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AUTOMOBILE INDUSTRY

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michael tartaglia

on 13 May 2015

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Transcript of AUTOMOBILE INDUSTRY

AUTOMOBILE INDUSTRY
INTRODUCTION

We have selected
-Ford
-Mercedes-Benz
-Ferrari

-These brands cover a broad spectrum of the automobile market in regards to their perceived
-Values
-Price range
-Target markets
-Quality and marketing approaches.
-Ford Motor Company is an American automaker and was founded by Henry Ford, on June 16, 1903.

-The company manufactures passenger cars, trucks and tractors as well as automotive parts and accessories

-Ford is the world's fifth largest automaker and is Based in Dearborn, Michigan.
Ford has a 14% market share in the American auto industry as off August 2014
Mercedes-Benz is a German automobile manufacturer

-They manufacture luxury automobiles, buses, coaches and trucks.

-The headquarters of Mercedes-Benz is in Stuttgart, Baden-Württemberg, Germany.

-Mercedes–Benz is one of the best selling luxury automakers in the world.
Mercedes-Benz has a 15.6% market share in the us as off April 2013
Ferrari has less then a 2.3% share of the american luxury auto market as off April 2013
-Ferrari is an Italian luxury sports car manufacturer based in Maranello, Italy

-Founded by Enzo Ferrari in 1929

-Ferrari road cars are generally seen as a symbol of speed, luxury and wealth
Values
Value is the consumers overall assessment of the good, based on their perception of the weighted costs and benefits.
-Consumers are value driven and hold different attitudes in respect to different products and brands.

-Some consumers perceive greater value when there is a low price, whilst others perceive value when there is a balance between quality and price.

-If we define value as only having two dimensions i.e. price (costs) vs quality (benefits) Ford cars would seem to have a greater value to most consumers
-Value is actually known to be multi-dimensional

-3 main types of value dimensions that ultimately drive a consumers purchasing decision: Emotional, Functional and Social values [refer to table].

-This is why it is important for marketers to focus their attention on specific dimensions of their brand that are seen to provide the greatest amount of value to the consumer.
-Because a car is a high-involvement product, consumers evaluate the costs and benefits in respect to the total product offering.

-The consumer is searching for a solution to their problem, which for the most part is a means of transport from A to B [the core offering].

-Consumers will analyze the total product offering to determine which brand has the highest value to them in regard to their personal needs and wants.



REFERENCE LIST

-Core product: the fundamental benefit of the product that satisfies the consumer’s need and wants.

eg. means of transport

-Expected product: this is the attribute of the vehicle that actually delivers the benefits that forms the core product and its value.

eg.steering wheel, engine, transmission, fuel efficiency.

-Augmented product: this is the benefits provided by the vehicle that adds more value to the product and allows companies to differentiate themselves from one another.

eg.seat warmers, sat nav, heads up display, quality materials.
Consumers need to consider the 3 dimensions of value when evaluating costs vs benefits.

-Ford vehicles mainly focus on the functional value of their vehicles, their fuel efficiency, family orientated/practical design, safety features and relatively low cost.

-Consumers of the Mercedes and Ferrari need to consider the social and emotional benefits that these vehicles will provide by making them feel happy when they drive and making them feel more successful and respected in society.

Ferrari doesn't focus their advertising on the functional benefits due to the fact that they aren't sold as practical cars.
-Value is communicated very differently by each brand depending on the strengths and weaknesses of their product and how it differs from then their competitors.

-All three brands use extensive interactive websites, TV ads-, social media and YouTube.


- Ford’s target market is predominately medium income earners.

-The focus is on issues important to this demographic of the market such as affordability, value for money, safety, fuel economy and family orientated design or the ‘functional value’ of their vehicles.

-Ford has many competitors such as Toyota, Holden and Nissan so they need to differentiate themselves from the rest of the market to gain market share

-Ford uses many different advertising strategies to communicate the value of its product to the consumer.

-Ford uses extensive TV advertising as well as facebook and YouTube to market their product.

(Tirkey, 2010)
- Mercedes target market is for a more middle/high income bracket.

-The focus is on the emotional and functional value of their vehicles

-Mercedes includes its luxury and quality aspects in its advertisements using social media platforms such as Facebook, YouTube or advertising its brand image in a magazine.




Mercedes YouTube clip..
(Mercedez-Benz Brand Value commercial, 2012)

-Ferrari targets high income earners

-Value is conveyed by focusing on the emotional and social aspects of value such as power, beauty and status.

-Ferrari does’t use traditional advertising, it's brand is primarily communicated through its exclusiveness and image.

-Ferrari focus on emotional value, the benefits you will gain from driving a Ferrari, how it will impact on your lifestyle and social position.

-Ferrari emphasizes the lifestyle more so then the practicality of the car, due to the impractical every day use of the car.

-They don't extensively use common mediums to advertise such as Facebook or Youtube.

-Ferrari uses brand association and “Evangilists” using celebrities and well-known figures in society to advertise its brand.

-By using people who hold high social status, Ferrari emphasizes on the social and emotional values of its brand as well as the lifestyle associated.

-It suggests that its products will provide those who purchase its cars with the same lifestyle and social status.
(Famous People Who Earn Ferraris, 2015)
(Famous People Who Earn Ferraris, 2015)
Recommendation
-Due to Fords wide market its different consumers consequently have contrasting ideas in regards to the perception of what value is.

-To make its product more valuable and desirable than competing offerings, Ford must take on a more comprehensive and in-depth view of it’s products [reference] in order to create a car that best meets the current needs and desires of its market.

-We think that this can best be done through engagement strategies.
Tirkey,M 2010, Margreth Road Bangalore, photograph, viewed 6 April 2015,
http://www.coroflot.com/manisha_tirkey/Graphic-design

Mercedez-Benz Brand Value commercial. (2012). [video] Available at: [Accessed 6 May 2015].

Famous People Who Earn Ferraris. (2015). [image] Available at: http://www.ranker.com/list/famous-people-with-ferraris/celebrity-lists?format=SLIDESHOW&page=2 [Accessed 6 May 2015].

(Elliot, Rundle Thiele, Waller 2010) Greg E, Sharyn R.T, David W, Marketing Third Edition, John and WIley sons Australia.






Costs and benefits
ENGAGEMENT
''Engagement is a type of marketing that promotes direct interactions with consumers and gives them opportunities to have their say in the product, development and final product or service that a company is offering''
(Elliot, Greg 2010)


-Engagement enables consumers to feel involved and have an aspect of community associated with big multi-national brands.

-Consumers can follow the evolution of the brand and be involved further emphasizing this community orientation.

-Rather than consumers being viewed as simply those who use the good, consumers should be actively involved in the processes of the brand, which inevitably develops brand loyalty and reduces competition across the marketplace.

-It allows the company insight into what the consumers are thinking and what could be improved on by the business.
Consumer Engagement is the point at which a brand and a consumer connect to further solidify the relationship between the two ultimately offering a better consumer experience related to the brands core values, a relationship that can only be enhanced over time.
-Co-creation is a large part of Engagement, it is a major tool that’s used to enhance this company consumer relationship.

-Co-creation is the engagement of a consumer and a company working on a product or service offered by the company in a mutually beneficial partnership.

-There are several mediums in which co creation can be implemented from a small scale coca cola design your own Coke, to Fords extensive and thorough car customization colour options.
CO-CREATION

Ford Australia uses a community based engagement model to directly target and interact with the customer base, forming a community
oriented feeling toward
the brand and inclusiveness with the purchase of a Ford vehicle.

-Ford uses Co creation as a direct way to engage with their customers and to enhance this caring and community based feeling.

-They give many customizable options; as well as custom exclusive features that only Ford community members have access to. Such as custom rims, colour scale and various accessories.

-Customers then also have the ability to leave feedback and offer suggestions on added features for the model of car they’re customizing.

-As a large part of Fords co-creation they give the ability to customize the primary colour of most of their models.

-This engages the customer and Ford in a way that is mutually beneficial. It provides the customer freedom to choose as well as offering a different previously unused colour combination by Ford as a direct result of the co-creation between the brand and the consumer.
-Ford has several mediums, which they use to advertise their product and engage with the community such as print, television and sponsorship.

-They primarily use television and print as the main sources of their advertising as it targets the primary customers of the brand.

-Ford uses community oriented advertisements to engage with their customers, big families and the creation of a family product is a big part of the 4x4 or all-wheel drive market.
-Mercedes-Benz is a luxury car brand with a stellar reputation for producing high quality, high performance cars.

-These cars are at the expensive end of the car market due to their quality but still remain affordable to the upper class.

-The pristine reputation that this brand has built since its formation in 1926 has been contributed to by a sound engagement strategy with its customers.
-An example of a Mercedes engagement strategy is the Mercedes-Benz car club.

-This club aims to unite owners, enthusiasts, fans and experts to all appreciate and discuss their associations with the brand.

-They hold many events aiming to achieve these desired cohesive effects, most commonly through car rallies.


-Mercedes-Benz utilizes social media to promote engagement, particularly through Facebook and Twitter.

-In 2013 for example, for the launch of the new A-class model, Mercedes launched a campaign aimed at consumers called #YOUDRIVE

-Consumers would decide the story of three separate advertisements.

-This example of engagement was extremely successful.

-In July 2012, the old A-class model only represented 0.4% of the UK hatchback market.

-Two months after the #YOUDRIVE campaign however, it represented 6.2%.

-The hashtag appeared 103 million times on Twitter and 30 million times on Facebook, highlighting the enhancement that social media has on engagement in the modern world.
Ferrari is a niche car market, the large majority of the population would be unable to afford the luxury sports car and as a result has drastically varied engagement strategies to Ford and even Mercedes.
http://www.allcarbrandslist.com/ferrari-logo/
http://www.logodesignlove.com/mercedes-benz-logo-evolutionhttp://
designrfix.com/inspiration/advertising-clever-automobile-ads
WWW.FORD.COM/LOGO
-With a niche market arises brand fanatics, individuals who are so intrinsically intertwined with a product they view it as much more than just a brand.

-The company is viewed as a community and a family, where the consumer is equally interested in the success of the business as the organization itself due to the tight knit connection they feel with the brand.

-If carefully harnessed the company is able to keep long-term customers even through generations by the strong community orientation.
-Ferrari has harnessed this customer and community orientation by supporting fan run Ferrari clubs around the world.

-Ferrari Club Australia has a website which includes group meetings, car information, group registration and exclusive Ferrari merchandise only available to these members.

-There are hundreds of fan and organized Ferrari clubs across the world spanning to nearly every continent

-This is a clear example of how a niche car such as Ferrari is able to interact and stay relevant with their consumers and enable the brand to live on simply through reputation and community relevance.
How is value communicated to the market
Ford
Mercedes-Benz
Ferrari
*(Images referenced on individual image as per RMIT Harvard standards)

Consumer perceived value: The development of a multiple item scale
Jillian C. Sweeneya,*, Geoffrey N. Soutarb Journal of Retailing 77 (2001) 203–220

Customer Engagement Behavior: Theoretical Foundations and Research Directions Jenny van Doorn1 , Katherine N. Lemon2 , Vikas Mittal3 , Stephan Nass4 , Doree´n Pick5 , Peter Pirner6 , and Peter C. Verhoef1


Ferrari Engagement
-Ferrari uses social media to promote the lifestyle of owning a Ferrari more so then the product itself.

-With a 15million following obviously not all 15 million own a Ferrari.

-This emphasizes the envied and idolized lifestyle associated with the product.

-Ferrari has harnessed this engagement to target people who might not be able to buy the product.

-Ultimately giving a better reputation and brand image, although not necessarily increasing sales.
Mercedes Benz
-Mercedes similarly like Ferrari uses social media to engage with their market.

-However Mercedes uses different strategies to Ferrari

-Mercedes targets a potential market market on social media using it as a medium to advertise the product and the lifestyle synonymously.

-Mercedes engages with their customers in a more personal manner using a community approach to target a certain demographic (middle to upper class)
https://www.facebook.com/MercedesBenz/photos/a.10150653089761670.421241.6604386669/10153099993431670/?type=1&theater
Ford
-Ford unlike Ferrari and Mercedes is the heaviest user of social media.

-They have social media platforms on Youtube, Facebook, Instagram, Twitter, Independent websites, Reddit and Tumblr.

-Ford is able to effectively and directly engage with their primary demographic using these forms of social media.

-This is in many cases free advertising for Ford.

-Facebook reaches over 2.9 Million fans in the U.S alone, providing information straight to their news feed on new models, specials and all Ford related news direct to the consumer.
Ferrari
-Ferrari uses social media(Facebook,Instagram, ect) as a platform to emphasize the lifestyle associated with Ferrari

-However there is unused potential to engage with customers in the social media forum.

-Ferrari could use Youtube to interact in a practical part of the market to show the physical capabilities and features of Ferrari's.

-They would be able to in further detail distinguish and show case the Ferrari brand in a break down of both the style and performance of the cars.
-Ferrari has over 200,000 followers on Youtube, this is only a fraction of the actual traffic the page would receive.

-Ferrari could engage with the consumer by getting high quality professional videos made.

-This would work as a free brochure for Ferrari to promote their product, and any potential customers could use the videos to determine whether to buy the product.
-Mercedes Benz has a market that primarily is the upper class.

-Mercedes has prided itself as a exclusive luxury car.

-In recent years Mercedes has increased there advertising to a wider demographic and income range.

-Due to this new market Mercedes has unused potential in lower income bracket markets.
To capitalize on these unused markets Mercedes could,
-Create a cheaper more affordable car.

-Advertise directly to this new lower income bracket an affordable yet luxurious car.

-Use television and social media relevant to that new market to advertise the availability and realistic nature of purchasing such a luxurious car.

-Emphasize the lifestyle association to a lower income bracket and associate the product with how it will impact on the consumers life.
(Elliot, Greg 2010)
(Elliot, Greg 2010)
http://caronwhite.com/make/ferrari/
-Ferrari should maintain their engagement and there advertising strategies.

-Continue relying on brand reputation and lifestyle association for sales.

-However they should also pursue free or relatively cheap advertising mediums to give potential consumers extra reason to be apart of the exclusive Ferrari club.

Such as,
-Increase Facebook, Youtube and social media use.
-Create in detail videos and tours of models.
-Emphasize the community aspect and lifestyle association on social media.
http://caronwhite.com/2012/mercedes-benz-cls-63-amg/
-Mercedes has remained a luxury car that emphasizes social position.

-Similar to Ferrari is able to sell based on brand reputation itself.

-However should look into other markets and niche consumers to expand there sales group, while remaining there luxury standards.

-Advertising the middle income bracket of consumers with the lifestyle and prestige associated owning a Mercedes on common social media is a sure way to increase sales and decrease market share.

-Ford should continue to emphasize their community aspect of their brand.

-Use the community aspect to further solidify their evangelistic consumers.

-Continue to use Ford motoring as a medium to show the benefits of being a Ford supporter.

-However more heavily focus on the co-creation aspect of Ford and the benefit of being involved in the growth of the company once again going back to the community oriented engagement.

-Ford should use there existing community aspect and co-creation momentum to further solidify there customers.

-By offering exclusive customization options to Ford community members or reoccurring customers Ford will secure a portion of the market reducing market share and increasing income.
http://www.nadaguides.com/cars/2012/ford/focus
"The only thing that matters in the new world of marketing is delivering the customer value"
[Albrecht pg 2, 2015]
(mmaglobal, 2012)
- Lays chips brand created an engagement strategy
- Lays asked consumers to come up with different flavour ideas for a chance to win $1 million
- Lays chose 3 of those chips flavours and brought them so life
- Ford could adapt same basic principals of the "do us a flavour strategy"
- consumers to come up with attributes and car features that they foremost desire
- Ford would be able to create a new and innovating model that best suits the most current needs and desires of the market.
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