Mini Car Case Study
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Global Control is a strategy whereby a firm controls all the processes of production, sales, advertisement and promotion in the international market. Local autonomy, on the other hand, is a strategy whereby the producer company controls all the processes of production, sale, promotion and advertisement of a product. A Mini is a small car. It is a product of the British Motor Corporation. This company has used a promotion strategy that comprises of a mixture of global control and local autonomy. This mixture of strategies has its advantages and its disadvantages.
Advantages of adopting a mixture of global control and local autonomy strategies
It enables the manufacturer to edge money market fluctuations. Here, the company avoids countries that have high foreign currency exchange rates. It does business with countries that have low exchange rates to ensure it does not lose profits. This strategy also promotes revenue stability. Different countries are experiencing different economic challenges. When there is a recession in one market, the other one could be experiencing a boom. Therefore, the company in question has a choice to trade in the performing countries, thus promoting sales.
It enables producers to satisfy a wide variety of customers. This is because the firm reaches out to both the local and the international markets. Thus, it can tell the countries and, or areas where they make most sales. The producer is also able to satisfy the consumer niche. This refers to tastes and preferences of consumers. The producer gets a chance to interact with various consumers both locally and internationally.
The mixture of policy promotes international integration. This is extremely crucial to a company like this one that manufactures vehicles, as it does not target local markets alone. This is because they are unusually small and easily get saturated. International integration prevents the possibility of rivalry among countries in question. It also promotes the stability of the balance of payment.
The Mini car manufacturing company benefits from the ability to practice transfer pricing. It also gains from the benefits that come with large-scale production and promotion. These are the economies of scale. This is the case, since a unit cost of promoting their commodity translates in to a large geographical coverage of the market, there by resulting in too much sales.
The manufacturing company is prone to effects of differences in tax regimes. Different countries have different tax rates that they levy on imports and exports. When undertaking the Global control strategy, this company will have to encounter these different tax regimes. There is also the disadvantage of fluctuating exchange rates. These exchange rates change because different countries enact different policies to control their imports and exports. (Claire, 2002)
The Mini manufacturing company will also encounter challenges caused by social-economic factors such as per capita income. This differs from country to country. It also differs with time in I given country. It refers to the total income that every citizen earns in that country. It dictates the ability of people in a given country, to buy the commodity. In this case, it is a car. One may find out that, in some countries, people earn too little and that only few people can manage to buy luxurious commodities such as cars. This would mean that no matter the degree of product promotion, remarkably few sales could be made. (Cappellin & Giuliani, 2004)
The company might also be faced with the enemy character situation. If the destination country is at war with the exporting country, then, the importing country could chose not to import from them again. The final consumers may also decline to buy those products. In such a case, the Mini car manufacturing company would be on the losing end.
When we consider the merits and demerits of using a mixture of the two strategies, I would recommend that the Mini manufacturing company continue using that mixture. The company must exploit the local market to the fullest. This is because it does not have many legal formalities, as is the case with international market. However, the firm must target international markets too. The local market is likely to be too small for it to consume all their cars. It is also likely to be easily saturated. These two reasons, therefore, would limit the company to manufacture lower than the capacity it has. (Fisher, 1991)
Methods of guerilla marketing
This refers to inconsistent advertisement marketing. The company should use product re-launch strategy. Here, a company conducts innovative car improvement, and then it launches the improved car. The company could also use product re-branding strategy. In this case, the car brand name may be changed, and then the same car gets back to the market. The Mini car manufacturing company could also employ group-marketing strategy. For example, it may offer after sale services such as free car repair for may be one year. (Claire, 2002)
Corporate Social responsibility (CSR) and sustainability
These are the strategies that the company can put in place in order to give back to the society. The company may achieve this by manufacturing an environmental friendly car that emits less carbon.
The ANSOFF model is a strategic marketing plan, where a company decides on whether to launch a product in a new market or to re-launch it in a pre-existing market. The BMW Company should adopt the existing market to existing market strategy as it always has the highest pay off.
Brand extension and franchising of the brand to other companies
In order for BMW Company to extend the brand name of the E-model, it may re-launch the Mini as a personalized car. It may also re-launch it as a luxury vehicle. The other option is to re-launch the Mini car as a rally car.
Franchising is the act of allowing a company to produce a product and then it uses the brand name of another prominent company. The BMW Company cannot franchise the brand to other companies, as the brand is not yet popular in the market. Therefore, an attempt to franchise the brand name may cause the dependent company to make poor sales. After the launching of the E-car model, the BMW Company can extend the brand away from cars. This could be quite wise since an advertisement of one of the products bearing the brand could end up promoting every other commodity that has that brand.
Rallies are quite popular in the field of sports. Therefore, rallying the new brand would act as an advertisement for the brand. The rallying car should be customized to be exceptionally fast, so that it can be outstanding in the rally. This could create a positive impression of the brand.
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