In the automobile industry, having a competitive edge helps a company outshine others in the market. Companies in this sector specialize on producing products that target a specific market segment (Chan, Chan & Jain, 2012). In the automobile industry, Mercedes Benz and Toyota lead in product differentiation and product quality due to the variety of products that they give in the market and the market orientation of their products. The two companies thrive because of their high differentiation levels in their products and the marketing strategies. Producing products that meet customers’ needs also helps the two companies in enhancing demand for their products, in the business. This paper evaluates Mercedes Benz and Toyota, the leaders in the automobile industry to establish the strategies that they use in luring and maintaining their customers.
The promotional strategies for the two companies resemble in many ways. First, both companies use social responsibilities and sponsorships in promoting their products. Mercedes Benz and Toyota sponsor social events and sports teams in order to gain market in different countries. Many people demanding the automobile products have a passion for sports, and social events hence the manufacturers of automobile industries prefer to sponsor the teams and social groups in order to gain access to such markets (Gabardi, Huang & Sha, 2013). In Europe, for example, the two companies sponsor soccer teams in order to gain access to the football fan base, which constitutes a large percentage of the business.
Both companies also promote their products through the social media and other social promotional strategies. Both companies have profiles on many social media platforms like Facebook, twitter, LinkedIn, and Instagram (Gundler, 2013). This helps them to reach many markets where people use the social media like the American market.
However, the promotional strategies for the two companies differ in a number of ways. First, Mercedes Benz uses the market-block promotion for their products while Toyota uses the market-wide promotion. Mercedes Benz promotes different products using different strategies in different markets because they produce products fitting the needs of the business (Gundler, 2013). The financial ability of consumers and the loyalty of the consumers determines the strategy used. However, Toyota targets the global market at large, distributing all their products to all markets fairly to all the markets. This means that Toyota targets all the markets with their promotional strategies and features which ogre well with all the markets (Gabardi, Huang &Sha, 2013). Similarly, Toyota produces a different value product at different prices for different markets while the quality and value of Mercedes Benz dos not vary regardless of the markets supplied. In developing countries, for example, Toyota produces different automobiles with cheap products serving the needs of the middle class in the countries. However, Mercedes Benz produces the same quality of products for the markets thus some of the middle income and low-income earners do not afford the automobiles.
An automobile company can use marketing information in gaining advantage over the competitors in the market through two major ways (Chan, Chan & Jain, 2012). First, in order to gain competitive advantage in the automobile industry, the automobile industry can increase the range of products in order to provide for all the classes in the economy. Production of automobiles suiting different economic classes and different customer needs will help a business to gain strategic advantage over the other companies in the business (Muller, 2013). The market for automobiles serves the high-income earners, the middle-income earners, and the low-income earners. All the economic classes in the world must have the satisfaction because they contribute to the development of the business. However, most of the companies produce automobiles that provide for only the rich and the middle class. However, if a company produces products that provide for the high-income earners, the middle-income earners, and the low-income earners, it would access a strategic competitive edge in business.
Moreover, the company could differentiate their products in order to attract more demand from customers. Production of automatic vehicles acted as a strong point in the business because it provided easy learning features to the automobiles as the people found the control features of the automobiles easier. However, further differentiation in the products to include highly- diversely all-weather products can give the companies in the automobile industry an edge over their competitors (Gabardi, Huang & Sha, 2013). This means that a company that wants defeat competitors in the automobile industry must strive to lead in product differentiation. A company should not only take up the differentiation from the other companies in the business because of its effect on their marketing and pricing decisions. Mercedes Benz, for example, must produce products that differ from the differentiated products in the market from Toyota in order to have a competitive edge in the market.
Consumer oriented products can help companies in gaining a competitive edge in business. This helps because the consumers can have efficient use in products. The customer needs change with time and the facilities available to the customers (Chan, Chan & Jain, 2012). Most of the customers have different needs that need accommodation in the products of the business. In order to increase sales and have an advantage in competing with other businesses in the market, a business in the automobiles industry can use two strategies (Anderson, 2013). First, the company should listen to the needs of consumers and accommodate them in their products. When the consumers have assurance that their views feature in the products of the business, they increase their loyalty towards the brand; hence, they will recommend more of their colleagues to the business, which will increase the demand for products from the company.
The company can also enhance demand from the customers through facilitation of consumer inclusion in the entrepreneurial activities of the business. Through the development of an idea hub, the company can accommodate different ideas from customers on the value and other features of automobiles that they should include in their products (Truett, 2014). The automobile industry will gain a general innovative attitude in the business through including innovative ideas from customers on the products in the market. Entrepreneurial development in the automobile industry can help in the positive development of the business because the clients will get a feeling of inclusion in the decision-making models, in the business (Muller, 2013). Development of thought hubs will help the business to incorporate the ideas of the business into their products hence they will easily win the loyalty.
The main pricing objective for Mercedes Benz in the business involves the inclusion of the quality and standards of the automobiles in the market as well as the brand loyalty. The pricing model for the company aims at directing different segments of the company’s customers to demand different models from the company (Anderson, 2013). Through this pricing model, the business adopts selective pricing, meaning they charge different prices for different markets depending on a number of customers demanding their products and the costs of supplying the automobile products to the markets. The business sustenance and maintenance pricing strategy mainly work along with the selective market pricing tools in ensuring that the market for the automobile products strengthens, as is the profit ratio for the business (Truett, 2014).
In the process of differentiation and establishing a competitive edge in the market, the automobile companies must undertake two main strategies. First, the companies should produce cost effective products to trade them for low in the developing economies. Through increased sales in the developing economies, the companies can develop brands that will have enough strength to challenge the established brands like Toyota and Mercedes Benz. Manufacture of cost effective products will also help companies to reach both the middle class and low class people in the developed countries; thus, they will build a reliable brand for their products (Anderson, 2013). Furthermore, the companies should undertake globalization of their production in order to maximize on the economies available in many foreign countries. Many governments support investment activities meaning that if the companies offer to produce from their economies, they will receive goodwill from governments and increase sales in the affected regions (Chan, Chan & Jain, 2012). Globalization of production will also reduce the cost of selling in the developed markets. Through this, the companies can develop strategies that will cement their relationships with the local people. Such relationships will increase sales in the local markets and increase their market share in those markets.
The most effective marketing strategy for a business in the automobile industry is celebrity advertising. This involves the use of respected people in the society to promote products from the business and increase their sales (Muller, 2013). For example, Chovrelt has increased their sales in the British market through using celebrities like Wayne Rooney and David Beckham to increase their sales. Similarly, in case Toyota wants to increase their sales among the people who like music in the United States of America, they can use celebrities like Rihanna and Jayson Stratham in the movie and theatre business. The celebrities feature in promotional messages from the customers; thus, they attract their fan base to the product (Anderson, 2013). This moves the fans to check out the qualities of the products in the market thus increasing the sales for the product. Celebrity marketing is the most effective form of marketing for the automobile industry. This is because many people use the celebrities as their role models. In order to emulate their lives, they will also tend to copy the lifestyles that the celebrities live and buy the automobiles they use.
Concisely, the automobile industry is highly competitive sector that needs strategic management to ensure that a company has a competitive advantage over others. Mercedes Benz and Toyota are the leaders in the automobile industry with global brands that attract customers from all parts of the world. These companies have strategically embraced media in promoting their businesses. Effective promotional strategies have helped the companies to increase their competitiveness in the market and appeal to customers. Similarly, the companies’ calculative product differentiation and pricing policies have enabled them win and retain customers. This is essentially through developing positive relations with the customers. In reference to the Toyota and Mercedes Benz’s marketing strategies, it is apparent that the use of celebrity is a strategic advertising approach that can help a company gain advantage over others. media for a company in the automobile industry that can help it to gain advantage involves the use of celebrity advertising. It helps companies to win the fan base of celebrities and increase their sales through engaging with the celebrities’ fans. It also helps them develop brand loyalty from the followers of the celebrities.
References
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