Promotionaland Advertising Strategies
Promotionaland Advertising Strategies
Popularlyknown as the GM, General Motors and Volkswagen Group are two leadingcompanies in the automobile industry. The paper chooses theautomobile industry, which is referred to as the oligopoly, whereaccording to Hackley (2005), is an industry with “fewer sellerscompeting and the startup costs are very high”. General Motors isregarded as a multinational corporation based in the United States,which is involved in designs, production, marketing, and distributionof the automobile services all over the world. There are ten brandsthat are registered under its name Holden, Chevrolet, Opel, GMC, andCadillac, and are manufactured in over 37 countries.
Onthe other hand, the Volkswagen Group is a multinational automotivecompany based in Germany. It is the second largest in the automotivecompanies. The company is also involved in designs, production,distribution of passenger and commercial vehicles, motorcycles,engines, and other automotive-related services like fleet, leasingmanagement, and financing. Volkswagen Company was established in1937, and is renowned for handling automotive brands, for exampleAudi, Bugatti, and Porsche (Volkswagen, 2010). The paper therefore,aims to compare and contrast the two company’s promotionalstrategies for the same products in the automotive industry.Additionally, the paper will also recommend marketing informationprovide rationale for the response, and effective advertising medium.
GeneralMotors existence in the automotive industry for over 75 years hasplayed an integral since it was established. GM is governed byphilosophies that embody the client focus, its culture, andexcellence in its product. The GM operates under four markets LatinAmerica, Asia, Asia Pacific, North America, and Europe. According toHackley (2005), a strategy that is chosen by the company willdetermine its sustenance and success over time. General Motors as inthe past embraced the use of social media to be one of its importantmarketing strategies. GM’s increase in sells has been attributed tointensive use of Social Media, even as other automotive companiessuch as Toyota, Ford, and Volkswagen dropped in their sales.Additionally, as part of GM’s strategy in aligning its design,retail operations, and engineering, GM came up with a newcommunication platform and vision for example in its Chevrolet brand.The brand was dubbed “find new roads”, in which the companyregards establishment to be the right thing towards the rightdirection in winning the clients (General Motors Corporation, 2011).
Accordingto General Motors Corporation (2011), the main aim of coming up withthis communication platform is to ensure it develops into acornerstone for the Chevrolet brand, for example, which is coming upwith new technologies and products. The products are aimed atsatisfying the clients in more than 140 countries, worldwide. TheGeneral Motors expects to revive the uniqueness of its brand throughthe brands’ initiative. Additionally, GM employs the use ofexcellent resource management and technology, with the intention ofleveraging its strategy. There are other promotional strategies,which are employed by the General Motors Company, which according toBoone et al. (2012), include market development, market penetration,product development, restructuring, and retrenchment.
OnVolkswagen part, its business philosophy is majorly revolved aroundthe provision of innovative, enduring value, and responsibility tothe clients across the world. The company’s brand expresses a senseof reliability, excellent engineering skills, and a sense of quality.The major promotional strategies, which are employed by theVolkswagen group includes customer satisfaction, groups salesrestructuring, loyalty to the clients, and remarketing efficiency.The customer’s satisfaction in the product is among the mostprioritized company’s pursuit. Hackley (2005) noted that it ismainly because of sales activities, which are driven by theclient-enhanced objective in giving satisfaction. The Porsche brandfor instance, is among the leading examples of the company’sattempt to satisfy the client’s demand.
Marich(2009) enthused that the company’s structuring of its sales areoften based on the multi-brand structure that runs across all thebrands, including the Audi. Volkswagen Group is a company, whichusually restructures its management board and the sales department.This is aimed at optimizing the volume of its cross-brands sales. In2009 for example, Volkswagen Group went ahead to involve the dealersinto the company’s well-structure information technology system(Volkswagen, 2010). This was done with the intention of leveragingthe company’s synergies, while facilitating quick exchange of thebrands’ information among the stakeholders.
VolkswagenGroup’s distribution network is aimed at fostering a very closerelationship between the company’s dealings and its dealers, whileat the same time achieves high profitability. In the company’s longterm growth strategy, it also markets the release of its new vehiclebrands. The company also uses its regular and annual surveys toacquire different perspectives and views of what the customers aimsat when buying their products. Therefore, while the General Motors asa company employs extensive use of social media in promoting itsbrands and products, Volkswagen Group on the other hand, does not(General Motors Corporation, 2011). Both companies however, employcustomer-based strategies, while trying to ensure that their clients’needs are met sufficiently.
Differentiationstrategies are often very critical in most of the business entities.They are also suitable, especially in the companies that are set outto meet varied demand and requirements of their clients throughdeveloping a standardized product (Volkswagen, 2010). For successfuland well-braded automobile companies for example, the General Motorsand the Volkswagen Group, it is important to carefully survey thebehaviors and demands of the buyers found in the market in order toaptly come up with a certain level of preference in their clienteles.According to Marich (2009), market information is very important inthe differentiation of products that are necessary for any companythat seeks to attain a competitive edge in the industry. Companiessuch as the Volkswagen Group and the General Motors can help utilizeimportance of market information, which it has collected duringincorporation of one or more in demand features by the clientstowards their products.
Thefeatures which are demanded by the clientele base are aimed atattracting more clients in purchasing of their products to avoid thesame clients buying the same products from a wide array of thebrands, which is sold by the competitors. This is achieved byensuring that any company can only have a competitive edge if thebuyers turn out to be strongly attracted to what the brand as tooffer from that company (Hackley, 2005). Additionally, through theaccess and use of relevant information from the markets, any companyfound in the automobile industry, for example the General Motors, candifferentiate its branded products successfully, and at the sametime, command preferred premium to be offered to the markettherefore gaining a greater clientele base and loyalty to its brand.
Consumer-basedpromotions entail offers from a specific value, incentive, ordiscount for the customers, especially when they opt to choose thepurchase of a specific product offered by the automobile company inquestion. Boone et al. (2005) observed that there are diverseconsumer-based promotions, which include premium, sampling,sweepstakes, refunds, contests, couponing, and price-offs. Thesepromotional tools are aimed at targeting clients with the intentionof convincing them to acquire specific products on sale, and thusboost the company’s sales. Additionally, consumer-based promotionsare also targeted at enabling the clients to save money to ensurethat they come back the second time in future.
Automobilecompanies such as the Volkswagen and the General Motors are in abetter position to utilize consumer-based promotions in both the longand short runs. This is also aimed at encouraging the consumers intothe purchase of their automobile brands, but also ensuring that theykeep coming back for more by gifting them with coupons, and thushelping them to save some money. General Motors Corporation (2011)noted that customer-based promotions are able to make these companiesin this industry to encourage loyalty of its clientele base to theirbrands both in short and the long run. Additionally, regarded to beat the forefront in matters automobile, the general Motors hasemployed a strategic means to effectively price its products andcommodities. Severally, the General Motors has since taken a step inemploying a number of pricing techniques, in order to raise thecompany’s market share, while achieving its set target rates ofattaining profits through sales.
Retailprices in General Motors are determined through taking part inproperty clinics whereby the participants make their comparisons withother vehicles within the company, and alongside similar vehicles ina different company. The participants are able to carry out reviews,rank them according to preferences, and finally end the pricingexercise. The information recorded in this exercise is of importanceto the General Motors, especially in having a competitive edge overits competitors. Additionally, it helps the company to estimate itscosts and shares in the market. Other competitors, according toHackley (2005), will have no option but to create an interest andexcitement over their products and features that may appeal thecustomers.
Today,a lot of companies have gone online in their advertisement of theirproducts. Social media sites such as Facebook and Twitter have helpin attracting more traffic on the product that is advertised. In theautomobile industry, the use of online advertising has since becomemore effective in opening up of new frontiers. Online advertising isalso cost effective, which also present a more diversifiedalternative that helps propagate information across the world.
Forautomobile companies to cut costs, but still be able to effectivelymarket their brands, advertising is a platform which is consideredeffective, according to Boone et al. (2011). They also offer thecompanies in question good returns on their shares and investments.The use of fliers and designs for advertising these automobileproducts are not only simpler, but also cheap and affordable.Additionally, the use of fliers to be effective tools of advertisingmay require the companies to offer discounts or incentives to itscustomers. Cooperate partners may partner with each other since itpresent an effective way attracting new customers (Marich, 2009).Through partnering of companies with each other, they would be inbetter position to save on the advertising costs, while at the sametime, would be able to increase exposure to their customers.
Inconclusion, while comparing different advertising media, the use ofinternet turns out to be the most effective in terms of costs,efficiency, and flexible when using it. Even though the use ofcorporate partnering and fliers are also seen to be cheap and easy touse, use of advertisements through the internet is easy and effectivebecause of its ability to reach out to a larger population worldwide.In addition, advertisements through the internet is also faster andeasy, which means the companies are able to track down time andprogress of their automobile products, while estimating their salesvolume.
Boone,L. e., Kurtz, D. L., & Mease, S. (2012). ContemporaryBusiness.Hoboken, N.J: Wiley.
GeneralMotors Corporation (2011). AnnualReport.Detroit, Michigan: The Corporation
Hackley,C. E. (2005). Advertisingand Promotion: Communicating brands.London SAGE Publications.
Marich,R. (2009). Marketingto Moviegoers: A handbook of Strategies and Tactics.Carbondale: Southern Illinois University Press.
Volkswagen(2010). VolkswagenAnnual Report 2010.Wolfsburg, Germany AG.