The German Car Industry: Marketing Plan

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Table of Contents

A Germany car marketing plan in international market
PEST Analysis
Competition
Structure of distribution geographically
References

A Germany car marketing plan in international market

In marketing, the German car Manufacturer in the international market various factors are taken into consideration. The management of the company must appraise the international market in which they want to penetrate into in order to know the entry strategy. They must also understand the culture, political, economic and competitive environment in which the car is going to be sold.

Another factor is the structure of distribution of the area where the car is going to be sold therefore the management will start by analyzing the market environment then choosing to go into the market, a strategy of entering the market and the marketing plan.

PEST Analysis

Economics

Several factors of macroeconomic environment affect profitability of a given business within a certain economy. These factors may be advantageous or disadvantageous to the profitability of a given business. These factors are mainly two dimensions, fiscal and monetary. They may include aggregate national income, total investment and export in a given economy, monetary policy, government investment policy, foreign exchange, inflation rate, balance of payment deficit, relationship with international partners, international markets macroeconomic policies.

When the aggregate national income is low, it leads to low level of per capita income and so it creates availability of cheap labor for the company. When high, the income per capita will be high and so labor will be expensive. Japan has a relatively high income per capita but with the financial crisis, there is a possibility of aggregate national income to go down comparative to the later years.

Foreign exchange is another critical factor. A favorable foreign exchange would enable the company purchase capital goods cheaply from foreign countries. An unfavorable foreign exchange has contrary effects. Purchasing of goods becomes too expensive for the company to purchase. Furthermore, clearing of debts becomes very expensive relative to when the exchange rates are favorable.

Inflation rate causes persistent increase in the prices of goods and services. This has a multipronged effect to the company. The company’s goods in the market become very expensive deterring away consumers. This will lead to a reduction in their production of the goods caused by lack of demand. The ripple effect of this is retrenchment of workers and reduction in their payments. With reduction of disposable income, consumption reduces and income to the company declines.

Balance of payment affects countries ability to import and export. When the balance of payment is high, county’s goods becomes very cheap comparative to other partners. This leads to increased sales of the companies goods, However, this gains are mitigated by the increased in importation cost.

Therefore the German car manufacturer is entering foreign markets the they should study the above factors of a country in which they are entering into. The economic performance of the country entering into must be attractive to the car. The population of the country and the amount of extra disposable income available to the population is very important. Looking at the industrial structure of the country entering into is also of value.

Political/legal environment

Politics play a big role in ensuring a stable environment. Germany has a stable political environment and this has assisted in maintaining a stable environment which has allowed businesses to thrive. This has provided an environment that has enabled car manufacturers grow. Therefore, this is another factor that should be considered by the car manufacturer when entering international market. If the political environment is stable then the car manufacturer will move in to the market because their investment will not loose value due to political instability.

The attitude towards international product also plays an important role to this end. In the political environment other factors taken into consideration include, influence of the registration for new businesses. Another political factor to be considering is population trends of a country because it plays an important role in providing market for car and labor force. Population trends favor the company because it can access a wide range of different population because it is a global company. Also due to its size and professionalism, it can access a large pool of well trained work force.

Cultural environment

Every country has its own values and cultures which the German car manufacturer must understand in order to supply the cars in the market effectively. The culture and the values of the people dictate the business practices of that country. For example if they want to enter the Middle East market they must be able to understand how the car must meet the needs of the people of Middle East and their culture.

Social and cultural trend define the people mode of line. This is important especially during advertisement, pricing, place of distribution and packaging. Being sensitive to people culture is of benefit especially if it comes to packaging whereby modes of packaging and labeling do not offend peoples culture.

Demographic factors involve a diverse population with different language and diverse culture. They can interact with the different diversity in their customer profile through different level of advertisement that fit different population groups. Demography is also significant because the labor force come from the local population. If the population comprise citizens are learned people and so the company has an advantage of well qualified and experienced work force as well as people who can demand the cars.

Competition

Competition that is prevailing in the economy in relation to the product In use all that will be distributed in the economy will be analyzed and understood. If there are so many car manufacturing that are distributed then a different manufacturing strategy must be used.

To understand the international market competition the will need to use Porter’s competitive Strategy framework. The car manufacturer’s strategy is to provide its customers with competitive cars at competitive prices. And this strategy brings them success and growth in income, sales and stock price. This is so for the reason that it has a little figure of existing rivalries, few threats from new entrants or alternates, and low bargaining power among suppliers and buyers.

Car manufacturer’s mission statement is to take care of their customers. They accomplish this through being the safest, highest in quality, lowest cost, most productive and most profitable car companies in the world. They are dedicated to doing this at the same time as being cultural and environmental stewards in the communities where they live and work. Their success comes through working together in unity.

If competition among firms in an industry is low in country then the manufacturer should think of entering the market. When a competitor acts in a technique that elicits a counter-reaction by other firms, rivalry intensifies. The amount of rivalry generally is referred to as being cutthroat, intense, moderate, or weak, based on the firms’ aggressiveness in attempting to gain an advantage. Therefore they should choose competitive moves to use. They can change prices either by rising or lowering the prices to gain a temporary advantage, they can also improve product differentiation by improving features, implementing innovations in the manufacturing processes and in the product itself. They can also creatively use channels of distribution by using vertical integration or using a distribution channel that is novel to the industry.

Structure of distribution geographically

In distributing the cars various structures will be used in various markets. Some markets will require joint ventures with the existing manufactures. While other markets will require direct exports to those countries. Where the market is large like north America china, India Indonesia, and many other countries putting up a plant to manufacture and assemble the cars in those countries will be the best distribution mode. Neighbouring countries will have show rooms where the cars will be displayed for the customers to buy. For strategic reasons African countries will require one plant or two to be able to reach the cars to the market with easiness. Strategic alliances are the best for transfer of knowledge among car manufactures especially in this era of global collaborations.

References

Blythe, J. (2005) Essentials of Marketing (3rd edition). England: Prentice Hall.

Cateora P., Gilly M. & John L. Graham J. L (2008); International Marketing, 14th Edition, McGraw-Hill College.

Chisnall, P. (2001) Marketing Research. 6th ed., London. McGraw Hill.

Porter, M. E. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.

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