Describe about the Managing Service and Service Marketing for a case study on KIA Motors?
This particular study describes about the trend in a automobile industry and with a special case study to KIA Motors. This study also elaborates the macro as well as micro environment of KIA Motors through the PESTEL Analysis tool. The Analyst also disclosed about the competitive advantage of this company. An analysis of competitive strategy and growth strategy is also shown here through using of Ansoff matrix analysis tool.
Marketing Environment audit and opportunities/Threats analysis
KIA Motors is an automotive industry, founded in 9th June, 1944 in. The headquarter of this company is established at South Korea. The automotive industries are now enjoying a relatively strong and growing market. PESTLE analysis of Kia motors shows the following factors-
Political factors- From 1960s to 2000s the political factors have greatly impacted the growth and development of Kia Motors. This company partnered with big branded car company like Ford, Hyundai, and Toyota for their development.
Economical factors- KIA Motors offers a range of vehicles to more than 640 throughout the US. This company has invested a lot of money for its development. Over the year prices of KIA automobile has been increased because of inflation. Factors that affect shifts supply and elasticity are like government taxes on manufacturing, figures of population, capacity of customers to buy the product (Higgins and Fletcher, 2015).
Social Factors- Social factors like population, culture of the people, social responsibility affect the product of Kia motors. Peoples are generally concerns about the price and mileage, and style of the car. They are also very much conscious about the after sales service of the products. The sale of Kia motor’s product depends on which people think about their product in term of age, culture, education.
Technological factors- Technological factors also greatly affect the products of Kia motors. One of the major problems of this company is fuel consumption. Now this company has developed various hybrid engines like Honda, Toyota to reduce the consumption of fuel (Mu, 2015).
Legal factors- The Kia motors are maintaining Countries legal system in a proper way. They are maintaining organisational law, securities law, and employment law in a justified manner (Gonzalez-Padron and Ferguson, 2015). Hybrid car are gaining more demand due to its friendliness with the environment.
Environmental Factors- This Company effectively faces the challenges of pollution, emission. Demand for hybrid car is increasing due to its environmental friendliness.
Types of customer and suppliers
In order to build a strong bond with worldwide customers and suppliers this company introduced various customer loyalty programs. Mainly young generation are tending to buy the vehicles of Kia motor due to its design. Kia Motors have select suppliers like Michelin, Infineon Technology, and FIFA. They have selected Hyosung as their supplier to launch electricity car.
Whole automotive industry trends
Competitive strategy analysis and evaluation
Porters generic Strategy
Cost leadership- Cost leaderships strategy of Kia motors have been introduced by this company to reduce the cost of the product in order to be the market leader. They introduced process innovation by newly designed production and techniques for cost leadership.
Differentiation- KIA motors have initiated differentiation strategy to increase their sales. Kia soul has a very innovative ad campaign that use party rock anthem and hip hop hamsters to make their car cool.
Focus- KIA has started to accept all new K5 sedans, which is popularly known as Optima internationally. Kia Has organized a ceremony in Mexico in order to introduce its business in Mexico. It will strengthen its position in Entire American continent (Verma et al., 2015). The below figure shows the competitive advantages of KIA Motors:
Figure 1: Porters Generic Model
(Source: Nemoto et al. 2015, pp- 09)
Comparison, contrast and Similarity
The three phases of Porter’s generic model tends to go towards achieving the same target. However the differentiation strategy is focused on differentiating of product. This particular strategy is concerned with understanding the preferences of the customer and serving according to the customer preferences. Cost Leadership is concerned with reducing the cost of the product to be the market leader. Focus strategy is concerned with serving a particular segment of the market. Focus strategy can also be known as niche marketing (Mu, 2015).
Product or Market growth and marketing strategy
Ansoff Matrix Analysis of KIA Motors
Market Penetration strategy- In this strategy Kia motors try to sell their existing product in the existing market. They wanted to satisfy the existing customers with their existing products. Kia also tried to retain the image of their Korean designed car and motor cycle.
Market development Strategy- In this Strategy Kia tries to sell their existing product in the new market. Kia has competed with the price by competitive price strategy. Kia tries to retain its brand image in the European market
Product Development strategy- In this strategy Kia has tried to introduce its new product in the existing market. New Kia soul urban crossover vehicle are introduced to attract thousands of new customers.
Diversification Strategy- KIA’s first solo designed car is an independent car to who has determined itself as a standalone brand in Europe with its innovative product design. Kia exports high end technology in automobile industry globally. This company has established R & D centre in Europe, Japan, and North America. Joint ventures of this company allow it to share and enhance technological capability (Nemoto, et al. 2015).
Korean designed car and motor cycle
Kia soul urban crossover
Retain brand image in European Market
Exports high end technology in global market
Figure 2: Ansoff matrix
(Source: Paget, Z. 2015, pp- i )
Growth and Matrix Strategies
Diversification strategy- Kia Motors tries to develop unique types of cars in the to meet the specific type needs of customers.
Concentration Strategy- This includes vertical and horizontal integration of company. In horizontal strategy the company is trying to make joint venture relationship with same type of company. In vertical integration the company is trying to make joint venture relation ship with different type of company.
Segmentation, Marketing Mix and Competiveness-
Age, culture, financial status is the main demographic factors. Kia must maintain segmentation process that satisfies all these factors. Such an individual who has a very average salary can only be satisfied with price that is moderate.
Kia Motors has to develop different types of car for different types of geographic areas. Such as car that can run on plane area as well as mountainous area.
Psychographic factors may consider social class and life style of people. KIA motor has to develop cars according to life style of their customer.
3.3.2 Marketing mix (4P’s Analysis)
Kia has to develop innovative type of products like motion sensor car, automated driving car and the car that reduces fuel consumption.
KIA should make car with a moderate price that would be affordable to people.
KIA should choose cite which is cheapest to build.
KIA should develop high end technology to promote their business.
Ford faces a lot of competition in the current market. Shanghai Automotive, GM Korea Company and Ssangyong Motor Company are the big competitors of KIA Motors.
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