INTRODUCTION TO STRATEGIC MARKETING
For the purpose of functioning in the business environment, organization will have to frame some kind of strategy (Marketing strategy, 2015). This is because by seeking assistance from an effective strategy, improvement in the profits of corporation can be carried out. In addition to this, manager has to frame varied type of strategies in accordance to the market situation. For example, if manager is interested in raising the sales of corporation at that time, it will have to frame the marketing strategy. In the process of framing the given strategy, manager of an enterprise has to make different types of strategic decisions. The report is based on the case study of BYD Auto company. It is a China based automobile company that design, develop, manufacture and sells passengers buses and cars (BYD Auto, 2015). The report will provide the description regarding the ways with the help of which an effective marketing tactic can be developed by the enterprise in an effective way.
Performing the market analysis to address the key issues
Market analysis is being carried out with an aim to identify varied environmental issues that is currently being affecting the automobile industry of China. In addition to this, the market analysis will also provide the description regarding the issues that will likely to affect the given industry in the future. In this respect, there are different types of issues identified that is currently being faced by the automobile industry of China. Among all, one of the most significant challenge being faced by the automobile industry of China is of taking the measures against the environmental protection (Auto industry is facing challenge, 2015). The type of engines used by the organizations in their automobiles causes necessary impact on the environment. Moreover, it is being taken as the main factor due to which air pollution is increasing in China. It is due to the presence of this aspect, automobile industry in China is facing the major challenge in terms of taking the steps against protecting the environment of country. However, there are some companies prevailing in China like BYD Auto that have taken action against these types of issues. In this context, organization has introduced such type of cars that possess the green hybrid technology. It is through such type of efforts only, a step is being taken by the enterprise in terms of working towards the protection of environment in an effective way (Grönroos, 2009).
In addition to this, energy conservation is another most crucial issue that is currently being faced by the automobile industry of China. Chinese steel industries use 1/5 of energy whereas 45% of the energy is being consumed by the cement industries prevailing in China. It is because of the presence of all these identified aspects only the need relating to the energy conservation is being raised in the Chinese automobile industry. If an effective action against the given issues is not being taken by the automobile industry, then in this condition, it became difficult for the corporation prevailing in China to carry out the production of their products in a smoother manner (Hill, McGinnis and Cromartie, 2007). Further, with this automobile industry is facing another issues relating to the human resource management. In this respect, it has been seen that automobile industry is facing overall shortages of mid management employees and young professionals. As a result of it, they will have to take measure in terms of outsourcing employees from other countries. This leads to raise the cost of production for the given industry.
Besides this, there are various other challenges identified that will likely to be faced by the Chinese automobile industry in the future. In order to assess the same, the technique like PESTEL analysis can be used. These are the major factors that lead to create challenge among the manager of the enterprise in an effective way (Hultman and Hills, 2011).
Any of the following factors can create future challenge for the Chinese automobile industry. In this regard, it can be said that any kind of changes in the political condition of the nation will likely to affect the given industry. For example, Chinese government has taken the step in terms of raising the tax rates for the automobile organization. In order to deal out with the given circumstances, corporation like BYD auto has to direct its efforts in terms of reducing the prices for the product (French, 2009). This leads to affect the sales and profitability related condition of the firm in an effective manner. In addition to this, social factor like change in the preference of buyers with respect to the design of cars is being regarded as another issue that will likely to affect the smooth running production of the company.
Performing the situation analysis for BYD Auto
A situation analysis is being carried out with an aim to assess the competitiveness of BYD Auto in its market. For the purpose to identify the effectiveness of the organization in the competitive business environment, it is necessary that it must conduct the situation analysis. This is because by performing the situation analysis, information regarding the internal and external environment of the company can be gathered. Furthermore, it is through such type of analysis only understanding regarding the organization capabilities and customers can be gained in an effective manner (Gilbert, 2000). In order to carry out the situation analysis for BYD Auto company, the technique like SWOT analysis is being used. It is an effective model because by using it, information regarding the strength and weakness of the company can be gathered. Furthermore, it is through such type of practices only, competitiveness of BYD Auto in its market can be assessed. In this respect, the SWOT analysis for the company is being enumerated as below:
- Availability of low cost labour
- Organization has developed electric automobile.
- Has the low prices of the product
- Possess the team of skilled personnel
- Has the limited working capital
- Does not have an effective presence in the global market
- To gain the support from the government policy
- To introduce new products and services
- Change in the rate of taxes
- Government regulations
The given SWOT analysis of BYD Auto provides the clear description regarding its competitiveness in the Chinese market. Organization faces the biggest advantages in the form of availability of low cost labour within the country. The given aspect will enable the enterprise in terms of carrying out reduction in the cost of production. As a result of it, goods and services of the BYD Auto can be sold at low prices. By using the given feature, BYD Auto can create competitiveness in Chinese market with that of its competitor (SWOT analysis of BYD Auto, 2015). This is because, by selling product of corporation at the low prices, large number of buyers can be attracted by the enterprise. It will assist enterprise in terms of increasing the market share of corporation in the Chinese market in an effective way (Polonsky and Rosenberger III, 2001). In addition to this, competitiveness of the organization can be assessed in the given aspect such as availability of skilled and talented employees within organization. The success of any industry depends upon its team as absence of an effective team will lead the enterprise in terms of failure in achieving the goals and objectives of the corporation in an effective manner. However, from the situation analysis, it has been seen that BYD Auto possesses the strength in the form of team of talented personnel. Company can use this strength in a way to mitigate the negative effect of the strategies being framed by its competitors in the given field (Shaw, 2009). However, there are some weakness identified that will hinder BYD Auto in terms of effectively maintaining its competitive position in the automobile market. It is of lack of availability of sufficient working capital and ineffective presence of corporation in the international market etc. By taking significant measures with regard to the same, the assessed weakness of BYD Auto can be converted into the strength. Overall, it can be said that possess the competency with regard to compete in the competitive automobile Chinese market (Tamilia, 2009).
Performing the detailed competitor analysis
Competitors analysis of the BYD Auto is being performed. Competitor analysis is the technique with the help of which information regarding the competitors of the firm is being assessed. For any organization, it is necessary with regard to gather the timely information about its competition (Gilmore, 2011). This is because, it is through such type of information only varied kind of changes is being carried out by the enterprise in its existing strategy. By complying with all such type of activity an effective presence in the competitive business environment can be marked by the manager of the organization. From the analysis, there are three basic competitors of the BYD Auto identified that gives direct competition to the company. Direct competition is the type of competition in which organization faces competition from those companies that produces similar type of goods and services in the same market (Direct competition, 2015). Shanghai Automotive Industry Corporation, FAW Group Corporation and Dongfeng Motor Corporation are being regarded as the major competitors of BYD Auto. The first competitor of BYD Auto is of Shanghai Automotive Industry Corporation. It is the leading car maker in China. It is the state owned automobile company that operates its operation in Shangai, China. The organization gives automobiles as well as commercial vans to its customers. In addition to this, corporation sold different type of products under the brand name. Further, with this corporation also sold passengers car like that of its competitor named as BYD Auto. Shanghai Automotive Industry Corporation possess joint partnership with the famous corporation in the given field named as General Motors (Chabowski, Mena and Gonzalez-Padron, 2011).
Besides this, BYD Auto faces the competition from the other firm named as FAW Group Corporation. It is one of the country largest automaker and which product line inclusive of wide range of products such as heavy and medium duty trucks, car, buses and mini vehicles etc. Organization sold more than 1.5 million vehicles per year. It operates joint venture with the famous corporation like Toyota, Volkswagen and Mazda etc. Though it possesses the large number of goods and services but organization does not offer the electric car which is being offered by its competitor named as BYD Auto (Berthon and et.al., 2012). Further, with this Dongfeng Motor Corporation is another competitor of the enterprise. Corporation offers as well as assemble passenger cars, commercial vehicles, automotive parts and engines etc. Corporation possess the biggest strength in the given aspect such as has an effective presence in the domestic market.
Performing the detailed customer analysis
The customers of BYD Auto is being analyzed. In order to attract the large number of customers towards the enterprise, BYD Auto carries out the segmentation of its customers in the following aspect such as difference of interest, demand of buyers and ability to buy etc. In this respect, it has been seen that demands of the buyers with regard to the use of car varies from one customer to another in Chinese market. There are some customers in the Chinese market which shows their concern towards the environment and it is the reason why they are demanding for such type of car which causes lesser impact on the environment (Martin and Isozaki, 2013). In order to fulfill the given demand of the buyers, BYD has launched varied kind of product in the name of F category. In the similar way, it has also given its contribution towards the environment by producing e passenger buses. It is through such type of practices only competitive position is being maintained by the enterprise in the Chinese market.
In addition to this, with an aim to provide value to the customers, BYD Auto tends to direct its efforts in terms of introducing new technology within the product. Organization compliance with the new technology sometimes develops issues in front of the customers of the enterprise (Hawkins, 2014). This is because, some technologies as used by organization are so complicated in nature that it will not being easily understood by the buyers. As the result of it their satisfaction towards the specific product is impacted. It directs impact can be seen on the sales and profitability related condition of the firm. In addition to this, through its product BYD Auto targets both upper and lower income class for customers (Jones, Suoranta and Rowley, 2013). BYD F0 and BYD F3 are some cars that satisfy the needs and demands of the lower income class of customers. In the similar way, its fulfill the needs and demands of the high income class group of customers by producing the luxury electric car under the Denza brand name.
Setting the strategic marketing objectives for BYD Auto
Strategic marketing objective is the type of objective which is being framed by the manager of an organization with an aim to accomplish the tactical goals of the marketing plan. For any corporation irrespective of industry, it is very important with regard to frame the marketing objectives for the enterprise (Kotler, Michi and Pfoertsch, 2006). This is because, it is with the help of such type of objectives only, the objectives framed in the marketing plan can be met in an effective way. This will lead to the enterprise in terms of increased profits and sales. In order to frame the given objective, assistance can be taken by the organization named as BYD Auto from the technique like SMART. It is being considered as one of the most effective technique which provides way to the organization in terms of framing its goals and objectives in an effective manner. The technique like SMART depict about the following such as S- Specific, M- Measurable, A- Attainable, R- Realistic and T- Time bound etc. By framing the objectives of the firm on the basis of given aspect, the framed marketing objective can be achieved by the enterprise within the given specified time limit in an effective way (Pfefferkorn, 2005). In this respect, strategic marketing objective for the BYD Auto is being set. The detailed description regarding the same is being enumerated as below:
- To enhance the awareness of customers regarding the BYD Auto varied range of products.
- To increase the sales of BYD Auto in the Chinese market by 20%.
- To enhance the market share of the corporation till the year 2017.
- To meet the needs and demands of the customers by carrying out the thorough market research.
These are being regarded as the four basic marketing objectives for BYD Auto with the help of which an effective success can be achieved by it in the Chinese market. The first marketing objective for the corporation is of raising the awareness of customers regarding the BYD Auto varied range of products. With an aim to achieve success in the Chinese market, it is being required by the enterprise with respect to direct its efforts in terms of raising the awareness regarding the product among customers in an effective manner (Aaker, 2009). This is because, in this context, it has been seen that large number of buyers can be attracted towards the enterprise if they have the thorough knowledge as well as information regarding the presence of specific brand product in the market. However, the awareness regarding the product can be spread by the manager of BYD Auto by using different type of marketing promotional tools and techniques. In addition to this, it is with the help of marketing promotional tools and techniques only, customers can be able to direct its efforts in terms of forming the comparison between BYD Auto and its competitors product. By forming the comparison between the product, buyers awareness regarding the goods and services as being produced by the BYD Auto company can be raised.
In addition to this, there is link is being found out between first, second and third objective of the organization. This is because, the second and third objective can directly be met by the organization if it is found as successful in terms of fulfilling the first objective which is of raising the awareness among Chinese customers regarding the presence of product in market (Proctor, 2014). This is because, sales and market share of the BYD Auto can be enhanced if customer possess the thorough information regarding the availability of product in market. In addition to this, meeting the needs and demands of the customers by carrying out the thorough market research is being regarded as the another most effective objective. By assessing the specific needs and demands of the buyers, improvement in the design as well as the feature of cars can be carried out by the BYD Auto. On performing the such type of activity, large number of buyers can be attracted by the organization. Due to this, the firm will be benefited in the form of increased profit and sales (Schnaars, 2000). Overall, it can be said that in order to achieve success in the market it is being required by the organization that is to frame an appropriate strategic marketing strategy.
Suggesting the recommendations to BYD Auto
Suggestions are being recommended to the BYD Auto company. By implementing the given suggestions within the enterprise the framed strategic marketing objectives can be met by the corporation in an effective manner. It is recommended to the BYD Auto company that it should have to use the combination of both electronic and non electronic means of promotion with an aim to raise the awareness regarding its product in the Chinese market. This is because, by using the given means information regarding the product can be spread by the customers among the wide number of customers in an effective way (Ho, 2012). Here BYD Auto company can use different type of non electronic means such as placing advertisement in the business magazines of China, giving ads in the famous newspapers and distributing the pamphlet of the product etc. In addition to this, awareness regarding the product can also be raised by the organization by using different type of electronic means of promotions such as placing ads in the television and using social networking sites like Facebook and Twitter with an aim to advertise about the goods and services of the BYD Auto company. The means assessed are effective because by using it clear information about the produced goods and services can be spread by the BYD Auto company among its respective customers. By complying with the such type of activity, large number of buyers can be attracted by the organization. This will lead to the enterprise in terms of increased profits and sales (Payne and Frow, 2013).
In addition to this, it is also recommended to the organization that it must have to carry out the thorough market research before developing the goods and services for the enterprise. In order to perform the same, BYD Auto can use both primary and secondary means of carrying out the research. Primary research can be performed by the manager of enterprise by using different types of tools such as survey and questionnaire etc. Here questionnaire must be framed by the organization in such a manner that it will help corporation in terms of fulfilling its marketing related objective in an effective way (Beamish, 2012). For example, BYD Auto has the marketing objective with regard to identify the needs and demands of the buyers. This can be assessed by the enterprise by framing such type of questionnaire that possess both open and close ended type of questions. With the help of open ended questions, the need of buyers can be clearly identified by the enterprise. Furthermore, survey is being regarded as another technique that BYD Auto can use with an aim to determine the needs and demands of its buyers in an effective manner. The survey must conducted by the organization in such a manner that it will leads to cover all the Chinese market. Besides this there are some recommendations is being given to the BYD Auto company with respect to the environmental issues being faced by it. From the analysis it has been assessed that thee are some factors that will likely to affect the work of corporation in the future. In order to reduce the impact of these factors it is being recommended to the BYD Auto company that it should have to carry out the thorough environmental research (Middleton and Clarke, 2012). This is because, by performing such type of activity information regarding the market can be gathered by the manager. By taking action against the assessed information sales and profits of the enterprise can be enhanced in an effective way. In addition to this, on the basis of SWOT analysis it is being recommended to the organization that it should have to direct its efforts in terms of marking its presence in the global market. Through this way profits of enterprise can be improved.
From the given report it can be concluded that by assessing the environmental issues prevailing in the automobile market varied measures with respect to same can be taken by the corporation. In addition to this, by using the tool like SWOT analysis detailed company analysis can be carried out. By assessing the products produced by the competitors of enterprise an effective strategy can be formed by the corporation. Overall, it can be said that by seeking assistance from the different type of strategic marketing strategies an effective presence in the existing market can be marked by the manager of enterprise.
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