Our company is Audi AG. Audi is headquartered in Germany and is a subsidiary of Volkswagen since 1966. Founded in 1909 by automotive pioneer August Horch, Audi specializes in high end and luxurious automobiles (“Audi Club North America Northeast “, 2014). Audi’s cars collection is comprised of sedan, SUVs, convertible, coupe, diesel and hybrids. Audi is one of the three biggest luxury cars companies in the world. Our plan is to launch our newest headlights technology along with thousands of new cars around the globe. The automobile market is driven by technology and Audi intent to be the premium brand (“Audi Ag”, 2014).We intent to do so, by delighting our customers worldwide (“Audi Ag”, 2014). Safety is the number one decision motivator when purchasing a car regardless of where you live and Audi wants to capitalize on that.
To predict our consumer’s buying impulses, we will rely on social, cultural and personal factors (Kotler & Keller, 2012).Now is the best time to launch such a product as people drive more and more due in part to recent planes crashes and disappearance. By making night rides safer, Audi intent to gain an edge against its competitors and increase annual sales. Germany and the USA will be our launching platform. We intend to maximize our sales by putting together a strong advertising campaign.
We will be utilizing social media like Facebook, Twitter, Instagram, we will also advertise via television, radio, billboard, etc. Our advertising team is composed of Me Philippe Biboum, Kevin Mobley, Kirkland Browne, Dana Cannon, Tameika Mclean and Johanna Gutierrez. We are highly qualified and we have combined over twenty years of experience in this field. Here are the components of our plan.
Market growth potential and competitive analysis
Segmentation, target market, and positioning
Pricing and distribution strategies
Marketing communication plan
Financial information(including forecasting demand, break-even, sales, promotional budget, and marketing expense) Intended marketing objectives for Y1, Y2, and Y3
Evaluation and control metrics and methodology to measure performance Contingency planning
The “Audi of America News Channel” (2014) website stated that in July 2014, Audi increased its sales by 11.9%. This represents the 43rd consecutive record sales for our brand. The launch of our new headlights technology will increase sales even more. Germany and America will be our test launch and we are confident that it will be a success. Our target markets are rich men and women as well as families. Our product will be sold to every individual who is able to purchase and maintain a luxury car. We have a wide collection of cars to will fit everyone lifestyle. In terms of demography, our product aims at people between the age of 25 and 60 who have a lot of money. We recently have been making cheaper car to capture the consumers less than 25 years of age. Audi is aware of the fact that gender, family status and age influence car buying, that is why we built certain models fit younger generation like the A6, SUVs and sedan for families and coupe for single people.
Geographically speaking, Audi knows that car buying differ according to the location. Our product will be appealing to individuals who live in the outskirts of big cities, or deep in the country because they often have to drive on roads that are not well lit. Social class, personalities and lifestyles divide the market into psychographic segmentations. Audi’s cars are aimed at upper social classes. We target individual who like a flashy lifestyle and want to show their wealth because we know they can afford the technology. About the market growth, we know that there is a need for a product such as our new headlights. According to the Highway Loss Data Institute (HLDI), good quality headlights are one of the best ways to avoid car crashes (“Insurance Institute for Highway Safety”, 2012). The recent plane crashes along with airfare are driving people to drive more and more. We know we will increase our sales as long as we have a strong marketing campaign to advertise our product.
One of the strength here is that our product provides a safer nighttime driving experience for drivers who do long distance driving. The cost to add the feature will increase the purchase price of the vehicle and this is a weakness. An opportunity could be the effective utilization of marketing approaches will help to determine market need (i.e. surveys) and gain a competitive advantage (promotion, placement/positioning. Audi’s competitors such as BMW, Mercedes Benz, etc. can use the same or similar product if there is no patent on the development of the product and this is a threat to our bottom line. Our key to success here is to respond to consumer demand by creating a product they want and need. That product is the new headlights technology. This product will separate us from our competition because it is an innovation, it will help save lives and increase our bottom line.
Market growth potential
Audi’s goal is to slowly integrate their LED headlight technology into all of their vehicles. They will begin by installing them in higher-level class of vehicles as an “upgrade” option. Brighter, longer lasting headlight bulbs will reduce the cost of replacing regular bulbs, and brighter headlights will increase driver visibility at night. Audi expects competitors to install similar devices in their vehicles; however, Audi believes their version is longer lasting, brighter and safer for Audi drivers as well as, other drivers on the road.
The automobile industry is fiercely competitive in the United States as well as, internationally. In 2006-2008, the automobile industry suffered a significant financial loss, especially the big three in Detroit. Foreign automobile manufacturers took advantage and saw growth. While some Asian and European manufacturers also suffered, many upgraded base models to entice buyers to purchase their product. Automakers did what they could to gain the upper hand against their competitors. Audi was no different, seeing a drop in sales during this time. For many customers, safety, reliability, and fuel efficiency are increasingly important, more so than flash, speed, and power. The safety and visibility of an Audi driver is a priority Audi is attempting to increase.
The market segmentation has spate, but distinct parts: geographical, psychographic, and demographic. Audi will use geographical sales statistics to determine where sales are highest. Introducing upgrades and changes to Audi vehicles to the customers who buy them more frequently will benefit Audi and satisfy customer demand. Audi is responding to increasing customer demand for safety; therefore, increasing driver visibility satisfies customer demand. Moreover, the longer lasting, brighter headlights benefit teen and elderly drivers who may become easily distracted or have difficulty seeing at night. The increase in safety may also decrease accidents, which will make insurance companies happy.
Audi is not specifically targeting one particular group; however, brighter lights will benefit drivers with limited experience or with poor vision or night vision the most. Elderly drivers are more likely to benefit from brighter headlights to increase their visibility at night. The headlight feature is not limited to elderly drivers though, all drivers can benefit from the safety feature. Audi expects high customer satisfaction and will eventually implement the LED headlight in all of their models. Any driver concerned for safety is part of the market Audi is targeting. Longer lasting lights means less maintenance cost, and brighter lights means other drivers can see the Audi sooner, and the Audi driver can see the road or and any debris in the road, sooner.
Positioning is important, and precise placement of the headlight translates to better driver visibility. However, regardless of how bright or long lasting the headlight is, defensive, non-distractive driving is key to reduce traffic accidents and avoiding road hazards. Moreover, the ability to see an item in the road sooner will help the driver prevent a collision; however, failure to pay attention to the road will increase the potential for at-fault accidents and collisions. While many discard some features as “unnecessary,” brighter, longer lasting headlights is a product Audi feels confident implementing, and confident customers will respond in an overwhelmingly positive way.
Pricing & Distribution
When looking at pricing and distribution there are several factors to be considered. The wholesaler’s will always calculate its prices by adding the cost of the product itself (headlights), wages involved in the production, the overheads and cost to deliver such. Then, after the wholesaler calculates a reasonable mark-up, the product will then be sold to Audi. It is then Audi’s job to make the best out of this product by the promotion it carries out. Before Audi agrees to any business with a headlight manufacturer Audi strategizes and plans a how to price and distribute. Audi is a well-known luxurious vehicle where they now will have an added feature to promote safety.
The sales potential are very high as we are targeting those that enjoy road trips, those that are behind the wheel for extended amount of hours. Audi then has to reanalyze its decision and consider losses, what if this does not work, how this will impact our business, what are other cost effective routes we can take. These are all considerations Audi has to take into play if the brighter headlights for their vehicles do not create more sales. This is going to be considered as a standard on all of Audi vehicles, it is not an add on feature Audi plans of charging extra for.
Marketing Communication Plan
Audi believes in its product. Before a company can be successful it must build its own awareness. Audi has built that awareness! Every day you see accidents caused by poor visibility due to poor lighting. Audi will use this to their advantage when marketing and communicating to its customers and potential customers the advantages of Audi’s new improved headlights. Furthermore, it is advantageous for Audi to stress the fact that the price tag of the vehicles have not changed due to the improved and upgraded headlights. Audi has been dedicated to communicate to its customers, potential customers and competitors that they have the solution for accidents caused by poor visibility due to poor lighting. They are advertising this through every mean of communication possible. Then internet/ media is a huge marketing communication source, the radio, newspapers, billboards, and the public itself by word of mouth. When driving on the road if you see an Audi vehicle you will see the difference in their bright headlights when compared to other vehicles.
Asserting the fact that you communicate with all of your customers and potential customers plays a vital part in how successful this will be. Audi has identified families and one of their targets and this is the main target we are communicating our new product to. Audi has partnered and networked with different sources such as “safety programs” and/ or famous people, have also taken it a step ahead by recording infomercials on highways, dark roads and valleys to show its costumers the strength behind the new headlights their vehicles have. Audi has been servicing consumers upwards of one hundred plus years and Audi intends on being a provider until the end of time in order to stay relevant in the automotive industry Audi is aware of the evolving of automobiles. Audi has done its research throughout the years and through the years consumer safety has remained the number one factor when building an effective brand.
Audi has continued to serve the consumer while remaining at the head of its class of Luxury automobiles. In past research through the National Highway Traffic Administration Audi found that one of the major issues of car accidents within the United States stemmed from blinding headlights (NHTA, 2013). The new product that Audi seeks is to install the LED headlights with objectives based around consumer safety first as well as profits. The objectives provided focused on the product from beginning to end starting from year one when Audi began searching for the new product to elevate the company. Audi will definitely captivate its target audience as well as reach its sales growth, once it begins manufacturing the product and getting the products in its show rooms.
Completed research on issues surrounding vehicle safety
Find the issue and find a product that will assist in increasing consumers comfort when driving
Find target audience
build a Safe brand to suite consumers’ needs implement the strategy in vehicles that target our initial consumer market (families) seek profits of upwards of 10-15 percent within the first year Year 3
Implement products in remaining vehicle models that service all consumers. Seek to increase Revenue another 10 to 30 percent
Begin research on new product to assist with current features
It is imperative that the financial outlook of Audi for 2014 is predicated on the prior performance drivers. In 2013, the Audi A4, A6, Q5, and Q7 experienced increased sales from the previous years over the other vehicle models. The A4 and A6 belong to the sedan category and the Q5 and Q7 are in the SUV/crossover category. That being said, it is forecasted that these same vehicle category’s sales will continue to increase in 2014. Therefore, the introductory marketing of the new headlight designs should be donned in the aforementioned vehicle models.
Moving forward, the following financial data, to include forecasted demand, sales, break-even point sales/units, and marketing/promotional budget expense, shall represent the four top selling vehicle models. Audi is looking to increase revenue by four percent annually over the next three years. With the addition of the enhanced headlights, Audi believes the projected forecasts will be successful. Figures A – D illustrate the proposed forecasts for each vehicle.
Forecasted Break-Even Point Analysis
Evaluation and Control Metrics
Utilizing control metrics to measure the success rate of employed strategies is a very important aspect of the marketing plan. Ensuring the success of the chosen methods of marketing is needed to determine if changes should be and/or can be made to increase revenue. There are a variety of metrics tools that can be used to benchmark marketing data, but identifying four of them will suffice for this particular analysis.
1 Market Size – the number of units sold to a market in a specific period of time (1 year). 2 Market Share – the number of units sold in a specific period of time that represents a percentage of the entire market size. 3 Brand Awareness – Actual and potential customers being able to identify the Audi brand. 4 Customer Satisfaction – Customer’s perception of Audi’s product and service delivery. (www.dobney.com, p.4-25).
The contingency plan for Audi headlights is very simple. As headlights are already used on every make and model, these advances in technology are not the reinvention of the wheel. These changes propose no danger to the continued success of Audi’s business operations. We will apply for a patent which will protect our new LED technology and lighting design for two years, and we actively pursue all copyright infringement to prevent any future instances. As it is inevitable that after the two year protected period that others will follow our lead we will use those two years to develop new designs with respect to LED lighting that will not only increase safety, but will also define Audi’s brand by a visual representation contained in our headlight assembly. A lighted trademark if you will.
Our definition of success with respect to contingency planning will be to defend our position for the first two years while developing a trademarked light design for all future Audi models.
Anonymous. Understanding market metrics. Retrieved August 17, 2014 from http://www.dobney.com/Research/market_metrics.htm
AUDI AG. (2014). Retrieved from http://www.audi.com/corporate/en/company/corporate-strategy.html Audi Club North America Northeast. (2014). Retrieved from http://www.neqclub.org/about-us/audis-history.html Audi of America News Channel. (2014). Retrieved from http://www.audiusanews.com/newsroom.do;jsessionid=B4BD8EEE4DAD44DA49C746C83D80A7BE?&id=65&allImage=1&name=sales-news&mid=98 Insurance Institute for