Showing posts with label Marketing. Show all posts
Showing posts with label Marketing. Show all posts

Sunday, October 9, 2011

Big Three


       When it comes to automakers in the United States, one term that will be consistently brought up is the term  “Big Three”.  The “Big Three” consists of the auto companies Ford, General Motors, and Chrysler.  Other than producing the most vehicles in Northern America, these three automakers have a huge influence on the overall economy. Because they are huge employers, the economy will grow due to their high union wages and benefit packages.

            The Big Three have been hurt from perceived poorer quality and reliability compared to their Japanese competitors. They have also been slow to bring new vehicles to the market, while the Japanese are considered the leaders in productivity and introduction to more sustainable cars (1). Falling sales and market share have resulted in the Big Three's plants operating below capacity, which lead to production cuts, plant closures and layoffs (1). They have had to rely solely on offering high buyer incentives and subsidized leases to sell vehicles. These desperate actions drove down a significant portion of the Michigan economy (1). CBC News explains, “Promotional strategies, including rebates, employee pricing and 0% financing, have boosted sales but have also cut into profits.” (1)

            In the 1990s, North American automakers made a big commitment to large sport utility vehicles (1). For a while, that was the segment that was selling. SUV sales peaked in 1999 and have been declining ever since (2). The gasoline price spiked hurt sales of SUVs even more, which only continued into April 2008. Sales of trucks dropped 17 per cent while sales of large SUVs suffered by 29 per cent (2). The Big Three’s primary product is now being overshadowed by Toyota’s and other automakers’ econ-friendly small and compact cars that have a much higher gas mileage. As stated in the CBC News, “New products, more efficient plants, fewer employees, renegotiated contracts and government loans may help the Big Three succeed.” (1)
 Sources
(1) http://www.cbc.ca/news/business/story/2009/02/17/f-bigthreeupdate.html
(2) http://www.washingtonpost.com/wp-dyn/content/article/2009/01/09/AR2009010903657.html
(Image) http://blogs.dailypennsylvanian.com/thebottomline/files/2009/03/detroit_3.jpg

How do companies differentiate themselves from one another?

Companies differentiate themselves by having different mission statements as well as different models. Each company wants to be the most successful and respected car company in various part of the world, but only some of them actually uses efficient strategies to help the buyers buy. The main distinction is in promoting the product. Whereas one of the last Toyota Venza commercials pointed out the difference between virtual and real life, the last promoting commercial of Chevy Silverado (part of General Motors industry) showed the single parts of the car (1), (2). People are interested in different kinds of cars and different kinds of commercials, but there should be something interesting, unusual and fresh in commercials, therefore from my point of view the first commercial is definitely better.   

Although most cars have the same overall purpose, they vary in different models, accessories and efficiency as well as in placing the product. People in the different parts of the world prefer various types of cars. The last news of Toyota company announced starting export from their foreign subsidiary in India to South Africa in March 2012 (3). On the other hand, General Motors focuses on producing Chevrolet Colorado Pickups in Thailand (4).

All car companies have one thing in common. They´re instantly trying to act "green" to our environment. Car designers and engineers work to find the most sensitive ways to improve the impact of products during their entire lifecycle.

Sources




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