Automobile Industry: Marketing Analysis. Business & Marketing Essay

Automobile Industry: Marketing Analysis
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Automobile Industry: Marketing Analysis
Introduction
The inception and dominance of the processes of liberalization, privatization, and globalization in marketing across all industrial sectors have increased the demand for goods and services. Liu and Shankar (2015) explain that the global landscape has witnessed great advancements in customer-driven marketing initiatives where all industrial operators have institutionalized the mechanisms needed to foster the attraction of new customer segments while retaining the existing ones. Shao, Taisch, and Ortega-Mier (2016) explain that the automobile industry has experienced massive developments since 2000. Such a notion could be attributed to the fact that the yearly transportation expenditures in developed economies such as the United States are ranked second after the cost of housing. Eilert e al. (2017) reveal that the global automobile industry has increased its levels of competitiveness by ensuring that it avails is customers with high-quality goods at minimized costs. According to Shalender and Singh (2017), competition in the automobile industry exists in two distinct levels: inter-brand and intra- brand competition. Cherubini, Iasevoli, and Michelini (2017) reveal that inter-brand competition is the kind of rivalry that exists between varied manufacturing firms availing their customer segments with differentiated commodities with the aim of satisfying different consumer preferences. For instance, intra- brand competition could exist among automobile organizations such as Toyota, Ford, Chevrolet, and Honda. On the other hand, intra- brand competition is witnessed among firms offering a similar brand and emphasizes the issues of pricing.
The automobile industry is characterized with higher degrees of operational dynamism that are manifested with issues such as variation in the patterns of demand, periodic fluctuation in the prices of fuel and declination in the levels of brand quality. The challenges above play a crucial role in raising the stakes for firms struggling to catch up with the disruptions presented by the business environment. As a consequence, Shahin and Mohammadi Shahiverdi (2015) explain that automobile firms across the globe can only increase their competitive advantages through the proper adoption of effective marketing ideologies. For instance, Choi and Lee (2018) reveal that the success of automobile manufacturers such as Tata Namo and Toyota can be attributed to the inherent capabilities of these companies to institutionalize effective marketing flexibilities. The current study is divided into three distinct sections. First, the study proceeds by describing the scope of the automobile industry, recent performances, SWOT analysis, the marketing-related lessons presented by the automobile sector, and the marketing recommendations concerning the strategies that need to be applied for the industry to realize the desired levels of success. The second part of the study shall undertake a critical analysis of the 2017 sales and profit performances of Toyota, the specific examples of the market segments served by the organization, its marketing mix strategy, the differential strengths and weaknesses of the firm, its website and the probable marketing recommendations for this organization. The last section of the paper provides a brief conclusion on the issues discussed.
Analysis of the Automobile Industry
The current section of the study seeks to undertake a critical analysis of the automobile industry by describing the scope of the automobile industry, recent performances, SWOT analysis, the marketing-related lessons presented by the automobile sector, and the marketing recommendations concerning the strategies that need to be applied for the industry to realize the desired levels of success.
The scope of the automobile industry and its segments
The global automobile industry plays a significant role in fostering the developments in the entire business cycle. Key players in the global automobile industry include manufacturers, assemblers, infotainment companies, and distributors. Aoki and Wilhelm (2017) explain that while the industry only accounts for a minimal share of the generalized industrial outputs across the globe, it reveals higher levels of volatility and could instill higher levels of fluctuations in the economy-wide activities. Aoki and Wilhelm (2017) reveal that currently, the sector has shifted from the initial practices of centralizing its operations to the adoption of a more simplified strategy of ensuring the internationalization of the final process of assembling motor parts as a way of preventing possible predicaments such as those that were imposed by the tsunami and earthquake in Japan in 2011.
The global production of the automobile industry has seen an increase in the levels of dispersion over the years. Barron, Pereda, and Stacey (2017) demystify that by 2009, Japan accounted for about less than 50% of the global production of passenger cars. However, Toma, Marinescu, and Grădinaru (2018) explain that over the last decade, the international landscape has experienced multiple shifts in the automobile industry as China has taken a central position based on its effectiveness in attracting investors as a point of assembly. Liu and Shankar (2015) demystify that the processes of assembly production among players located outside Japan greatly depend on this economy for the importation of essential spare parts. According to Eilert e al. (2017), about 40% of the raw materials used by automobile companies located in Japan, Asia, and the Oceania region are sourced from Japanese organizations. As a consequence, a slight decline in the levels of production realized by the Japan-based manufacturers causes a sharp decline in the levels of availability of essential spare parts among the non-Japanese automobile firms.
Automobile sales in the global landscape are greatly correlated with the levels of private consumption. Eilert e al. (2017) reveal that the sales eves saw a sharp increase after the global recession of 2007 but started increasing at a steady rate since 2010. According to Shalender and Singh (2017), the levels of consumption of automobiles in China, Japan, the Eurozone, and the United States saw a steady increase since 2010.
Recent performance in the automobile industry
The global automobile industry has experienced great advancements in the past two decades. Cherubini, Iasevoli, and Michelini (2017) explain that while the automobile sector was previously looked at as an industry that is associated with an unpleasant selling procedure, high commodity costs and poor services, it has experienced multiple transformations and acceptance across the globe. Currently, auto manufacturers have launched fierce competitions amongst one another; an aspect that has driven the need to attain optimal profits through minimization of costs and striving to meet the prevailing consumer demands for high-quality cars and trucks at affordable prices. on the other hand, Shahin and Mohammadi Shahiverdi (2015) demystify that the survivors in this industry are faced with the new threat presented by players drawn from outside the industry who have strived to thwart the efforts put in place by key manufacturers in the processes of renewing their business interests of creating strong and long lasting ties with their consumer segments.
The rapid growth of the automobile industry is attributed to the multiple changes experienced in the global demographic compositions. Choi and Lee (2018) reveal that the increasing growth of the baby boomer generation has led to an increase in demand for vehicles meant to serve the younger generation yearning for a good time in their day to day operations. For instance, the Ford Company launched the Mustang model with the aim of meeting the prevailing demands presented by the young generation customers. The researchers estimate that over 400,000 Mustangs were sold within the first year of release into the market. According to Aoki and Wilhelm (2017), the sector has experienced an average annual sales growth of 3% since 1964; a figure that is roughly about two times the annual growth of the world’s population over a similar period. Aoki and Wilhelm (2017) reveal that while the annual sales in the Japanese, North American and Europe markets have remained constant in the past one decade, the increasing levels of sales have been as a result of the emerging markets such as China. According to Barron, Pereda, and Stacey (2017), the auto sales in China increased by over 300% in the last two decades from about 9 million vehicles sold in 2004 to about 25 million trucks in 2014. On the other hand, Toma, Marinescu, and Grădinaru (2018) predict that the Chinese market will account for the sale of over 30 million cars on a yearly basis by 2020 up from 20 million on 2013.
The automobile industry’s performance was initially based on the supply push ideology since the inception of Henry Ford’s production line. Shao, Taisch, and Ortega-Mier (2016) reveal that the supply push philosophy is aimed at initiating a strong bias towards ensuring that the players in this sector cover the high production costs associated with the manufacture and assembly of motor vehicles. However, Eilert e al. (2017) demystify that with the inception of new technologies in this sector, over 15% of the vehicles sold in this sector will be fully autonomous by 2030. Cherubini, Iasevoli and Michelini (2017) explain that the inception of advanced driver-assistance systems (ADAS) in this sector has played an influential role in preparing key industrial players such as consumers, distribution channels, regulatory agencies and corporations for the advancement of midterm reality of auto motives aimed at taking over the control of drivers. While ADAS present the end consumers with multiple benefits, Shahin and Mohammadi Shahiverdi (2015) demystify that their rates of uptake by the targeted consumer segments is hindered by factors such as safety, the levels of consumer understanding, and pricing. However, the autonomous vehicles will present the consumer with multiple benefits after these challenges are addressed with the seriousness they deserve.
The emergence of stricter regulatory regimes targeting proper reduction of the levels of carbon emission, minimization of the underlying battery costs, and the increasing availability of charging infrastructure have played an essential role in fostering the inception of electrified automobiles across the globe. However, Choi and Lee (2018) reveal that the rate of the inception of the autonomous vehicles will be determined by the regional variations in the regulatory push as well as the interactions that emanate from customer pull. According to Shao, Taisch, and Ortega-Mier (2016), electric vehicles will account for up to 50% of the new automobile sales by 2030.
SWOT analysis
SWOT analysis seeks to undertake a critical review of the internal environment of the automobile industry. The current section of the study reviews the strengths, weaknesses, opportunities, and threats presented to the automobile industry across the globe.
Strengths
* The automobile industry boasts of its strong market position and recognition of brands. Automobile companies such as Toyota, Mitsubishi, Honda, Chevrolet, Ford, Yamaha, Tata, and Mazda boast of their strong market positions in their geographical areas of operation across the globe. For instance, Liu and Shankar (2015) explain that Toyota accounted for a 12% market share in North America, 46% of the Chinese and Japanese markets and 13% of the Asian market. Other brands such as Ford, BMW, and Audi account for a significant level of consumption in the European market.
* A strong emphasis on R&D. Automobile companies across the globe increase their competitive advantages by focusing on the processes aimed at expanding their R&D infrastructure as a way of enhancing their functional...