The History Of The Marketing Mix Strategies Marketing Essay

Published Date: 23 Mar 2015

Audi Aotomobilewerke was establish on 1901 by August Horch. He was success produce the first left hand drive car in German on 1921. Until the First World War some of cars built under the Audi name won several rallies, which helped to establish the name worldwide. During the War, Audi was forced to produce vehicles for the war effort, and the recession was also a tremendous problem for the company after the war. In year 1920, the founder August Horch left the company. The company managed to get through the hard time from 1927-1930. In 1931, the management recognized that only a union with other independent vehicle manufacturer could keep Audi alive. During the year 1964, the Volkswagen Group acquired the company. After 5 years, it was merged with NSU then changed the name to AUDI AG. Nowadays, sales of AUDI around world are growing strongly.

Nature of business

Audi, Top 10 automobile brand in the world produces several product lines of cars such as Supermini, Small Family Car, Compact Executive Car, Full-size Luxury Car and others to satisfy their customers' needs. Vision: "Audi-the premium brand".

Audi automobile is use the sophisticated machines that embody technological perfect (Vorsprung durch Technic) for produce the exquisite, beautiful, high standard car in the world. The mission statement "we delight customer worldwide" therefore plays a key role on the path to becoming the leading premium brand. The Audi brand has defined its understanding of customer delight in greater detail in four areas of action:

We define innovation

We create experiences

We live responsibility

We shape Audi

Objective

Since 2008, Audi's marketing objectives had to increase brand awareness and sales even in the time economic crisis in future.

Target market

The target market of AUDI automobile is aimed at a single audience with a high purchasing power and seeking the best performance in both safety and comfort without being picky about the price.

The marketing Mix Strategies

Product strategy

Product identity

Audi manufactures "Vorsprung durch Technik" produces a wide range of sports car. Audi R8 produce series of products such as R8 coupe 4.2 FSI Quattro, R8 Spyder 4.2 FSI Quattro, R8 coupe 5.2 FSI Quattro, R8 Spyde 5.2 FSI Quattro, R8 GT coupe 5.2 FSI Quattro and R8 GT Spyde 5.2 FSI Quattro.

Audi R8 coupe 5.2 FSI Quattro offers a dynamic drive for anyone looking for elegance, muscle, performance and safety in a good-looking package. This product is machine gun wrapped in marshmallow, where the comfort of the car belies its extreme performance.

The new car contain Parking system plus with rearview camera, auto-dimming, fine Nappa leather sport seats, full LED Headlights with LED daytime running lights, Bang and Olufsen Sound System, Bluetooth seatbelt microphone, HomeLink remote transmitter, Navigation System plus with traffic information.

Product Classification

Audi R8 5.2 FSI Quattro is a tangible product which may include brand, quality, price and color. It is classified as specialty product because of consumers purchases this tangible product not frequently. Consumers buy this product when they have money. A lot of customer purchases this product for their own consumption to satisfy their daily life move to better life.

Product & Service Attributes

Product quality

Audi Space Frame (ASF) mixed construction using aluminum and steel. The use of aluminum in the auto body allows for a saving of up to 200 kilograms in vehicle weight. The powerful silhouette of the product contain the powerful 5.2 liter high-speed engine located towards the rear cause the car's unbridled forward urge.

Product features

For better performance, the car enhance the driving experience and skill with a number of features such as parking system plus with rearview camera and auto-dimming heated exterior mirrors.

Product style

It offers many colors and many styles to attract attention from trendy consumers and general consumers.

Product design

Consumers are free to alter appearance, features and construction such as adding items on the back of the Audi car, lowering the car making it look more stylish like a race car.

Branding

Advantages to buyer:

Customer's loyalty knows Audi offers specialty or luxury products and services have its own features, benefits and quality.

Advantages to seller:

Basis for product's quality of Audi provides legal protection helps to segment the market with different products for different segments.

Packaging

Since the product is car, packaging might not be of much important. Cars usually don't come in a box. If the car is the gift for someone's birthday, it can be decided to make in a big box.

Labeling

Car is no labeling. However for curious users, there will be a small brochure about the ingredients car parts, so they can see how exactly the car works and what and where the different parts are they form.

Warranty

Basic warranty: Covers everything except items that are subject to wear and tear or replacement in the ordinary course of vehicle ownerships. Tires and batteries are often excluded, but usually have their own warranty provided by the manufacturers of those items. Emissions equipment is required by Federal law to be covered for five years or 50,000 miles.

Drive train warranty: After the basic warranty has expired, this part of the warranty covers most of the parts that make the vehicle move, including the engine, transmission, drive axles and driveshaft.

Rust or Corrosion Warranty: This warranty covers the vehicle's sheet metal, and protects you from rust.

Pricing Strategy

The price of latest product of Audi R8 coupe 5.2 FSI Quattro is RM 1,250,000 for personal registration and RM1, 273,916 for company registration. These are the good value pricing because it is setting reasonable and affordable price. If the customer perceived price are lower than the value of the product, they will choose to buy it.

There are many factors affecting the price decisions of product. The external factors that are affecting the pricing decisions of this market are included the company strategy and objective and organizational considerations. There are few kinds of markets which are affecting the pricing decisions such as pure competition market, monopolistic competition market, pure monopoly market and oligopolistic market.

Audi R8 coupe 5.2 FSI Quattro is belonging monopolistic market. Audi is a price marker which has ability to control the price in the market. If Audi raises the price, they maybe lose some customers from competitors. It is because Audi produce the product differentiated in monopolistic competition which has low barriers to entry.

New product pricing strategies is used when the Audi first introduces R8 coupe 5.2 FSI Quattro to market. Audi is using skimming pricing strategy and setting the high price when specialty or luxury product as the product differentiated entry the market with little or no initial competition. Audi have high customer perceived value due to the company produce high quality product that able to competitive in the market. The high customer perceived value for the product mean customers are willing to pay more for their product.

Product mix pricing strategy or pricing policy for it is product line pricing. Audi use product line pricing in mix their selling products by set the limited price for different products based on costs, features, customers evaluations, and competitor's prices for different products.

There are 5 types of price adjustment strategies or reductions from list price that can be used namely cash discount, trade discount, quantity discount, allowances and rebates. The car is set a limited price that not easily to change but seller accepts less money or to give allowances to customer when they purchase this kind of used car. For example, Carlist.my is Malaysia's largest car classified to buy and sell used cars or second hand car.

Promotion Strategy

Due to the unpredictable nature of consumer buying, market share in the automobile industry is often gained or loss based on product variation, brand existence and critical brand experiences. So that, promotion requires a careful designed blend of variables to satisfy the needs of company's customer and the organization goal's to be achieved at the same time too.

Audi automobile had used the personal selling to promote their product. It is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and action. It involved personal interaction between two or more people therefore it is important to have friendly and persuasive salesmen in the dealerships to convince customer to buy their car. They used this type of promotion because they can observe the customers characteristic and needs and can make quick adjustment. In addition, it can provide more information about their product to customer directly.

Next, Audi automobile promoted their product through advertisement. It is a form of non-personal communication through mass media to introduce their product such as through television, internet, or radio. It is the most fast promotion type to promote their product and build a long term image in worldwide. They will promote their product in major motor shows in the world and various advertisements on television or internet. For example, Audi has contracted with two entities advertising global impact sports, such as Real Madrid and FC Barcelona. In addition, they invited Jason Stahtam, Hollywood actor to promote their product as an advertisement to attract more audience.

Furthermore, Audi's automobile also organizes trade show to promote their product in many countries such as at Malaysia, Singapore, Japan and others. They will show their product especially the new series car at the trade show for the purpose to find the new sale leads, contact with customer, introduce their new product, meet new customer, sell more to present customers and educate customers with publications and audiovisual materials. For an example, they will promote their new series car at an automobile expo Malaysia with comparisons of major competitors.

Audi's automobile had sponsorship for some events especially the sports. Due to large audience involves in sports event, Audi would go through this kind of promotion. For examples, it had been sponsored the regional teams ERC Ingolstadt (hockey) and FC Ingolstadt 04 (soccer), England Polo Team, and others. In addition, it had long partnerships exists with many football teams such as Chelsea FC, Red Madrid CF, AC Milan and others.

Distribution strategy

The type of Audi's market distribution is intermediary. The intermediaries help Audi company to promote their automobile such as they will have car promote at shopping complexes and the places where do have car shows. They also help to sell and to distribute Audi's automobile to final customers.

Besides, customers can look for Audi automobile at Audi showroom outlet in their own country, such as showroom outlet at Malaysia, United State, Germany, Singapore and England. Usually, those buyers will look for Audi cars' information from website, such as the price, the newest designation of their cars, cars function and so on. After they decided to buy which model of the car they want, they will look for further more information from showroom outlet.

Audi headquarter is at Ingolstadt. It transports their automobile by ship from Germany to others country. By shipping, it will take about 2 to 3 months to reach other country like United State and Malaysia. Audi ships 150000 cars every year but there is rail transport of cars using renewable energies from Ingolstadt up to Emden which on Germany's North Sea. This rail transporting concept is a trailblazing step for the car industry and a crucial element of Audi's strategy of ensuring that production is sustainable developing in all areas.

Market Opportunities

Based on analysis, there have market opportunities for Audi to have a strong position in the automotive market. Audi focus more on family-friendly vehicles and innovation of high technologies that make their company to generate huge amount of profit.

Recently, market drives more consumers toward family-friendly vehicles. Audi has jumped on this opportunity to create models within these market segments. Based on the research, Audi is offering its two models for the year 2012, the Audi Q7 and the Audi Q5, as well as the Audi Q3 crossover Sports Utility Vehicles (SUV) to provide an entry level option into the crossover or SUV market. Q5 is an SUV that contains all the luxurious trappings and snob appeal of its Q7 bigger brother, but in a much more compact and manageable size. This kind of luxury Crossover vehicle has already perfect balance between sporty looks and features. No matter a family yearning for roomy, sporty comfort, or a business person who desires a comfortable drive is encourage to buy this type of vehicle. This opportunity helps Audi to increase the amount of profit and attract more customers. Customer base had increased and many customers prefer to choose family-friendly vehicles. Due to the reason, it becomes the opportunity for Audi to capture existing customer and attract more new customers. Audi adapt to the environment changes and fulfill the need of customers through offer family-friendly vehicles. People who want to buy luxury car and at the same times it is a family-friendly vehicle, Q5 and Q7 is a best choice for them. In conclude, Audi is successful increased by 14.9 percent sales growth in August.

The next market opportunity is the innovation of high technologies and reduces fuel consumption will lead Audi to make more profit. A successful company knows to observe and adapt for the changing environment. Nowadays, the fuel price of global market constantly increase which affect the price of petrol in Malaysia. The raise of price affected the purchasing decision of customer. Therefore, Audi creates a lot of innovative technologies, their motivation is the principle of efficiency and their goal is provide more power from less fuel of automobile. They accomplished high compression ratios, efficient combustion processes and optimum efficiency. These are the best ways of reduces fuel consumption and increases performance. The engines of Audi automobile are very efficient high-tech machines. Furthermore, the Audi invented turbocharged fuel stratified injection (TFSI) to increase power output and a more dynamic performance with lower fuel consumption. TFSI is the combination of petrol direct injection and turbocharging to improve efficiency and fuel economy. Audi also creates S Tronic to combine the sportiness and efficiency of a manual gearbox with the benefits of an automatic transmission to cut down the automobile's fuel consumption. From these innovation of high technologies and reduce fuel consumption, Audi successfully to gain the marketing opportunity in Malaysia which according to data from the Malaysian Automotive Association, Audi cars were sold with 90 units in September 2012 compared with 52 units in September 2011.

Recommendations

According to the operation of Audi Company, most of Audi's manufacturing costs are much higher than other producers. By comparing with Toyota Company, there are more Toyota buyers than Audi buyers because the selling price of Audi is higher than Toyota. They are almost all high technology and high build quality's automotive, so Audi costly expensive. This is why less customers purchase Audi as their automobile. Moreover, Audi has great interior build quality and its well performance engines. Production costs for building Audi are most likely higher and customers have considered them as a luxury automotive. It makes customers cannot be consume their desired automobiles affordably. Hence, Audi Company should try to cut down the manufacturing costs on its engine, interior and exterior designs, as well as raw materials that launch these automotive in order to achieve their mission, We Delight Customer Worldwide. Next, Audi should create an Audi automobile by using recycle materials to save its production costs.

Secondly, the other serious problem that occurs in Audi is dependence more in the overseas markets. Based on research, we observe that Audi delivers about 254,011 cars to customers in Germany in 2011 while in the same year; Audi which located outside Germany has delivered approximately 1 million cars to the consumers. This shows that Audi expects higher on overseas production than its own country's production. This problem will lead to decline of sales revenue in Germany and increase the total revenue outside the Germany which affected economy condition of the country. Therefore, Audi should concentrate on manufacturing in its own country. They should advertise more on their brand name products in order to promote Audi automotive within Germany country, as well as to build up customers' confidence and loyalty. At the end, the sales volume of Audi in Germany will be impacted and starts to grow steadily. Thus, Audi must more depend on Germany market, so as to rise up marginal profits and market share in Germany.

Lastly, Audi should launch different designs of car to attract the customer in order to increase its profits. These few years, the model and design of Audi is slightly different from each other. To resolve this problem, they can have meetings to discuss about the ideas and have common solutions. Audi should always fulfill the customers need according the trend of target market. They could send some car designer and some employees to other car manufacturer to get to know how to improve car's feature and some innovation idea on design. Audi could share experience to each other in order to improve the company. In conclusion, although Audi is the leading automotive manufacturer, there are still a lot for improvement.

References and Appendices