Essay: Marketing Strategy & Structure Plan For Australian Automotive Industry.

Situation Analysis of the Industry

Discuss about the Marketing Strategy and Structure Plan.

Automotive is the particular industry as selected for analysing and reflecting critical marketing knowledge in this paper. Motor vehicles are responsible for providing great extent of mobility and independence to the families and communities across the broad range of regions of Australia. Hence, the primary reason behind the choice of Australian automotive industry is the prevalence of the sector in the development of freight and transportation segment of the market. From the initial understanding, auto industry plays one of the central roles in the development of Australian economy while promoting the way of life for the vast array of population (Lawrence, Marr, and Prendergast 2013). Based on the statement provided by Lawrence et al. (2013), the car manufacturing industry in Australia is accounted for converting the raw materials like steel and aluminum into the highly valued goods with the potential to export in the international market. The particular factor drives the chosen industry to achieve the spot as one of the frontrunners in the domestic manufacturing industry to become the leading contributor to the overall community and society.

Based on the investigation to the industrial structure, the particular growth and significance of the industrial presence reflect in the overall economy of Australia. The car-manufacturing industry of Australia is responsible for providing a substantial boost to the national workforce of the country with offering more than 400,000 employment opportunities to the population directly or indirectly (Shaheen and Cohen 2013). Apart from that, different recent statistics suggest the same of more than 1 million new vehicles in Australia with more than 100,000 motorbikes sold in the previous year. Apparently, the growth of automotive industry to become one of the market dominators is significantly proliferated by application of increasing innovation. In this case, the dominative presence of innovation is highly possible by the vital ongoing investment of the industry in the research and development department (Armstrong et al. 2014). At the same time, the significant investment in the environmental technologies and ensuring the appliance of safety features for the designing and development of Australian vehicle fleet are the considerable factors causing the expansion of the industry and leading it becoming the current market leader.

In this particular context, Shaheen and Cohen (2013) has critically reflected the fact revealing that the automotive industry of the country has gained the capability to reduce average emissions from its new vehicles by around 15% over the last 8 years. The particular study has further disclosed that billions of dollars are planned to invest by the leading organizations to ensure the manufacturing future vehicles to be even environment-friendlier. The car industry of Australia is the leading one in the world regarding the adoption of advanced safety features and technologies in its vehicles, such as Electronic Stability Control (Al-Alawi and Bradley 2013). The particular feature was introduced by the industry to its respective market in the country before many other growing and dominant international markets.

Marketing Macro Environment and Forces

From the analysis conducted by Armstrong et al. (2014), it is determined that the particular industry in Australia receives an enormous funding from the government each year amounting to $500 million for ensuring the hassle-free flow of investment. Based on the net present value calculation as part of the economic welfare presented by Armstrong et al. (2014), the result of the particular investment in the chosen industry has caused an expansion to the overall economy of the country by more than $21.5 billion. Significantly, government assistance can also be observed in the car manufacturing process as well calculating around $18 per person involving the method (Wiengarten et al. 2013). The particular situation involving the Australian automotive industry potentially drives this paper to conduct a useful analysis from the marketing perspective on its one of the leading corporations known as GM Holden Ltd.

GM Holden Ltd., popularly known as Holden, is an Australian automobile manufacturer functioning in the domestic market and is headquartered in Port Melbourne, Victoria. The company was formed in 1856 as a saddlery manufacturer to shift its operating focus in the automotive industry in 1908. Later, the company became a significant subsidiary of United States-based General Motors (GM) in 1931 to offer a broad range of regionally manufactured vehicles to the Australian communities supplemented by the imported GM models (Kotler et al. 2015). The company has experienced different kinds of instabilities in its growth and portfolio influenced by the fundamental factors associated with the external environment of the respective industry. Wiengarten et al. (2013) have explained that each macro factor from the external market environment influence the various aspects of the decision making of the companies driving the understanding that the implications of macro-environmental forces present imperative opportunities and threats to the marketers of Holden in its domestic division of operations. This particular understanding leads to undertake PEST analysis on the car industry of Australia with reference to the challenges and benefits faced by the operating decisions of Holden (Boons and Lüdeke-Freund 2013).

Political Forces: Different kinds of vital measures, regulations, restrictions designed by the legal and political environment of the country have their elemental applications to the overall industry. Out of the various legal and political approaches, some essential forces affect the automobile industry including the operations of Holden.

Law and regulations provide emphasis to the maintenance of environmental measures largely, which are meant to be fulfilled by any organizations operating in the automotive industry in Australia. According to Kotler et al. (2015), the car manufacturers and the marketers are required shaping up their approaches and decisions critically during the vehicle manufacturing process by considering the precautions indicated by the different political restrictions for achieving the aim of diminishing the environmental issues. Apparently, the activities of the automobiles industry globally are highly responsible for influencing the political factors throughout the world (Grant 2016). It is evident that the demand for the hybrid vehicles is increasing continuously in the global automotive market including the Australian market while the particular type of vehicle is gaining the growing support from the governments due to the application of its eco-friendly emissions. Hence, the stringent policies are produced by the national and international governing bodies for promoting the compliance of emission standards during the manufacturing of vehicles by the carmakers while promoting the individual type of vehicle in the parallel basis (Johnson, Ringham, and Jurd 2013). This particular factor associated with the political environment provides both opportunity and challenge for Holden to develop necessary conformity system and satisfying the demands of the identified market.

Political Forces

Economic Forces: Economic factors deals mostly with the application of exchange rates, global economic growth, and the particular condition of the business predominating the individual industry. The individual economic factors having their connections with the particular industry and the chosen company are discussed below.

Grant (2016) suggests that the car manufacturers produce the large volume of vehicles at a particular time for providing high-rise to their revenue regarding the marketing and development of new products and designs. Due to the particular scenario, the high volume of revenue is restrained during the period of less demand from the capacity of supply. Inflation is another significant economic factor causing the price hikes in the automobile industry (Gilmour 2013). One of the vital elements developed by way of analysis is the key role played by the car industry in the process of infrastructural developments. In this case, oil dependency is the major factor affecting the external price elasticity of the companies operating in the automotive industry. The high price of petrol does not often reduce the demand for vehicles, as the population perceives the new car as fuel efficient than the previous offerings. It enables the buyers to save their money (Piercy 2014). Hence, the particular factor associated with the economic environment provides substantial opportunities for the marketers of Holden regarding the expansion of the company revenues.

Socio-cultural Forces: The implication of social forces are hard to notice in the automobiles industry, where the factors mostly include the social, cultural, and demographical changes in the global and domestic environment. It is observed that the changes in the identified areas affect the buying behaviours and spending powers of the individuals from the defined population.

The global customers including the buyers from the automobiles industry in Australia develop a specific buying pattern based on labels applied by the different companies within the sector (Australia 2014). Apart from that, different demography of the population has their unique needs influencing their buying decisions. For example, if the specific buyer has a large family then the buying decision would favour more spacious vehicle with the inclusion of advanced safety measures offered by the company. Alternatively, customers are preferring sportier, stylish, and luxurious cars according to their comfort level to engage in the buying process. Therefore, the marketers of Holden should need to learn on capitalising these social and demographical factors to convert them as the business opportunities and excelling the revenues through multiple segments.

Economic Forces

Technological Forces: The advancement of technology holds the key to success for an automobiles company within the particular market sector (Ward and Peppard 2016). As explained by Johnson, Ringham, and Jurd (2013), the continuous evolution of technology is observed in the automobiles industry for the reduction of CO2 imitations and complying with the other relevant environmental guidelines and restrictions. Furthermore, the advancement of technology ensures the introduction of more advanced safety features to the different car models to fulfil the primary needs of the buyers. More apparently, a stringent set of rules and regulations are required following by the automobile manufacturing firms for developing the environmental-friendly automobiles and motors. Apart from that, the leading vehicle providers are adopting the increasing use of technology with the aim of creating vehicles having the alternative distinct fuel systems (Thompson et al. 2013). Hence, ensuring proper investment to the technology for minimising the pollution and eliminating the casualty often provide a momentous challenge for Holden. Alternatively, the increasing support from the Australian government regarding funding and investment has provided multiple opportunities for the car manufacturing companies including Holden.

For developing the target market, Holden uses several strategies as part of its business operations. The particular policies are based on recognising and targeting two or more segments of the identified market and developing the marketing mix for each segment. The critical objective of the target market strategies adopted by Holden is appealing a wide range of customers from the specific market segments. The company achieves the certain process through ensuring the satisfaction of their various needs (Jani et al. 2014). Based on the analysis of marketing plan of the company, it is determined that the group forms various types of vehicles like economy cars, sports cars, vans, wagons, and luxurious cars for targeting the unique areas of target customers.

Target Market Segment	Target Market Specification	Market-oriented Product
Demographical segment	·   Increasing appeal regarding the behavioural perspective ·   Capturing the attention of the family-oriented buyers ·   Providing advanced safety measures to the users	Latvala
Psychographic segment	·   Focusing on obtaining attention of the luxurious segment ·   Offering and maintaining luxurious elements in the vehicle ·   Satisfying the psychographic needs of the customers from the top income level	Mustang

Table 1: Table demonstrating two of the Target Market Segmentations and their Specifications for Holden

(Source: As created by the Author)

As disclosed by Gilmour (2013), Holden uses some specific segmentation variables like geographic, demographic, behavioural, and psychographic segmentation for separating the target market and the needs associated with it. Based on the demographic segment, Holden has developed a new car model named Latvala for capturing the married individuals. Alternatively, the company for winning the increasing appeal from behavioural division has designed the new Mustang (Biggemann et al. 2013). Therefore, the principle justification for the segmentation strategy devised by the firm can be established, as different models of vehicles are manufactured by the enterprise for covering the demands of all the segments pointed out by the marketing strategy. The Latvala model is designed with maintaining more rooms in the interior and including the advanced safety protocols, which the individuals having their families would love to buy. On the other hand, the Mustang model represents the coming of age luxurious design for the individuals preferring the certain type. This kind of vehicles often comes with a high degree of cost driving the buyers from the top income group of the society to participate in the buying process (Tedlow and Jones 2014).

The marketing mix associated with two identified products of Holden for its dissimilar target market is developed within the following section for understanding the strategies used by the marketers in two different categories.

Product Strategies: According to Piercy (2014), product refers anything that has been offered to the market for capturing the attention and enabling the acquisition and consumption concerning the satisfaction level of target customers. The brand name of Holden is classified mainly in the medium-sized cars with the application of elegant and generous research techniques. The historic branding label used by the company in its two different types of vehicles is responsible for capturing increasing attention from the target market (De Backer and Miroudot 2014). Apart from the commonness in the branding strategy, the difference is observed in labelling process. As part of labelling, different brochures are offered to the customers stating the unique specifications about the cars and detailing parts and equipment used to develop the vehicle.

As part of the product features and designs, a significant level of difference is there. The Latvala model uses the Ti-VCT Engine, whereas the Mustang model is developed with the inclusion of a Kinetic design (Grosjean et al. 2012). Therefore, the needs of the customers are well accompanied during the maintenance of features and designs by the marketers.

Promotion Strategies: In order to achieve the marketing edge over the other market competitors, Holden uses different promotional and advertising strategies for its various ranges of products. Ward and Peppard (2016) explained, two types of promotional strategies are adopted by Holden such as mass media and non-media advertisements. Mass media advertisement mediums like television, newspapers, and radios are used by the organization for promoting the sale of Latvala model, where the non-media advertisements like discounts, sponsorship, shows and campaigns, and sales promotion activities are introduced for the Mustang model (Moodie et al. 2013).

Therefore, the core purpose of the advertising strategy embraced by the company is providing a supplement to the entire sales team from various directions and persuading the product to the public. In addition, it is acknowledged that advertising and personal selling play key roles in promoting the brand and service image of the company through establishing the uniquely identified vehicles of the company to the multiple segments of the target market.

Distribution Strategies: According to Thompson et al. (2013), the elementary goal of the distribution strategies is facilitating the customers finding their desired products in the proper quantities at the suitable time and appropriate places. In case of both the identified products, the company primarily uses road or train transportation for distributing the vehicles to the dealers (Litman 2014). Additionally, an exclusive distribution is used by Holden for its luxurious vehicle in the mean of distributing in only one specific outlet in a relatively large geographic area. Significantly, the supply chain management of the company is developed with the integrated approaches and functions from the operations and logistics management for ensuring the success of distribution strategy.

Pricing Strategy: The vital difference in the pricing strategies implied by the firm can be observed during the selling of its two diverse models of vehicle. In case of the Latvala model, the economic pricing scheme is identified and employed by Holden with the aim of engaging more families to develop a favourable buying decision. Alternatively, the Mustang model of vehicle is sold by the company in the specific regions of the country by adopting the premium pricing strategy (Armstrong et al. 2013). It aims to provide luxurious requirements in its car models as demanded by the specific genre of buyers.

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