Success in the highly competitive automotive industry is largely dependent on how well the car maker is able to position the product in the market to appeal to the customers who are faced with an ever growing range of cars in the market. The upcoming of many car manufacturers has caused the flooding of markets resulting in cut throat competition a fact that makes players in the industry constantly develop creative marketing techniques in a bid to win over car buyers. Most importantly, the differentiation element of the marketing mix rules the automobile industry. The major players in the sector understand that competing in the prices will not necessarily lead to the acquisition of larger market share. In fact, it might.
In positioning the various products offered, car manufacturers use different media and channels in delivering the message on the uniqueness of their products and the reason why they stand out from the rest. This paper analysis the marketing communication strategies and mix applied by Skoda and BMW in the UK. It reports on the analysis by focusing on the major differences on the extent to which the different communication channels are utilized in communicating and branding processes which are very influential to the performance e of car sales in the UK.
Marketing strategy is the overall guiding principles adopted by an organization in a bid to utilize the ever limited resources optimally to generate the greatest possible impact in the market. The main aim is improving the levels of sales volumes as well as developing competitive advantage at lowest possible costs. A strategy guides the daily actions of the marketing team towards the achievement of a certain market related goal. A market related goal could be in the form of customer satisfaction, brand positioning or simply the growth of sales. It informs the utilization of the marketing mix to be used as well as the communication strategies most applicable to achieve the set goals. The marketing strategy is the single biggest determinant of whether the firm succeeds or not. If it is right for the business and the product in question, the probability of the business succeeding is very high. However in situations of mismatch, the probability of failure is most real. The marketing strategy should be entrenched in the business to the core. The organizational behavior, business ethics as well as the firm’s culture must reflect the same attitudes and vision as that portrayed in the communication channels used by the business. The strategy develops a cohesive holistic approach by guiding policies and actions (Marketing Teacher, 2009, Par8).
The marketing mix refers to the application of the four critical elements of price, product, place and promotion as marketing tools. Emphasis on each of the elements is guided by an assessment of the nature of the product as well as the nature of the market of the product.
The price element of the marketing mix defines the ways in which the price of a product is arrived at. Numerous pricing strategies have been developed to serve different types of products. Premium pricing is an approach adopted in cases where the product in question is unique in a certain way. The uniqueness provides competitive advantages which enable successful setting of higher prices. The approach is mostly applied for luxury items.
Penetration pricing is charged for products which have not gained adequate market shares to justify production. The price is set low at the entry point of the product and later raised. In addition, price skimming is applied where there is unsustainable competitive advantage. The high price set at the beginning attracts competitors which makes them fall due to increased competition.
Psychological pricing is applied when the intention is to make the customer react out of emotions and not rationally. These are mostly applied in retail stores. Product line pricing is done in the situation where the price is to reflect the benefits of different sections of the product line. Cost pricing is guided by the need to meet costs incurred in the production process (Brownsell, 2008, Par 6).
The place element of marketing is concerned with the channel of distribution adopted for effective selling of the product. The selection of the mechanism through which the product reaches the consumer is a critical determinant in the effectiveness of the firm in delivering sales. On the product element, the quality, the product life cycle as well as the customer life cycle are important aspects of consideration.
Promotion is concerned about the tools available for effective marketing communication. This is concerned with the marketing communications adopted to promote the product using the different channels available. Elements of communication mix are sales Promotion, personal selling, direct mail, trade fairs, advertising, public relations and sponsorship. These elements are cohesively intertwined and merged for effectiveness. A certain message about a product is consistently passed through all the chosen elements. The message passed using any of the above elements goes through the entire communication process shown by the chart below.
Personal selling is a method of direct marketing. It is very effective in establishing close relationships with the customers. The sales agent personally represents the entire firm and applies some techniques and tactics in order to win over the customer. The rewards to the sales people are measured mainly on the amount of returns they are able to generate. The method is most applicable in products with high returns.
Sales promotion refers to all other efforts to improve sales except advertising. They include discounts, Buy One Get One Free (BOGOF) couponing, offers on introduction and many others. A well analyzed sales promotion can be very effective as it makes customers act with haste in buying the product to take advantage of the promotions. This sense of urgency drives up sales levels in the time of promotion (BMW Educational Program, 2009, Par4).
Public relations are a promotional aspect engrained in the culture and behavioral aspects at the organization. It deals with enhancing the relationship between the business and the public. Developing and maintaining a good relationship with the general public is essential in establishing a good reputation which in turn breeds royalty among customers. It involves the development of relevant cultures and norms which define the platform to guide all possible dealings with the public and more importantly the customers. Here long-term rehearsed responses to events are carefully developed with the aim of ensuring excellent treatment of the public hence create a name for the company (Marketing Teacher, 2009, Par6).
Direct mail is another direct form of marketing. It targets people through established databases. Potential consumers are clearly defined and their behavioral aspects analyzed to guide agencies in setting up mailing facilities focusing on the individuals who frequent certain locations. An example is the advertisement for cosmetics on women magazines. The advent of the internet has greatly boosted the direct mail for of advertising. Emails can be sent to persons accessing certain websites on the understanding that they are potential customers based on their visitation of certain websites.
Trade fairs and exhibitions are also effective tools to establish new contacts with customers while at the same time renewing lost contacts. The aim here is to build and develop awareness about the product and educate the customer further on the product use. Participants in such events increase the opportunity to meet with prospective customers and other supportive institutions and be able to expand business networks further.
Advertising is the most popular among the elements of promotion. Advertisement campaigns are directly paid for by the dealer. It is used to position the product in a certain section in the society. It also helps create awareness, influence attitudes and more importantly transmit information towards the customer so as to elicit certain responses. The media used are chosen depending on suitability of the products. The internet is providing new frontiers by expanding the media available for advertising.
Sponsorship involves paying for certain famous events to create an image of concern for the society in the line of corporate social responsibility. Sports and charity lead in this category. The companies sponsoring them hope to gain popularity by associating with the events (What is the Marketing Communications Mix, 2009, Par5).
Skoda UK is known for its effective marketing strategies and has received a host of awards in recognition to this feat. In the IPA effectiveness awards conducted recently, Skoda ranked first. In 2002, the company also won the famous DMA awards. In fact, the company’s advertising agency together a closely associated direct marketing firm Archibald Ingall Stretton produced six awards in the DMA. The IPA Effectiveness awards focus on appreciating creativity and the impact caused by the advertising modes developed. The “Skoda Honest” campaign was agreed to greatly shape the perception of people towards the brand and was the reason for Skodas growth in sales in the country (Lee, 2009).
In the DMA awards, the accolades recognized were evaluated on the criteria of creativity, results and strategy. Interestingly almost all models adopted for Skoda were mentioned. The direct marketing category was dominated by Skoda. The innovative approaches used by Skoda are in deed the best in the UK car industry (Lee, 2009).
BMW on the other hand is a big success in the UK based on its history as a high performing car. It is has developed a great legacy and concentrates on the high income group among the customers in the UK. Great rewards in the DMA for the efforts made in direct marketing the car as well as developing and maintaining a clearly superior brand (BMW Educational Program, 2009, Par3).
In establishing the various marketing communication mix used by the two companies in the UK a three pronged approached was adopted. In the first approach focus was on establishing the visibility of the brands to the general public. This involved checking for billboards, newspaper advertisements and any other general publicly visible advertisements especially in commercial areas. Secondly, I indulged in a more intense search of the more targeted approaches to promotion to establish possible use of direct marketing for the two cars. Thirdly, I indulged in establishing the differences in application of the communication mix used. On this front focus was on establishing the promotional elements emphasized by each car company and why.
I also did enquiries from friends on whether they had any personal contact with any sales people from either of the companies and the experiences they had with them.
Analysis and discussion
Findings showed that BMW was largely biased towards indirect marketing. The company prioritizes radio and television advertising mostly for branding its cars as well as announcing the launch of new cars. In this media, creative advertisements are created to portray the superiority of the new car in the market in offering new features. The recent campaign of the BMW V8 engine is one such example. The advertisement clips portray the new V8 engine as one having superior accelerating capabilities in comparison to all other cars in the market. The BMW is promoted as ‘the ultimate engine’. Both the radio and the television carried the same message for the customers (BMW Educational Program, 2009, Par4).
Skoda on the other hand mainly uses TV advertisements only and the message is always biased towards portraying efficiency, economy and elegance. The two main cars available from Skoda are Skoda Fabio and Skoda Octavia. Style elegance and economy are the main messages passed. There is also an ongoing sales promotion where discounts on used cars are offered giving customers the opportunity to save.
There are numerous well selected and positioned banners, posters and billboards for both car companies telling messages similar to those passed over the radio and television. Radio and TV adverts are repeated or enhanced by the displays at the shopping malls and other commercial areas. The most notable aspect of the displays was the photos of respective car models well developed to fit the message being passed. For BMW, the high energy and accelerating abilities are visible from the motions effects created in the photos which made the car appear to be moving at very high speeds. For Skoda, the photos are elegant and deliberately promoting the high quality aspect. This is with the aim of improving the perception of the car model which has suffered a long period of negative sentiments being propagated.
Both the car companies engage in intensive advertisements over the internet. The adverts are targeted to different websites which are deemed favorites for people who love cars. This is in addition to their own developed websites where all the available models with full specifications are displayed. A host of other sites had the car adverts. Interestingly, BMW is biased towards the websites accessed by the higher income groups such as those relating to expensive jewels expensive holidays and other expensive luxurious items. Skoda on the other hand posted advertisements on websites accessed by the average income groups in the society. This is due to the proper understanding of the market segment for each of the cars.
Enquiries from friends and colleagues on their experience with sales representatives from the two companies revealed that Skoda had a greater emphasis on direct marketing than BMW. Skoda even goes a notch higher to target certain groups offering a ready market for the cars. A good example is the focus on taxi businesses through the low consumption campaigns. Magazines are also awash with pictures of both car models. However the choice of the magazine differs. BMW is mostly advertised in the high end magazines such as Forbes magazines while Skoda focused on lifestyle magazines and newspapers.
Issues such as environmental friendliness and high quality are top on each advertisement for Skoda. For BMW, style, power and class rule.
Recommendation and conclusion
The success of the two car models in sales over the last two years has been immense. Skoda has moved from being the underdog in car sale volumes to becoming a formidable force in the sale of low consumption cars. BMW is a historical success story in the UK. Despite the successes a few issues need to be improved in choosing the marketing mix for the two car companies.
BMW should diversify and include advertisements among the lower income groups. This is because it is still possible to find potential customers access the websites for different reasons. Again, the perception that the car is almost exclusively made for the high income people has the potential to discourage upcoming people from buying the cars. Skoda on the other hand should also target high income groups as there are possibilities that they may need the cars in large numbers.
In conclusion, the integration of the various media in passing similar message about a product is an effective marketing strategy to achieve the right attitude among the customers. Skoda has successfully managed to position itself as a low consumption and high quality car despite the many years of negative publicity. BMW has also managed to successfully combine the use of the various forms of the media in positioning itself as a powerful car in the market.
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Lee, J., 2009. Marketing magazine. Brand Health Check: Skoda. Web.