MINI cooper marketing analysis in China

1、1. IntroductionMINI Cooper, an exquisite car, entered Chinese market in 2003 (Yarrow, 2003). During these periods, with outstanding appearance and performance, it has become increasingly popular, In this marketing audit, I will analyse its business environment, marketing mix and STP strategy, and gi

2、ve some suggestions for a future strategy.2. Company and product backgroundMINI is an independent brand of BMW group, which is born in 1959 in United Kingdom. MINI Cooper, one of the most famous product of MINI, has sold more than 5,000,000 cars (Paternie, 2002). MINI Cooper has stayed ever since an

3、d owns multitudes of followers including employers and employees, the old and the youth. 3. The business environment3.1 The macro environment3.1.1 Political environmentFrom reform and openness onward, China witnesses a stable political environment for developing. In 2001, China joined into WTO and h

4、as cancelled quota management of import autos and tariffs of import autos are decreased gradually from 80% to 25% in recent years (Lan, 2011). It provides a proper chance to MINI, as a foreign automobile manufacturer.According to Xinhua (2011), China would draw up a new law of vehicle taxation aimin

5、g to engines size, and the law is going into effect in 2012. It reflects that China plans to cut down the consumption of oil dependence and encourage the purchase of small cars, which is beneficial to MINI as it concentrates on exquisite cars.3.1.2 Economic environmentAfter worldwide recession durin

6、g the period from 2007 to 2009, the economy of China began to recover. Consumers could afford what they want to buy than before because they have enough funds and more buying power (Pride & Ferrell, 2011). Increasingly inhabitants decide to purchase a car as a means of transport. From 2009 onward, c

7、hina has become the first automotive consumer around the world (Chow, 2011). MINI is facing to a significant opportunity to expand its turnover. According to China Association of Automobile Manufacturers statistics (2011), in the first half of 2011, the total amount of imported cars is 34.545 billio

8、n dollars, increasing by 26.92% in comparison with the first half year of 2010. Table 1: China Inflation Rate (Source: TradingE; China Economic Information Net)According to the chart, in these years the inflation experiences an increase in general. Therefore, citizens prefer to purchase commodities

9、rather than save money into bank because currency has devalued. Irremovable property, autos and luxury are favourable, which has a significant impact on the sales of MINI in Chinese market.3.1.3 Socio-culture environmentIn the area of automobile, German brand consistently reflects high quality and v

10、alue, and Britain brand represents traditional and classical style. MINI, as an independent brand of BMW group, originated from UK, has a relatively high reputation for consumers.In china, increasingly youngsters prefer to purchase cars than before and the car involving fashion and personality is es

11、pecially welcome (Chua, 2007). They tend to seek for a car which satisfied their education, experience and occupation and make sure that they could enter some groups.3.1.4 Technological environmentAs an outstanding automotive brand, MINI has powerful competence of research and development. Meanwhile

12、, MINI has a share with BMW in terms of technology and research, which can guarantee its advancement and stability to a large extent. Both MINI and BMW concentrate on the fun to drive, no matter the exterior or function. Compared with a small family car, it more likes a mini racing car (BMW Group, 2

13、009).3.2 The micro environment3.2.1 Competitor analysisGeneric competition means different companies aim to achieve consumers money through their products and services (Pride & Ferrell, 2011). As for MINI Cooper, all companies of durable consumption goods are its generic competitors. Some consumers

14、prefer to purchase a small apartment because they can maintain the value in the long term. However, some consumers tend to buy an exquisite car such as MINI Copper or Smart at high prices as maybe customers like cars and can acquire a sense of accomplishment. MINI Cooper needs not only compete with

15、automobile manufacturers product, but also compete with other manufacturers vehicles including motorcycles and bicycles. Kotler (2000:718) defines form competition as “a company sees its competitors as all companies manufacturing products that supply the same service”. For customers, they have oppor

16、tunities to choose one of traffic tools mentioned above as all of them supply the same service for working and travelling.According to Krishnamacharyulu & Ramakrishnan (2011), Industry competition means enterprises can provide the same kinds of products and services for customers. In terms of MINI C

17、ooper, all auto manufacturers should be regarded as its competitors, which could pose a threat to its market share. Some consumers prefer to purchase an inexpensive car whereas others, perhaps, buy an SUV. Brand competition is that companies supply similar products and services at similar prices to

18、the same target market (Ferrell & Hartline, 2011). Beetle, as a product of Volkswagen, is a typical brand competitor for MINI Cooper in china. Both of them, with glorious histories, have similar price. 3.2.2 Consumer behaviour analysisAs target customers, most of them have already had the first cars

19、 in China. However, the previous cars have been out-of-date, or other friends recommend them to change another automobile. Thus, they decide to purchase another car because of internal and external stimulation. Next stage is information search, consisting of internal and external search (Bettman, 19

20、79). Consumers tend to memorize their experience related to the characteristic and brand, which usually comes from friends recommendation, previous buying and information collection. Meanwhile, they are likely to acquire information in other ways including personal sources (families, neighbours and

21、friends), commercial sources (advertisements, sales assistants and retails), public sources (car owner-clubs and mass media) and experience sources (remarks and forums of cars).Buying a car is extended problem solving. Therefore, “The more complex and costly the purchase, the more time buyers will s

22、pend searching for the best supplier” (Solomon et al., 2009:200). In the third stage, consumers will combine demands with collected information and form their own assessment standard. The exterior is a significant element as consumers need to show their characteristics. Furthermore, they have capaci

23、ties to afford cars with high manoeuvrability. After collecting comprehensive information of automobile, they will choose the subsistent brands which are similar to their ideal brands (e.g., MINI).According to Bourne (1957), reference group has an influence upon the process of consumers decision mak

24、ing and the more visible the products are, the greater impact consumers suffer. Thus, after communicating with reference group including families, friends and specialists, calculating all kinds of benefits, they will make the final decision between these optional products and brands. Then they will

25、go to MINI 4S stores, sign contracts and carry their cars.After purchasing, consumers will judge whether MINI Cooper could satisfy their expectation and create consecutive reaction. If it cannot reach their expectation, they will make some negative responds including voice respond, private respond a

26、nd third party respond, which is likely to form a vicious cycle. However, if MINI Cooper has expected or ideal performance, it is helpful for MINI to increase sales, improve the market share and enhance consumers brand loyalty.4. The organizations marketing mix4.1 Product4.1.1 The levels of the prod

27、uctTable 2: The Three Level of a Product(Source: According to the picture (2011) and Solomon et al. (2009), core product is the benefits which the product will offer for customers. What customers want to buy is not only to gain the product, but also to satisfy what they need. The core product of MIN

28、I Cooper consists of transportation, enjoyment and carrying. Each brand of cars has the same core product. However, MINI cooper has higher excitement and more than 80% available spaces in comparison with other competitors (Wagner, 2011). Colour, surface, interior design, quality and brand are the ac

29、tual product of MINI cooper (Solomon et al., 2009). MINI cooper is a type of English classical automobile, representing the retro style in 1960s, having fashionable colour and special exterior, which attracts the attention of multitudes of youngsters. In terms of interior design, according to BMW Gr

30、oup (2009), MINI cooper has the same inside layout as well as the period of 1968 with the orange lighting, which provides a sense of conformation and familiarity. In the area of quality and brand, it is obvious that MINI cooper inherits the level of quality from BMW with high brand recognition.The a

31、ugmented product of MINI Cooper consists of warranty, maintenance service, loan services, repurchasing plan, etc (Kotler & Armstrong, 2010). According to the policy of MINI website (2011), MINI Cooper has the highest driving thrills guarantee and thorough maintenance services. It also offers loan se

32、rvices and customers could use mortgage calculator to make purchasing plan, and recently, MINI Cooper makes a decision of repurchasing plan for MINI and BMW owners (MINICHINA, 2011). 4.1.2 Classification of MINI CooperAccording of the length of product, MINI cooper is durable goods (Solomon et al.,

33、2009). MINI Cooper, as an exquisite car, will be used over several years, which means that customers will spend multitudes of time considering and analyzing if MINI Cooper is worth to be brought.According to user based, MINI cooper is specialty goods (Solomon et al., 2009). What is meant by this is

34、that customers prefer to focus on the value of brand and special characteristic rather than price and convenience. Therefore, MINI does not need to build many retailers and consider if customers are convenient. What it should do is just to let them know where to purchase.4.2 PriceTable 3: Price and

35、Product Quality Strategies(Source: http:/www.atkinson.yorku.ca/lripley/imUprice.htm)The price-quality matrix indicates the interaction between price and quality. The green areas represent the suitable situation including economy, medium value and premium value. In China, the price of MINI Cooper is

36、relatively higher in comparison with other competitors. According to MINICHINA (2011), the price of MINI Cooper is from ￥269,000 to 309,000 (Approximately GBP 26,900 and 30,900), which is equal to the price of other medium-large cars. Even through, the cost of sales is comparatively higher as MINI C

37、ooper is imported from UK and Germany with high quality of manufacture and elegant connotation, which infers the position of premium value. Meanwhile, according to Brassington and Pettitt (2003), high price could help to establish a high-quality position so as to appeal to more discerning customers.

38、 More precisely, it is not uncommon that customers will think high price poses a close link to high quality. The expensive products are likely to offer unique characteristics and distinctive quality, which impels them to purchase without considering their high price. As MINIs price strategies, when

39、confronting with the price, consumers always believe MINI Cooper offers high quality and reflects MINI and BMWs reputation. 4.3 PromotionTable 4: Promotion Through PLC(Source: According to product life cycle (Vernon, 1966), MINI cooper is in growth stage. In 2003, MINI introduced the first product,

40、MINI cooper, in China (Yarrow, 2003). MINI has made success to the extent until now, which has got accustomed to Chinese market, accounted for sizable market share. In the stage of growth, however, the competitors including Smart and Beetle have been in market in order to make profits. Under this ci

41、rcumstance, some strategies of promotion have been taken.Advertising is important for the growth stage. “Be Mini”, as a declaration of advertisement, shows unique characteristic and favourable lifestyle through mass media including fashion newspaper, magazines and televisions (MINICHINA, 2011). It r

42、eveals some factors that consumers care about such as design, security, technique and after-sales services so that they could realize MINI Coopers brand value and comparative edge.A disadvantage of advertising is that MINI cannot communicate and interact with customers directly. Therefore, MINI mana

43、ges to generate public relationship through some exciting activities in the stage of growth, i.e. MINI cooper is holding CHINESE JOB, an exciting race, to show its product and increase communication with potential customers (MINICHINA, 2011). MINI could pass its brand concept to targeting customers

44、directly, which can form positive interpersonal communication for the sake of attracting the consumers notice and augmenting brands loyalty.4.4 PlaceTable 5: Distribution Channels(Source: http:/www.web-MINI Cooper, in China, takes direct-marketing channel, because direct-marketing channel is simple

45、and efficient in comparison with other methods in terms of automobile (Kotler & Armstrong, 2010). The channel width is exclusive distribution. The concept of exclusive distribution is that in a region there is only a single outlet (Solomon et al., 2009). MINI, with high price and specialty products,

46、 aims to target customers rather than mass customers and therefore, what it needs to do is to pass the information to its customers directly.For the sake of meeting the needs of growth market, according to MINICHINA (2011), MINI has expanded its outlets with 44 cities and continued to penetrate Chin

47、ese market in northwest and southwest areas, which positively perfects its system of distribution in recent years. Under the circumstance of intensive competition, MINI Cooper has taken new direct-marketing distribution. Customers could order their desirable cars-MINI Cooper limited edition on the i

48、nformation highway (MINICHINA, 2011). Karl-Heinz Gassner (2011, as cited in Zhuan, 2011), the head of sales operations and dealer development in BMW China, claims that using the new distribution way is not only essential to understand Chinese customers online purchasing habits, but also necessary to

49、 develop own distribution system.5. The segmentation, targeting and positioning strategy5.1 The segmentation strategy“Marketing segmentation is the process of dividing consumers into homogeneous groups” (Pelsmacker et al., 2010:133). Marketing segmentation usually consists of different variables inc

50、luding profile, psychographic and behavioural. One criteria of profile is demographic segmentation and demographic segmentation often consists of age, gender, occupation, education, etc (Solomon et al., 2009). For MINI cooper, it locates its products for young social elites who are from 20 to 35, an

51、d they always have relatively high education and occupation. Another element is geographic segmentation such as city size and density, and residents living in metropolis are its target market. Compared with other people, target customers prefer to discover and adventure such as self-driving tour bec

52、ause on weekdays they are quite busy with a relatively fast tempo of working. They could acquire special experience, improve themselves and ease their minds through these activities. As their interest, they tend to different hobbies related to mental respects and realize the value of life. They have

53、 formed special tastes and lifestyle about fashion and quality of products, which more concentrate on the level of conformation in their daily lives.For most segmentation consumers, the end use of them is to experience the passion of driving, showing their unique lifestyle, and what MINI Coopers app

54、earance could offer them an excellent platform. In the meanwhile, it could bring them multitudes of benefits consisting of convenience, performance and status. Indeed, owning a car will provide convenience to a large extent because customers could reach any what they want in any cases. In term of us

55、age rate, heavy users always occupy a few in the market, but account for a high percentage of total buying (Kotler et al., 2008). What MINI Cooper need is to develop potential customers who are light and medium users. A market could be segmented in terms of brand loyalty and there are different degr

56、ees of loyalty. MINI cooper has already had several loyal users and it is necessary to improve the proportion of potential users, which could study and analyze though its own loyal consumers. Buyer readiness state is segmented by the process of purchasing and divided from unawareness to intending to

57、 buy. For instance, some customers have the need of vehicles but do not realize the existence of MINI Cooper whereas some customers know MINI cooper but have problems with its price and quality. Some customers have been interested in MINI Cooper while others are intending to buy. In summary, MINI Co

58、oper should take and develop different tactics aiming to different buyer readiness state.5.2 The targeting strategyAs a prevalent company of automobile, the targeting strategy of MINI is differentiated strategy. As can be seen from MINICHINA (2011), MINI consists of different types of automobiles in Chinese market including MINI Cooper, MINI Cabrio, MINI Clubman, MINI Countryman and MINI Design Model S. Different types have different marketing mix as well as their targeting market.