Holden’s Inc. Efforts to Acquire new Markets and its advantages

Profit making and ensuring perfect performance has become a major concern for most companies. This study is going to look at Holden’s efforts to acquire new markets and its advantages. Holden is an Australian based automobile manufacturer that has not fully utilized the global market. Given the current state of affairs and situation in the global market, this study is going to look at the strategies that can be pursued in the country in order to effectively acquired new markets globally.

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After analyzing available resources and the state of affairs in the market, the report established that the best way of ensuring the company acquires global recognition is through exporting and extensive product promotion and marketing. The promotion will use integrated marketing communication. The campaign shall utilize mainly online resources to inform consumers of the product. The campaign is expected to take place between 2014 and 2017 after which Holden is expected to have complete recognition in the new market.

 

Holden is an automobile maker based in Australia. It is headquartered in Victoria and has been manufacturing automobiles since then. One of the most common products offered by Holden is the Holden Barinas. This subcompact vehicle has been manufactured and sold by Holden since 1985. The vehicle comes in different models and is believed to have evolved through five generations. Holden makes sales of these products mostly in the European market and Australia. The company has not focused much on marketing and selling cars in the international market. The key focus of this study is to establish a strategy that can be used by Holden to tap into the international market. It is the aim of every business to increase its market share as a way of ‘maximizing profits. A business also extends in markets to increase the amount of products produced and service offered in order to enjoy the economies of scale. It is important for an organization to look at the concept of international trade as an opportunity whenever it is carrying out an analysis of its opportunities, Strengths weaknesses and threats.

 

On the other hand, attaining global recognition is a way of increasing local pride though certain scholars argue that, expanding to the global level may have an effect on local responsiveness. This is because such organizations end up focusing on attaining maximum global recognition. However, an organization can expand to global levels considering the concept of autonomy. This includes ensuring that each branch in every country works independently; this will reduce the risk of decreased local responsiveness. It is noteworthy for an organization to look at international trade as a market security. Looking at the automobiles industry in United States the ‘big three’ i.e. General Motors, Ford and Chrysler, focused on local markets. This had an impact on their performance during the financial downturn. Therefore, it is vital to focus on different markets to help ensure that the company is always in a good position considering the fact that at certain periods a specific market may perform poorly.

2.0 International and Domestic Marketing Environment Analysis

 

 

This form of analysis is used to study the organization’s environment. This form of analysis looks at the Political, Economic, Social, Economic and Technological factors surrounding the business. This is another key tool of strategic management since the management can use to make vital decisions when it comes to product, promotion, pricing and forecasting. Applying SWOT analysis on Holden, we are able to see that some of its key strengths include, a good brand name, huge capital base which gives it an opportunity to expand its market share and the ability to produce models which have not been produced by other companies. Looking at its opportunities include, expansion to other markets e.g. Africa and increasing its product line to include other forms of electronics. The company has a Board of Governors, which assists the chief executive officer in making important business decisions. The following is an environmental analysis of the automobile industry across the globe

  • Political issues: The main political issue surrounding the industry is the regulations formulated by the government to regulate the income and activities of the organizations. For example, the government may review the tax principles governing consumers or the company. Other major issues include environmental conservation and rates. It is vital to understand the fact that the company will now be operating in the global market. This shows that it will have to adhere to rules set in the global market and whatever changes that the rules may undergo during its period of business in the international market.
  • Economic environment: The organization is going to operate in different markets. Therefore, it is expected to incur different rates of inflation, taxation and even monetary policies. The company is also likely to be affected by constant changes of the same (Ekaterina, 77).
  • Socio-cultural issues: Holden is likely to experience many differences when it comes to the social environment of its business. This is due to varying demography and consumers’ cultural make up. Therefore, the company must always work towards ensuring that they deliver products while considering the cultural preferences of respective consumer groups (Ponchard, 17).
  • Technology: Consumers across multiple industries would like to be part of the advantages brought about by the new technology. This includes the use of more convenient marketing and payment methods; another major invention that has shaped the world in terms of business is the internet. This is a vital resource that can be used for a wide range business activity which includes making sales.

3.0 Estimated market size and gap analysis

Table 1: Vehicles production since 1997
The table above indicates the manufacture of automobiles across the globe. It is a clear indication that the number has been increasing every year. However, production declined in 2009 as a result of an economic recession which shows demand and ability to keep producing at the global level is affected by other uncontrollable factors. The table shows the GDP in the top ten countries with highest purchasing power across the globe.

Table 2: Approximate GDP Purchasing Power Parity

Country Approximate GDP- Purchasing Power Parity
1 United States of America $14,624,180,000,000
2 China $10,084,370,000,000
3 Japan $4,308,630,000,000
4 India $4,001,100,000,000
5 Germany $2,932,040,000,000
6 Russia $2,218,760,000,000
7 Brazil $2,181,680,000,000
8 United Kingdom $2,181,070,000,000
9 France $2,146,280,000,000
10 Italy $1,771,140,000,000

 

There is a constant improvement in the global economy since the recession. The world has been witnessing increased standards of living characterized by increased access to goods and services. This is a clear indication that the potential of individuals in the target market to purchase a car increases by the day. Therefore, the company should focus on supplying the Holden Barinas in the above countries considering the fact that their societies are characterized by persons of varying classes (Economy watch, 1).

4.0 Expected Sales and Market Share Analysis

Table 3: Approximate Global Vehicle Unit Sales by Top Auto Manufacturers 2010, (millions)

Toyota 8.5
General Motors (GM) 8.3
Volkswagen 7.2
Hyundai 5.7
Ford Motors 5.4
Nissan 4.0
Peugeot 3.6
Honda 3.5

 

The table above shows the top companies in the automobile industry. Holden is the General Motors branch of Australia, which means that the company has a good brand name. The main objective of this campaign is to inform, 65% of the global population about the Holden Barinas. This is expected to attract consumers from different parts of the globe towards purchasing the vehicle. The organization shall measure if the set objectives are being met or not, this will be done through trying to evaluate the number of people accessing the information resources availed by the organization, this will assist in establishing the interest of the people in the campaign and to decide if the campaign is heading in the positive direction. The objectives are expected to be met since the organization has both the financial and human resources needed to steer the campaign in the right direction. The objectives of the campaign are expected to be met within three years. After the period, the company is expected to be posting sales of about 1,000,000 units a year.

5.0 Market Entry Mode Analysis and Strategies

Due to a lot of competition in the market, teaming up with other companies through franchising or patent could be a very tricky strategy. Therefore, this report recommends the use of the exporting market entry technique. This technique shall be followed by a marketing campaign aimed at improving the company’s brand name across the globe and informing consumers where the Holden Barinas will be exported of its qualities and other product traits (Croucher, 10).

5.1 The focus of Integrated Communication in New Markets

  • The integrated market communication will mainly be aimed at convincing the customers that the organization is actually aimed at attaining its objectives with regard to a particular subject matter. Therefore integrated communication will make it possible for Oxfam to know what the customers expect of it as a charity organization (Stacey, 64). After knowing this, the company can act as per the expectations of consumers therefore making it possible for the customers to get convinced that the organization is dedicated towards the elimination of the Sahel food crisis, this will increase the number of customers that will respond to the campaign.
  • The use of integrated marketing communication tends to understand the costs that will be met by the clients/customer when it comes to satisfying the want to support the food crisis. The price of the units will just be viewed as a measuring mechanism for the customer’s costs.
  • The use of integrated marketing communication is very vital since it does evaluate whether while buying the commodity offered by the organization he/she will be inconvenienced. The use of convenience as a measuring tool is very important; convenience involves satisfying the wants of the consumer. Convenience includes considering the time which the organization’s staff will be available to serve customers and is the organization’s office placed in a position which it will make it possible for customers to get hold of the products and services presented by the firm.
  • This is the fundamental tool of integrated marketing communication. It is important for the organization to not only deliver information to the targeted consumer group but also to ensure that consumers have a say with regard to the information presented to them. The use of normal marketing tools such as online advertisement and product promotion, such marketing tools does not make it possible for consumers to react with regard to the position of the product (Ponchard, 17).

5.2 Integrated Marketing Communication and Its Roles

Integrated marketing communication is the bringing together of all the organization’s marketing methods, tools, functions and resources into a single campaign or initiative that maximizes the final effect on consumers and other stakeholders at a minimum cost. The main aim of integrated marketing communication is managing the relationship between consumers and the organization and improves the value of the brand in the market. The key driving force behind integrated marketing communication is the use of excellent communication skills to communicate certain points and initiatives to the customers. Integrated communication also facilitates the communication between consumers and the business through effectively controlling and ensuring that messages sent to customers and other stakeholders are equipped with the right information that will change the attitude of customers and other stakeholders towards the organization (Croucher, 10). Integrated marketing communication is also aimed at improving the value of the organization’s brand. This strategy is going to utilize the following:

  • The foundation: it is going to use the image of the organization in the market, Holden has a strong brand in the market, and therefore the success of the campaign will be boosted by the strong brand name of the organization.
  • Advertisement: the public is going to be made aware of the new campaign through advertisements in television and radio. The information given about the newly available product will thoroughly be analyzed and subjected to quality checks to ensure that the targeted group has sufficient information about the campaign. Advertisements will include the development of appealing messages to be posted to television and radio stations so as to attract customers and other stakeholders.
  • Promotion: this will involve promoting the activities of Holden across the globe. Promotion will include managing the relationship between the organization and the customers. Promotion will also include customer relations management.
  • Integration tools: integration tools will mainly include the use of the internet to promote the activities of Holden across the world, including its efforts to try and help society members from respective societal problems.

Considering the fact that the main aim of Holden will be to pass information to consumers, it will be important to use the benefits availed by the internet considering its huge popularity in the modern world. With the high growth of the information technology, the sector has not only seen the increase in the size of population using the internet but also the increase in the number of hours spent by be the people on the internet. This has made the internet a perfect advertising and promotion grounds. With regard to product promotion and the use of the internet to advertise products have the following advantages;

  • The internet has greatly developed to the level that the company may provide options on the websites that allows the organization staff and customers to exchange private messages. This will be very important to the organization since it makes it possible for the organization to communicate with customers and clarify on any information about the products being offered.
  • Customers are currently finding it hard to use traditional sources to access information these days, they mostly use the internet to access information, this makes it possible to make it easy to communicate with the consumers by use of the internet since most of them are using the internet to access information about organizations and other educational materials.
  • The use of the internet to inform the public of the new product available from Holden has very many advantages. For instance, the information will be able to cover a wide range of consumers. In addition, the information will not only reach the target market but the information will be disseminated to the whole world and the whole of the target market.
  • The internet has comprehensive media tools that make it possible for the organization to develop advertisements using media presentations that makes advertisements look attractive and appealing to the customers, this increases the probability of a person having the morale to read the information contained in a particular website, the use of the internet to promote the campaign makes it possible to provide more detailed information about the campaign, this includes the use of images to show what is actually going on the ground
  • Internet advertising will be easier for the organization to monitor the success of the campaign. This is mainly due to the availability of services that allow for the monitoring of the number of people who have accessed a particular website in a certain period. This will make it easy for the organization to determine to monitor the campaign and establish whether the campaign is successful or it is just there to misuse the funds of the organization.
  • The use of the internet to inform the public of the Sahel food crisis campaign by Holden will not only increasing the number of consumers willing to support the campaign but will also improve the brand name and market position of Oxfam when it comes to competing with other firms.

6.0 Time frame 2014—2017

 

The campaign will take approximately a period of three years. The campaign will take such a period because the company is expected to cover a huge part of the international market. The following is the campaign schedule

Activity Period
Sensitizing the employees of the newly set objective, training them and informing them of their responsibility towards the campaign and gathering support from staff members and other stakeholders January – June 2014
Development of the website and other online advertising equipment, involves contracting the web designers. The websites will include information about the products being offered by Holden. They will also include their respective prices June – December 2014
Keeping the campaign in motion including putting the advertisements on television. This will also include constant updating of websites among other resources available to consumers. This will make sure that consumers have information about any changes in the product line. 2014 and 2016
Maintaining the website and keeping track of the campaign measuring whether it is a success or not. Just like in the previous stage, this will also include updating information available in online resources and other resources being used to pass information to consumers 2017

 

7.0 Estimated Budget for International Marketing Mix Elements

In order to conduct the campaign, the organization will have to channel funds towards certain aspects. First, the company will also have to incur costs such as transport costs, hiring of training professionals and other expenses associated with the campaign. The company is expected to incur costs with regard to various aspects. For example, ensuring that employees are on the same page with regard to the campaign will take training.

The actual budget is as presented below

Transport                                                                     60000 USD

Human resource                                                           120000 USD

Training equipment                                                     10000 USD

Provision for inflation                                                 10000 USD

Total amount used for workshops and training           200000 USD

The implementation of the workshop and fundraising communication program will greatly depend on the support of the management. The first form of support will be to provide these funds so as to ensure that the campaign runs smoothly (Meyer, 183). The campaign will take place in two major platforms (television and radio plus the internet). From the above we are able to see that the campaign will incur costs majorly when it comes to promoting the campaign, the following is the estimated total costs to be incurred by the firm during the campaign.

Communication through the internet                                  $ 10, 264, 000

Communication through television and radio                     $ 84,000, 000

Total cost                                                                             $ 94, 264,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Works Cited

Ekaterina Eller. “Choices and Best Practice in Corporate Marketing.” Journal of Applied

Corporate Marketing, 19.4 (2007): 69-88. Print.

 

Economy Watch. The World’s Largest Economies; Emerging economies are smaller than

developed countries – but they are growing faster and opening up, leading to greater investment opportunities than ever before. 30 June 2010. Web. 6 September. 2012 <http://www.economywatch.com/economies-in-top/?page=full>

 

Meyer, Ron. Strategy Process, Content and Context: An International Perspective 3rd ed.

Thompson Learning. 2004. Print.

Ponchard, Nathan. “At last, Holden Finds a Seoul Mate”. Wheels Magazine (Sydney, New South

Wales: ACP Magazines). 2011. Print.

Croucher, Sheila. Globalization and Belonging: Politics of Identity in a Changing World.

Rowman & Littlefield. 2004. Print.

 

Stacey, Ralph. Strategic Management and Organizational Dynamics, 2nd ed. London: Pitman, 1996. Print.

 

 

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