Group Marketing Report

Barrie Cook - B00269412 George Michael - B00255964 Phillip Papageorghiou - B00276069

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CONTENTS PAGE

Page

Executive Summary 2

Introduction & Background 5

Objectives 9

Methodology 10

Theory 12

Application of Theory 19

Conclusions 25

Reference list 29

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Executive Summary

INTRODUCTION

This report will look at the new car market in the UK and how car

manufacturers apply the key marketing area of promotional mix to market

their vehicles, in particular it will focus on two main competitors, Ford and

Vauxhall.

BACKGROUND

The UK new car market is examined and the following findings are made

The economic recession resulted in 2008 resulted in a fall in the market

as consumers cut down on expenditure on high ticket items such as cars

The market has started to strengthen since 2010

Ford has the largest market share in the UK with 13.8% in 2010 and the

main competitor, Vauxhall had 12.2%

Ford and Vauxhall have both seen their market share dip since 2007

There is a major trend in the industry towards more fuel efficient cars

OBJECTIVES:

Review market characteristics of the UK New Car market

Explain the key aspects of the Promotional Mix

Apply the theory of Promotional Mix to Ford and Vauxhall in the UK New

Car market

Make strategic recommendations for future development by Ford and

Vauxhall in the UK New Car market

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METHODOLOGY

This report used secondary research, the 2011 Mintel report-Car buying UK

was the main source used for this secondary research. The following findings

are made

Mintel is a respected marketing research company

The information within the Mintel report was detailed, clear and had a

lot of valuable data within it

Secondary research has limitations such as the Mintel report was 3 years

old so the information and data within may no longer be relevant

Other sources used in the report such as information from companies

websites may be biased and unreliable

THEORETICAL AREA:

This report looks into the theory of the promotional mix and how businesses

can use the ingredients of the promotional mix to promote their products. The

benefits and any limitations to each ingredient are also examined. The

following findings are made

Advertising, public relations, sales promotion and personal selling are

the four traditional ingredients of the promotional mix

All four ingredients have benefits but also each has limitations

APPLICATION OF THEORY

This report looks at how the ingredients of the promotional mix are being

utilised by Ford and Vauxhall in the UK new car market. The following findings

are made

Both Ford and Vauxhall spent large sums of money on advertising

between 2006 and 2010

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Ford undertook a successful advertising campaign around the drivers of

their vehicles and Vauxhall featured the celebrity Abbey Clancy in their

advertising campaign

Ford have a sales promotion of buy now pay later, Vauxhall offer no such

promotion but both companies offer customers finance packages to pay

up a vehicle

Ford are the first UK car manufacturer to offer direct selling to

customers via the internet

CONCLUSIONS

The objectives at the start of the report are examined and conclusions are

drawn from the content of the report. Strategic recommendations for the

development of both Ford and Vauxhall in the marketplace are also made. The

following findings are made

Opportunities exist for car manufacturers at the top and bottom end of

the market

A link can be made between car manufacturers sales and advertising

budgets

When deciding how to utilise the promotional mix companies need to

take into consideration the benefits and limitations of each promotional

mix ingredient

Fords utilisation of the promotional mix has been more successful than

Vauxhalls and this shows in Fords greater share of the market

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INTRODUCTION

This report will look at the new car market in the UK and how car

manufacturers apply the key marketing area of promotional mix to market

their vehicles, in particular it will focus on two main competitors, Ford and

Vauxhall.

A definition of promotional mix is

"The specific combination of ingredients an organisation uses to promote a

product, traditionally including four ingredients: advertising, personal selling,

publicity and public relations and sales promotion" (Dibb et al,2012)

It is therefore very important that car manufacturers have a good

understanding and awareness of the different ingredients in the promotional

mix so they can promote their products effectively.

BACKGROUND

The UK car industry has been badly affected in recent years since the UK

economy entered recession in 2008, this is shown by Figure 1 below displaying

total new car sales since 2006

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Figure 1: Total UK New Car Sales 2006-15 (Mintel,2011)

As Figure 1 shows the UK new car market has shrunk since 2007 but it is in

recovery and is projected to increase although sales will only increase if the

economy and consumer confidence continue to improve (Mintel,2011).

According to Mintel (2011) the recession hit expenditure on high ticket items

such as cars and has only started to strengthen since 2010, also Mintel (2011)

states that recovery did start thanks in a large part to the UK governments

scrappage incentive scheme(sis). This scheme allowed drivers with a vehicle at

least ten years old to claim a cash incentive for trading in their car for a new

vehicle, the scheme ran from mid may 2009 until late march 2010 and it

tempted 400,000 drivers to trade in their old vehicles.

The Mintel report into car buying in the UK in 2011 shows that Ford has the

largest share of the UK market with 13.8% in 2010 although this is down 0.7%

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compared to 2007, Vauxhall are Fords biggest competitor with 12.2% of

market share in 2010 again though they have dropped 1.6% since 2007. Ford

and Vauxhall still dominate the market but both appear to be suffering from

increased competition in the marketplace, the smaller brands none of which

take up more than 2-3% of new car sales are becoming more popular with

consumers due to their low prices and wide range of models available

(Mintel,2011). It seems that consumers are increasingly trading up when

buying new cars and this is shown by brands such as Volkswagen and BMW,

which position themselves at the top end of the market in terms of price,

increasing their market share between 2007 and 2010. Volkswagen increased

its share by 0.4% and BMW by 0.3% this suggests as the economy increases

and consumers have more money available to spend there is a greater appetite

for luxury cars (Mintel,2011).

In February 2011 Mintel carried out a small sub-survey looking at the

demographics of car buyers, according to that data the demographics of key

users that car manufactures should be targeting are men aged 55+ from the

north of England and Scotland that are retired and are in the AB socio-

economic grouping. These consumers are the most likely to purchase a new

car from a particular car manufacturer.

Main media advertising on cars peaked in 2007 at £600 million, this dropped to

£410 million in 2009 (Mintel, 2011). As the economic downturn hit sales many

companies dropped their advertising budgets by around 20% but as car sales

increased in 2010 so did spending on advertising and it moved up to £432

million (Mintel, 2011).

Figure 2 below shows Ford, who have the largest market share, also spent the

most on advertising over this period and although they have lost some of their

market share it can be argued it is money well spent. The company has

managed to gain mass market appeal and the advertising campaigns that

portray their cars as 'engineered for life' and 'built for the road ahead' have

helped attract consumers looking for reliability over style (Mintel,2011).

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Figure 2: Cumulative spend on advertising 2006-10 (Mintel,2011)

There has been a major trend in the industry towards more fuel efficient cars

due to the cost of fuel rising, this should lead to a growth in sales of alternative

fuelled vehicles as manufactures develop technology in this area and the

government offer incentives to buy these types of vehicles as part of its

climate change commitments (Mintel,2011). According to Mintel (2011)

dealers still dominate the car market but another trend of the industry is the

emergence of the car supermarket and the internet as a channel for

consumers to purchase a car. The market has also seen a influx of low cost

brands from Asia eg Daihatsu, that offer similar performance cars but do not

have the extra features of the established mid-market brands and this could

steal further market share from the likes of Ford and Vauxhall (Mintel,2011)

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OBJECTIVES

To

Review market characteristics of the UK New Car market

Explain the key aspects of the Promotional Mix

Apply the theory of Promotional Mix to Ford and Vauxhall in

the UK New Car market

Provide strategic recommendations for the future development

of Ford and Vauxhall in the UK New Car market

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METHODOLOGY

According to entrepeneur.com secondary research can be defined as "being

market research that's already been compiled and organized for you". Reports

and studies by government agencies, trade associations or other businesses

within the chosen industry are all examples of secondary research, the

secondary research within these sources is very useful as it can contain

information and data that gives marketers a greater understanding of a

particular market. The 2011 Mintel report- car buying UK was the main source

of information and data for this report.

Mintel is an established and well respected market research company so this

report was chosen as the information and data within it should be able to be

relied upon. The Mintel Report chosen, has been presented and classified in a

way that fulfils the needs of this report to look into the car market in the UK

and how the promotional mix is adopted by Ford and Vauxhall . The data

within the Mintel Report was very detailed and helped to answer questions

such as, what market share Ford and Vauxhall had up to the year the report

was written, also the information was very clear and concise. This report

wanted to take its information from secondary research that looked at the UK

car market as a whole and had well rounded and balanced information, the

Mintel report provided that.

On the other hand some limitations were found to using the chosen Mintel

report. This Mintel report dates from 2011 and as some of the findings were

projected there might be a flaw in the accuracy of the projected values due to

factors such as the current state of the economy. From 2011 to 2014 new car

manufacturers could have appeared on the UK market and a change in market

share may have happened following initiations of marketing campaigns by

various car companies. Also consumers may have changed their approach to

evaluating and choosing a particular car and factors such as the fuel

consumption and maintenance cost may now not be as important. Since 2011

car manufacturers have brought out a new array of cars and this means the

Mintel report we used will not take into account these vehicles so the data

within it such as advertising spend by individual companies may be completely

different. Car manufacturers could have also changed their approach to the

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promotional mix which could have an altered impact on the competing brands

as a wider spectrum of people might have been targeted by different

companies. Also the Mintel report highlights the environment as playing an

important factor in the car industry within the UK, this could now be a much

bigger factor than it was when the Mintel report was written in 2011 as car

manufacturers are now offering a wide range of electric cars to fulfil

consumers desires to reduce their carbon footprint . The economy is heavily

linked to the car industry according to the Mintel report and any dip in the

economy may have seen car sales fall which means the conclusions in this

report may not be applicable in the current market. Other sources of analysis

for this report include advertising material directly sourced from specific car

manufacturers websites, information from companies websites will contain

bias so may not be entirely accurate. It is also possible to have bias within the

Mintel report as the contributors may have had a preference to a specific make

of car. Another unforeseeable factor that might have played a part in data

being inaccurate could be the hyperinflation of profit and expenditure

numbers by the car manufacturers themselves.

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THEORY

Definition

"The ‘Promotional Mix’ is identified as a part of the marketing mix. It is used to

help business promote their benefit of their product or service to their

customers" (Dibb et al,2006)

Ingredients of the promotional Mix

The Promotional mix includes the following four traditional ingredients (Dibb

et al,2006)

Advertising

Public relations

Sales promotion

Personal selling

ADVERTISING

Advertising is a very powerful variable of the Promotional mix. Advertising is

used to gain customers’ attention, attract customers’ interest, create a passion

for a product or service and then stimulate them to purchase a specific product

or service (Dibb et al,2006).

According to the American Marketing Association advertising is a defined as

“Any paid form of non-personal Presentation and promotion of ideas, goods or

services by an identifiable sponsor”

There are many opportunities to advertise a business or service, for example

adverts can be placed in newspapers, on the internet or on public transport .

Adverts can also be created for the radio, cinema and the Television and it can

be as simple as placing posters in shop windows (Dibb et al,2006).

To create a successful advertisement a company needs to have a clear

understanding of the message it wants to send to consumers and to which

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target audience it intends to reach and also where to reach that target

audience (Dibb et al,2006) for example advertising at a football match to target

a mainly male audience.

Benefits

According to Fill, Hughes and Francesco 2012 advertising a product or service

informs the consumers about the benefits of the product or service being sold

therefore it should decrease the number of lost customers and hopefully gain

more customers for the product or brand. The overall effect of advertising is to

raise awareness to consumers about the product and gain more customers.

Advertising helps to increase sales for that specific product or service which

helps to reduce the cost per unit of the product and help the business gain a

higher margin of profits.

Limitations

However advertising a product or service ads to the cost of the product, large

amounts of money are often needed to advertise a product. Manufacturers

look to recoup advertising costs so these costs tend to be added to the selling

price of the good which raises the price (Fill, Hughes and Francesco,2012).

PUBLIC RELATIONS

A company’s public image is the responsibility of the Public Relation team of

each company, they need to have ongoing activities to ensure that the overall

public image is strong and to help the public to understand the company and

its products (Dibb et al,2006). In Public Relations a company’s image can be

talked about in the press or the news, a company's Public Relations team

would work with members of the news media to build a favourable image by

publicizing the organisation or product through broadcast media or print.

Strategy

To gain a good public image for a company or product the companies Public

Relations team needs to have a clear idea on what message it wants to send

out to your potential and existing customers (Dibb et al,2006).

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When the message is clear to the Public Relations team then their job is to aim

to reinforce those messages in the mind of the public and to talk to existing

customers to find solutions to any problems they are currently facing with the

company or product (Oliver,2009).

According to Oliver 2009 when it comes to managing Public Relations it can be

time consuming and it is often easy to miss a good Public Relations

opportunity, small firms usually use the services of a Public Relation agency,

this does not need to be expensive and may pay for itself in the long term.

However it must be noted that Public Relations teams cannot be used to

guarantee results as you have no control over what is said, how and when

(Oliver,2009).

Benefits

Credibility

Consumers today are more cautious on what they are spending their money on

which is why credibility is so essential to a successful business. Consumers feel

safer if purchasing a product that is being talked about favourably by the

general public and in the media as there is less likely to be the bias that will be

in advertisements.

Cost

Dibb et al 2006 report that Public Relations objectives can be achieved at very

low cost compared to other promotional efforts like advertising. This does not

mean that public relations are not costly, it might be when marketers hire a

professional Public Relations firm to handle the work.

Image

Public Relations is not just about promoting a product, Public Relations takes

the company behind the product and puts it in the spotlight and this can help

business have a very strong public image, a positive public image can only be

beneficial.

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Limitations

Hard to Measure Success

Companies often find it hard to measure success of their Public Relations

campaign due to the fact that it is hard to compare and contrast impact across

publications (Dibb et al,2006).

Inaccurate Message or Storytelling

When your Public Relations team distribute a press release, it falls into the

hands of journalists, who may change it accordingly to make it a more

interesting story. The impact of this can be significant as it can be an advantage

to have a story written about your business or it can be a disadvantage if the

story is inaccurate, incomplete or misleading.

SALES PROMOTION

Sales Promotion is the set of marketing activities which are undertaken in

order to boost sales in the short term ,to achieve this the company needs to

find cost effective solutions. Sales Promotion costs less to implement but can

give a bigger increase in sales (Dibb et al,2006).

The following are the major sales promotion activities.

Consumer Promotion

Consumer Promotion strategy is aimed at consumers in order to increase sales.

For consumer Promotion these include purchase display material, In store

demonstrations, Samplings, multi pack offers and Loyalty reward programs for

your clients (smallbusiness.wa.gov.au, n.d.).

Business Promotions

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Business Promotions are aimed to correctly appeal to business customers, the

following can be done - set up seminars and workshops for clients, Conference

Presentations, Trade show displays, Newsletters and Events sponsorship

(smallbusiness.wa.gov.au, n.d.)

Trade Promotions

Trade Promotions are aimed at wholesalers and retailers. In order to achieve

effective trade promotions reward incentives linked to purchases or sales and

bonus stock for large quantities need to be taken into consideration

(smallbusiness.wa.gov.au, n.d.).

Sales force Promotions

In order for the staff of retailers to have an incentive they can be offered

commission on each order they manage to close and also the company may

have a sales competitions with prizes or awards for the top sellers of the

product within a specific time period (smallbusiness.wa.gov.au, n.d.).

Benefits

Gaining new customers with Price

By offering a reduced price on an item companies can lure new customers

away from competitors and turn them into regular consumers of their product

(Roddy,Cummins,2010).

Reward Programs

By giving the customers a chance to gain reward points when purchasing from

a specific store and the ability to claim prizes or discounts by redeeming those

points, this can make them more willing to purchase regularly from that store

(Roddy,Cummins,2010).

Providing Information

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When providing information for a new product it can make the customer more

interested in the company or brand and if a customer receives a free sample

about the new product and how it works it can help to remove any anxiety

(Dibb et al,2006).

Limitations

Time Frame

Sales Promotion typically last for a specific time period, if the promotion did

not achieve its wanted goal this could mean that the sales promotion was a

waste of money for the company (Dibb et al,2006).

Warning

If a Sales Promotion was successful competitors are more likely to imitate or

better the sales promotion in order to stop customers from being lured away

and to gain new customer (Dibb et al,2006)

PERSONAL SELLING

Personal Selling is when business uses sales force people to sell products face-

to-face with customers in order to persuade a purchase. It needs the human

touch in order to sell a product or service to a customer (Dibb et al,2006).

Products with a relatively high price tags or complex features are usually sold

using personal selling (Dibb et al,2006).

Strategy

Personal selling is all about how you approach the potential customer, first it is

important to find out why the customer is interested in your product or

service. Once this information has been gathered the salesperson should have

enough knowledge of the customer's needs and the product to potentially

close a sale (Dibb et al,2006).

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Benefits

Adapting to the situation

When a personal sale is taking place it is a two way communication between

the salesperson and the customer, the salesperson can change their sales

technique to adjust to each individual customer which can persuade them to

make a purchase they may not have made otherwise (Brassington,Pettitt,

2012).

Building Relations

According to Brassington and Pettitt in 2012 the nature of Personal selling

means the interaction between the salesperson and the customer can build a

relationship between them. If the customer finds the experience of buying the

product enjoyable this can lead to potential repurchases in the future. The

personal selling experience can differ from company to company so a positive

experience for customers can lead to word of mouth advertising from happy

customers to potential customers.

Limitations

Staff

The personal selling experience entirely depends on the individual salesperson

being knowledgeable, enthusiastic and have the ability to close a sale, if a

company has staff that don't have these skills it can lead to a loss of sales and

customers forming negative thoughts about the company (Dibb et al,2006).

Cost

Personal selling is very expensive due to the fact that the salespeople have

salaries and bonuses are usually put in place in order to motivate them to sell a

product (Dibb et al,2006). Sales People also need to be trained on a range of

goods and sales techniques in order for them to be able to persuade the

customer to purchase the product (Dibb et al,2006)

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APPLICATION OF THEORY

This section of the report looks at how the ingredients of the promotional mix

are being utilised by Ford and Vauxhall in the UK new car market

ADVERTISING

Both Ford and Vauxhall spent large sums of money between the years of 2006

to 2010 on advertising (Mintel,2011). As figure 3 outlines below Ford spent

the most on advertising and promotion in those years, closely followed by

Vauxhall. The difference in spending between the companies being £4,337

(Mintel,2011)

Car Buying - UK - March 2011 - Advertising and Promotion

Figure 3: Leading car advertisers, (cumulative spend of £50,000 or more), 2006-10

£0

Ford 226,326

Vauxhall 221,989

Citroen 195,958

Renault 176,510

Volkswagen 174,912

Peugeot 141,097

Toyota 123,587

Nissan 107,735

Audi 94,682

BMW 84,796

Fiat 84,161

Kia 79,618

Volvo 73,686

Land Rover 69,539

Mercedes-Benz 66,711

Mazda 66,320

Hyundai 63,361

Honda 55,535

Lexus 54,554

Skoda 53,695

Source: Nielsen Media Research/Mintel

(Mintel, 2011)

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Ford in 2009 redesigned the Fiesta and they chose 100 drivers from thousands of entries to drive the fiesta for a year, also the company gave them free gas, insurance and video cameras to record honest reviews of the vehicle. Ford was trying to learn more about how they could improve the car for future development and what did the customers actually use and how did they used it. This campaign was called the ‘Fiesta Movement’, the driver-generated content became the basis of the company’s TV and print advertisements (Ford, 2014).

Scott Monty the global and multimedia communication manager and his team

developed a social media component of the ‘Fiesta Movement‘ campaign. This

helped Ford raise more than 1.8 million followers on Facebook and 206,000

followers on Twitter. These figures compare very favourably against Vauxhalls

who have 479,000 followers on Facebook and 91,000 on twitter. There is no

doubt the 'Fiesta Movement' advertising campaign caught public attention and

has proven to be very successful for Ford (Ford,2014)

In 2011 Vauxhall in order to reach a very large number of people and to tap

into a mainly male target market agreed a deal to become the lead sponsor of

all four home football associations-England, Scotland, Ireland and Wales

(Vauxhall,2014). This deal also enabled Vauxhall to reinforce itself as a British

car manufacturer that has a long heritage in the UK car market. Also to attract

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a younger generation of customer and appeal more to females the company

paid Abbey Clancy a British model to advertise their new Vauxhall ADAM. This

campaign was aimed towards a mainly younger active and motivated

generation. (Vauxhall, 2014)

The advertising strategies of Ford and Vauxhall have been different with

Vauxhall concentrating on football as a huge platform to advertise and using a

celebrity in adverts. Ford has used its own customers in adverts and on social

media to promote the brand which seems to be more successful as according

to the 2011 Car buying UK Mintel report Ford has the highest market share in

the UK. Although Ford has lost market share since 2007, Vauxhall have lost a

greater percentage of market share suggesting Fords advertising campaigns

are superior (Mintel,2011). Figure 4 below shows the market share of the UK

new car market from 2007-2010 (Mintel,2011)

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Car Buying - UK - March 2011 - Market Shares

Figure 4: Manufacturer shares of new car registrations, 2007-10

2007

2009

2010

% point change

0 % 0 % 0 % 2007-10

Ford 349 14.5 316.4 15.9 280.4 13.8 -0.7 Vauxhall 331.3 13.8 237.8 11.9 247.3 12.2 -1.6 Volkswagen 197 8.2 161.1 8.1 174.7 8.6 0.4 BMW 121.6 5.1 98.7 5 109.4 5.4 0.3 Peugeot 146.1 6.1 102.6 5.1 109.3 5.4 -0.7 Audi 100.9 4.2 91.2 4.6 99.8 4.9 0.7 Renault 126.8 5.3 63.2 3.2 95.6 4.7 -0.6 Nissan 66.4 2.8 77.9 3.9 89.7 4.4 1.6 Toyota 118.5 4.9 102.6 5.1 87.4 4.3 -0.6 Mercedes-Benz 82.3 3.4 72.3 3.6 75 3.7 0.3 Citroen 97.8 4.1 72.5 3.6 73.3 3.6 -0.5 Honda 106 4.4 74.8 3.8 63.7 3.1 -1.3 Hyundai * * 56.7 2.8 61.8 3 na

Kia * * 50.6 2.5 56.1 2.8 na Fiat 59.4 2.5 60.3 3 53.1 2.6 0.1

Mazda 50.9 2.1 47.9 2.4 45.4 2.2 0.1 Mini 47.7 2 39.9 2 43.9 2.2 0.2 Skoda 39.9 1.7 37.3 1.9 41.2 2 0.3 Volvo 30.1 1.3 34.9 1.8 37.4 1.8 0.5 Land Rover 46.6 1.9 29.2 1.5 37.3 1.8 -0.1 Seat 34.8 1.4 30 1.5 32.9 1.6 0.2 Suzuki 32.9 1.4 28.5 1.4 21.5 1.1 -0.3

Other 217.9 9.1 108.6 5.4 94.6 4.8 -4.3

Total 2,439.70 100 1,995.00 100 2,030.80 100 -

* not available separately, included in Other Note: data may not equal totals due to rounding

Source: SMMT/Mintel (Mintel,2011)

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SALES PROMOTION

According to both Car manufactures websites, Ford and Vauxhall both have

offers on new cars that give the buyer the opportunity to pay monthly for a car

rather than upfront. Ford currently have an offer which means you can buy a

new Ford in November 2014 and pay nothing until February 2015 (Ford,2014).

This allows the customer to purchase a car before the typically expensive time

of the year of Christmas and not have to worry about payments for a few

months, the company hopes this may persuade consumers to buy now rather

than wait until a later date. In comparison Vauxhall has no such offers but does

gives the buyer the option to pay a new car over 60 months (Vauxhall, 2014),

Ford also offer this option. Taking both companies sales promotion into

consideration, it can be seen that Ford are trying new innovative approaches

to boost sales in a difficult marketplace.

PERSONAL SELLING

All car manufactures rely on some degree of personal selling in order to sell

their cars. Details such as how the sales representative dresses and how the

cars are displayed in the showroom can make a difference in this competitive

marketplace. Ford have rebranded their Ford Retail group to ‘TrustFord’, by

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doing this they have undertaken internal and external research on how

customers purchase a new car and they believe with this new rebranding

customers will have more trust in the brand (Am-online.com,2014). Ford have

also were the first UK car manufacturer of its kind to sell cars direct to the

customers via the internet (Williams,2010). Research the company has carried

out suggests four in ten buyers want to buy their next vehicle on the internet

(Williams,2010). This is a initiative Ford believes will leave its rivals playing

catch up as they try and keep pace with the company (Williams,2010). This is a

major move away from the traditional manner of selling cars through

dealerships and personal selling, Ford has recognised how big an impact the

internet has had on consumer purchasing behaviour and has made its move to

internet only selling to stay ahead of its rivals.

Vauxhall on the other hand has kept with the more traditional model of

personal selling via its dealerships. The company hopes the expertise and skills

of the sales staff will persuade customers to buy their products. Sales staff are

offered monetary incentives to sell vehicles to motivate them to sell. Vauxhall

also gives the customer an option that they will call them back in order for the

customer to save call charges (vauxhall,2014), these simple things that a

customer might appreciate Vauxhall hopes will improve sales.

Until recently the personal selling approach by both companies has been

similar but with Ford selling direct from the internet to customers it is about to

change dramatically. Taken all into consideration Ford has again taken the lead

and an innovative approach on how they sell their cars and come into contact

with their customers, this opens up opportunities and threats but with the

research the company has carried out selling direct to customers from the

internet should see the company increasing its domination of the marketplace.

Verdict

After analysing how both companies utilise the ingredients of the promotional

mix it is clear Ford and Vauxhall have a different approach but it is Fords

approach that is more successful. Ford seem to be more innovative and have a

better understanding of what the consumers want so it is no surprise the

company is the market leader in the UK new car market.

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CONCLUSIONS

Conclusions are achieved by interpreting the report findings with respect to

the relevant objectives; i.e.

1. Review market characteristics of the UK new car market

2. Explain the key aspects of the promotional mix

3. Apply the theory of the promotional mix to Ford and Vauxhall in the UK new

car market

4. Make strategic recommendations for future development of Ford and

Vauxhall in the UK new car market

Review market characteristics of the UK new car market

This report found the economic recession in 2008 badly affected the UK new

car market but recent signs suggest the market is steadily improving

(Mintel,2011). According to Mintel, 2011 the marketplace in the future is going

to be heavily linked to the state of the economy. The report shows that new

trends in the market such as a move from consumers to low cost more fuel

efficient cars has seen market leaders Ford and Vauxhall have their market

shares reduced (Mintel,2011). Also it has been shown as the economy

increases and consumers have more money available to spend, luxury cars are

becoming more popular (Mintel,2011), this means there are opportunities at

both the top and bottom of the market for car manufacturers. Also it is shown

that both Ford and Vauxhall have the biggest market shares in the UK and also

spend the most on advertising and promotion (Mintel,2011) therefore it can be

concluded a link can be made between manufacturers sales and advertising

budgets.

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Explain the key aspects of the promotional mix

It is highlighted in the report the four traditional ingredients of the

promotional mix are, advertising, public relations, sales promotion and

personal selling (Dibbs et al,2006). The report outlines each ingredient and the

benefits and limitations each one has, it can be concluded that all four

ingredients are important tools to help business promote the benefit of their

products or services to consumers. It is found that companies need to have a

clear understanding of the promotional mix and which ingredients to use too

reach different target markets. Also a company must be aware that although

each ingredient has its benefits, all have limitations which must be taken into

consideration when deciding how to utilise the promotional mix.

Apply the theory of the promotional mix to Ford and Vauxhall in

the UK new car market

This report examined how both Ford and Vauxhall utilise the promotional mix.

It can be concluded there are clear differences in how both companies do this,

for example Ford used drivers of their vehicles in an advertising campaign

whereas Vauxhall used a celebrity to advertise one of its products. It can also

be concluded that both companies have taken the ingredients of the

promotional mix and applied them differently to their products with different

degrees of success but even so both companies are aware of how important

the promotional mix is in business. This report concludes that as Ford have the

largest market share in the UK and Vauxhall lost a bigger percentage of its

market share between 2007 and 2010 (Mintel, 2011), Fords application of the

promotional mix to its products has been more successful than Vauxhalls.

Fords 'Fiesta movement' advertising campaign was very successful and the

company built on that by increasing its profile on social media which is an area

Vauxhall are well behind Ford. The sales promotions Ford offer such as the buy

now pay later offer gives customers a bit more flexibility when it comes to

buying a Ford than consumers looking to buy a Vauxhall have at their disposal

and this is another reason why Ford is performing better than Vauxhall in the

marketplace. Finally Ford have identified there is a trend from consumers

away from buying via personal selling in the UK new car market to buying via

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the internet (Williams,2010) and the fact it is the first company to sell directly

to customers online shows Ford are innovative and are better placed to grow

in future in the marketplace.

Make strategic recommendations for future development by Ford

and Vauxhall in the UK new car market

To develop in the Ford and Vauxhall in the marketplace the 7ps of the

marketing mix need to be examined, these are the factors both companies

have at their disposal to develop their product offering for the market.

Product, Price, Promotion, Place, People, Physical Evidence and Process make

up the 7ps of the marketing mix (Dibbs et al,2006)

Product

Both Fords and Vauxhalls market share are under threat from low cost brands

that have emerged in the market recently (Mintel,2011). Also a big

consideration for consumers is now running costs and the environment

(Mintel,2011) so it is recommended both companies develop a low cost fuel

efficient car range that will appeal to the consumers currently buying the low

cost brands.

Price

No changes are recommended for this apart from any low cost range both

companies develop match the price of the existing low cost brands in the

marketplace.

Promotion

Ford as the market leader (Mintel,2011) are successful with its promotional

activities and should continue developing its advertising campaign and offer

promotions such as buy now pay later. This is an area that Vauxhall needs to

work on, it is recommended the company develop an advertising campaign

that promotes the product more and doesn't rely on a celebrity being central

to the campaign, also the company should think about a sales promotion

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similar to Fords as currently it does not offer any promotion except a finance

package.

Place

Ford is ahead of all its competitors by being the first UK car manufacturer to

sell direct to customers online (Williams,2010), it is therefore recommended

Vauxhall as a company offer this as research suggests there is a big demand

amongst consumers to purchase new vehicles this way. If Vauxhall do not take

steps to meet this need it is going to fall even further behind its main

competitor.

People

The fact that Ford now offer sales direct from the internet is also a potential

threat to the business as the customer won't be dealing directly with staff and

this could cause problems if anything goes wrong with the ordering online.

Vauxhall can use that as an opportunity to make sure all its staff excel in

service and make buying a product from Vauxhall a much more enjoyable

experience than buying from Ford. It is recommended to take advantage of this

opportunity Vauxhall puts its staff through updated customer service training.

Ford should ensure all staff that speak to internet customers via the helpline

are very knowledgeable about the products being sold therefore training is

recommended again.

Physical Evidence

No change is required for either company

Process

The process for both companies appears to be working well but Vauxhall offer

to call customers back to reduce customers phone bills (Vauxhall,2014) and

this extra service can mean the difference between selling a car or not. It is

recommended Ford offer a similar service or risk giving Vauxhall a competitive

advantage in the marketplace.

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