Know about the tips and tricks of marketing assignment
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Marketing refers to the business activities that involves transactions related to buying and selling of a product or service. It deals with ascertainment of needs and requirements of users and then carrying out manufacturing process accordingly. Also, it involves the processes like advertising, selling and delivering products to people so as to increase the revenue generation for company. The first section of report is based upon Tesla Inc. which is a Silicon Valley company that develops vehicles with electric energy so as to promote sustainable use of energy. The company was found in 2003 by duo Martin Eberhard and Marc Tarpenning. This report covers the impact of internal and external marketing environment upon marketing decision of company. Also, it includes the factors that influence the behaviour of buyers and their implications upon marketing and segmentation strategies. The second and third part of report is about Mercedes and the new model launched by company. This section includes the marketing mix of this product along with the marketing concepts used by company. Along with that, the influence of global environment upon sales of Mercedes Benz in Asia is discussed.
Question 1. Impact of Internal and External Marketing environment upon marketing decision for Tesla in the UK market
In the present market scenario, analysing the external and internal market forces has become very essential for marketers. The internal marketing analysis known as micro environment while the external environmental analysis is referred to as macro environment. In relation to automobile industry, its is imperative for marketing practitioners to determine the micro and macro environmental factors that affect the growth of business in industry. The competition in market in very high in today's world. Thus, Tesla needs to carry out an effective market analysis so as to gain knowledge about various forces that affect the operations of business.
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The external environment of any business can be evaluated by using PESTLE analysis. PESTLE framework helps to ascertain and analyse the external forces of market that influence the operations of business and also the business growth in long run. This framework includes six factors, namely, political, economic, social, technological, legal and environmental. The impact of these factors on the working and functioning of Tesla in global market is given below:-
Political: These factors define the extent of government intervention in operations of business entity. For a business to conduct operations in global environment, it is essential that it takes into account these factors. These include government stability, policies, regulations etc. For an electric car manufacturer like Tesla to function efficiently in marketplace, it is significant that the company complies with the legislations set by government for automobile industry. Tesla need to equip proper safety measures during its operations in compliance with government laws so as to ensure that there are no harmful incidents. Also, Tesla needs to make sure that the electric vehicles manufactured and developed by company has minimum fuel efficiency.
Economic: Economic condition of a country has impact on the buying power of consumers. It is an external market force for the automobile industry. Electric vehicles are expensive and therefore, an economical recession will prevent the organizations from conducting sustainable business. Therefore, it can be said that economic factor has wide impact on the automobile industry.
Social: When it comes to the social factors, it has impact on the buyers’ decision-making process. Social background of the targeted consumers influences the buying behavior. For example, consumers from high social background will seek for products with premium pricing. On the other hand, people from low social background will seek for moderate quality products at low cost. Therefore, it is highly important for automobile industry to evaluate the social factors before entering in international market.
Technological: In automobile industry, technological improvement affects the business process in an effective manner. A car manufacturing organization should implement innovative technologies in order to attract the consumers towards the brand. When it comes to the electric vehicle manufacturer, the organizations need to be more attentive while introducing new technologies. It is highly important to evacuate whether the targeted consumers are accustomed with innovative technologies or not.
Legal: In automobile industry, the organizations need to evaluate the legal frameworks imposed by the government. Different countries have different legal procedures. Without complying with the legal frameworks, it will not be possible for the organizations to conduct sustainable business.
Environmental: In order to conduct business in global market, organizations should maintain the environment quality. Now, in case of the automobile industry, the organizations need to maintain minimum carbon emission. However, the electric vehicle manufacturers need to ensure that their products are energy efficient. In this manner, it will be possible to comply with the environmental policies.
Analysing Internal Business Factors of Tesla Motors
Internal business factors refer to the internal analysis of an organization. Tesla Motors deals with electric vehicles and now planning to expand in global market through physical stores. Therefore, it is highly important to conduct an internal analysis through which it will be possible for the company to understand the probable opportunities. The current profit margin of the company is 29.6%. Now, the company has planned to reduce its battery cost by 30% in order to increase the profitability. Apart from that, the company needs to expand business in international market and therefore, it is highly important to evaluate the organizational resources carefully. Following is the internal environment analysis of Tesla Motors, which shows its internal business factors, which can affect organizational growth of the company.
Question 2. Factors that influence buyer behaviour and their implications for marketing and segmentation strategies
Evaluation of Markets
In order to enter in international market, it is highly important to evaluate different markets before taking the final decision. Here, it is important to consider economic conduction of the country in order to analyze feasibility. Tesla Motors needs to evaluate the market based on product demands and market competition. The company should choose a country, where market competition is present (Hamilton and Webster 2015). In this manner, it will be possible to gain competitive advantages. Now, Tesla Motors needs to understand the market from every aspect in order to ensure sustainable development. Following is the process of evaluating different markets in international market.
Country identification: Here, the company needs to identify the potential country for the electric vehicle. Developing country will be the most efficient target market for Tesla Motors. In such market, the company would be able to reduce manufacturing cost in an efficient manner (Lópezâ€ Duarte, Vidalâ€ Suárez and Gonzálezâ€ Díaz 2015). In such countries, the company would be able to reduce the labor cost and other resources. Apart from that, the economical background of the country should be taken under consideration.
Preliminary screening: Here, Tesla motors needs to take a close look to the external market forces. For example, the economical stability and buying powers of the consumers are the most important factors, which the company needs to observe (Neelankavil 2015). Apart from that, the company should evaluate exchange rate and currency stability of the nominated countries.
In-Depth Screening: In this step, Tesla needs to conduct in-depth evaluation of the markets. Here, it will be beneficial to observe business growth of companies in automobile organizations (Drogendijk and Martín 2015). Following this process, the company would be able to narrow down the process of market selection in an efficient manner.
Final Selection: Here, the company should select a country based on the previous analysis. In this step, the company needs to take the final decision of international expansion (Eicher 2016). In order to select the appropriate market, the company needs to consider some critical success factors such as market competition, buyers’ power and demand of technological products.
Selection of Market with Justifications
In order to enter in global market, Singapore would be the most feasible location for Tesla Motors. Singapore is a developing country in Asian market. In this country, Tesla would be able to reduce labor wages. After conducting market evaluation, it can be said that political risk factor of Singapore market is comparatively low from other countries. The major threat of automobile industry is restrictive political framework. Expanding business in this country would help the company to maintain sustainability (Cuervo-Cazurra 2016). When it comes to the economic factors, the country is vibrant in terms of economical background. Singapore’s per-capita income is 76,860 dollars. The business environment is corruption-free, which will help the company to conduct ethical business. Due to favorable economic state, the market competition of this country is high and therefore, it will be easy for the company to gain competitive advantages. When it comes to the social factors, purchasing power of the consumers is very high in this country. Therefore, Tesla Motors will be able to maintain stable cash inflow in an effective manner (Folsom et al. 2016). Singapore is a technologically advanced country, where demand of innovative products is very high. Consumers are willing to buy product with good features. Therefore, it will be easy for Tesla Motors to manufacture electric cars in this particular market. After evaluating the Singapore market from different aspects, it can be said that the selected market is feasible for the company. In this market, the company would be able to influence consumers’ buying behavior through innovative range of electric vehicles.
Market Entry Strategy for Tesla Motors
In order to enter in Singapore market, Tesla Motors should implement Joint Venture strategy. Through this strategy, the company would be able to reduce entry cost in an efficient manner. The company should evaluate the company with which they can conduct collaborative business. Here, the company can choose Ford as the company with which strategic alliance is possible (Ghemawat 2015). In this entry strategy, it is highly important to understand the required resources for the planned expansion. For example, the company should have adequate knowledge about the roles and responsibilities of their strategic alliance. Tesla should take the responsibility of product manufacturing in order to build a global image. Through this market entry strategy, the company would be able to reduce the cost of physical store in Singapore market (Deyo 2016). Apart from that, the cost of manufacturing unit will be reduced through this strategy. Entering in international market is costly and therefore, it would be easy to merge up with another organization in order to maintain profitability.
Question 3. (a) Utility of the extended Marketing Mix (7Ps)
Before entering in international market, it is highly important to frame the marketing strategies through appropriate marketing mix. It would help Tesla Motors to gain superiority in international market. Following is the marketing mix for Tesla Motors in order to conduct sustainable business in Singapore market.
7Ps Marketing mix framework
Product: In order to attract consumers in Singapore market, the company should incorporate innovative features into their products. Apart from that, the company should pay close attention to the product quality. Following are the features that Tesla will incorporate into the electric vehicles.
- ·The products will be energy efficient
- ·High security features will ensure low damages
- ·Zero carbon emission would help to improve environment condition
- ·Minimum recharging time (less than one hour)
The above-mentioned features would help to attract the consumers in Singapore market. Additionally, the company needs to focus on product design and build in order to gain competitive advantages.
Price: Economic background of Singapore is feasible and therefore the company would implement premium-pricing strategy. Purchase power of consumers in Singapore is high. Therefore, this pricing strategy would be favorable for the targeted customers in this country. However, the company has planned to reduce cost of lithium ion battery by 30% in order to increase organizational profitability. People in Singapore are willing by products with high technological features. Therefore, high pricing will not be an issue for this group of customer.
Place: Tesla will conduct business through physical stores in Singapore market. Apart from that, the company will also collaborate with the distributers in order to increase product availability in this market. Consumers will be able to book products through official website of Tesla Motors. Online selling process is not used in automobile industry before. Therefore, this service will attract large group of consumers in an effective manner.
People: Tesla would recruit workforce from the Singapore market. Through this strategy, the company would be able to reduce company wages, because labor cost of this country is comparatively low. However, the employees are skilled and well efficient to handle critical situation. The company will recruit based on skills and cultural background of people. In order to maintain business sustainability, the company will avoid segregation while recruiting. A fair recruitment policy would help the company to utilize knowledge of skilled workforce.
Promotion: In order to promote the products in Singapore market, the company would adopt online promotional strategies. Tesla should adopt celebrity endorsement in order to influence buying behavior of Singapore’s consumers. Wirth effective social media promotional strategy, the company would be able to communicate with the targeted consumers directly. The proposed promotional strategies would help the company to promote the electric vehicles in Singapore market in an efficient manner.
Process: In order to expand in this particular market, the company should adopt joint venture strategy with Ford, which is a car manufacturing company of global market. Through this strategy, the company would be able to work collaboratively. Therefore, it can be said that cost of expansion will be low with this strategy.
Physical evidence: In order to increase trust level of the consumers, Tesla Motors will open physical stores in Singapore market. However, the company will also provide the facility of online purchase. Consumers can buy products through physical stores or the website. The company will provide efficient training to the employees in order to ensure high quality reception to the consumers.
(b) Marketing concepts used by Mercedes
Production concept is the part of marketing concept which elaborates that consumer like and favour those products that are easily available and economical for the middle age group. This concept is highly recognised by the industrialist. Professionals focuses on this concept for achieving high efficiency, low cost and wide distribution of goods and services. This concept is widely use in developing countries where consumer mainly focuses on the product rather than the features of the product. They believe on the wide sale of goods and services by examining the perception of the consumer's and target the large consumer base and access them by advertising. In nations where manpower is less costly and easily available, the production should be maximized in contrast diminishes the costs, it increases the production effectively in Mercedes. India and china widely use the concept of production concept to capture the huge market share and satisfy the needs and wants of the consumer. The main goal of the production concept is profit maximisation by achieving the wide area of consumers and achieve the large consumer base . The backbone of the production concept is skilled labour and technological advancement. It resulted in the higher revenue with decreased the cost of operations. In this concept consumer purchase those products which are easily available in the market and consumer buy those goods which are less costly and affordable for them. On the other hand consumer's always compare the prices from the competitors product and after evaluation the prices then purchase the product.
this concept focus on the selling the goods not observing the demands of the consumers . The aim of this concept is the product build according to the company not according to the consumer's demands and wants. In this concept higher authority focuses on that consumers will buy that goods that they never like to buy. Selling concept enables the suppliers to think that customers will not buy the product unless large scale of promotions and selling efforts are not caring. Selling concept is one of the big ideologies in marketing concept. Selling concept is used for the goods which customers don't buy normally. The focus of selling concept is more on selling the products to the company with proper analysing the consumer needs and increases the sales transaction in the Mercedes . Selling concept works on the poor concept that if the customers are in habit of buying the particular product they will definitely like it and hence if the dissatisfaction of the product is there they will not buy if the product is beneficial. The Selling Concept elaborates the concept that customers, be individual or in group will not buy sufficient of the organization’s goods unless they are persuade to do sell the product and selling effort. So organizations should understand selling and promotion of the products of marketing achievement. The consumers mainly are unstable in their needs and they need to be stable for buying by reversing their inert need into the actual needs and estimate the demand.
Question 4. PESTEL of Mercedes Benz in Asia
While concluding, it can be said that in order to expand in international market, it is highly important to conduct feasibility study. After conducting the micro and macro environment analysis of automobile industry, it can be said that organizations in this sector has huge opportunity to enter in international market. In case of Tesla Motors, The Company should target Singapore market with joint venture strategy. Through this strategy, Tesla Motors will be able to reduce the cost of international expansion in an effective manner.