Automobile industry has a great role in the today economy and since the industrial revolution it has played a leading role in stimulate growth in economies throughout the world. It includes commercial vehicles, cars, three wheelers and two wheelers segments. This essay explain marketing strategies of General Motors. Areas of this assignment are background of GM, internal and external analysis (SWOT & PESTEL), analysis and application of Ansoff’s matrix. In addition it explain Market Segment, Target Market and Product Positioning. Moreover, it analysis Marketing Mix strategy.
Background OF GM Company
GM is the second largest car company in the world operating in more than 70 countries. Was founded in 1908. In 1931 GM has become automotive sales leader in the world before surpassing Toyota. Today GM operating over 32 countries. GM vehicles are offered in more than 190 countries. It has different brands such as, Buick, Cadillac, Chevrolet, GMC, Holden, Hummer and others.
The vision of GM is to be the leader in transportation products and related services over the world. Its mission is to deliver products and services of this quality so that customers receive superior value while GMs and their business partners participate in the success of the company and GM shareholders will receive a higher sustainable return on their investment.
General Motors Company has six basic values ??for its business. Every GM employee worldwide recognizes the following values
Individual respect and Responsibility.
General Motors has played a basic role in shaping Sullivan’s global principles. These principles are followed by all companies from different sector and of different size. The main things that is Sullivan’s global principles theory focuses on, are respecting for staff in addition to health, safety and dignity at work policy. GM has established an educational and cultural organization for its employees throughout the entire organization. GM designed its University to support its investments with business needs, and to distribute the best practices and main values.
Objectives of GM Company
Use of common practices whenever possible .
GM SWOT Analysis
General Motors have the global market today. Today General Motors has operations in 32 countries and it sold its vehicles in 192 countries.
General Motors has the largest annual sales of $185,524.00 million, which is up to 15 percent of the global market. This a huge amount of annual sales making GM Leading the industry in sales which is helps it to spend more time and money in its Research and Development department.
In the last century General Motors was battling is employee satisfaction leading continuous blows throughout the company. Managers are struggling with employees and unions to save their hours, wages, and retirement plans fair.
GM spending a large portion of its income on health care for retirees as compared to new automotive company.
Critics criticized GM for waiting too long to develop what is now newest vehicles, the Hybrid cars.
GM is almost universal, and the ways that General Motors convert threats into opportunities proves that it is number one in the industry. With 60 percent growth in sales in the Middle East last year, General Motors wants to build a sales network in Iraq, which will help Iraq’s economy recover from the war.
Additional threat to the loss of safety experts due to retirement at GM has been converted into an opportunity to develop GM’s recruitment and training program.
In terms of threat, like losing of any share in the global market, GM has been converted this threat into an opportunity, by made progress in E-commerce strategy and technology for Asia’s auto industry. It is important that every company tries to convert the threats into opportunities for improvement and development.
The CEO of General Motors has launched the price war about three years ago. He never thought this price war would be still continuing, which is caused the market share of GM to fall last year.
The plants of GM have a very large capacity in the United States, this leading them to make long-term business decisions.
Dissatisfaction of the workers. The dissatisfaction of the workers is happens worldwide, not only in America.
GM PESTEL Analysis
Political and Legal
The automobile industry affected by the government laws and regulations. Nearly all regulations that come by consumers is rising fears about the environment and anxiety about safer cars. In 1966 the Congress of the United States of America was voted for the first safety act which is called the Traffic Safety and National Vehicles Act (Gale, 2004). His action obligate manufacturers to improve passenger safety, driver clarity, and vehicle braking. He also stated that manufacturers should inform the public when they remember cars. The concerns about the safety is concerns during all period. There was growing concern about the environment even before the oil disaster. The oil disaster affected another act to be handed in the 1970. For the year 1975 the Energy Policy and Conservation stated that all automobiles must meet a certain amount of miles per gallon.
The US economy has a big impact on the auto industry. The University of Michigan and the Car Research Center said the industry is the main user of computer chips, textiles, aluminum, copper, steel, iron, lead, plastic, vinyl and rubber. Also, it showed that for every worker in the automotive industry, there are seven other jobs created in other industries. These industries contain anything from aluminum to vinyl leads. The total car sales reached 3.7% of the country’s GDP in 2001. This is $ 375 billion in sales.
Society in these days judge people which type of car they have to drive. In the reality community does not like to declare this but it is the truth . Manufactures exploit the culture of people and targets their markets with these ideas. who driving a beautiful car thinks he or she is rich. People who drive unattractive car they do not want to be seen by anyone because of what others will think. When consumers are driving a beautiful or new car this make them feeling better. There is another phase of socio cultural concern is the environmental need for cars with efficient consumption of fuel. Many environmental experts are concerned about the pollution caused by cars gas which is impact on the environment. There is legislation obligating cars averaging miles per gallon.
The Internet has been influenced by all industries in the world. Also, it has had a major impact on the auto-industry. Because of the Internet B2B markets have given many opportunities for the companies, such as increased efficiency, save time and decrease the cost of production. In 2000 General Motors announced to make online exchange for their distributors and manufacturers of original equipments. The economic situation and global warming have caused the development of the automotive industry for alternative fuel cars. At first, car manufacturers were not interested in considering development because of the high cost and risks. The new legislations in automotive industry sector lead the manufacturer to come up with technology to produce cars with efficient consumption of fuel. Car makers decided that the best way to meet the requirements of legislation is to produce electric cars.
GM and cars industries have been challenged by great storm. Its suffers from different things, such as global economy, weak US, rise of the fuel prices, environmental and concerns and issues of sociopolitical. GM have to producing variety of substitute fuel cars, like fuel cell, electric, and hybrid, to overcome potential threats.
Ansoff Matrix Strategy:
Market Penetration strategy :
Market penetration is a method that relies on shown a low initial entry price on products, often less than the final market price, to attract many new customers. This strategy is about convincing the customer to change the old brand to a new brand because of its lower price. The goal of Market penetration is usually to increase market share or volume rather than short-term profits.
The advantages that the company obtains from the market penetration pricing are:
Fast entry to the market Which takes competitors by surprise and does not give them time to act.
It can make a good standing between the first consumer segment. This would lead to increase the movement of trade through advertisement.
Discouraging the new competitors for the market. Because of low prices is a barrier to their entry.
Market penetration is more important when demand for the product is highly flexible. And the product is suitable for the large and large-scale market. Also when there is no enough demand for the product.
GM would be able to attract more customers by selling at competitive prices plus provide some feature like fuel efficient engines. in addition, GM selected to increase the competitive advantage as a one way of market penetration .It is studding to delete some of brand such as Pontiac brand and focus on its main brands like Chevrolet, Cadillac, and GMC .
Market development strategy:
In the past GM did one mistake. When they produced one new model of car with high prices; they ignored one important thing which was the competitions with Japanese companies in the Third World markets. The result in that time showed that, GM wills losses thousands or millions of dollars from the new model. But they were geniuses and they try to overcome that mistake by developing market strategy by producing more spare parts and raise the quality of produced cars. Market Expansion and good relationship were not the weakness of GM Company.
Product development strategy:
Development and improvement of the product is very necessary thing for survival and growth. Increasing in competition, new technology and change of demands may create strong market. GM Company is now going to develop old product, and they intend to introduce a new cars which is fast way to help GM to be initial in the market, and gain additional market share, and finally, achieve leadership Industrial. GM increase sales by modifying existing vehicles such as in design, or engine. Also, through produce new cars like Holden, Opel .ect.
Diversification holds different meaning. One of that is add new and different activities to a particular company. Diversifying company is the company which operates in two or more areas of business activity. The Company may use a diversification strategy to stop the competitor entering the same industry. There are two main types of diversification: diversification related to the company’s industry (product or service) called (related diversification). The second type: diversification doesn’t relate to industry’s products and called (diversification is not linked).
If we apply this strategy to our aim company which is GM. The first diversification for GM happened when it manufacturing most famous cars which is Chevrolet and Opel. GM produces cars in more than 20 countries that will help to diversify into many different activities.
General Motors Company offers vehicles in different segments and for different purposes. GM customers are looking for their request and put order for their needs. Almost all vehicles are good for driving on soft ground and some are excellent to drive on the side of the hills. They can meet customer requirements and they are friendly user. GM company has developed a fuel efficient vehicle, which is considered cost effective.
The car manufacturer manufacturing these vehicles for different purposes and is excellent for progress in developed countries, which have a good market share. Also, these vehicles can be provided in the city areas, where can find customers with good live standard to buy these vehicles for use.
The company’s products are supplied in the market in a wide array of vehicles. There are about 13 new brands of vehicles the company are designed. All of these brands are extremely popular due to the quality of its engineering and spare parts. GM is the market leader in the automotive market which has to compete with others in the market to offer sustainable quality vehicles within a reasonable price range.
GM Marketing Mix Strategy
GM is one of the largest car manufacturers offering a wide range of vehicles and brands. It is providing the latest offers and accessories to its customers who customize their vehicles. It offers a variety of products all over the world under the brand name, which helps the company to attract customers from different markets. There are 12 brands under GM which are GMC, HSV, Opel, Chevrolet, Buick, Cadillac, Holden, Ravon, Jie Fang, Vauxhall, Wuling, Baojun. GM providing vehicles under Cadillac to attract consumers with middle-class through their Chevrolet array and for rich buyers. There are many things that GM focusing on producing its products like quality, technology, designs and affordability. It is focuses on high-level engineering in producing its vehicles. For example of its brands name, Opel is part of GM and Opel offers high quality German products. Also, Buick offers modern luxury vehicles with efficient fuel and advance technology. Moreover, Jie Fang provide array of light trucks with high quality. furthermore, General Motors provides a variety of after-sales services like, maintenance, lights, repairs and accessories. Additionally, GM provides financing for new and used vehicle inventory, inventory insurance, working capital and loans.
GM concentrate on improving high quality, efficient and advanced products. The pricing strategy is based on vehicle type, quality, prices of competitors and geography display. Vehicles prices vary according to brand and features. GM offers its vehicles to different segments of the consumer market all over the world. Offers are available at affordable prices for middle class customers which is ranging from offers to luxury cars. The competitive strategy of GM helps to build its brand reputation. The value pricing of GM’s product helps to attract more customers especially in Asia. For example, Chevrolet uses average central prices for its product, while Buick offers luxury cars at a higher price. Also, GM provides financial services to its clients.
GM operates on 6 continents through 23 time zones. In 2015, about 9.8 million cars are delivered worldwide. GM has a strong international presence with a strong network of 20,000 suppliers selling cars in 125 countries. GM sell its cars directly from the company or through its network of suppliers. Production operations are carried out in 37 countries around the world. GM has access to worldwide and well-known brand all over the world for its products and for after sales service.
GM’s promotional strategy can be explained in the marketing mix as a marketing model and a comprehensive declaration to gain brand awareness around the world. GM using social media, print media, celebrity endorsements and TV commercials ads to promote its products. GM reach to its target customers through promoting its vehicles at car showrooms. The company’s auto showrooms offer test engines for their new product to make curiosity among customers. Experts and journalists present judgment in articles published in GM magazines. GM magazines also publish articles and comments related to cars. GM concentrates on developing innovative solutions to protect environment by designing fuel-saving vehicles. In additional, it supports health and humanitarian services. Moreover, As part of the company’s citizens, its supports education.
General Motors Company is one of the leading companies in automobile industry. It aims to lead the market in transportation products and related services segment globally. Among the above strategies product development strategy is the most appropriate, possible and acceptable. This strategy helps GM and give it chance to produce a hybrid car before its competitors. In addition, it has enough capacity of technology to achieve this, it makes sense to produce it. According analysis of marketing strategy, GM needs to improve its market through an effective marketing strategy and availability of its vehicles in developed regions in all countries. GM gets good market share by launching its new designed vehicles. In the global market, there are many competitors, who are manufacturing their vehicles to their customers, so they should maintain their customer base by offering their vehicles on time.
Also, in the fields of customer satisfaction, innovation, technology and competition, critics around the world have recommended that General Motors have to be speeder and do not give the chance for their competitors to get the advantages in the nearly future in the producing of Hybrid cars. It should be very cautious about the long run the future. It good to be on the same level, if not before the competition with what the new fashion will be in the coming years. If GM’s customers are not adapting to the Hybrid cars, then GM might be take a good decision to jump to the efficient consumption of fuel. But the advantage of doing so however is that if Hybrid cars are the future of the automobile industry and not hydrogen fuel, GM will still be able to deal with the recreation of the industry. .word count: (2941)
Books and Websites
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