Contingency Factors of Marketing-Mix - Click to Solution

Question: Describe about the Contingency Factors of Marketing-Mix. Answer: Introduction With the growing competitiveness in the global automobile industry, it is essential for a business firm to design the effective international marketing plan and strategies in order to attain a sustainable competitive advantage by beating the competitors marketing strategies (Codita, 2011). This assignment will discuss the International marketing planning and strategy of Tesla Motors. This report will analyze the internal analysis of Tesla Motors by using the SWOT analysis (Bose, 2010). The PESTLE analysis will be used to analyze the market positioning of Tesla Motors by analyzing the external factors. The market area will be chosen and justification will be given for the selected area. On the basis of selected market area, an appropriate marketing strategy will be recommended for the selected market. Analysis of the macro and micro factors affecting the automobile industry Micro environmental factors- Micro environmental forces are controllable forces that can be directly/indirectly controlled by the internal policies and strategies of the company(Griffith and Jain, 2011). These are such internal forces upon which the organization has full control. There are several micro environmental factors affecting the automobile industry (especially electrical vehicles). These factors include suppliers, customers, competitors, employees, government, and investors or shareholders. The shareholders or investors affect the economic performance of the automotive industry because they expect profit growth, high share price or return, and dividends growth. The employees are the most important parts that affect the turnover, productivity and profitability of the industry through their performances and valuable contributions, but for this, they expect the attractive salary, wages, incentives, bonuses, and allowances. The suppliers affect the productivity and profitability of the company through cons istent supply of the raw material, spare parts, and equipment. These play an important role in the long-term contract, prompt payment and growth of purchasing, product availability, pricing and product quality. The customers are the most important entity for the automobile industry. The customers affect the productivity, profitability, and sales-figures of the company. The customers demand for value-added and high-quality automobile products, affordable pricing, good customer service, product availability and value for money (Richter, 2012). The customers needs and expectations are rapidly changing day by day that significantly affect the business performance of the automobile industry at national and international level.The competitors affect the business growth, profitability and sales-output of the automotive industry through the different pricing, distribution and product development strategies. For ex- the competitors, like- BMW, Hyundai, Honda, Nissan, and Volkswagen are giving tough competition to Tesla brands.The media affect the brand presence and loyalty by creating the high brand awareness among the customers or users.The government affects the automobile industry through differe nt trade policies, legislations, and taxation structure(Wedel and Karmakura, 2005). Macro environmental factors- (Pestle analysis) The macro environmental factors are major or external environmental factors that cannot be controlled by the company through its internal policies and business strategies (Codita, 2011). There are uncontrollable forces upon which the organization has no control and supervision. Macro environmental factor analysis helps the company in effective risk management and devising strategies. PESTLE Analysis- PESTLE Analysis is an acronym to analyze the impact of external environmental factors on the business planning and strategies of Tesla (Codita, 2011). It provides a significant strategic framework to analyze the impact of major environmental forces, such as political, economic, socio-cultural, technological, legal and environmental on the business activities and performance in the long-term (Smyczek and Glowik, 2011). It assists the company to improve the decision-making and strategic performance by getting advantage of the external environmental conditions. This tool analyzes the strategic capabilities of the company to attain competitive advantage by reducing the impact of external environmental factors on its business operations and activities. The political factors comprise of the political instability, taxation policies, government spending and legislations affecting the business profitability, productivity, and revenues of the company while doing businesses from one country to another country because each country has different types of political conditions and competitive structures. Tesla automotive industry has been facing the economic fluctuations, such as economic recession or crisis, high target markets, high cost materials, economic leadership in the industry and change in the inflation, interest and exchange rates. All the economic forces affect the customer purchasing power and economic growth of the company. The automotive industry is also affected by some socio-cultural factors such as demographic differences, cultural and value differences, different in customers shopping pattern and purchasing power, language and communication differences, and income distribution of the people (OHara, 2015). These factors aff ect the business growth, profits, and sales ratio of the company while doing businesses from one country to another country because different people from the different regions have different needs, perceptions, interests, and demand patterns. The growing technological awareness, technological modifications and inventions and innovative trends affect the product planning, business strategy and operations of the company because in todays technological age, each automobile company has been producing the latest models with high street designs, advanced features, latest applications, and valued services according to acceptability of the products to the customers. The growing government intervention, trade laws and regulations, and taxation policies affect the business growth, profitability, and productivity of Tesla Motors adversely because the government legal policies and legislative pattern put pressure on the company to follow the fair trade policies and transparency in the competition structure by avoiding the monopolistic conditions. The customer protection laws, employment laws and trade union policies put pressure on the company to follow all legal terms and conditions. The growing environmental awareness and constrain ts affect the sustainable product performance and global corporate image of the company(Musk, 2006). The environmental hazards, such as green-house effect, industrial wastes and effluents, excessive emissions of gases, and hydrocarbons affect the image of the company in the general public. Analysis of internal business factors of Tesla Motors SWOT analysis is an important strategy planning tool that stands for strengths, weaknesses, opportunities, and threats of the organization. This is an internal analytical tool that assists the management in decision-making by analyzing both internal and external influences on the business activities and performance level of the organization (Swarbrooke and Horner, 2012). This tool analyzes the ability of the company to exploit the available business opportunities by reducing the external threats or internal risks. It can be used to analyze the market positioning of Tesla motors Inc. by analyzing the internal strengths of the company. The main purpose of conducting internal analysis is to understand the main internal forces within the organization. For understanding Teslas current strategic marketing, SWOT analysis is selected as internal analysis tool that will be effective in identifying the major strong and weak points of the company(Codita, 2011). The SWOT will represent the stren gths, weakness, opportunities and threats of strategic position of the company. From the SWOT analysis, it is identified that a range of factors affect the market positioning and competitive strength of the company. This tool shows that the company has good financial base and high market share to produce a range of commercial electric vehicles by using the advanced research, IT, and innovative reengineering ideas. This tool analyzes the impact of the internal business factors impacting the marketing strategy of Tesla Motors.From the SWOT analysis, it is identified that the company has strengths, such as the growing market share in the global automobile industry and global market presence, good financial base, improved business performance, and good track record of the product performance. It also has weaknesses, such as high-priced products, lack of infrastructure projects for the automotive electric vehicles, lack of customer responsiveness, and dependency on its own stores. The SWOT analysis identifies some opportunities for Tesla motors to expand the market through mergers, acquisition, franchising, distributorship or entry into new market, such as India. The SWOT analysis also presents some threats for the company that should be considered in order to ensure the long-term sustainability of the businesses in the global automobile markets. For example, the competition level in the automobile car manufacturing industry is rising at rapid pace because the large numbers of companies are investing with their low-priced and high-quality car models (Dibb and Simkin, 2013). Along with this, the economic conditions, product planning, and business structures of Tesla at also affect the market share and strategic positioning of Tesla Motors. Additionally, Tesla Motors can focus on its strong points to capitalize the available market opportunities as well as overcome its weak points to deal with adverse market conditions and business risks effectively. Some other internal factors, such as organizational communication, cross-cultural training, leadership and management styles, organizational structure and culture, workforce commitment and values, and motivational level of the employees affect the business performance of Tesla Motors. Evaluation of markets including an identified shortlist Tesla Motors Inc. is an American Automobile company which produces the wide varieties of the electrical car models in both personal and commercial vehicles. It distributes its vehicles to the global customers through its own stores, Tesla Stores. It has its in-housing operation, manufacturing, and distributions centers for the electric vehicles. Tesla is more likely to grow its businesses by 2020 through entering into the high potential automobile markets. There are lots of markets for the automobile products (e.g. cars as vehicles) including India, China, Brazil, Russia, and South Africa where it can enter to enhance its market share as well as improving the economies of scale because all these countries are high-growth markets providing numerous growth opportunities for the new investors to grow their businesses through making huge investments in the automotive infrastructure development(Proctor, 2013). All these countries involve growing economies, wide geographic access, and high transportation infrastructure development. Among the above defined market areas, the Indian Automobile industry sector is selected because it is one of the leading automobile industries in the world comprising high-growth potential markets with large customer base, growing economies, high structured automotive infrastructure and good demands for the vehicles. By investing into the Indian automotive industry, it can enhance its market share, profitability global brand presence, and customer loyalty. The Indian automotive industry is continuously growing at rapid pace, providing equal opportunities for the foreign automobile investors to start their operations into the Indian automotive markets by producing the latest designed, high-street, innovative and value added cars models to the Indian customers. The national government of India also promotes the growth of the automobile sector by encouraging the huge investments by the foreign investors into the Indian Car manufacturing industry. The Indian automotive cars industry is t enth at present and expected to rise with the fifth position by 2020 after looking the enormous growth of the cars vehicles (Reddy and Pellegrini, 2012).The luxury car marketing is attaining high growth-potential in India and expected to reach 150,000 units for the cars production by 2020. The total investment in the Indian Automobile industry during April, 2000 to October 2013 was noted as US$ 9079 million. The fuel economy and demand for the greater fuel efficiency in India is another reason affecting the customer purchasing decisions. Because of the abundance of the oil, gases, and fuel products in India, the company can make great investment into the Indian Automobile sector. India has been emerging as a global automotive hub in the near future because of the significant investments by top global automobile companies, such as BMW, Volkswagen, Honda, Suzuki, Nissan, Audi, and Ford Motors. The car purchasing customers are growing rapidly in India because the income distribution and GDP of India have been improving to the great extent. All these reasons and market analysis bases prove justification for the selection of the Indian automobile sector as a new market entry. Recommended market and Justification for market selection There is a range of market segments where Tesla Motors can enter to expand its business operations in order to boost economic growth of the industry, but in regard to this, the high potential market criterion of the Indian Automobile Industry is selected which is a high productive business environment, providing a lot of opportunities for the new automotive investors to make significant investments in the automotive infrastructure. The Indian Government also promotes the large amount of investments by the foreign investors into automotive sector so that the innovative and high-street designed models of the electric vehicles with the latest technologies and configurations could be introduced into the Indian Automotive markets (Hartline and Ferrell, 2012). The Indian automotive industry provides equal opportunities for the automobile companies whether domestic or international to make significant investment in the Indian automobile sector by providing them thesound automotive infrastru cture facilities. The Indian government also charges the fewer amounts of taxes by giving them lots of subsidies on the vehicles that attracts the automobile companies to invest in this market criterion by producing a range of vehicles with high configurations. The Indian automobile industry is high-potential markets which account for 80-90% by overseas automobile companies. There are several automobile companies which has been operating their businesses in India for couple of decades after the de-licensing of the sector since 1991. By investing into the Indian automobile sector, Tesla Motors can enhance its market share, global corporate image, profitability and sales-output. The another reason for investing into the Indian automobile sector is that the Indian automobile industry is continuing to grow at exponentially rates, expected to be the world third largest automobile industry and tenth largest passenger car industry by 2018 which will be a great news for the global automotive companies. There are a range of major global automotive brands, such as BMW, Volkswagen, Suzuki, Honda, Nissan, Audi, Scorpio, and Skoda, operating their businesses in India from last couple of decades. The Indian government has also set the National Automotive Testing and R D Infrastructure Project centers (NATRIP) and National Automotive Boards for promoting the automotive infrastructure development to theoverseas automobile companies (Hunt and Bush, 2011). There is also low cost for the labors, physical layouts and production storage, and outstanding technological and R D facilities in the Indian Country that attract the foreign automotive investors. The Indian automobile i ndustry is a sector where every large global automobile company is more likely to invest to expand its business growth as well as global market share. Recommended market entry strategy and justification Market entry through acquisition, mergers, franchising and distributorship: Tesla Motors Company is a well-known automobile company producing a range of electric vehicles by using the advanced technology and inventions. It can enter into the new proposed Indian automotive market by contracting with the automotive distributors, franchising, dealers or independent sales agents (Swarbrooke and Horner, 2012). The company can enter into the selected market by making trade partnerships or contracts with the third-party automotive sales agencies whether authorized distributors, franchisees, sales agents or dealers. It could also be effective for the company to make acquisition or mergers with the local automotive firms of the selected market (Jobber and Ellis-Chadwick, 2013). The mergers or acquisition with other firms will be effective to develop and expand its high-growth markets in the selected market area by acquiring the high-potential customers with the corporation of local automotive firms. Along with this, the company can offer its products at economic pricing to acquire the new customers of the selected market area and to establish good business relationships with them for a long-term. This main reason behind the selection of this strategy is to boost the sales-figures, profitability, annual profits, and revenues of the company by developing a strong market in the selected area. This strategy will also be effective to cover the most part of the selected automotive market by enhancing trade contracts with business channels, acquiring new customers, increasing product performance, building good marketing channels, increasing product varieties, operating customer-centered activities and by bringing innovation and creativity in its products and services through the adoption of latest technology (Kerinand ORegan, 2008). This strategy will be effective to identify the customers needs and expectation of the selected market and to represent the high-performing and innovative models of electrical vehicles as per market demands and customers perception. Recommended adaptations to Teslas marketing mix for the proposed market Tesla Motors Inc. is a USA-based global automotive car manufacturing company which designs, develops, manufactures and sells the electric vehicles (such as cars) and energy storage products (Powerwall for residential application). The company is entering into the Indian automotive markets to enhance its market share and overall business growth. For this, it is essential for Tesla Motors Inc. to produce the automobile products after observing the market conditions in the Indian automobile sector. It should launch new electric car models with value-added features, latest designs, and modern applications after considering the changing customers needs, interests, and perceptions. Tesla should also analyze the competitors strategies, economic conditions, market forces, and industry rivalry while developing, producing and distributing new automotive products (Jobber, 2012). The products designed, developed, and manufactured by Tesla motors should match with the Indian customers needs, perc eptions, and income distribution. The changes should be made in the quality, prices, and distribution strategies regularly after receiving reviews and feedbacks from the customers. The company should also consider the impact of the political conditions, economic fluctuations, environmental constraints, and socio-cultural factors on its product performance, business growth, and profitability. Tesla Motors Inc. should adopt the economic pricing strategy to offer its electric vehicles at low prices in comparison to the competitors in order to attract the large numbers of customers or vehicle purchasers. The firm should set prices for its automotive products after analyzing the competitors pricing and average customers affordability in India. Tesla motors should also make changes in its promotional strategy while moving in another culture of the Indian Automotive sector. It should use social media tools and e-advertising instead of the traditional channels. It should advertise its automotive products through the social media networking websites (Facebook, You-tube, Instagram, Twitter, Gmail, and Yahoo) to create high brand presence and loyalty among the Indian customers(Kotler and Keller, 2009). Along with this, it can also use other promotional tools, such as electronic advertising sites, brand ambassadors or celebrity endorsement, TV and radio channels because social media and electronic media is the most popular promotional campaign among the Indians. Additionally, Tesla stores are not sufficient to attain the optimum sales-output, so, the company should adopt other distribution ways to sell its products. Tesla Stores Inc. should distribute its products through authorized distributors, dealers, showrooms, franchising stores, and independent sales agencies to boost the sales of its automotive products in India. Conclusion Recommendations From the above discussions, it can be concluded that all external factors of marketing including the elements of marketing process, marketing mix components, micro environmental factors, macro environmental factors, global promotional strategies, market review, and market research methods are such factors that determine the success of the company. The SWOT analysis was conducted to analyze the internal strengths and weaknesses of strategic marketing of the company. The Pestle analysis was performed to analyze the macro environmental factors. From the above studies, it is recommended for Tesla Motors to develop an international strategy in order to enter into the new markets of the global automobile industry. Along with this, it will be effective for the firm to adopt the suitable marketing strategies in order to deal with market complexities and business risks involved while entering into other markets. References Bose, C. D. 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