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Smart Company's Aim to Manufacture Unique Environment-Friendly and Fuel-Efficient Mini Cars - Example

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The paper “Smart Company's Aim to Manufacture Unique Environment-Friendly and Fuel-Efficient Mini Cars” is a motivating example of a business plan on marketing. The smart company was introduced in Australia in 2003 under the ownership of Mercedes-Benz and Daimler. Smart cars are also sold in South and North America, Europe, and Asia.
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Contents Executive Summary 1 Situational Analysis 2 Market Summary 3 SWOT Analysis 3 Strengths 4 Weaknesses 5 Opportunities 6 Marketing Strategy 7 Marketing objective 7 Target Market 8 Brand Positioning: 8 Marketing Mix 9 Competition 11 Promotion Schedule 11 Implementation Budget 12 Reference List 14 Executive Summary Smart company was introduced in Australia in 2003 under the ownership of Mercedes-Benz and Daimler. Smart cars are also sold in South and North America, Europe and Asia. According to Smart SWOT analysis its strengths include high safety ratings, online platform, technical support, safety and environmental conscious, and renowned manufactured Mercedes Benz. Its weaknesses include negative public perception, the size of the car and the price. Its opportunities include rising fuel cost and Kyoto protocol. Its threats include Lexus and Volvo. The products of Smart are micro vehicles like Smart ForTwo which can be driven in the city, easy to find parking space, safe, environment friendly and fuel efficient. The marketing objectives of Smart include increasing unit sales by 20% in two years and increase its market share by 5 % in one year. Smart targets young and high income earners living in major cities, have a busy lifestyle, are environmentalists and care about status. Smart will position itself as a market leader in safety, fuel efficient and environment friendly. The marketing mix for Smart includes product, price, promotion and place. The product is a uniquely designed small car that is safe, fuel efficient, stylish and environmentally friendly. It will be promoted by advertising both online and in local media. The price of Smart car will range between $10,000 and 55,000. The cars will be distributed at Mercedes-Benz dealerships. Situational Analysis Market Summary Smart vehicles have been sold in Australia since 2003. Currently the Smart is sold through dealerships of Mercedes Benz. The dealerships in Australia have been offering Smart cars in the mid-range trim of ‘Pulse’. Other trims like ‘Brasbus Xclusive’ and ‘Passion’ are not yet available in Australia. However, Smart sales are not doing well in Australia compared to USA. Consumers are still opting for bigger cars (Smart Australia, 2013). SWOT Analysis SWOT Analysis is a method used to evaluate a company’s strengths, Weaknesses, Opportunities and Threats (Roger, 2012). Strength: Online showroom and booking Awarded 4 stars out 5 in Euro NCAP Adult Occupant Protection Technical Support Unique features and design Electric driven, no pollution Option of completely customizing the vehicle Strong research Top 20 least expensive to insure Riding on Mercedes-Benz Brand Weaknesses: 1. No extensive dealer network: is not available worldwide like other normal cars. 2. High Cost 3. Lack of market awareness 4. Trouble with strong winds 5. Public perception 6. Size 7. Price Opportunities: The hybrid platform it is working on currently is a huge opportunity There are newer markets it hasn’t explored. High rate of fuel taxes will encourage individuals to go for low fuel consuming vehicles. Threats: Companies of large vehicles have well established dealers and supply chain networks. No recharging options available to customers Face stiff competition from cheaper vehicles. Strengths Safety Ratings The new Smart Fortwo was awarded a rating of 4 stars out of 5 in Euro NCAP Adult Occupant Protection and 2 out of 4 stars in the pedestrian protection test. The Insurance Institute for Highway Safety (IIHS) rated the Smart car ‘good’ for roof strength and side impact. These ratings prove to the public that Smart car is the ideal safe car to use. Online showroom and booking Smart car company, Mercedes-Benz Cars will collaborate with DataMotive to develop an online platform that is user friendly and can allow customers to buy smart cars online. Customers will be able to see the vehicles online, look at different models, price ranges, features and car colours. They can book online and pay for their favourite car. The car is then delivered to wherever the customer is making it very convenient to the customer. Smart car is known to be an innovative brand and this move will be added to its list of firsts. Though other brands have also provided opportunities to secure vehicles online with a deposit, the difference with Smart platform is that every detail which includes delivery and road costs calculation, service packages, amount of the payment in full, and delivery point can be accomplished through the platform and will have no restriction to a specific time period. Customers will be able to make pay a deposit of $1900 and complete the balance through Bpay or pay in full using a credit card. This organized online purchase will save consumers the time constraints related with visiting a dealership. Technical Support To ensure that customers stay mobile with their Smart cars assistance called ‘smart move’ is made available by the. There is a toll free number that customers can call anytime, thus enjoying a worry free drive. Safety Smart vehicles are ‘small on size, big on safety’. A 7,000 pound SUV was put on top a frame of a two-person Smart car weighing 2,000 pounds. The Tridion cell stood firm and never bent. Despite its size the car has safety features that are very extraordinary. The tridion safety cell is rigid and is designed to distribute the impact of energy to the rest of the body of the car. There are eight air bags in the car with two in front (Kim, 2012). Riding on Mercedes-Benz Brand Mercedes-Benz has the largest share of Smart. Smart vehicles will be distributed at Mercedes Benz dealerships. This will provide a high leverage for Smart because any brand that is associated with Mercedes-Benz is easily trusted. Mercedes-Benz brand will enable Smart brand be accepted in the market. It will receive a high status title because of Mercedes-Benz. Weaknesses Public Perception People believe big cars are strong, stable and safe. A small car like Smart is perceived to be easily blown away by the wind or crashed into pieces instantly when involved in an accident. However, Smart intends to change this perception by providing customers with safety rating given by The Insurance Institute for Highway Safety (IIHS). It will also provide live public demonstration where a 2000 pound Smart’s tridion safety cell frame carries a 7,000 pound car. Size People with families are highly concerned about the safety of their families and cost reduction, and one thing they would want to have is a car that is safe and fuel efficient. Even though Smart meets this requirement its size cannot accommodate an ideal family. This makes families feel left out in sharing the ‘cake’. Price The average price of a smart car will vary from $ 12,000 to over $ 16,000. Those who can afford are only high earners. Those who need a small, safe and environmental friend car cannot have this car if their earnings are lower. Opportunities Rising fuel cost The Australian fuel prices are high and are likely to go higher. This is leading people to look for cars with more fuel efficient. There are also an increasing number of vehicles in major cities, citing a parking problem. People will need to go for Smart cars for fuel efficiency and ease of parking. Kyoto protocol Kyoto protocol expects countries to reduce gas emission up to a certain level to reduce pollution. Australia has signed a second commitment period to cut greenhouse gas emissions under the Kyoto Protocol at the United Nations climate change. Australia is expected to reduce emissions by 2020 to five prevent below 2000 levels (Australian Government Department of Environment, 2012). In an effort to meet this target the Australian Government will encourage its citizens to go for cars that are environmentally friendly. Threats Lexus has started to manufacture high quality cars thus trying to beat Mercedes. However, Lexus does not have cars that can compete with the Smart Car. In terms of safety Volvo brand is growing as the leader and can easily beat Smart Car if they decide to have a smaller car. Marketing Strategy Marketing objective According to Kotler & Armstrong (2010), marketing objectives define what a company would like to achieve through its marketing activities. Below are the marketing objectives for Smart: 1. Increase unit sales in two years by 20% 2. Increase awareness of Smart car’s innovative features of technology by 25percent in two years. 3. Increase the market share by the end of 2015 by 5percent amongst the subcompact market. Target Market According to Kurtz (2010), a business aims its market efforts towards a group of customers called target market and eventually its products or services. A target market that is well defined is the first marketing strategy element (William, 2005). The target market for Smart has high income and is interested in saving the environment. They have a need to drive to and from work daily and need to maneuver places easily. Young individuals of age between 18-40 who are highly earning and live in major cities. They have a busy lifestyle and would like to maneuver through the city easily and find a parking space whenever they need to. They want to look stylish and like to support environmentalists. Brand Positioning: Positioning is a way by which a distinct impression is created by marketers in the mind of customers (Levi, 2007). According to Jayachandran (2004), positioning a product or service is creating an image in the mind of consumers because consumers buy brand images rather than actual products or services. Smart car in Australia will be positioned as capable of doing what big cars can do but with sufficient fuel use while sustaining the environment. For young high income earners leaving in urban areas Smart is environmental conscious, high quality, energy-efficient, stylish, small and luxurious and offers status. The positioning statement will be ‘Smart Car Smart Choice’. Marketing Mix The concept of marketing mix is a list of important ingredients or elements that compose a marketing program. They are also known as the four Ps of marketing including product or service, place, promotion and price (Kotler, 2000). Product Smart vehicles are micro cars that have a capacity to have a driver and one passenger. Smart cars have a small front crumple zone that they use. Its structure is a Tridion Safety Cell, a stiff structure which activates the crumple zones of a vehicle that is colliding. There is a strong safety cell created by the design around the passengers to protect them in case of an accident. It is because of this that Smart has received high safety testing ratings. The car is environmental friend as it enables customers to save on fuel, unlike a normal car which consumes a lot of fuel causes severe air pollution. Smart will use a lowercase logotype for branding and its logo will incorporate a letter ‘c’ for ‘compact’ and an arrow that means ‘forward thinking’. It is the ideal solution for urban mobility providing excellent comfort, safety, and environmental friendliness as a cabrio or a coupe. Since Smart cars have a sleek look and small enough it is easier to find a parking space as they can fit an in tight spaces. . It is also ideal for shopping during summer and going for picnics. Price The price of the Smart Car will be slightly above average normal car. This will make the customers feel that they are different from the average normal automobile and that they are the ones in the front line preserving the environment. The price should not be too high to enable the mass consumers to afford it. So the price of the smart car will be at the middle between the normal economy car and luxury car. The price range of the smart will be around $10,000-55,000. However with the hope that many people will be more interested in the Smart Car, the price will go abit down in order to gain more market share. Place/Distribution The Smart car will be distributed from the branches of the company and other car dealers willing to partner with the company. This will help to increase sales volume of the car by customers gaining easy and more access to see Smart car and may decide to purchase. The company will also have an online showroom where customers can see all the cars and book online. The Smart car will be delivered to the customers wherever they are. Promotion The company will promote the smart car by advertising in the television and newspapers, flier distribution in malls, posters, public relations, trade shows and online marketing like emails, social media (Facebook, YouTube, and Twitter), company website and blogs. For the first six months of the Smart car being introduced in the market 15% discount of the price to lure customers to buy the car. This is to attract customers to try the car. Free insurance or warranty will be provided to customers for the first one year. This will assure customers that there are more benefits they will get from the company. Competition There are other automobile manufacturers providing low cost vehicles to consumers in Australia. However, none of them produces what Smart Car is. Prospective competitors of Smart Car could lower prices to create price competition to prevent its penetration to the market. There may be battles of advertising with the introduction of the Smart Car. The competitor may stress the need of safety from accidents and try to portray an image of a deeply crashed Smart Car. Australian consumers would think ‘Yes, it is good to have a car that is fuel efficient and environmentally friendly but I would sure want a car that will not allow me to survive an accident”. Promotion Schedule Item By When Design and print posters 30st June 2014 Print fliers 20st June 2014 Create Website 15th May Create social media accounts and post information 30th June Send first emails to prospective customers 15th July Run radio and television campaign 30th July Conduct flier distribution 30th July Pin up posters in public malls and trading centres 30th July Design and print of banners 20th May Conduct Search Engine optimization 1st May Create Newspaper and magazine advert and place advert 30th June Implementation Budget What is the size and source of budget allocation for this plan and how was it determined? Item Date Completion Cost Measure of Success Business website 02nd July $ 3,000 Total number of hits per month Search engine optimization payments 1st August $ 2,000 Number of customers enquiring or making an order online or visiting the Smart website Printing flyers and posters and banners and distributing them 15st July $ 20,000 No of enquiries and orders made Advertising through magazines 30th July $ 10,800 Monthly slot accepted Radio and television advertising 10th August $250,000 Number of enquiries received per day Hosting the Smart website 05th July $5,600 Featured in first pages of all search engines Social Media advertising 10th August $ 20,500 The number of likes and followers received as well as order placements and enquiries. Smart Launching Day 20th October $ 50,000 The number of people attending the launching TOTAL $ 361,900 Conclusion The aim of Smart is to manufacture unique mini cars like Smart ForTwo to respond to a need of having environment friendly vehicles, find it easy to find parking space, vehicles that are fuel efficient and the need to drive in the city comfortably. Though the Smart sales in Australia are not satisfactory, there is an opportunity to gain substantial market share if not dominating it. As people become concerned about the environment and the rising of fuel costs Smart cars may just be the solution they are looking for. With the outlined marketing strategy there is hope that many will want to try Smart cars. Reference List Department of Environment 2012, Press Release: Australia joins Kyoto Protocol Second Commitment as world on track to 2015 climate change agreement. Australian Government Jayachandran, S 2004, Marketing Management. Excel Books India, p. 118 Kerin, Roger A 2012, Marketing: The Core, McGaw-Hill Ryerson. Kim, S 2012, Smart Car Ad Wows and Underwhelms With Crushing Weight on. ABC News. Kotler , P & Amstrong, G. (2010). Principles of Marketing (13ed). Pearson Prentice Hall, p.293 Kurtz, D 2010), Contemporary Marketing Mason, OH: South-Western Cengage Learning. Levi, K 2007, Differentiate or Diminish: The Art and Necessity of Business Positioning. p. 9 Smart Australia 2013. Smart Story. web. Thomas, N &, Reed, H 2002, The Strategy and Tactics of Pricing. Prentice Hall, Pp 4-104. William, CA 2005, The Marketing Plan. John Wiley & Sons, Inc. Read More
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