Marketing communications - Part 4 - Marketing Essay Example

Marketing Communications

 

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I.         Introduction

In the fast-growing industry like automobile, automobile manufacturers are to take strategic decisions in order to ensure that their automobile products match exactly their customers’ needs. At several successful automobile manufacturers, especially high-end car manufacturers, their excellent strong performance in terms of revenue is the result of prolonged customer-oriented strategy that company has implemented since several years ago and also the outcome of customers’ intimacy or retention.

The situation suggests that in order to succeed in today’s fierce competition, an automobile enterprise should be aware of the needs to be a customer-oriented organization in order to win customers’ hearts and thus gain bigger profits.

Concerning the issue, this paper will discuss the semiotic analysis of advertising from a luxury automobile product, Mercedes Benz E320 CDI. In addition, this paper also elaborates the proposed integrated marketing communications plan for the Mercedes Benz series, alternative media that Mercedes Benz can use to target their high-class customers, and effectiveness of sales promotion for premium product.

 

II.        Automobile Industry and Market of Mercedes Benz

II.1      Automobile Industry

In recent years, there are a number of new enterprises that compete in an industry. The advanced information technology that enables customers to experience new ways of purchasing products and enable sellers to reach worldwide audiences, rapid economy growth of a country and diversification of products have driven many start-ups to exist in and industry.

However, in the global automobile industry, the situation is not so intense like happens in fact-moving consumer goods since the number of new entrants is not so vast. In fact, as happened within the past decade, the worldwide automobile industry recorded a number of mergers and acquisitions like Renault-Nissan and Daimler-Chrysler.

To achieve optimal results, any business should take into consideration a fundamental procedure of successful business that is creating and implementing a marketing plan. While a market is a particular group of who needs services, a marketing plan composes of several components including communication plans.

Concerning the Daimler-Chrysler AG, the combined company keeps producing high-end products that have strong brands in customers’ mind as luxury cars. Prior to the discussion of communication activities of Mercedes Benz E320 CDI, below is the brief of Daimler-Chrysler AG.

 

II.2      Brief of Daimler Chrysler AG

DaimlerChrysler AG is widely known as a luxury car manufacturer that has innovated and produced many luxurious products in the high-class automobile market. Nowadays, most of the Rich worldwide will consider buying any type of Mercedes-Benz cars to represent their social status.

Interestingly, while in common senses, the worldwide automotive industries experience 3-percent declines of sales figures due to unfavourable condition such as raise in the oil price etc, Mercedes-Benz continues experience strong growth within the past several years.

In 2002 alone, Mercedes Car Group was able to maintain the company’s performances by experiencing significant increase in the sales figure. In 2002, the company was able to sell about 1,232,600 units, an increase from 1,229,700 units in 2001 (Automotive Intelligence, 2003).

In addition, in passenger cars segment, the company also succeeded to maintain the market by reaching the sales figure about 1,110,300 passenger cars in 2002 from 1,113,500 sold units in the previous year (Automotive Intelligence, 2003).

In SUV (Sport Utility Vehicle) segment, Mercedes-Benz also performed outstandingly in this highly competitive market segment. In 2002 alone, Mercedes-Benz sold 102,000 units of M-Class models. This was an extraordinary achievement since within the past three years; Mercedes-Benz is successfully record sales figure in M-Class above 100,000 units (Automotive Intelligence, 2003).

Moreover, in Western Europe alone, the M-Class had successfully maintained its achievement by having a market share of about 22 percent. Industrial analysis says that the success factor was the decision of Mercedes-Benz to launch diesel versions in the M-Class. In home country, Germany, M-Class still dominates the SUV market with a market share of 38 percent (Automotive Intelligence, 2003).

 

III.      Semiotic Analysis and the Advertising of Mercedes Benz E320 CDI

III.1    Scope of Semiotic Analysis

In conducting semiotic analysis of a message including posters and ads, we might use the term denotation and connotation. Denotation is simply a ‘literal’ meaning while connotation is additional meaning (Chandler, 2002).

In semiotics, the use of denotation and connotation represent the terminologies that describe the relationship between the signifier and its signified. In addition, two types of compose an analytic distinction signified; they are a denotative signified and a connotative signified.

Furthermore, the term Denotation has tendencies to “represent definitional, ‘literal’, ‘obvious’ or ‘commonsense’ meaning of a sign” (Panofsky 1970a, 51-3). In the situation of linguistic signs, the denotative meaning is what the dictionary attempts to provide. For example, in the situation of viewing a visual image, Erwin Panofsky says that the denotation is what all viewers of the image who come from any cultures and at any time would perceive the image as depicting.

Meanwhile, the word connotation refers to the situation that a person uses his socio-cultural and personal’ associations (e.g. ideological, emotional etc.) of the image or sign. Since connotation deals with personal perception, therefore, the diversity of connotation depends on person’s class, age, gender, ethnicity and so on (Wilden 1987, 224).

In addition, connotation and denotation are often elaborated regarding to levels of representation or levels of meaning, which exists in different orders of signification (Barthes 1957; Hjelmslev 1961, 114ff).

Barthes (1957) and Hjelmslev (1961) say the first order of signification is the signification of denotation in which there is a sign consisting of a signifier and a signified. Meanwhile, connotation is a second-order of signification which uses the denotative sign (signifier and signified) as its signifier and attaches to it an additional signified. In this perspective, connotation can be considered as a sign which derives from the signifier of a denotative sign. It means that denotation leads to a chain of connotations (Chandler, 2002).

 

III.2    Semiotic Analysis of Mercedes Benz E320 CDI

 

 

Figure 1          Ads of Mercedes Benz E320 CDI

 

In the ads of E320 CDI, we can a simple design of automobile advertising that exhibits an E320 CDI while driving in a highway. With a similar colour of silver, black, and a yellow line, the ads want to inform that the new E320 CDI is the car of the future.

The ads clearly emphasize on the appearance of the cars itself instead of taking the customers to read the performance of the cars. However, the ads still provide a caption, which is a linguistics substance. The main caption “whilst breaking the 100,000 mile non-stop endurance record, we encountered a few hitched” is somewhat crucial to introduce what E320 offers to customers.

Moreover, the message of E320 ads can be broken down into several aspects. For instances, the small sign of Mercedes Benz in the bottom right shows not only the emphasis of the brand name but also it  additional signified, “quality” and “classy product”. Under such circumstances, the linguistic message of E320 CDI ads composes of denotational and connotational.

In addition to linguistic message, we can see a strong image of Mercedes Benz E320 that smoothly runs in a highway. In the ads, the German manufacturer, Daimler Benz, does not try to provide an image that associate the E320 CDI with a Germany national flag by exhibiting a combination of national colour: Red, Yellow, and Black. The ads only take two colour of German national lag: a thin yellow line, and the black of road. The use of two main colours in this image is to convey the signified and its signifier. The signified of the ads is the endurance of the E320 CDI cars that supported by a small caption at the bottom explaining the brief of the test results such as fuel consumption, emission, model features. Meanwhile the signifier is the esteem of the E320 CDI car that drives safely in the road

By looking at the description of the ads, we see that E320 CDI target high-class customers who are ssomewhat similar to the target customers of all Mercedes-Benz product since, in general in which customers perceive the Mercedes-Benz products as luxury cars that are must-to-have for the ones who consider themselves as rich people.

The strengths of E320 CDI are on the commitment of the company to value customers’ investment with extraordinary innovation in order to maintain the premium position of Mercedes-Benz cars in the automobile industry.

 

IV.      Integrated Marketing Communications Plan of Mercedes Benz

IV.1    Components of Integrated Marketing Plan

Performing promotions via television and online media are two examples of the implementation of marketing plan. The terminology “integrated” means that a company maintains its promotion message so that in every media the promotion still conveys similar tones to ensure the effectiveness of the promotion to targeted audience. Under such circumstances, a company will provide careful plan so that their message in print advertising, web site, and radio will be similar.

Under such circumstances, when developing communications plan for a well-known luxury automobile product likes that of Daimler Benz such as Mercedes Benz E320 CDI, the company should consider the “integrated” notion so that the operational expenditure in the forms of advertising that costs millions of dollars is not useless.

Moreover, since Mercedes Benz’s products represent the luxurious of cars and the class/success of the owners as well, therefore, in the company’s advertising, there should be a representation of what successful people have and do. This is because, culture or behaviour become one of five most influential elements in marketing communications (Pennington 2005). To be precise, below is the integrated marketing plan for Mercedes Benz E320 CDI:

Web Site
The key points when conducting promotion via online media is that the message should clearly describe and inform about what Mercedes Benz E320 CDI is offering and had better to provide some links to close the deal (e-commerce ready). In Daimler Chrysler web site (www.daimlerchrysler.com), there should be overwhelming applications such as Flash Media or pop up. Since not all guests have high-speed computers that can access the flash media quickly. In my experience, opening a web site that are equipped with flash media like www.habitat.net can provide guests with dullness since it takes much time to see the animation appear in my screen.

Advertising. It includes print, online, radio, and TV. Since Mercedes Benz cars are associated with luxury cars, therefore, in the advertising, the company must clearly convey message that targeted audiences understand it as Mercedes Benz’ things.
Marketing Collateral. It includes brochures, case studies, white papers (RD Marketing 2005). This knowledge media should be also in compliance with the promotion that Mercedes Benz informs in their web site or print media. The key points of using these materials is that the company should build and define the brands of Mercedes Benz by giving customers the important look at positioning and messages.
Trade shows. In this promotion media, the brand of Mercedes Benz has been known to convey ‘being success’ message since the owners of Mercedes Benz cars are those who are successful in their business, relationship, and life, in general. Therefore, in trade shows the company should design its booth that reflects ‘being success’ message as well.
Direct mail. The use of this communications tool is to provide customers with personal media in which the company can design the mail that fit the customers’ individual characteristics (RD Marketing 2005).
IV.2    Communication Plans of Mercedes Benz E320 CDI

IV.2.1 Budget of Promotion

Business activity always costs money; therefore, there should be budgets to estimate the expense. The budget should include separate accounting for internal hours (staff time) and external costs (out-of-pocket expenses). Table 1 shows the resume of budget for E320 promotion.

The budget of promotion for E320 CDI is assumed to account for 24 percent of Mercedes Benz promotion budget. The 24 percent value is obtained from the proportion of the number of E-class that was sold in 2005.

The total promotional budget of Mercedes Benz promotion is 2% since there are no exact amounts of advertising budget as percentage of sales revenue and assume that in that year E320 CDI become focuses of the company’s sales activities). This amount is considerably acceptable (Canada Business, 2005).

Consider that the UK’s Mercedes Benz Cars revenue in 2005 was €5.8 millions (see Table 1), therefore, the budget of communication plan for E320 CDI is 24% x 2% x €5,820 millions = €27,9 millions.

 

Table 1            Budget of Promotion for E320 DI

No.
Items
Budget
1
Revenue of Mercedes Benz Cars in Europe
29,103 millions*
2
Revenue of Mercedes Benz Cars in UK (assumed 20% of Europe Sales(
5,820 millions
3
Revenue Proportion of E Class
24%
4
Budget for marketing efforts per annum (of gross sales)
2%

Total
€27.9 millions
 

 

 

 

 

 

 

 

Note: * source: www.daimlerchrysler.com

 

IV.2.2 Communications plan of E320 CDI

Promotion deals with how to promote or create responsiveness of the product in the marketplace. A promotion plan describes the tools or tactics used to accomplish the marketing objectives. Promotion decisions are those related to communicating and selling to potential consumers.

 

 

 

 

 

Table 2            Communication/promotion activities, budgets and time scheme, and measures for evaluation

 

No
Communication

Activities
Budgets

(€)
Time Schedule
Measure for Evaluation
1
Corporate Open House
5,500,000
Once every two months in the first year
§  The number of Audiences Gathers at Open House (minimum 1,000 people per open house -day)

§  Vast Participants/Audiences Feedbacks
2
Press Releases
400,000
every events of E320 CDI
News Distributed into Media
3
Brochures, case studies, white papers
1,900,000
White papers of E320 CDI
Distributed to owners of Mercedes Benz cars and journalist
4
Website Updates
100,000
Any time
Web sites updated once a changes/new activities of E320 CDI promotion occurs
5
Direct Mail
2,000,000
After the Grand Launching of E320 CDI
Distributed to owners of Mercedes Benz cars
6
Automobile exhibitions/shows(includes souvenirs etc)
18,000,000
November 8-13
Hard selling during automobile exhibitions/automobile shows
TOTAL
27.9 millions

Source: (RD Marketing, 2006 & Canada Business, 2005)

 

IV.3    Effectiveness of Sales Promotion for Premium Products

IV.3.1 Refusal to Advertising

With the overexcited of advertisement in daily life, can the people regard the exertion of advertisement in order to awake the people about the importance of the advertisement as one of information source? I am not sure. Some negative impressions even dominate the society’s feeling. This issue is proved by the fact that there are many peoples shift to another channels when they watch and hear some kind of advertisement.

One of the reasons is boredom. Boredom that resulted at consciousness about “however the product is being packaged, basically advertisements bring the same message: selling goods, service and idea to their goals audience”.

Second, sometimes people are feeling shy or nauseated when they assume that the advertisements violate ethical factors. This issue is usually addressed at the advertisement that having dilemmatic problem about the moral concept and society’s culture. The examples are advertisement of woman bandage, condoms, and underwear.

For the product that mentioned above, generally, the advertisement product causes uncomfortable feeling, so however they are being packaged, cultural conflict will always come out to surface.

Third reason, it might possibly because of feel afraid about the consumerism impact, which is buzzing by every advertisement. For example a mother, will effort to make limitation about children’s duration when they are watching TV, because a mother feel worry how if they whimper, ask the product that advertised in the TV, the examples are toothpaste peppermint, dry food that rich of MSG, modern electronic equipments which in fact are not for their consumption, etc.

Concerning the issues, it is important that Daimler Benz carefully designs their promotional messages for E320 CDI so that it would hamper any ethical violations and easily discerned by customers.

Therefore, successful advertising campaign does not only refer to the increasing figure of sales but at maximum point that the advertising can attract potential buyers for the product. In case of the luxury cars, the key message of its advertising should be highlighting the benefits and features messages since based on the research the features of high-end cars become the key message that automobile fans consider before deciding to buy.

 

IV.3.2 Market Research and Assessment of Advertising Effectiveness

By definition, Antonio Barrios defines market research as a process of collecting appropriate data for the purpose of giving management’s suitable business decision-making. Such analysis is imperative for a company intending to move into a new location, offer products in new markets, or merely increasing market share.

The first step is to provide measurable and quantitative objectives. For instances, a manufacturer might set a target of a certain number of enquiries from a campaign. Based on the objective, therefore, the measurement is quite easy since the marketer simply measures variations between journals and between responses at different times of the year in which the target for the response set in advance of the campaign is the criterion for measuring it (“Making Your Ads Work Harder’).

Second step is to measure image, attitudes, and awareness right before and after the campaign is launched in order to measure the effectiveness of the campaign. However, assessing market size and market shares, for instances, are not sufficient in measuring advertising effectiveness.

In other literature, I found that there are also two steps in creating the most influential advertising campaign. It results in the number of favouring findings to make the advertising gets more effective in as following:

Step 1 – Setting up The Key Message
I          in this first step, a company might conduct a focus group discussion in separate places (could be cities or continents) in order to figure out perceptions of buyers of products to be launched.

Step 2 – Testing The Advertisings
There are many ways to do this. The market researchers might test these amongst the products’ buyers in a location, says in a continent or a city (70 interviews) and in other location (30 interviews). Afterwards, copies of the ads were mailed by courier to the 100 respondents who were then phoned and asked to comment on each of the ads in terms of:

a.       Stopability

b.      Interest

c.       Relevance

d.      Clarity

e.       Likelihood of taking action

(‘Advertising Research’)

 

The above steps when appropriately developed will provide a company with suitable information that ensure the effectiveness of advertising campaign for a product that favour the company to gain not only increased market share but also to reach as much as potential buyers. Therefore, the effectiveness of advertisings for premium products do not depend on perceptions that customers of premium products rarely pay attention to ads but at what extent, Daimler Benz can take into account refusal factors and the five factors of consumers perceptions on the ads of E320 CDI.

 

IV.4    Advertising in India: What Factors Need Adjusting?

If Daimler Benz wants to advertise in India, therefore, the ads of E320 should be altered in some ways. For example, the use of miles is not appropriate since in India, they use kilometres.

Concerning the comparison whether to choose global advertising or local one, we can take into account several considerations such as the purpose of advertising. For example, if a company intends to develop a strong global corporate image, we can suggest that the company had better to use global campaign where the promotional material could be the same from one country to another.

However, if the objective of the advertising is to launch a new product or brand in a designated market like India, we can suggest that the advertisers or product owners to develop local campaigns matched the characteristics of local markets and culture (Douglas and Samuel).

For example, an automaker that wand to advertise their new high end product could use difference model in their commercial. In Europe, they could use a famous entrepreneur since it will have great impact on European customers but in Asia, the use of local or well-known worldwide celebrities has greater impact in promotional message. Or else, the automaker will loose sales.

According to some researchers, we have to pay attention to “context” issue. In “high context” cultures, for example, “the collectivist Asian cultures in Japan and China, the context in which information is embedded is as important as what is said” (Hall 1976). Meanwhile, in low context cultures, the information should be composed in the verbal messages adopt low context culture; it is essential to provide adequate information relating to the product or service in order to satisfy their need for content (De Mooij 1998).

Concerning the advertising in international context such as in India, Daimler Benz should decide “whether or not to develop a global or regional advertising campaign, or rather tailor communication to differences in local markets” (Peebles and Ryans 1984).

Bibliography

 

Automotive Intelligence. 2003, ‘Mercedes-Benz Extends Its Leading Position in the World Market for Premium Automobiles in 2002’, Automotive Intelligence

Barrios, Antonio. ‘Market Research Enhances Business Decision-Making’, University of Georgia: Small Business Development Center

Canada Business. 2005, ‘Plan Your Advertising Budget’, Canada Business

Daniel Chandler. 2002, ‘Semiotics for Beginners’, [Online] Retrieved August 23, 2006 Available at: http://www.aber.ac.uk/media/Documents/S4B/sem06.html

De Mooij, M. 1998, Global Marketing and Advertising: Understanding Cultural Paradoxes. Sage Publications, Thousand Oaks, CA

Douglas, Susan P. and Craig, C.Samuel. 1995, Global Marketing Strategy. McGraw Hill, New York.

—, ‘International Advertising’, New York University Stern School of Business

Grein, A. and Ducoffe, R. 1998, Strategic Response to Market Globalization among Advertising Agencies. International Journal of Advertising, 17, 301-319.

Hall, Edward T. 1976, Beyond Culture. Anchor Press, Garden City, NY.

Rijkens, R. 1992, European Advertising Strategies. Cassell, London.

Kassel, Amelia. ‘How to Write a Marketing Plan’, [Online] Retrieved August 23, 2006 Available at: http://www.infotoday.com/mls/jun99/how-to.htm

Kotler, Philip. 2000, Marketing Management, Prentice Hall, New Jersey

‘Making Your Ads Work Harder’, [Online] Retrieved August 24, 2006 Available at: http://www.b2binternational.com/article7.html

Peebles, D.M. and Ryans, J.K., Jr. 1984, Management of International Advertising: A Marketing Approach. Allyn and Bacon, Boston.

RD Marketing. 2006, ‘Creating an Integrated Marketing Communications Plan’,

Ries, Al. 1996, Focus. New York, HarperCollins Publishers, New York

Tiffany, Laura. ‘The Ingredients of a Marketing Plan’, Entrepreneur Magazine

Pennington, April Y. ‘An American icon: some things just say “America,” like baseball, apple pie and … franchises. Here are 5 big ways franchising has affected our nation’, Entrepreneur  January 2005

 

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