009)
• Managing Marketing Communications: Ford is being successful in automobile industries by managing effective marketing communications programmes between target markets local and international context.

Comparative Analysis of Marketing Mix

Marketing mix is the set of tools a firm use for the attainment of its marketing objectives. There are four P’s of marketing mix, which are Product, Price, Place, and Promotion. The differentiation between Skoda and Ford motors are largely depends on these.

Marketing mix of Skoda and Ford is developing based on four dimensions, which are:

Marketing mix of Skoda has developed in below:

Ford is trying to offer its product with more fuel efficiency. It is continuously trying to improve its product offering by manufacturing hybrid vehicles. This is the sign of the technology driven product offerings. Besides, it has planned to bring battery driven electric vehicles.

The price of Ford motors has based on the risk associated with its business. Thus, it is offering moderate to high price. It is scheduling to offer a premium price.

The placement of Ford is now becoming lower because of the recessionary impact. It could not be able to use its financial resources to attain its previous place. In many case the service offerings degraded and the quality of its service reduced significantly.

Ford previously depends largely on promotional programs. Now to offset the economic effect, it is taking some low quality promotional programs, which is decreasing the brand image. In many cases, it is sponsoring some lower graded events, which do not match with the brand.

Conclusions

The marketing communication makes a huge difference between Skoda and Ford. In some extent, Ford has more competitive advantages than Skoda, as the industry is foreign company dominated. However, the marketing communication makes the difference where the exclusive marketing communication cultured by Skoda gives superior awareness than Ford. For this, Skoda is now the market leader and Ford is placing second in the UK automobile industry.

Recommendations

• Both of the companies are trying to attract the consumers of luxurious car. However, there are significant amount of consumers who cannot afford these cars and they are looking for low priced cars. Thus, the companies should offer lower priced cars like Tata Nano.
• The product offering should drive according to the preferences of the consumers.
• The communication process should follow strictly. The companies should establish a team to find out the major lacking of the present communication program and work with highest effort to overcome the lacking.
• The present economic crisis posses a significant threat not only to these two firms but also the other companies of the industry. To overcome this, the firms should work with the government and utilize the maximum of the government initiative. Using the financial resources accordingly and ensuring the appropriate means to return the borrowed money can be effective in this case.
• To compete in a market like UK automobile industry, it is not possible to become successful bypassing the mass advertisement. Therefore, Ford should concentrate in identifying appropriate ways of advertising. Sponsorship must give to such events, which has highest events and match with the Brand image.
• Skoda has to invest on its marketing communication programs like television advertisements and sponsorship.

Reference

Belch, G. E. & Belch, M. A. (2004) Advertising and promotion. 6^th ed. New York: McGraw Hill.

Ford (2008) Ford F-150 Advertising Campaign. [Online] Web.

Ford motor (2008) Annual Report 2008 of Ford motor company: More Products People Want. [pdf] Web.

Gazdik, T. (1997) Ford Revs Its Ad Budget. [Online] Web.

Griffith, R. (1999) Productivity and Foreign Ownership in the UK Car Industry. [pdf] Web.

HCBSEC (2009) The Automotive Industry in the UK. [pdf] Web.

Hoovers. (2009) Skoda Auto. [Online] Web.

Kotler, P. & Keller, K. L., (2006) Marketing management. 12^th ed. New Jersey: Pearson Prentice Hall.

Leach, B. (2009) Skoda voted number one car in UK. [Online] Web.

Simpson, M. (2009) Conference. [Online] Web.

Skoda Auto (2009) Annual Report 2008 of Skoda Auto. [pdf] Web.

Skoda Minotti. (2007) Integrated Marketing Communications Planning. [Online] Web.

Skoda Minotti. (2009) Marketing Services Integrated Marketing Communications Plan Case Study – #34. [pdf] Web.

Spong, T. (2003) How Skoda Used Creativity To Increase Sales By 27%. [pdf] Web.

Zikmund, W. M. (2006) Business Research Methods. 7^th ed. Orlando: Harcourt Publishers.

Footnotes

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