This document provides a marketing report on the UK new car market. It examines the market characteristics and shares of Ford and Vauxhall. The report outlines its objectives to review the market, promotional mix theory, and application of theory to Ford and Vauxhall. It utilized secondary research, primarily a 2011 Mintel report, to analyze the market and companies' use of advertising, sales promotions, and personal selling. The report concludes with strategic recommendations for Ford and Vauxhall based on its findings.

1. Group
Marketing Report
Barrie Cook - B00269412
George Michael - B00255964
Phillip Papageorghiou - B00276069

2. CONTENTS PAGE
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Page
Executive Summary 2
Introduction & Background 5
Objectives 9
Methodology 10
Theory 12
Application of Theory 19
Conclusions 25
Reference list 29

3. Executive Summary
INTRODUCTION
This report will look at the new car market in the UK and how car
manufacturers apply the key marketing area of promotional mix to market
their vehicles, in particular it will focus on two main competitors, Ford and
Vauxhall.
BACKGROUND
The UK new car market is examined and the following findings are made
 The economic recession resulted in 2008 resulted in a fall in the market
as consumers cut down on expenditure on high ticket items such as cars
 The market has started to strengthen since 2010
 Ford has the largest market share in the UK with 13.8% in 2010 and the
main competitor, Vauxhall had 12.2%
 Ford and Vauxhall have both seen their market share dip since 2007
 There is a major trend in the industry towards more fuel efficient cars
OBJECTIVES:
 Review market characteristics of the UK New Car market
 Explain the key aspects of the Promotional Mix
 Apply the theory of Promotional Mix to Ford and Vauxhall in the UK New
Car market
 Make strategic recommendations for future development by Ford and
Vauxhall in the UK New Car market
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4. METHODOLOGY
This report used secondary research, the 2011 Mintel report-Car buying UK
was the main source used for this secondary research. The following findings
are made
 Mintel is a respected marketing research company
 The information within the Mintel report was detailed, clear and had a
lot of valuable data within it
 Secondary research has limitations such as the Mintel report was 3 years
old so the information and data within may no longer be relevant
 Other sources used in the report such as information from companies
websites may be biased and unreliable
THEORETICAL AREA:
This report looks into the theory of the promotional mix and how businesses
can use the ingredients of the promotional mix to promote their products. The
benefits and any limitations to each ingredient are also examined. The
following findings are made
 Advertising, public relations, sales promotion and personal selling are
the four traditional ingredients of the promotional mix
 All four ingredients have benefits but also each has limitations
APPLICATION OF THEORY
This report looks at how the ingredients of the promotional mix are being
utilised by Ford and Vauxhall in the UK new car market. The following findings
are made
 Both Ford and Vauxhall spent large sums of money on advertising
between 2006 and 2010
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5.  Ford undertook a successful advertising campaign around the drivers of
their vehicles and Vauxhall featured the celebrity Abbey Clancy in their
advertising campaign
 Ford have a sales promotion of buy now pay later, Vauxhall offer no such
promotion but both companies offer customers finance packages to pay
up a vehicle
 Ford are the first UK car manufacturer to offer direct selling to
customers via the internet
CONCLUSIONS
The objectives at the start of the report are examined and conclusions are
drawn from the content of the report. Strategic recommendations for the
development of both Ford and Vauxhall in the marketplace are also made. The
following findings are made
 Opportunities exist for car manufacturers at the top and bottom end of
the market
 A link can be made between car manufacturers sales and advertising
budgets
 When deciding how to utilise the promotional mix companies need to
take into consideration the benefits and limitations of each promotional
mix ingredient
 Fords utilisation of the promotional mix has been more successful than
Vauxhalls and this shows in Fords greater share of the market
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6. INTRODUCTION
This report will look at the new car market in the UK and how car
manufacturers apply the key marketing area of promotional mix to market
their vehicles, in particular it will focus on two main competitors, Ford and
Vauxhall.
A definition of promotional mix is
"The specific combination of ingredients an organisation uses to promote a
product, traditionally including four ingredients: advertising, personal selling,
publicity and public relations and sales promotion" (Dibb et al,2012)
It is therefore very important that car manufacturers have a good
understanding and awareness of the different ingredients in the promotional
mix so they can promote their products effectively.
BACKGROUND
The UK car industry has been badly affected in recent years since the UK
economy entered recession in 2008, this is shown by Figure 1 below displaying
total new car sales since 2006
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7. Figure 1: Total UK New Car Sales 2006-15 (Mintel,2011)
As Figure 1 shows the UK new car market has shrunk since 2007 but it is in
recovery and is projected to increase although sales will only increase if the
economy and consumer confidence continue to improve (Mintel,2011).
According to Mintel (2011) the recession hit expenditure on high ticket items
such as cars and has only started to strengthen since 2010, also Mintel (2011)
states that recovery did start thanks in a large part to the UK governments
scrappage incentive scheme(sis). This scheme allowed drivers with a vehicle at
least ten years old to claim a cash incentive for trading in their car for a new
vehicle, the scheme ran from mid may 2009 until late march 2010 and it
tempted 400,000 drivers to trade in their old vehicles.
The Mintel report into car buying in the UK in 2011 shows that Ford has the
largest share of the UK market with 13.8% in 2010 although this is down 0.7%
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8. compared to 2007, Vauxhall are Fords biggest competitor with 12.2% of
market share in 2010 again though they have dropped 1.6% since 2007. Ford
and Vauxhall still dominate the market but both appear to be suffering from
increased competition in the marketplace, the smaller brands none of which
take up more than 2-3% of new car sales are becoming more popular with
consumers due to their low prices and wide range of models available
(Mintel,2011). It seems that consumers are increasingly trading up when
buying new cars and this is shown by brands such as Volkswagen and BMW,
which position themselves at the top end of the market in terms of price,
increasing their market share between 2007 and 2010. Volkswagen increased
its share by 0.4% and BMW by 0.3% this suggests as the economy increases
and consumers have more money available to spend there is a greater appetite
for luxury cars (Mintel,2011).
In February 2011 Mintel carried out a small sub-survey looking at the
demographics of car buyers, according to that data the demographics of key
users that car manufactures should be targeting are men aged 55+ from the
north of England and Scotland that are retired and are in the AB socio-economic
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grouping. These consumers are the most likely to purchase a new
car from a particular car manufacturer.
Main media advertising on cars peaked in 2007 at £600 million, this dropped to
£410 million in 2009 (Mintel, 2011). As the economic downturn hit sales many
companies dropped their advertising budgets by around 20% but as car sales
increased in 2010 so did spending on advertising and it moved up to £432
million (Mintel, 2011).
Figure 2 below shows Ford, who have the largest market share, also spent the
most on advertising over this period and although they have lost some of their
market share it can be argued it is money well spent. The company has
managed to gain mass market appeal and the advertising campaigns that
portray their cars as 'engineered for life' and 'built for the road ahead' have
helped attract consumers looking for reliability over style (Mintel,2011).

9. Figure 2: Cumulative spend on advertising 2006-10 (Mintel,2011)
There has been a major trend in the industry towards more fuel efficient cars
due to the cost of fuel rising, this should lead to a growth in sales of alternative
fuelled vehicles as manufactures develop technology in this area and the
government offer incentives to buy these types of vehicles as part of its
climate change commitments (Mintel,2011). According to Mintel (2011)
dealers still dominate the car market but another trend of the industry is the
emergence of the car supermarket and the internet as a channel for
consumers to purchase a car. The market has also seen a influx of low cost
brands from Asia eg Daihatsu, that offer similar performance cars but do not
have the extra features of the established mid-market brands and this could
steal further market share from the likes of Ford and Vauxhall (Mintel,2011)
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10. OBJECTIVES
To
 Review market characteristics of the UK New Car market
 Explain the key aspects of the Promotional Mix
 Apply the theory of Promotional Mix to Ford and Vauxhall in
the UK New Car market
 Provide strategic recommendations for the future development
of Ford and Vauxhall in the UK New Car market
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11. METHODOLOGY
According to entrepeneur.com secondary research can be defined as "being
market research that's already been compiled and organized for you". Reports
and studies by government agencies, trade associations or other businesses
within the chosen industry are all examples of secondary research, the
secondary research within these sources is very useful as it can contain
information and data that gives marketers a greater understanding of a
particular market. The 2011 Mintel report- car buying UK was the main source
of information and data for this report.
Mintel is an established and well respected market research company so this
report was chosen as the information and data within it should be able to be
relied upon. The Mintel Report chosen, has been presented and classified in a
way that fulfils the needs of this report to look into the car market in the UK
and how the promotional mix is adopted by Ford and Vauxhall . The data
within the Mintel Report was very detailed and helped to answer questions
such as, what market share Ford and Vauxhall had up to the year the report
was written, also the information was very clear and concise. This report
wanted to take its information from secondary research that looked at the UK
car market as a whole and had well rounded and balanced information, the
Mintel report provided that.
On the other hand some limitations were found to using the chosen Mintel
report. This Mintel report dates from 2011 and as some of the findings were
projected there might be a flaw in the accuracy of the projected values due to
factors such as the current state of the economy. From 2011 to 2014 new car
manufacturers could have appeared on the UK market and a change in market
share may have happened following initiations of marketing campaigns by
various car companies. Also consumers may have changed their approach to
evaluating and choosing a particular car and factors such as the fuel
consumption and maintenance cost may now not be as important. Since 2011
car manufacturers have brought out a new array of cars and this means the
Mintel report we used will not take into account these vehicles so the data
within it such as advertising spend by individual companies may be completely
different. Car manufacturers could have also changed their approach to the
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12. promotional mix which could have an altered impact on the competing brands
as a wider spectrum of people might have been targeted by different
companies. Also the Mintel report highlights the environment as playing an
important factor in the car industry within the UK, this could now be a much
bigger factor than it was when the Mintel report was written in 2011 as car
manufacturers are now offering a wide range of electric cars to fulfil
consumers desires to reduce their carbon footprint . The economy is heavily
linked to the car industry according to the Mintel report and any dip in the
economy may have seen car sales fall which means the conclusions in this
report may not be applicable in the current market. Other sources of analysis
for this report include advertising material directly sourced from specific car
manufacturers websites, information from companies websites will contain
bias so may not be entirely accurate. It is also possible to have bias within the
Mintel report as the contributors may have had a preference to a specific make
of car. Another unforeseeable factor that might have played a part in data
being inaccurate could be the hyperinflation of profit and expenditure
numbers by the car manufacturers themselves.
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13. THEORY
Definition
"The ‘Promotional Mix’ is identified as a part of the marketing mix. It is used to
help business promote their benefit of their product or service to their
customers" (Dibb et al,2006)
Ingredients of the promotional Mix
The Promotional mix includes the following four traditional ingredients (Dibb
et al,2006)
 Advertising
 Public relations
 Sales promotion
 Personal selling
ADVERTISING
Advertising is a very powerful variable of the Promotional mix. Advertising is
used to gain customers’ attention, attract customers’ interest, create a passion
for a product or service and then stimulate them to purchase a specific product
or service (Dibb et al,2006).
According to the American Marketing Association advertising is a defined as
“Any paid form of non-personal Presentation and promotion of ideas, goods or
services by an identifiable sponsor”
There are many opportunities to advertise a business or service, for example
adverts can be placed in newspapers, on the internet or on public transport .
Adverts can also be created for the radio, cinema and the Television and it can
be as simple as placing posters in shop windows (Dibb et al,2006).
To create a successful advertisement a company needs to have a clear
understanding of the message it wants to send to consumers and to which
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14. target audience it intends to reach and also where to reach that target
audience (Dibb et al,2006) for example advertising at a football match to target
a mainly male audience.
Benefits
According to Fill, Hughes and Francesco 2012 advertising a product or service
informs the consumers about the benefits of the product or service being sold
therefore it should decrease the number of lost customers and hopefully gain
more customers for the product or brand. The overall effect of advertising is to
raise awareness to consumers about the product and gain more customers.
Advertising helps to increase sales for that specific product or service which
helps to reduce the cost per unit of the product and help the business gain a
higher margin of profits.
Limitations
However advertising a product or service ads to the cost of the product, large
amounts of money are often needed to advertise a product. Manufacturers
look to recoup advertising costs so these costs tend to be added to the selling
price of the good which raises the price (Fill, Hughes and Francesco,2012).
PUBLIC RELATIONS
A company’s public image is the responsibility of the Public Relation team of
each company, they need to have ongoing activities to ensure that the overall
public image is strong and to help the public to understand the company and
its products (Dibb et al,2006). In Public Relations a company’s image can be
talked about in the press or the news, a company's Public Relations team
would work with members of the news media to build a favourable image by
publicizing the organisation or product through broadcast media or print.
Strategy
To gain a good public image for a company or product the companies Public
Relations team needs to have a clear idea on what message it wants to send
out to your potential and existing customers (Dibb et al,2006).
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15. When the message is clear to the Public Relations team then their job is to aim
to reinforce those messages in the mind of the public and to talk to existing
customers to find solutions to any problems they are currently facing with the
company or product (Oliver,2009).
According to Oliver 2009 when it comes to managing Public Relations it can be
time consuming and it is often easy to miss a good Public Relations
opportunity, small firms usually use the services of a Public Relation agency,
this does not need to be expensive and may pay for itself in the long term.
However it must be noted that Public Relations teams cannot be used to
guarantee results as you have no control over what is said, how and when
(Oliver,2009).
Benefits
Credibility
Consumers today are more cautious on what they are spending their money on
which is why credibility is so essential to a successful business. Consumers feel
safer if purchasing a product that is being talked about favourably by the
general public and in the media as there is less likely to be the bias that will be
in advertisements.
Cost
Dibb et al 2006 report that Public Relations objectives can be achieved at very
low cost compared to other promotional efforts like advertising. This does not
mean that public relations are not costly, it might be when marketers hire a
professional Public Relations firm to handle the work.
Image
Public Relations is not just about promoting a product, Public Relations takes
the company behind the product and puts it in the spotlight and this can help
business have a very strong public image, a positive public image can only be
beneficial.
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16. Limitations
Hard to Measure Success
Companies often find it hard to measure success of their Public Relations
campaign due to the fact that it is hard to compare and contrast impact across
publications (Dibb et al,2006).
Inaccurate Message or Storytelling
When your Public Relations team distribute a press release, it falls into the
hands of journalists, who may change it accordingly to make it a more
interesting story. The impact of this can be significant as it can be an advantage
to have a story written about your business or it can be a disadvantage if the
story is inaccurate, incomplete or misleading.
SALES PROMOTION
Sales Promotion is the set of marketing activities which are undertaken in
order to boost sales in the short term ,to achieve this the company needs to
find cost effective solutions. Sales Promotion costs less to implement but can
give a bigger increase in sales (Dibb et al,2006).
The following are the major sales promotion activities.
Consumer Promotion
Consumer Promotion strategy is aimed at consumers in order to increase sales.
For consumer Promotion these include purchase display material, In store
demonstrations, Samplings, multi pack offers and Loyalty reward programs for
your clients (smallbusiness.wa.gov.au, n.d.).
Business Promotions
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17. Business Promotions are aimed to correctly appeal to business customers, the
following can be done - set up seminars and workshops for clients, Conference
Presentations, Trade show displays, Newsletters and Events sponsorship
(smallbusiness.wa.gov.au, n.d.)
Trade Promotions
Trade Promotions are aimed at wholesalers and retailers. In order to achieve
effective trade promotions reward incentives linked to purchases or sales and
bonus stock for large quantities need to be taken into consideration
(smallbusiness.wa.gov.au, n.d.).
Sales force Promotions
In order for the staff of retailers to have an incentive they can be offered
commission on each order they manage to close and also the company may
have a sales competitions with prizes or awards for the top sellers of the
product within a specific time period (smallbusiness.wa.gov.au, n.d.).
Benefits
Gaining new customers with Price
By offering a reduced price on an item companies can lure new customers
away from competitors and turn them into regular consumers of their product
(Roddy,Cummins,2010).
Reward Programs
By giving the customers a chance to gain reward points when purchasing from
a specific store and the ability to claim prizes or discounts by redeeming those
points, this can make them more willing to purchase regularly from that store
(Roddy,Cummins,2010).
Providing Information
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18. When providing information for a new product it can make the customer more
interested in the company or brand and if a customer receives a free sample
about the new product and how it works it can help to remove any anxiety
(Dibb et al,2006).
Limitations
Time Frame
Sales Promotion typically last for a specific time period, if the promotion did
not achieve its wanted goal this could mean that the sales promotion was a
waste of money for the company (Dibb et al,2006).
Warning
If a Sales Promotion was successful competitors are more likely to imitate or
better the sales promotion in order to stop customers from being lured away
and to gain new customer (Dibb et al,2006)
PERSONAL SELLING
Personal Selling is when business uses sales force people to sell products face-to-
face with customers in order to persuade a purchase. It needs the human
touch in order to sell a product or service to a customer (Dibb et al,2006).
Products with a relatively high price tags or complex features are usually sold
using personal selling (Dibb et al,2006).
Strategy
Personal selling is all about how you approach the potential customer, first it is
important to find out why the customer is interested in your product or
service. Once this information has been gathered the salesperson should have
enough knowledge of the customer's needs and the product to potentially
close a sale (Dibb et al,2006).
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19. Benefits
Adapting to the situation
When a personal sale is taking place it is a two way communication between
the salesperson and the customer, the salesperson can change their sales
technique to adjust to each individual customer which can persuade them to
make a purchase they may not have made otherwise (Brassington,Pettitt,
2012).
Building Relations
According to Brassington and Pettitt in 2012 the nature of Personal selling
means the interaction between the salesperson and the customer can build a
relationship between them. If the customer finds the experience of buying the
product enjoyable this can lead to potential repurchases in the future. The
personal selling experience can differ from company to company so a positive
experience for customers can lead to word of mouth advertising from happy
customers to potential customers.
Limitations
Staff
The personal selling experience entirely depends on the individual salesperson
being knowledgeable, enthusiastic and have the ability to close a sale, if a
company has staff that don't have these skills it can lead to a loss of sales and
customers forming negative thoughts about the company (Dibb et al,2006).
Cost
Personal selling is very expensive due to the fact that the salespeople have
salaries and bonuses are usually put in place in order to motivate them to sell a
product (Dibb et al,2006). Sales People also need to be trained on a range of
goods and sales techniques in order for them to be able to persuade the
customer to purchase the product (Dibb et al,2006)
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20. APPLICATION OF THEORY
This section of the report looks at how the ingredients of the promotional mix
are being utilised by Ford and Vauxhall in the UK new car market
ADVERTISING
Both Ford and Vauxhall spent large sums of money between the years of 2006
to 2010 on advertising (Mintel,2011). As figure 3 outlines below Ford spent
the most on advertising and promotion in those years, closely followed by
Vauxhall. The difference in spending between the companies being £4,337
(Mintel,2011)
Car Buying - UK - March 2011 - Advertising and Promotion
Figure 3: Leading car advertisers, (cumulative spend of £50,000 or more), 2006-10
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£0
Ford 226,326
Vauxhall 221,989
Citroen 195,958
Renault 176,510
Volkswagen 174,912
Peugeot 141,097
Toyota 123,587
Nissan 107,735
Audi 94,682
BMW 84,796
Fiat 84,161
Kia 79,618
Volvo 73,686
Land Rover 69,539
Mercedes-Benz 66,711
Mazda 66,320
Hyundai 63,361
Honda 55,535
Lexus 54,554
Skoda 53,695
Source: Nielsen Media Research/Mintel
(Mintel, 2011)

21. Ford in 2009 redesigned the Fiesta and they chose 100 drivers from thousands
of entries to drive the fiesta for a year, also the company gave them free gas,
insurance and video cameras to record honest reviews of the vehicle. Ford was
trying to learn more about how they could improve the car for future
development and what did the customers actually use and how did they used
it. This campaign was called the ‘Fiesta Movement’, the driver-generated
content became the basis of the company’s TV and print advertisements
(Ford, 2014).
Scott Monty the global and multimedia communication manager and his team
developed a social media component of the ‘Fiesta Movement‘ campaign. This
helped Ford raise more than 1.8 million followers on Facebook and 206,000
followers on Twitter. These figures compare very favourably against Vauxhalls
who have 479,000 followers on Facebook and 91,000 on twitter. There is no
doubt the 'Fiesta Movement' advertising campaign caught public attention and
has proven to be very successful for Ford (Ford,2014)
In 2011 Vauxhall in order to reach a very large number of people and to tap
into a mainly male target market agreed a deal to become the lead sponsor of
all four home football associations-England, Scotland, Ireland and Wales
(Vauxhall,2014). This deal also enabled Vauxhall to reinforce itself as a British
car manufacturer that has a long heritage in the UK car market. Also to attract
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22. a younger generation of customer and appeal more to females the company
paid Abbey Clancy a British model to advertise their new Vauxhall ADAM. This
campaign was aimed towards a mainly younger active and motivated
generation. (Vauxhall, 2014)
The advertising strategies of Ford and Vauxhall have been different with
Vauxhall concentrating on football as a huge platform to advertise and using a
celebrity in adverts. Ford has used its own customers in adverts and on social
media to promote the brand which seems to be more successful as according
to the 2011 Car buying UK Mintel report Ford has the highest market share in
the UK. Although Ford has lost market share since 2007, Vauxhall have lost a
greater percentage of market share suggesting Fords advertising campaigns
are superior (Mintel,2011). Figure 4 below shows the market share of the UK
new car market from 2007-2010 (Mintel,2011)
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23. Car Buying - UK - March 2011 - Market Shares
Figure 4: Manufacturer shares of new car registrations, 2007-10
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2007
2009
2010
% point change
0 % 0 % 0 % 2007-10
Ford 349 14.5 316.4 15.9 280.4 13.8 -0.7
Vauxhall 331.3 13.8 237.8 11.9 247.3 12.2 -1.6
Volkswagen 197 8.2 161.1 8.1 174.7 8.6 0.4
BMW 121.6 5.1 98.7 5 109.4 5.4 0.3
Peugeot 146.1 6.1 102.6 5.1 109.3 5.4 -0.7
Audi 100.9 4.2 91.2 4.6 99.8 4.9 0.7
Renault 126.8 5.3 63.2 3.2 95.6 4.7 -0.6
Nissan 66.4 2.8 77.9 3.9 89.7 4.4 1.6
Toyota 118.5 4.9 102.6 5.1 87.4 4.3 -0.6
Mercedes-Benz 82.3 3.4 72.3 3.6 75 3.7 0.3
Citroen 97.8 4.1 72.5 3.6 73.3 3.6 -0.5
Honda 106 4.4 74.8 3.8 63.7 3.1 -1.3
Hyundai * * 56.7 2.8 61.8 3 na
Kia * * 50.6 2.5 56.1 2.8 na
Fiat 59.4 2.5 60.3 3 53.1 2.6 0.1
Mazda 50.9 2.1 47.9 2.4 45.4 2.2 0.1
Mini 47.7 2 39.9 2 43.9 2.2 0.2
Skoda 39.9 1.7 37.3 1.9 41.2 2 0.3
Volvo 30.1 1.3 34.9 1.8 37.4 1.8 0.5
Land Rover 46.6 1.9 29.2 1.5 37.3 1.8 -0.1
Seat 34.8 1.4 30 1.5 32.9 1.6 0.2
Suzuki 32.9 1.4 28.5 1.4 21.5 1.1 -0.3
Other 217.9 9.1 108.6 5.4 94.6 4.8 -4.3
Total 2,439.70 100 1,995.00 100 2,030.80 100 -
* not available sepa rately, inclu ded in Other Note : data may not eq ual totals d ue to roun ding
Source: SMMT/Mintel
(Mintel,2011)

24. SALES PROMOTION
According to both Car manufactures websites, Ford and Vauxhall both have
offers on new cars that give the buyer the opportunity to pay monthly for a car
rather than upfront. Ford currently have an offer which means you can buy a
new Ford in November 2014 and pay nothing until February 2015 (Ford,2014).
This allows the customer to purchase a car before the typically expensive time
of the year of Christmas and not have to worry about payments for a few
months, the company hopes this may persuade consumers to buy now rather
than wait until a later date. In comparison Vauxhall has no such offers but does
gives the buyer the option to pay a new car over 60 months (Vauxhall, 2014),
Ford also offer this option. Taking both companies sales promotion into
consideration, it can be seen that Ford are trying new innovative approaches
to boost sales in a difficult marketplace.
PERSONAL SELLING
All car manufactures rely on some degree of personal selling in order to sell
their cars. Details such as how the sales representative dresses and how the
cars are displayed in the showroom can make a difference in this competitive
marketplace. Ford have rebranded their Ford Retail group to ‘TrustFord’, by
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25. doing this they have undertaken internal and external research on how
customers purchase a new car and they believe with this new rebranding
customers will have more trust in the brand (Am-online.com,2014). Ford have
also were the first UK car manufacturer of its kind to sell cars direct to the
customers via the internet (Williams,2010). Research the company has carried
out suggests four in ten buyers want to buy their next vehicle on the internet
(Williams,2010). This is a initiative Ford believes will leave its rivals playing
catch up as they try and keep pace with the company (Williams,2010). This is a
major move away from the traditional manner of selling cars through
dealerships and personal selling, Ford has recognised how big an impact the
internet has had on consumer purchasing behaviour and has made its move to
internet only selling to stay ahead of its rivals.
Vauxhall on the other hand has kept with the more traditional model of
personal selling via its dealerships. The company hopes the expertise and skills
of the sales staff will persuade customers to buy their products. Sales staff are
offered monetary incentives to sell vehicles to motivate them to sell. Vauxhall
also gives the customer an option that they will call them back in order for the
customer to save call charges (vauxhall,2014), these simple things that a
customer might appreciate Vauxhall hopes will improve sales.
Until recently the personal selling approach by both companies has been
similar but with Ford selling direct from the internet to customers it is about to
change dramatically. Taken all into consideration Ford has again taken the lead
and an innovative approach on how they sell their cars and come into contact
with their customers, this opens up opportunities and threats but with the
research the company has carried out selling direct to customers from the
internet should see the company increasing its domination of the marketplace.
Verdict
After analysing how both companies utilise the ingredients of the promotional
mix it is clear Ford and Vauxhall have a different approach but it is Fords
approach that is more successful. Ford seem to be more innovative and have a
better understanding of what the consumers want so it is no surprise the
company is the market leader in the UK new car market.
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26. CONCLUSIONS
Conclusions are achieved by interpreting the report findings with respect to
the relevant objectives; i.e.
1. Review market characteristics of the UK new car market
2. Explain the key aspects of the promotional mix
3. Apply the theory of the promotional mix to Ford and Vauxhall in the UK new
car market
4. Make strategic recommendations for future development of Ford and
Vauxhall in the UK new car market
Review market characteristics of the UK new car market
This report found the economic recession in 2008 badly affected the UK new
car market but recent signs suggest the market is steadily improving
(Mintel,2011). According to Mintel, 2011 the marketplace in the future is going
to be heavily linked to the state of the economy. The report shows that new
trends in the market such as a move from consumers to low cost more fuel
efficient cars has seen market leaders Ford and Vauxhall have their market
shares reduced (Mintel,2011). Also it has been shown as the economy
increases and consumers have more money available to spend, luxury cars are
becoming more popular (Mintel,2011), this means there are opportunities at
both the top and bottom of the market for car manufacturers. Also it is shown
that both Ford and Vauxhall have the biggest market shares in the UK and also
spend the most on advertising and promotion (Mintel,2011) therefore it can be
concluded a link can be made between manufacturers sales and advertising
budgets.
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27. Explain the key aspects of the promotional mix
It is highlighted in the report the four traditional ingredients of the
promotional mix are, advertising, public relations, sales promotion and
personal selling (Dibbs et al,2006). The report outlines each ingredient and the
benefits and limitations each one has, it can be concluded that all four
ingredients are important tools to help business promote the benefit of their
products or services to consumers. It is found that companies need to have a
clear understanding of the promotional mix and which ingredients to use too
reach different target markets. Also a company must be aware that although
each ingredient has its benefits, all have limitations which must be taken into
consideration when deciding how to utilise the promotional mix.
Apply the theory of the promotional mix to Ford and Vauxhall in
the UK new car market
This report examined how both Ford and Vauxhall utilise the promotional mix.
It can be concluded there are clear differences in how both companies do this,
for example Ford used drivers of their vehicles in an advertising campaign
whereas Vauxhall used a celebrity to advertise one of its products. It can also
be concluded that both companies have taken the ingredients of the
promotional mix and applied them differently to their products with different
degrees of success but even so both companies are aware of how important
the promotional mix is in business. This report concludes that as Ford have the
largest market share in the UK and Vauxhall lost a bigger percentage of its
market share between 2007 and 2010 (Mintel, 2011), Fords application of the
promotional mix to its products has been more successful than Vauxhalls.
Fords 'Fiesta movement' advertising campaign was very successful and the
company built on that by increasing its profile on social media which is an area
Vauxhall are well behind Ford. The sales promotions Ford offer such as the buy
now pay later offer gives customers a bit more flexibility when it comes to
buying a Ford than consumers looking to buy a Vauxhall have at their disposal
and this is another reason why Ford is performing better than Vauxhall in the
marketplace. Finally Ford have identified there is a trend from consumers
away from buying via personal selling in the UK new car market to buying via
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28. the internet (Williams,2010) and the fact it is the first company to sell directly
to customers online shows Ford are innovative and are better placed to grow
in future in the marketplace.
Make strategic recommendations for future development by Ford
and Vauxhall in the UK new car market
To develop in the Ford and Vauxhall in the marketplace the 7ps of the
marketing mix need to be examined, these are the factors both companies
have at their disposal to develop their product offering for the market.
Product, Price, Promotion, Place, People, Physical Evidence and Process make
up the 7ps of the marketing mix (Dibbs et al,2006)
Product
Both Fords and Vauxhalls market share are under threat from low cost brands
that have emerged in the market recently (Mintel,2011). Also a big
consideration for consumers is now running costs and the environment
(Mintel,2011) so it is recommended both companies develop a low cost fuel
efficient car range that will appeal to the consumers currently buying the low
cost brands.
Price
No changes are recommended for this apart from any low cost range both
companies develop match the price of the existing low cost brands in the
marketplace.
Promotion
Ford as the market leader (Mintel,2011) are successful with its promotional
activities and should continue developing its advertising campaign and offer
promotions such as buy now pay later. This is an area that Vauxhall needs to
work on, it is recommended the company develop an advertising campaign
that promotes the product more and doesn't rely on a celebrity being central
to the campaign, also the company should think about a sales promotion
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29. similar to Fords as currently it does not offer any promotion except a finance
package.
Place
Ford is ahead of all its competitors by being the first UK car manufacturer to
sell direct to customers online (Williams,2010), it is therefore recommended
Vauxhall as a company offer this as research suggests there is a big demand
amongst consumers to purchase new vehicles this way. If Vauxhall do not take
steps to meet this need it is going to fall even further behind its main
competitor.
People
The fact that Ford now offer sales direct from the internet is also a potential
threat to the business as the customer won't be dealing directly with staff and
this could cause problems if anything goes wrong with the ordering online.
Vauxhall can use that as an opportunity to make sure all its staff excel in
service and make buying a product from Vauxhall a much more enjoyable
experience than buying from Ford. It is recommended to take advantage of this
opportunity Vauxhall puts its staff through updated customer service training.
Ford should ensure all staff that speak to internet customers via the helpline
are very knowledgeable about the products being sold therefore training is
recommended again.
Physical Evidence
No change is required for either company
Process
The process for both companies appears to be working well but Vauxhall offer
to call customers back to reduce customers phone bills (Vauxhall,2014) and
this extra service can mean the difference between selling a car or not. It is
recommended Ford offer a similar service or risk giving Vauxhall a competitive
advantage in the marketplace.
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31. Vauxhall, (2014). Vauxhall Official Site. [online] Available at:
http://www.vauxhall.co.uk/ [Accessed 31 Nov. 2014].
Williams, D. (2010). Ford is first car manufacturer to sell its cars on internet -
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