Discuss about the Global Business Marketing for Business Planning.
Global business marketing refers the selling of products in the international market. Therefore, an organisation requires to include an effective procedure of business planning, producing, marketing and promoting their products in the global market. As per the statement of Ferraro & Brody (2015), it can be stated that global marketing is benefitted for the products.
This study will highlight how Mercedes Smart fortwo, Germany will meet the individual’s requirement in the target market. Mercedes Smart, Germany has planned to expand their business in the market of Australia. In this context, this study will conduct the strategic analysis of Australia.
Daimler Ag is a German multinational automotive company, whose headquarter is at Stuttgart, Baden- Wurttemberg, Germany. Daimler AG is the manufacturing organisation of Mercedes Smart fortwo (daimler.com). Daimler AG is the thirteenth largest car manufacturer automobile organisation.
Mercedes smart fortwo is a new smart third generation car. This car has two seats and two doors. The designing of this model reflects good balance between thee mind and the heart of the users. The design of Mercedes smart for two is familiar as “FUN.ctional”. It is known that automobile industry in Germany is most competitive and innovative within the world. Therefore, it can be mentioned that the employees of this country will be able to meet the Australian consumer’s requirement.
Research shows that the consumers of Australia are willing to be comfortable during their journey. As a result, Mercedes smart fortwo will provide all the level of comfort to the consumers. Hill, Cronk & Wickramasekera (2013) opined that Australia has been suffering from huge pollution and the government has restricted the usage of car. In this point, it can be observed that carbon emission from the engine of this car is very less. It emits 119 grams carbon per kilometre.
On the contrary, Vercellotti & Vercellotti (2016) argued that Australia is famous for the manufacturing of large sized passenger vehicles. Therefore, consumers are willing to purchase small sized cars. Australia is not usually produced small sized cars. Therefore, the demand for the small car for the use of personal usage has been increasing in Australia. This also proves that in case of expanding the business of Mercedes Smart fortwo, the company will get the success in their business.
On the other hand, in case of launching this product in the other country, Mercedes smart fortwo has determined that they will charge affordable price from the consumers. By doing so, the management will be able to occupy a large portion of market in Australia. They set $ 15000 for this model. Mercedes smart fortwo has made a grand success in Europe. Furthermore, report shows that monthly purchase of vehicles for the personal use has been increasing in Australia since 1988, which can be noticed in the following chart:
Figure 1: trend of purchasing of cars in Australia
(Source: Cavusgil et al., 2014)
From the above figure it can be observed that the trend of purchasing cars have been increasing with the passage of time. This proves that the consumers are willing to purchase the small sized cars. Therefore, if Mercedes smart fortwo will expand their business in the market of Australia, the Merecedes manufacturing company will be benefitted.
In order to discuss the strategic analysis of Australian automobile industry, the economical, political, social environment of the target market is required to understand.
According to Rittenburg (2016), economical factors of target market are associated with the exchange rate and global economic growth of the host nation. As a result, larger amount of revenue restrained even in case of lower demand compared to the supply. On the other hand, due to the rise of inflation in the world market, has increased the price of the cars. On the other hand, the price of the fuel is depending upon the price elasticity of oil. Therefore, high price of oil leads to the fall in demand in Australia. In this situation, the demand for Mercedes smart fortwo will be decreased (Data.worldbank.org 2017).
Political factors refer the major law and regulations of Australia, which reflects an organisation in case of expanding their business in the Australian market. In the words of Aronczyk (2013), the laws and regulations are brought up around the environmental measurement, which are required to fulfil to the automobile company. On the other hand, government of Australia also impose tariff in case of trading of cars from Germany. This would protect the country’s exporters from the international trade. In this point, Adekola & Sergi (2016) mentioned that the automobile requires to set affordable price of their product, so that after tax imposition, the price of the importable cars would not be increased highly.
Based on the demographic condition and standard of living of Australia, the purchasing pattern will depend. The income statement of the consumers will directly make an effect on the purchasing behaviour. However, it can be noticed that increase the interest regarding the small sized cars has been increasing within the country. As a result, the revenue earning by the organisation will be increased. This will in turn increase the GDP of the target market.
Mercedes has the opportunity in case of providing the more environmental products, such as higher fuel efficiency cars. Therefore, Rittenburg (2016) cited that business sustainability will be increased through the improvements in organisation’s process efficiency in this country.
The major competitors of Mercedes Company in Australia are such as Iveco and Elfin. They are small car manufacturing company of Australia. In the year of 1983, Elfin first manufacture junior models of the cars. They are specialised in the production of small sized cars. On the other hand, Iveco has the specialisation in the manufacturing of small sized semi trucks.
Figure 2: Revenue earning
(Source: Created by author)
In order to make the business successful in the Australian market, Mercedes requires to consider the income statement of the consumers In addition, they also consider the ability to pay of the consumers, competitors action, target market condition in case of expanding the business. Therefore, it can be recommended the car manufacturing company requires to set penetration pricing policy in order to gain the market (Adekola & Sergi, 2016). As the demand is high for this car in Australia, therefore, Mercedes has planned to charge higher price for the products initially and then with the passage of time, the price of the car will be decreased.
Mercedes smart fortwo has planned to distribute their products in Australia to the wholesalers. It is not possible to sale the products to the consumers directly. The wholesalers will sell the cars directly to the customers. As the demand for this smart car is higher in Australia, therefore, the management of Mercedes Smart fortwo will not be able to communicate individually with the consumers, therefore, they take the help of the wholesalers (Adekola & Sergi, 2016).
Moreover, Aronczyk (2013) mentioned that in order to market the product in Australia, Mercedes requires to take the help of media, social networking sites for the purpose of advertisements. The effective promotional strategy such as providing innovative offer can increase the sales of the company.
Conclusion
The major concern of this study is to market Mercedes smart fortwo car in the market of Australia. Therefore, the company requires to first identifying the political, environmental, economical and the social factors in Australia, which can affect the organisation in case of expansion. The organisation also requires to follow penetration pricing policy in order to occupy the market.
References
Adekola, A., & Sergi, B. S. (2016). Global business management: A cross-cultural perspective. Routledge.
Aronczyk, M. (2013). Branding the nation: The global business of national identity. Oxford University Press.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Ferraro, G., & Brody, E. K. (2015). Cultural Dimension of Global Business. Routledge.
Helm, R., & Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets. International Business Review, 23(2), 418-428.
Hill, C. W., Cronk, T., & Wickramasekera, R. (2013). Global business today. McGraw-Hill Education (Australia).
Rittenburg, T. L. (2016). Cowboy Ethics: Marketing Gimmick or Business Ethics Tool?. In Thriving in a New World Economy (pp. 31-35). Springer International Publishing.
Vercellotti, S. V., & Vercellotti, J. R. (2016). The development of a global small chemical business with international marketing and outreach. In Chemistry without Borders: Careers, Research, and Entrepreneurship (pp. 147-156). American Chemical Society.
Wild, J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education Limited.
GDP per capita (current US$) | Data. (2017). Data.worldbank.org. Retrieved 31 January 2017, from https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=AU-IM
(2017). Retrieved 2 February 2017, from https://www.daimler.com/company/
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