Subject Code: MKTG10001 This essay critically analyses the article “Volvo eyes ‘responsible’ car buyers” written by Jorn Madslien for BBC News (2013). This essay will outline how the marketing concept Customer Orientation, as well as other concepts such as Competitor Orientation, Brand Associations and Targeting Markets have been actively used by commercial car-maker Volvo in an attempt to increase their customers in Asia, differentiate itself as a brand from other competitors in the market, sell its new product the ‘Volvo V60’ and “reach its goal of selling 800,000 cars per year by 2020”(Volvocars.
om, 2012). Finally, this essay will also consider the degree of effectiveness expected from the use of these particular marketing concepts in actively contributing to positive brand equity for Volvo as a commercial business. Originating in Sweden as a part of the Swedish Volvo group, April 14th, 1927 marks the date that Volvo’s first car was produced. Now owned by the Zhejiang Geely Holding Group of China, the Volvo Car Group used to be owned by the Ford Motor Company from 1999 until 2010 (Volvocars.
Since the appointment of new Chief Executive, Haakan Samuelsson, the company has promoted their new brand strategy ‘Designed Around You: putting people at the centre of all operations in the company’ (Volvocars. com, 2013). As reported by Madslien at the 83rd International Geneva Motor Show, Volvo have just launched their product the ‘Volvo V60’, “the world’s first dieselelectric plug-in hybrid in production” and while also promoting Volvo’s renewed aim “no one should be killed or injured in a Volvo by 2020”(Madslien, 2013).
Citing that safety features developed by Volvo included in the V60 such as their new City Safety and Active High Beam Systems ‘will protect you in a fast moving world’, Volvo is using the marketing concept Customer Orientation, focusing on adding value for the customer in order to increase its corporate value; both intangible assets, such as brand equity, and tangible, such as profitability (Volvocars. com, 2013). Their company strategy, ‘Designed Around You’ is “a foundation and a guide for the business, products and the corporate culture”(Volvocars. om, 2013). The concept of Customer Orientation is part of a wider marketing concept termed Market Orientation, defined as: “the organisation-wide generation of market intelligence in relation to current and future customer needs, to the competition and to collaborators; dissemination and inter-functional coordination of the intelligence across business functions and organisation-wide responsiveness to the intelligence” (Pride, Ferrell, Lukas, Schembri & Niininen, 2012, p. 17).
Customer Orientation, put simply, means “The set of beliefs that put the customer’s interest first, while not excluding those of all other stakeholders such as owners, managers, and employees, in order to develop a long term profitable enterprise”(Deshpande, R. and Farley, J. & Webster, F. E. Jr, 1993, p. 27). Proactive Customer Orientation, a preferred definition for this essay is: “The capability to continuously probe latent needs and uncover future needs of customers, and consists of two dimensions, proactive customer oriented climate: the extent to which attention to customers’ latent and future needs is lived within an rganisation, and proactive customer oriented processes: the extent of information processes that aim to probe latent needs and uncover future needs of others” (Herhausen, 2011, p. 42-43). It is evident that Customer Orientation is the foremost marketing concept being used by Volvo to promote their new product the Volvo V60 to their Target China market. This can be seen by their acknowledgement that China, with it’s one child policy, is a more openly ‘safety conscious’ market than the West, where car companies like Volvo’s European rivals such as Audi, Mercedes and BMW generally target ‘Petrol Heads’ (Madslien, 2013).
Volvo is orienting their marketing towards a customer base that will be more receptive to their brand’s associations with equity and responsibility rather than speed. By acknowledging it’s own strengths as well as targeting a specific market through what those particular customer’s needs and wants are actively promoting safety and “no accidents by 2020”, Volvo is operating within a proactive customer orientation climate with their brand strategy ‘Designed Around You’ and is using proactive customer oriented processes by integrating customer needs into their products through safety features.
This is inferred by Chief Executive Haakan Samuelsson when he says: “In society, being responsible for your family means you will have to be considerate about safety, about the environment in which that family lives, and indeed about family economics including motoring costs… We aim that no one should be killed or injured in a Volvo by 2020… We’re the only brand that has the credibility to formulate such a vision” (Madslien, 2013).
This also hints at the use of Competitor Orientation, another concept within the Marketing Orientation definition, by Volvo in its marketing strategy in an attempt to “differentiate itself from its European (namely German) rivals such as Audi, BMW and Mercedes” (Madslien, 2013). Competitor Orientation, simply, means: “The product is experienced from the competitor’s perspective” (Lukas, 2013, Slide 8) or “the ability and the will to identify, analyze and respond to the competitor’s actions” (Gatignon, H. , Xuereb, M. , 1997, p. 78).
In terms of targets for this new product, Volvo aims to sell at least 7000 Volvo V60’s in 2013 alone, leading to their larger goal of selling 800,000 cars a year, a marked difference from last year’s 422,000; this target is seen by analysts outside the company to be difficult, mainly due to its “continued perceived weakness in its core European market” (Financialtimes. com, 2013). But the impact of using Customer Orientation as a primary marketing concept has been hailed by external analysts as a way for Volvo “to boost sales in China to compensate for the falls in Europe” (Financialtimes. om, 2013). To conclude, it is through the application of the wider concept of Market Orientation, with the focus upon Customer Orientation that Volvo aims to increase the awareness and perceived need for their new product the Volvo V60, which they hope will in turn improve their brand’s associations of having the safest cars in the market, in turn increasing their share in existing markets, Europe, and to break into a new one, China.
As discussed in the article “Volvo eyes ‘responsible’ car buyers”, the use of the marketing concept Customer Orientation is considered to favourably increase Volvo’s brand equity, though whether it is to the extent that Volvo predicts remains to be seen (Madslien, 2013). The use of this marketing concept by Volvo is considered shrewd as it carries out a number of the company’s goals such as promotion, market share, corporate value and a prediction of improved cash flow, all through the addition of value for customers through increased safety measures.
BIBLIOGRAPHY BBC News (2013). Volvo eyes ‘responsible’ car buyers. [online] Retrieved from: http://www. bbc. co. uk/news/business-21708251 [Accessed: 4 Apr 2013]. Deshpande, R. and Farley, J. (1993). Corporate Culture, Customer Orientation, and Innovativeness in Japanese Firms: A Quadrad Analysis. Journal of Marketing, 57 (No. 1, Special Issue on Innovation and New Products ), pp. 27. Retrieved from: http://www. jstor. org/stable/3152066 [Accessed: 6 Apr 2013]. Financial Times (2013). Volvo discovers sales distortions in China – FT. om. [online] Retrieved from: http://www. ft. com/cms/s/0/82035ea2-92d0-11e2-959300144feabdc0. html#axzz2PrWHyLNI [Accessed: 7 Apr 2013]. Gatignon, H. and Xuereb, M. (1997). Strategic Orientation of the Firm and New Product Performance. Journal of Marketing Research, 34 (No. 1, Special Issue on Innovation and New Products ), pp. 78. Retrieved from: http://www. jstor. org/stable/3152066 [Accessed: 7 Apr 2013]. Herhausen , D. (2011). Understanding Proactive Customer Orientation: Construct Development and Managerial Implications. e-book] Springer. pp. 42-43. Available through: Google Books http://books. google. com. au/books? id=ggBFdtJt288C&pg=PA42&dq=customer+orientation+definition&hl=en&sa=X&ei=DNRgUf znG-yViAeXuoDICw&ved=0CDsQ6AEwAg#v=onepage&q=customer%20orientation %20definition&f=false [Accessed: 6 Apr 2013]. Pride, W. Ferrel, OC. , Lukas, B. , Schembri, S. , Niininen, O. (2012). Marketing Principles. South Melbourne, Victoria: Cengage Learning Australia, pp. 17. Volvocars. com (2013). Volvo V60 – Premium 5-door Sportswagon. online] Retrieved from: http://www. volvocars. com/intl/all-cars/volvo-v60/Pages/default. aspx [Accessed: 6 Apr 2013]. Volvocars. com (2013). This is Volvo Car Group | Corporate | www. volvocars. com/intl. [online] Retrieved from: http://www. volvocars. com/intl/top/corporate/pages/this-is-volvo-carcorporation. aspx [Accessed: 8 Apr 2013]. Volvocars. com (2013). Volvo Cars Heritage – Vintage, Retro, Classic & Heritage. [online] Retrieved from: http://www. volvocars. com/intl/top/community/heritage/Pages/default. aspx [Accessed: 8 Apr 2013].
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Сritical Analysis of Article “Volvo Eyes ‘Responsible’ Car Buyers”. (2016, Sep 28). Retrieved from https://graduateway.com/volvo-marketing/