Promotional and pricing strategies in the automobile industry

Marketing Report Summary & Approach

The author of this report has been asked to prepare a report central to some marketing concepts and questions. The first question asks the author to compare and contrast the promotional strategies that are used by two different companies for a similar product within the category that has been selected. The second question asks for there to be two recommendations via which the companies can use the marketing information to differentiate itself in the marketplace so as to gain an advantage over its competitors. There will be a rationale provided for those recommendations. The third question asks the author of this report to provide two uses for customer-oriented promotions that could assist a company in both the short- and long-term for the product group that has been selected. Fourth, there will be an analysis of the strategic manner in which a leading company in the product group has made its pricing decisions while using one or more of the four overall pricing objectives. Fifth, there will be two suggestions of actions that other companies within the same product group may take in order to gain their own competitive advantage along with a rationale for that. Sixth, and finally, there will be the determination of the most effective advertising medium for a company in the selected product category. The response will be supported by two examples of the efficacy in the chosen medium. All of the questions above will be answered in bullet point form per the parameters of the assignment. While marketing can be approached in more than one way, there are some methods that work better than others. The sales arena that will be used for this report will be the automobile industry.

Question One

The approach taken by each car company differs greatly based on the price level of the car, the mindset of the company and the niche that the car is trying to fill. The author of this report will cover the approaches of several car companies.

The first car company reviewed is Hyundai. Their main homepage online has a very big picture banner that plays a bit of a slide show. Two static pictures that are nestled in that slide show is one picture that talks about the Hyundai Tucson that is powered by fuel cells and the other talks about how Hyundai is becoming the first car company to offer Android smartphone inter-operability in their cars. The pictures in the slideshow go through their different models. The price range of each model is different and they tout the awards, safety, price affordability and so forth of each model. The third parties they point to in terms of accolades and so forth include U.S. News and World Report, the IIHS and so forth. As partially noted above, their primary selling points are price savings, safety, nifty features and environmentally-friendly comforts and features like good fuel economy, "green technology" that is coming in the future and so forth. There is not a certain price point focused on as they give a summary of their entire line. For example, the Sonata and Elantra are fairly cheap but the Genesis and their SUV's are a little more expensive. There are sitemap-like links at the bottom for other parts of the site but the banner above is the obvious and complete focal point of the main page (Hyundai, 2015).

The second car company and its associated promotion strategy looked at would be that of Toyota. They have a banner/slideshow going on as well but it is not nearly the only thing on the page. They cars they tout on the banner include the Corolla (their entry-level car), the RAV4 (their smaller SUV), the Camry (their tried and true mid-range sedan) and the Avalon (another car in the middle of their price range). They tout zero percent financing and/or cash back on all of the parts of the slideshow. However, their promotional website also offers other things for those that scroll down a bit. For example, they have links to things like local price specials (presumably links to local dealers), a link to the Kelly Blue Book (KBB) trade in calculator, safety recall information (which has been a sore point for Toyota in the not-so-distance past), their "TRD" performance division, a more national-based inventory search tool, a specific link for the newly designed Toyota 4 Runner (their "feature" SUV), a similar link to the Toyota Tundra model (their large pickup truck), a college graduate rebate program link, a link to their safety performance information (a bit different than the similar link above) and finally a link to their ToyotaCare no-cost maintenance and roadside assistance plan. Like the Hyundai site, they have sitemap-style links at the bottom. They are more prominent and numerous than the Hyundai version of the same but there is a lot between the flashy pictures and those links within the site (Toyota).

Question Three

In terms of promotions that could be offered, the Hyundai/Android thing is a game changer. Hyundai (and any future carmakers that sign on to the Android to car integration) should pump that news on their website and in commercials as early and often as they can. There are so many people in the car-buying market that use Android-powered smartphones from companies like LG, Samsung and others. Apple will surely some along as well and perhaps Hyundai could offer the option between Apple and Android integration. However, that may not be cost-effective and/or Apple or Android may require exclusivity or some other major strings to be attached. This sort of approach would certainly help in the short-term. However, the long-term is less certain because the smartphone landscape could very well change and it could happen quite quickly. However, Apple and Android phones are firmly ensconced in the market and there is little chance of that changing in at the somewhat near future. Companies that do this (like Hyundai) will need to make sure their integration and technology evolves with the times but they should otherwise be fine if they do that well (Wallen, 2015).

Another promotion would be a further pushing of alternative technology. However, the cars involved would probably be mostly battery powered because the infrastructure is simply not there for other technologies at this time. Adoption for these new technologies will be slow but the selling has to be done to get people to adopt it. It should not be a bulk of sales or advertising budgets but it has to be part of the system (EERE, 2015).

Question Four

According to John LeBlanc, the three biggest car companies are, in order, Toyota, General Motors and Volkswagen (LeBlanc, 2015). Toyota and General Motors are direct competitors so their pricing structures will be similar. Toyota will probably have to rely more on placement, price and so forth because they are a foreign car company. Further, their promotions (another P) will need to be centered on the good attributes of their prices, safety ratings and driver satisfaction. Lastly, the product itself will have to be better with Toyota because of the American advantage that General Motors has. With that said, General Motors has some things working against it. They are having their own safety issues and they're much more recent than Toyota. Also, their prices would seem to be a smidge higher than what Toyota is offering. However, that can be a boon to GM because people will pay more for an American and/or a "better" product (MindTools, 2015).

Question Five

As far as tools and actions that carmakers can do, the aforementioned integration between either Apple Phones or Android phones with cars would be a huge step for any car company to make given that people are so attached and fixated on their phones. Hyundai is touting themselves as the only car company to be doing the Android integration at this time. New technologies can be raw and unproven. However, that will be a major selling point for car-buying customers that have Android phones (Wallen, 2015).

Another action that car companies can take on is to really drill down on what the customers want and make sure the models they have focus on that. It is possible to have a car line that addresses a lot of different needs and wants but fleshing things out too much can lead to problems and failures. Saturn was a bit of an oddball. Mercury was basically a set of cheap Ford knock-offs. Hummer was a collection of SUV's that only niche buyers wanted and so forth. However, it is even going beyond that. Dodge is killing off the Durango and Chrysler is putting its core SUV's going forward, it would seem, in the Jeep line where Dodge will be focusing on performance cars and grocery-getter type vehicles. In short, finding the right product mix is key. Targets need to be wide enough to be diversified but they cannot be too narrow either. For example, if Dodge just made the Challenger and the Charger, they'd have issues during a Recession because not a lot of people would buy sports cars at that time (Suttle, 2015).

Question Six

Without question, the king medium right now is the Internet and this would include computers, tablets and internet enabled cell phones. While some people are avoiding the medium and/or will never join it, the Internet will be more and more dominant as time goes on. Sure, newspapers and magazines are still around in some form but those mediums are becoming lesser and plastering posters and placards can only go so far (Ingram, 2015).

Conclusion

Each car company has its own approach. Some car companies are similar when comparing them but others are quite different. Some car companies have one tried and true name while some parse out by regular and luxury (e.g. Toyota/Lexus). Most car companies get by and are able to weather storms while others wither away. What happens to each depends a lot on marketing and the four P's that go into marketing.