Strategic analysis

The PESTLE study of the business identifies the threats and opportunities facing the automotive manufacturing company. The business is renowned for having the most employees and for being one of the top providers of autos (Shende, V., 2014 1). On the other hand, the business must make sure that it recognizes the dangers and possibilities that are coming. To ensure that it keeps its positions in the auto manufacturing industry, it should take advantage of the opportunities. With the PESTLE in mind, the business can create initiatives and plans that will support its expansion and stability. Indeed, the mojo company can maintain its position as the best company in the production of motors. The company needs to ensure that it address the various factors that are addressed in the PESTLE.

Political factors affecting the operations of the company

The political conditions dictate whether the company would operate in various countries or not. The political stability in the targeted markets might play a major role in controlling the sales of the company. If there is political instability, the company cannot dare selling their products in specific regions because it might suffer losses (Ivanova, K., 2015 80). The company also relies on the agreements of the country with other countries to allow for the exportation of the products. A government that supports the various technological advancements in the company also helps in the growth of the company (Felzensztein, C., 2014 840). Government projects that initiate the infrastructure advancements help in ensuring that the company increases its production. Government infrastructure projects that help in the development of roads promote the growth of the company. The company is more likely to grow in places that there is no tension politically. Government support of the eco-friendly products help in ensuring that the company produces products that are environmental friendly (Ivanova, K., 2015 85). Also, governmental strategies of increasing the exports and decreasing imports help the company to get the targeted internal and external markets. Governmental support of the innovations also helps the company to ensure that they produce more unique products. The unique products help in the attraction of a greater customer base. The political macro environment helps in improving the markets for the consumption of the products produced by the company.

Economic factors affecting the operations of the company

The changing economic conditions may affect the company positively or negatively. The company needs to ensure that it notes the trends in the economy of the country how and when to react when they experience economic challenges. The PESTLE analyses help the company to identify the effects of the economy on its macro environment. The growth of the economy of the potential markets ensures is an opportunity for the organization (Jiang, J.,et al 2015 550). When the economy grows, it ensure that the company makes huge profits since more individuals would be capable of buying the products. Steady economic growth is the best way through which the organization can be assured of the market. The company also relies on the market growth. Market growth is through identification of new markets through which the organization can explore (Doufene, A., et 2015 70). More markets ensure more sales and this is to the advantage of the company. However, the increase in the value of the currency of the market can be a potential threat to the company. Increase in the currency value would mean that the company would have to sell its products at relatively lower prices and this have a great impact as the expected profit margins would be lower. Also, the company must have incurred higher costs in production as the value of the currencies was lower.

Social cultural factors that affect the operations of the company

The company experience the impacts of the social environment in which it operates in. The social cultural environment greatly dictates the whether the company would make profits or not. If the wealth gap between the individuals living the community widens, there is a potential threat in the profits that the organization would make (Birk, D., 2015. 50). The company would have to divide the attention they give to the various groups as they poor are less likely to take they products. A smaller gap would mean that the organization would produce cars that are affordable to all individuals in their people in their potential market. Increase in the interests in the electric and hybrid cars is an opportunity for the organization. Electric and hybrid cars are few in the market, high demand for them would mean that the organization would have to produce more to satisfy the market. Snow balling in the community due to the increased interests in a rare product would mean that the company would attract a larger customer base than before. The middle class make the great customer base for the mojo company. Thence, a wide economic gap would mean that the company would not have a great customer base.

Technological factors that affect the company

The technological advancements help the mojo company to favourably compete with other companies. The analysis of various economic situations of the company would mean that the company would have the opportunity to ensure that it makes the bets move in technological advancement. The rising usage of smartphones is a potential opportunity that the company can utilize. Potential customers can get the description and prices of the cars that they need online. The company can invest in the software development to ensure that it has a website that helps in marketing its products (Zaidi, Z.Z. and Kumar, R., 2016, 65). Most customers nowadays do their orders online and might get the description of the product that they want to be delivered to them at their door step. A fulfilling online service by the company would ensure that the company base of the company is improved. It is the responsibility of the organization to ensure that the services that they provide online are efficient and easy to use. However, there is no alternative network in which the organization can use if the online methods fail.

Environmental factors

Before making any decision, the company needs to ensure that it makes the most appropriate decision that does not affect the environments in which they operate. Considering the two way theory, more imports than exports is likely to increase the pollution levels of the country. There should be a balance between the exports and the imports to ensure the environment is not exploited (Chari, S., Katsikeas, C.S., Balabanis, G. and Robson, M.J., 2014, 145). The environmental factors that favour the company include the climatic changes, the emphasis on the sustainability and the depletion of the oil reserves. In the decline of the oil reserves, the company finds the opportunity to produce the electric vehicles. The electric vehicles get the opportunity to be used in the markets. The electric vehicles would be relatively more expensive as compared to the ones that use oil. Therefore, the company is likely to get more profits. The depletion of oil reserves also helps the company to produce environmentally friendly products which use electricity to move. The company also have the opportunity to be able to introduce and sustain the products that use electricity. The PESTLE analysis helps the company to identify the environmental factors that might allow for its continual growth.

Legal requirements

The mojo car company must ensure that it satisfies all the legal requirements that are necessary for its running. The company needs to identify the legal requirements that hinder and promote its operations and the best ways to ensure that it avoids the threats and embrace opportunities available (Sah, S. and Fugh-Berman, A., 2013). Some of the legal requirements that are necessary before the business runs are the regulations on environmental protection and increasing the safety regulations. Environmental protection regulations offer a great opportunity to the organization since it would have the opportunity to focus at producing vehicles that do not use oil. The vehicles that use electricity cause less harm to the environment as compared to those that use fuel. Most countries generate their own electricity (Felzensztein, C., et al 2016, 67). However, not every country is endowed with a region in which it can get its own oil. Therefore, producing vehicles that use electricity would mean that the company would not have to spend much on imports. Import export imbalance normally result into great impact to the environment. The regulations that ensure that the safety of the users is maintained also provide opportunity for the company to maintain its position as the leading cars provider. The company can provide warranties to ensure that it maintains a larger customer base.

Competition

Owning a vehicle in the current world is not a big issue in the current world. The consumers are everywhere in the world. Since there is a large customer base, a great number of investors have invested in the production of vehicles. To stand out, the companies need to have an extraordinary performance. The companies need to produce cars that are both environmental and economical friendly to their users. The mojo company is likely to get great competition from other companies like Nissan, Ford and GM. The businesses have various marketing strategies that are aimed at ensuring that they maintain their customers as well as they attract more customers. Customers go for the companies that produce durable cars and at lower prices. Companies have established various marketing strategies including looking for markets in the neighbouring countries whereby they would have to export their products to get more markets.

Question two

The concepts of corporate strategy assume that the organization is made up of a series of interconnected parts. The parts that make up the formation of the corporate strategies include the customers, product and service development and core competencies among others. The company need to check on the customers preferences to know the type of cars they can produce for them. The organization needs to understand the economic status of various groups of individuals and strictly produce vehicles that they can afford. Producing very expensive vehicles in a region whereby the residents come from relatively low economic status would mean that the organization is very likely to incur losses (Keyes, J., 2016, 30). Also, Mojo Company needs to monitor the trends in their potential markets and realize the various socio-cultural activities and how they may sometimes affect the purchase of their products. The company needs to identify its strengths through the use of PESTLE analysis.

The company needs to produce more electric cars. The advancement in technology makes the potential customers to understand the potential problems that affect their health due to use of cars that use oil as the source of energy. Customers prefer vehicles that do not pollute te surrounding environments. Also, the cost of maintaining the cars that use electricity is relatively low. Therefore, more customers are likely to prefer them. The company needs to develop the core competencies (Colmorn, R. et al 2016 15). The core competencies simply involves utilizing the resources that they have within the company to ensure that they are head of their competitors. The company needs to ensure that it hires the best staff to ensure that it favourably competes. The company needs to ensure that it evaluates the costs incurred in production and operation and how they can reduce on the operational costs (Arya, D., 2016, 6). Reducing operational costs mean that the company would still make bigger profits by selling their products at lower prices as compared to their competitors. The company need to ensure that they provide services in such a way that the customers are satisfied. They need to ensure that they provide a platform through which the customers provide feedbacks. Customers can also give insights on how they want to be served. Making customers get the best is the best that each company aims to offer. Thence, car Mojo Company needs to ensure that it provides the best to its customers.

The company need to understand its competitive priorities. The company needs to identify the competitive priorities to be able to outline the best corporate strategy. The company needs to understand that the competitive priorities that it must ensure that it are the best is checking on how the staffs handle its customers (Sah, S. and Fugh-Berman, A., 2013, 65). The organization can also check on the production costs to enable it check on how to change their selling prices.

The organization needs to consider the design that it provides to the customers. The company needs to give the customers the car design that majority prefer and at subsidized prices. The company needs to ensure that it is very innovative in the goods that it provides to ensure that they are different from companies offering similar products. The company need to understand the psychological benefits that are attached to the customer satisfactions. The company should be innovative enough to the leaders in the introduction of new brands into the market. New brands allow the company to get a huge customer volume before their competitors can try to offer similar types of goods (Babafemi, I.D., 2015, 45). Offering new products can also be accompanied by patency rights whereby only the company is allowed to provide a particular type of good for a specified period of time.

Considering the 4Ps, of marketing, the company needs to ensure that it identifies the right product, and give it at the right time, right price and at the right time. The four Ps of marketing include the Product, the Price, the promotion and the Place. The company needs to market their products using the unique identity of their product. For instance, the company can identify the cars that use electricity. A product that do not cause harm to the environment and is affordable (Johnson, G., et al 2016 70). The major consumers of the car mojo products are the individuals who are within the middle class. The company needs to ensure that the company prices their goods in prices that can be afforded by the potential market. The company also needs to get well trained personnel who understand soft skills and can effectively advertise the product. The company needs to ensure that it establishes a great number of outlets to ensure that the customers get the products at the right place.

The human resource professionals are expected to interview the employees and evaluate their competencies well to ensure that the company get the most competent employees. Also, the company need to operate in an optimal portfolio to ensure that it has reasonable steady returns.

Question three

The external factors that are identified through the PESTLE analysis can help in the identification of the threats and opportunities that the company might have as a result of influence by the external environments. The company can realize the laws that help in the growth of the company such as those that ban the production of vehicles that use oil. Also, the decrease in the value of the currencies of the countries in which they supply also plays a great role in ensuring that the company gains more Decrease in the currency value of the potential market reflects on the opportunity for the company to fully exploit the market. The threats that may the company might be exposed to include widening of the wealth gaps within the potential markets. The company relies on the individuals within the middle class as their major customer base. Innovation in the technology could help in ensuring that the company succeeds in getting a great number of customers.

Car Mojo company has great opportunity to grow; the company can ensure that it explores various opportunities presented by PESTLE to ensure that it grows. The company can strive to satisfy the demand of the cars that use electricity as a result of the ban on the cars that consume oil as well as the depletion of the oil supplies. The company can also make contracts with various countries that offer potential markets for their products. The company must employ strategies that may make it grow its markets worldwide. The strategies that help in the global growth of the potential market include the effective use of the social media.





References

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Arya, D., 2016. A STUDY ON CONSUMER BUYING BEHAVIOR REGARDING FOUR WHEELER. perception, 5(10).

Babafemi, I.D., 2015. Corporate strategy, planning and performance evaluation: A survey of literature. Journal of Management, 3(1), pp.43-49.

Birk, D., 2015. Tesla Motors, Inc. Market Analysis and Definition.

Chari, S., Katsikeas, C.S., Balabanis, G. and Robson, M.J., 2014. Emergent marketing strategies and performance: The effects of market uncertainty and strategic feedback systems. British Journal of Management, 25(2), pp.145-165.

Colmorn, R. and Hülsmann, M., 2016. Strategic Perspectives of Electric Mobility—Steps Towards the Slope of Enlightenment. In Markets and Policy Measures in the Evolution of Electric Mobility (pp. 9-20). Springer International Publishing.

Doufene, A., Dauron, A. and Krob, D., 2014, July. 2.1. 1 Model‐Based operational analysis for complex systems‐A case study for electric vehicles. In INCOSE International Symposium (Vol. 24, No. 1, pp. 122-138).

Felzensztein, C., Stringer, C., Benson-Rea, M. and Freeman, S., 2014. International marketing strategies in industrial clusters: Insights from the Southern Hemisphere. Journal of Business Research, 67(5), pp.837-846.

Grinblatt, M. and Titman, S., 2016. Financial markets & corporate strategy.

Ivanova, K., 2015. Market Potential Analysis of Finland and the UK; Business case–“Sidebar business proposition”, Case Company: Orion Automotive.

Jiang, J., Blank, A., Maier, F., Bharthepudi, A. and Kumar, P., 2015, August. Financial analysis and comparison of compact electric and gasoline cars. In Management of Engineering and Technology (PICMET), 2015 Portland International Conference on (pp. 511-518). IEEE.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P., 2013. Exploring strategy text & cases (Vol. 10). Pearson.

Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate strategy. CRC Press.

Purce, J., 2014. The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.

Sah, S. and Fugh-Berman, A., 2013. Physicians under the influence: social psychology and industry marketing strategies.

Shende, V., 2014. Analysis of research in consumer behavior of automobile passenger car customer. International Journal of Scientific and Research Publications, 4(2), p.1.

Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle River, NJ: Prentice Hall.

Zaidi, Z.Z. and Kumar, R., 2016. Marketing Strategies for Socially Responsible Products-Company Brand Name and Market Scenario: An Industry Cross-Sectional Study. LBS Journal of Management & Research, 14(1), pp.64-69.









Appendix





















International Journal of Scientific and Research Publications, Volume 4, Issue 2, February 2014

1

ISSN 2250

-

3153

www.ijsrp.org

Analysis of Research in Consumer Behavior of

Automobile

Passenger

Car Customer

Vikram Shende

*

*

Senior Manager

–

Programme Management, Foton Motors Manufacturing

India

Pvt. Ltd. Pune,

India

Abstract

-

The automobile industry today is the most lucrative industry.

Due to

increase in disposable income in both rural and

urban sector a

nd availability of easy finance are the main drivers of high volume car segments.

Further competition is heating up with

host of new players coming in and global brands like Porsche, Bentley,

an

d Ferrari

all set to venture in Indian market. This research

will be helpful for the existing and new entrant car manufacturing companies in India

to

find out the customer expectations and their

market offerings. Indian Automobile car business is influence

d by the presence of many national and multinational manufacturers.

This paper presents analysis of research in the area of Consumer Behavior of Automobile Car Customer. Proper understanding of

consumer buying behavior will help the marketer to succeed in

the market. All segments in Indian Car industry were studied and

found that buyer has different priority of behaviors in each segment, where as main driver for car purchase is disposable in

come.

Value for money,

safety and driving comforts top the rank

in

terms of customer requirement; where as perceived quality by customers

mainly depends on brand image.

For this research, methodology adopted was to study the research papers in the area of Passenger Car segment, study the purch

ase

decision process and

its interaction with behavior parameters across all the segments of car such as small & Hatch Back segmen

t

,

Sedan class segment, SUV & MUV segment and Luxury Car segment. The objective of this study is the identification of factors

influencing

customer’s

preferences for particular segment of cars. This paper also at

tempts to consolidate findings &

suggestions to

overcome present scenario of stagnancy

in sales and cultivate future demand for automobile car market.

Index Terms

-

Consumer behavior,

Small Car, Sedan class segment, Customer Perception, Luxury C

ar segment, Automotive

Industry

I.

I

NTRODUCTION

ndia being the second most populated country in the world and the growth rate of Indian economy is also high as compared to

developed countries, whi

ch attracts the presence of huge demand in the Automobile Small Car Indus

try. India is becoming emerging

market for worldwide auto giants.

India is on growth path and has lowest passenger vehicle penetration, ref. Figure 1.

Figure 1: Passenger Vehicle P

enetration

Source: ICRA,

Mar

2011

There are various

reasons for the growth of the Indian automobile market such as

-

1.

The people have more disposable income as economy is growing.

2.

Increase in the need of mobility due to urbanization and leisure travel.

3.

Car

Finance options available from Financial Institutes at reasonable rate of interest.

4.

Availability of service centers and spare parts in near vicinity.

5.

Improvement in highway infrastructure.

1200

500

463

445

246

188

158

85

45

13

0

200

400

600

800

1000

1200

1400

I

International Journal of Scientific and Research Publications, Volume 4, Issue 2, February 2014

2

ISSN 2250

-

3153

www.ijsrp.org

For most of the

people, purchasing a car is the second most importa

nt and expensive

decision

, next to purchase of a house; for the

automotive manufacturers, first

-

time car buyers give them the opportunity to create positive brand image which definitely could be

reflected in next coming years because consumers could

make r

epeat car purchasing. The concept of “buying behavior” is of prime

importance in marketing and has evolved over the years. It is very important to understand consumer buying behavior as it pla

ys a vital

role while purchasing products. Day to day human want

s are growing, expectation

is

growing. Car Models are no exception to this

behavior. Consumer behavior is fairly complex as Car Purchase implies a high level of social and psychological involvement.

Consumer buying behavior is a blend of Economic,

technolo

gical, political, cultural, demogra

phic

a

n

d natural factors

as well as

Customer’s own characteristics which is reflected by his attitude, motivation, perception, personality, knowledge and lifesty

le.

This lead to constant modifications of Car Models and it

s features in terms of their size, capacity, styling etc. and today we see a new

model coming into the market practically every quarter. Market has become very competitive and has become very

‘

important place

’

to

study the behavior of consumers and also pr

ovide useful insights what a consumer requires in a product in a constant

dynamic

environment. Consumer behavior also differs for same Car under below conditions

-

1.

New Car launch in market

2.

Car is in market for 1

-

2 years

3.

Car is in the market for more than 4

years

4.

Purchase of second hand Car

It is only through research that a company will be able to study t

he buying behavior

of consumers. With better understanding of

customer’s perceptions, companies can determine the actions required to meet the customer’s ne

ed. They can identify their own

strengths and weaknesses, where they stand in comparison to their competitors, chart out the future progress path and improve

ment.

The passenger car market changed very rapidly due to the fierce competition and advance techn

ology, therefore, it requires the

automotive manufactures to understand the

consumer’s preference on time and take fast actions to reflect market changes quickly. So it

would be very interesting to know consumer’s preference in today’s fast

-

changing passen

ger car market and how is the customer’s

buying process.

II.

STATEMENT OF THE PROBLEM

Due to the emergence of globalization and liberalization there is a stiff completion among the Automobile industries which ar

e

focusing attention in capturing the Indian mar

kets an automobile are no more considered as luxury once, now occupies a part of day

-

to

-

day life and has become a necessity. Customers have now changed their attitude that yesterday’s luxuries are today’s necessit

ies.

To be a successful marketer it is abso

lutely essential to study the perceptions of the prospective buyers and track their drivers of those

perceptions.

III.

REVIEW OF LITERATURE

Manish Kumar Srivastava, A.K. Tiwari [1], studies the consumer behavior for A3 segment vehicles such as Honda City and

SX4 in a

particular region Jaipur. Data collected from 100 respondents 50 each from Honda City and Maruti SX4. Respondents were

considered from various backgrounds like Gender, Occupation, Income class. Also customer purchase parameters considered for s

tud

y

are Price, Safety, Comfort, Power & Pickup, Mileage, Max Speed, Styling

, After Sales Service, Brand Name and Spare Parts Cost.

Based on above parameters and analysis made in this it revealed that, while purchasing A3 segment car Customer give much

import

ance to Safty, Brand Name and seating and driving comfort. Also word of mouth publicity and advertisements in car magazines

are more effective communication medium for promotion of Cars.

Prasanna M

o

han Raj [2], studied the factors influencing customers

brand preference of the economy segment SUV’s and MUV’s.

Data collection was made through direct interaction and customer intercept survey using questionnaire. Descriptive

analysis was used

to transform data into understand format and factor analysis was u

sed for identi

fication of factors influencing customer preference. In

light of study findings, the preference of a given brand can be explained in terms of six factors namely Product reliability,

monetary

factor, trendy appeal, frequency of non

-

price promo

tions offered, trustworthiness and customer feeling or association towards brand.

There is need for marketers to take these factors into

consideration

when crafting product innovations in the SU

V segment of

Automobile market.

Nikhil Monga, Bhuvender Chaudh

ary, Saurabh Tripathi [3], this research attempts to answer some of the questions regarding brand

personality of selected cars in India by conducting the market research. This personality sketching will help in knowing what

a

customer (or a potential custo

mer) thinks about a given brand of car and what are the possible factors guiding a possible purchase.

Similarly, the idea of measuring the customer satisfaction will serve the same purpose of determining the customer perception

. Thus,

by measuring the will

ingness of exciting users of a car to recommend it to others will help the car manufacturers to chock out the

entire customer Buying Behavior. The study shows that brand perception is something which starts building up before a car is

purchased and goes on

with its use and is reflected in the recommendations. The customer makes to his acquaintances for the same

car.

Also it is seen that the customer might not be using the car still he holds the perceptions about it. Brand personality of a

car is

enforced by

the sellers in the mindsets of the customers and customers reacts to it by forming their perception about the car and this

reflects in the overall brand image of the car. So brand image and brand personality complement each other and the brand perc

eption