Automotive Sector Strategy and Internationalization

The provided document is a detailed analysis of the automotive sector, focusing on its global strategy, internationalization, and key players. It includes references to various books, journals, and online sources, covering topics such as X-CAPM, digital business strategy, and the global land rush. The assignment also discusses the relationship between point in time, time to, and speed of international expansion, hybridity and globalization, product diversification, and competitive strategy. It provides a comprehensive overview of the automotive sector's strategic management and internationalization.

GLOBAL MARKETING

EXECUTIVE SUMMARY
Global marketing helps an entity to expand its business on international platform.
Mercedes Croove is a mobile based application for car rental services which is planning to
expand in UK. The automotive industry of UK have more than £71.6 billion turnover with
169000 people are employed in manufacturing concerns. The entity will target youth and
business travellers in order to take their services. It can use various promotional strategies such
as, social media platform, leaflets, flyers, etc. The distribution strategies adopted are, airport
rental locations, event sponsorship etc. It will help the company to maximize its revenue and
increase its market share in UK as well.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
(III) Business environment of the country, its competitor, market and size potential...........1
(IV) Entry mode.....................................................................................................................5
(V) Target Market...................................................................................................................6
(VI) Objective of Marketing...................................................................................................9
(VII)Marketing strategies to reach marketing objectives.....................................................11
(VIII) Recommendations......................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

Illustration Index
Illustration 1: Auto mobile sector in UK.........................................................................................3
Illustration 2: Different types of auto mobile companies................................................................4
Illustration 3: Automotive sector.....................................................................................................5

INTRODUCTION
Global marketing is an effective way to promote a business on international platform. It
helps to take adequate measures that can attract potential customers in another country
(Bharadwaj and et.al., 2013). Mercedes Croove is a mobile application based car rental company
who provides vehicles on rent for a specific period. It also takes cars from those who are not
using it frequently to further give it on rent in lieu of price as mentioned in the contract. The
report discusses potential market of Croove in UK. Further, it also focuses on marketing
strategies that can be used to promote application in UK as the target market are youngsters.
Various types of pricing and promotional strategies are suggested that can be used by the
company in order to increase its market share in UK. In the end, it ponders on distribution
strategy adopted by Mercedes Croove.
(III) Business environment of the country, its competitor, market and size potential
Mecedes Croove is an app based company which provide cars on rent for a specific
period. The facility is used by the people who do not require cars all the time and can rent it for
some days through this app. The company wants to expand in European market. European
countries are famous for their adaptability. In order to expand the market of Mercedes Croove,
UK has been chosen as an aspirant country. It will help the organization to grow and expand its
customer base. It is important that the chosen country is adaptable enough to the change and
company gets an opportunity to maximize its returns. The car rental platform is not offered by
many companies in UK which makes it a potential market. Moreover, the market values of the
customers living are simple enough that can be easily adopted by the entity. UK possess greater
proportion of young population attracting them to use a car rental app (Cotula, 2012). It will be
an easy task to promote the new application there as young audience are more adaptable to the
new things in comparison to the older one. It will be easy to make them understand the policies
and regulation followed by the Mercedes. Further, government rules and regulations in order to
enter the market are not stringent and will be easy for Mercedes to enter into that market.
UK is the central country of Europe which makes it a prime location to start a business.
The expansion of Mercedes Croove market in UK will help the company in global presence. It
will help the entity to increase its market share in the other country as well.
Competitors
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The main competitors of Mercedes Croove are auto mobile and cab service companies
running in UK. Cab services companies such as, Twelve transfers, Mason and Green, Silver fleet
transfers, Airport24, Blackberry cars, etc. These companies provide cab services all around UK
which can give tough competition to Mercedes Croove. Also, there are car rental companies
available in the market which are functioning in that market since years such as, Limo hire,
London car rentals, Resources for drivers and many others. Further, most of the people prefer to
take cab service with a driver rather than taking a sharing car on rent. The other competitive
sector is auto mobile where the customers in UK line to purchase a car rather than taking on rent
again and again.
Market potential
The automotive industry of UK have more than £71.6 billion turnover with 169000
people are employed in manufacturing concerns. There are more than 30 auto mobile
manufacturers are present in UK with more than 70 models of vehicles (Cuervo‐Cazurra, 2012).
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The industry is still growing due to increase in demand of vehicles by the people living in
UK. People in the country opt for car rental services if they are visiting to other place rather than
taking their own vehicle. There are also people who do not use their car frequently and this app
allows them to rent their car as well. It whelps to have extra earning and their vehicle also get
used.
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Illustration 1: Auto mobile sector in UK
Source: Grant, 2016

UK statistics, 2013 shows that only 13% rental companies are attracted to the cars who
are between the age of 0-2 and the interest get decreased as the age of the vehicle rises. It helps
the company to get second hand car used for few years at cheaper rate. Mercedes can have the
access to these type of cars while functioning in UK.
Size potential
There is a growth in number of cars in UK. People in UK prefer to take car rather than
walking or taking a bicycle. It helps them to commute from one place to another easily.
However, there are few people who prefer to take other modes and their vehicles become unused
for various days in between. Since, the size of auto mobile industry is growing, it will be fruitful
for Mercedes Croove to expand in UK market as it will help the company to grow its market
share. The production of vehicles is also on increasing phase which will help Mercedes Croove
to function properly and improve its sales there.
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Illustration 2: Different types of auto mobile companies
Source: Kumar, Gaur and Pattnaik, 2012

(IV) Entry mode
It is important to choose effective mode to enter in an international market. It is an
important step which decided that whether the company will be able to earn high profits and
brand image or not (Madsen and Walker, 2015). There are various entry modes that can be used
by Mercedes Croove in order to enter UK market. Some are mentioned below:
 Licensing: It is mode where the company charges fees or royalty in order to permit
another organization to use its technology, expertise and brand. It is the easiest way to
grab international market. As the organization which has already set up there have idea
about taste and preferences of the customers and it can adopt its practices in order to
promote a brand on international platform. It also involves Turnkey contracts where the
employees are given training and development programme and it is handover to the other
entity for its functioning.
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Illustration 3: Automotive sector
Source: UK Automotive, 2016

 Strategic Alliances: It is an agreement between two or more parties with same objective.
However, the entities remain independent but come together for a specific goal. It helps
the company, which is going to be set up in another country, understand the market and
build brand image.
 Joint venture: Two or more companies join hands for a common goal. During this
tenure, entities can use each other's technology, core competencies and management
skills. It helps to easily gain entry in the foreign market (Ramamurti, 2012). The
enterprise can also use each other's distribution channel, manufacturing units and research
and development factor. It will be a beneficial option for Mercedes Croove in order to
expand in UK market. It will help the entity to use other company's resources in order to
set up its business in that country. It can go for joining hands with car rental services as it
will be an effective mode to enter in international market.
Joint venture will allow Mercedes to explore the car rental market in UK and help in
making better strategies for its functioning. Also, it can be a useful way to promote the company
under the name of other entity which is already existing in UK. It is a useful measure to share
risks with the venture partner and the enterprise do not have to bear losses all alone. The
commitment between the parties have a specific time span and it does not continue for ever. The
companies involved can gradually separate according to mutual understanding.
Mercedes Croove, being new in the market, may not be aware of its potential customers
and ways in which it can approach to them. It is required to study the market first and then
decide that how the organisation can approach its potential customers by using various
promotional activities such as, social media posters, advertisement, banners. The other company
going into joint venture with Mercedes will help to increase the market share, increase
productivity, generate greater profits. It will also help in growing network to attract more
customers in order to use this service.
(V) Target Market
Mercedes Croove will select a target audience which are required to be focussed while
making marketing strategies. The company is going to target following people:
 Those passing through the area on the way to and from whistler. These will be the people
who visits the place to the maximum and make various trips from one city to another in
UK.
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 Residents within a 2.5 hour drive. It will be convenient for the company to approach
them otherwise the cost will increase to the estimated one.
 Visitors coming into the greater to UK area. It includes, students, business personnels,
professional etc. These people require roaming around the city and requires vehicle for
that purpose.
 Visitors coming into the country requires rental cars, they can be approached. These
people come to the country for sight seeing purpose and requires taking this facility for
their convenience in travelling from on place to another.
 Entrepreneurs travelling to the country for business purpose. These are the frequent
visitors can turn to be loyal customers as well. They are price adapters and are less price
sensitive then any other segment of people.
 Small business start-ups in the creative arts and recreational industry. These are young
people visiting to the city for business expansion. They travel from one place to another
and requires taking a car on rent for few days.
 Light manufacturing of adventures- related to gear, clothing. These people visit to the
country for adventure purpose. The major segment consist of youngsters.
 Creative professionals, digital technology, film, writing, and other creative pursuits. They
require travelling from one place to another in the country in search or scenic beauty.
 Students/ Educators visits UK on education tours and requires travelling a lot, within the
country.
 Young families with a passion for community, world-class recreation. It is another
segment of target market for Mercedes Croove.
 Single young professionals looking for a super – creative lifestyle mixed with
recreational pursuits.
 Urbanites looking to live away from the big-city perhaps working remotely with
occasional trips to the office(in greater Vancouver area)
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 Using the Croove app or website, renters can easily find a private vehicle in their area,
not tied to fixed-location rental stations. Owners can easily rent out their car and earn
some extra money.
 People with multiple cars can give their vehicle on rent and increase their income.
Mercedes Croove is targeting youngsters in UK therefore marketing strategies used by
the company will be different. Youth marketing technique can be used by the entity in order to
target people of age segment 16-34 years. These people can be entrepreneurs, college going
students, visitors, single young professionals etc. The entity will adopt following marketing
strategies so as to meet the needs of new market platform:
 Flyers: Mercedes can get its attractive flyers published in order to distribute them
wherever the young population is mostly found such as, coffee shops, bars, discs, outside
the school and colleges, record stores, outside the mall. Etc. It is an effective medium
where entity can make one to one contact to its potential customers (Rothaermel, 2015).
 Be interactive: Mercedes can build fascinated videos, online application and games in
order to keep the youth engaged in it. It will also attract them to use this car rental
application made by Mercedes.
 Social media platform: It is a platform used by the various companies in order to attract
youth population. Since, every single youngster is found on Facebook, instagram,
LinkedIn etc. It is the best place to catch them and promote Mercedes Croove. It will help
the entity to target large potential customers in one go.
 Make the application easy and user friendly: The customers get attracted towards easy
and user friendly app. Explaining the method of using the application in its promotional
advertisement attracts the customers to install and use it once. It will help in promoting
Mercedes Croove in better way. Convenience is another important factor that is noticed
by the young generation these days.
 Offer value: Generation of youth are attracted towards value offers. Providing them with
better discount offers will attract them ton use the app again and again. Giving
promotional and introductory offers in UK will also attract large number of customers in
one go.
 Support a cause: It is an attractive marketing strategy that can be used by Mercedes
Croove in order to attract potential customers. Support a good cause which works for the
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welfare of the society. It can be done by giving donation to the already existing one or go
for partnership with them. Foe instance, the company can set a pollution checking
criteria before taking any vehicle from the client side it will reduce emission in the
environment. It can also promote clean and green environment initiative. These
associations attract young population to invest these kinds of venture as an investor or as
a potential customer.
(VI) Objective of Marketing
Businesses are set up with the motive to capture the highest market share. Marketing
objectives are prepared in order to attract large number of customers, increase sales and provide
product and services which suits the taste and preferences of customers. The enterprise should
also be established at the right place in order to serve large number of customer. Penetrating right
kind of marketing strategy in the market defines the goals for the enterprise and set a benchmark
for all those who are working in the entity. The objective made by the company are required to
be SMART, that is, smart, measurable, actionable, relevant and time bound. It will help the
benchmark set by the enterprise prudent enough to be achieved after a certain duration (Barberis
and et.al., 2015).
Mercedes Croove is a service providing company whose objectives will define that what
is the enterprise's pathway that will lead the company to achieve long term goals. These
strategies will allow Croove to differentiate itself from the competitors. It will be able to create
Unique selling Product through this activity. There are following objectives that can be prepared
by the marketing department in order to increase the highest market share and attract maximum
customers:
 To increase the sales conversion rate by 10%. For instance, if Croove has made 40 sales
in a month when it inquired for 200. It shows that the lead conversion rate is 20%. The
company can set marketing objective to increase conversion rate upto 22%. It will help in
increasing revenue as well as customer base. It is required to take adequate measures
which will increase its presence in the country (Tsang and Yamanoi, 2016).
 To increase the revenue upto 20% from that of previous year. It will help the entity to
measure that whether the company is able to increase its presence or not. Increase in sales
revenue also states the increase ion profits as well.
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 Creating loyal customers by interacting with them through e mails and social media
websites. It makes the customers feel that he / she has been valued. The entity can
prepare a team which is solely involved in interacting with customers.
 Managing the cost effectively in order to increase profits. Preparing a budget specifying
estimated cost of marketing which is required to be followed as a benchmark by the
department. Actions should be taken by the department if major change in the variance
arise between the actual and estimated budget.
 Growing sales month by month and calculating average increase will help to assess
company's growth. Increase in sales revenue will assess the growth of the organization.
 Providing training and development to the sales person so that maximum number of
potential customers are approached and increase sales conversion rate. Every sales person
should have an increase of 5% in its leads every month.
 Choosing the location in UK in such a way that it can attract the highest number of
customers. It requires proper study of the place and average number of visitors per day.
The place that come in the budget and have the highest visitors on daily basis should be
chosen.
 Creating posters, banners and advertisement in attractive manner which can be watched
by maximum viewers. Further, checking conversion rate according to it.
 Increase in Return on investment by 15% in the second of its operations in UK. It will
assess increase in profits by the entity.
 To increase market share by 10% in its second year of operation. It will help the company
to expand and increase its sales revenue (Verbeke and Kano, 2016).
The above mentioned objectives will help the company to expand and increase its sales revenue.
These objectives are framed in such a way that Croove while expanding in UK can compare its
outcome to the year of operations. It will also help the entity to make enough space in the
country which will help it to earn enough profits.
(VII)Marketing strategies to reach marketing objectives
Marketing strategies allows the company to maximize its sales and its profits. It considers
the marketing goals and objective prepared by the entity and prepare action that can be taken in
order to achieve its goals. Effective strategies adopted by the enterprise will increase its
sustainability and competitive advantage as well. Marketing strategies are prepared for long term
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and short term activities of the business (Flick, 2015). The organization have to analyse its initial
position, based on which strategies are formulated, evaluated and selected for the entity. It
contributes towards the marketing objectives and in the end helps in achieving organizational
goals.
Mercedes Croove is planning to set up its business in UK. The marketing strategies
prepared for the company should help the entity in expansion and attract as many customers as it
can. The proposed marketing objectives can be achieved by Croove in following manner:
Product strategies
 Croove have been involved in car rental services. However, USP of the company is to
take cars who don't use their vehicle frequently and forward it on rent. It helps people to
earn an extra income from their vehicle and it also gets used as well.
 The services provided by the entity are required to be fast enough and customer should
not wait much for their rented car.
 Mercedes Croove belongs to an auto mobile industry therefore, potential customers for
the entity are those who do no have their own car and rent it for travelling purposes.
Another customers are those who do not use their cars frequently and want to earn extra
income from it (Hay and Marsh, 2016).
 Competitors of Croove either cab services companies or car rental companies. However,
no other company is available who provides rented cars of those who do not use their
cars. It acts as USP for the company is order to attract large number of customers.
 Customers get attracted towards quality services and hence, Croove should focus on it
and make sure that the expectations of the service receiver are fulfilled.
 Croove should examine the market of UK in order to asses the viability of project and
evaluate the taste and preferences of the customers so that adequate services can be
provided to them.
 UK market have various companies who are already indulge in car rental and cab
services. However, Croove requires introducing its product in such a way that it can
attract large number of customers. The service launch in UK should be effective enough
for successful implementation of the project. The service launch in UK should be
effective enough for successful implementation of the project.
Pricing Strategies
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The demand of customers is highly elastic and can vary based upon the pricing of the
product or services. To attract large number of customers, the introductory prices of Croove
should be eye catchy for the customers. In this way, entity will able to earn high revenues in its
initial phase of services. It can give introductory offers and discounts to potential customers that
will help to attract maximum customers during the entry of the entity itself. Further, it helps to
create exceptional reputation in the market as it acts as an important measure when a comes to
decision making. Croove should decide its prices based upon the competitor's pricing strategy. It
must be updated about constant pricing changes in the industry. Customers are selective enough
and hence, prefer to opt for the services which are value for money.
Croove can opt for following pricing strategies:
 Price skimming: The entity decides to opt for focussing on premium customers and
decided to keep the prices slightly high. These customers are basically early adopter and
have lower price sensitivity than other section of the society. Croove can use this strategy
in order to earn maximum return in initial stage of launch itself. It will help to increase
return on investment based upon marketing goal set by the entity (Hilmersson and et.al.,
2017).
 Penetration pricing: The entity choose to price it products slightly lower than that of
competitors that attracts major chunk of customers towards it. Croove will be able to
increase its customer base in UK by using this strategy. It attracts budget concious
buyers.
Promotion strategies
The company tend to have better promotional activities in order to increase its market
share and sales revenue as well. It is a necessity for every entity in order to bring the brand in
front and attract customers. Croove is planning to set up its business in UK which requires
attractive promotion strategy in order to persuade the customers to use its services. Some
promotional activities that can be performed by Croove are:
 Social media platform: It can promote its car rental services on social media platform.
The company is targeting youngsters and entrepreneurs whose majority is available on
social median platform. It will help the company to do direct marketing for the services.
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 Mail order marketing: This type of activity tend to attract the customers who have
decided to use the services but haven't tried it once. They can be provided with personal
information or Croove can offer first free service to them as well.
 Customer referral incentive program: Croove can encourage its present customers to
refer to new customers in lieu of it company can give incentives or cash rewards to them.
It increases the referrals and entity tend to earn higher revenues
 Posters, banners and leaflets: Croove can put posters and banners on the roads where
maximum number of visitors are found. It will help to make them aware that a new entity
is going to enter into the market which they can use to avail car rental services. It can
distribute leaflets in coleeges, outside the corporate houses and airports. It will help trhe
entity to improve its customer base in UK (Kraidy, 2017).
 Personal selling: It is an effective technique which Croove can adopt while expanding in
UK. It can appoint certain people in order to convince customers to use its services. It
helps in making seller – customer relationship and encourage sales and maximization of
profits.
Distribution strategies
Mercedes Croove is a mobile based application which is looking to expand in UK. The
company is providing car rental services and no product is involved in it. Hence, distribution
strategy of service will be quite different from that of product. The company tend to have cars on
rent from those people who do not use there car on daily bases. It will enter into a contract with
these parties in order to take ownership of their vehicle. Croove can follow the below mentioned
car rental services:
 Availability of models based on geographical region: Croove is going to provide
services in entire UK. The models of car will be made available based on customer needs
and preferences. Facilities will be made available near the airports, theme parks etc. It
will also include navigation devices and child friendly accessories. It can make
geographical plan in order to assess that how many cars will be made available in what
location. With the help of it, Croove can monitor its cost on location basis and develop
competitive pricing accordingly.
 Airport rental locations: Large number of customers who come from other countries
required car rental services in order to travel within the country. They need to access the
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cars from airport only. Croove can set up its rental facility in outside the terminal in order
to make easy access for them.
 Event sponsorship: Sponsoring an event acts as a distribution strategies for mobile
based application entity. It helps the company to directly come in touch with the
customer. They also get to see the company is closer manner which is available only in
digital form.
 Confirmation to the lender: Renting a car from customer only requires to enter into a
contract with them. The customer should also be aware that who is going to take his car
and for how much time. Croove also have to give confirmation to the one who lent her
car that its quality will not be degraded by them. Further, company also have to pay an
amount whose receipt is given to the lender. It will help the lender to trust on Croove that
he will get his car back in safe condition.
 Resale of old model: Cars are required to be replaced with the latest new model so that
effective services can be provided to the customers. Croove can incorporate distribution
strategy in order to get additional revenue from them. It can also promote older models in
towns and semi urban areas via advertising, corporate websites and print media. It will
help to sell used car and get revenues that can be invested either in purchasing new
vehicle or in investing the amount back in business.
(VIII) Recommendations
Merecedes Croove, which is a mobile based application for car rental services, can plan
to expand in UK. The company can use penetration or price skimming technique in order to earn
high revenues. The company is recommended to adopt effective promotional strategies in order
to compete with available can services and car rental companies. It can use social media
platform, posters, banner, leaflets etc. to promote Croove in the country. It is advised that
marketing strategies of the entity should act as a benchmark while working. It helps to maximize
profits with effective utilization of resources. It can also revise its strategies based on taste and
preferences of the customers. The company can penetrate itself in UK market by entering into a
Joint venture with existing car rental company on order to achieve organizational goals.
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CONCLUSION
From the above report, it can be concluded that, Mercedes Croove, who wants to expand
in UK, will to study the environment in order to understand taste and preferences of the
customers. It can further be inferred that, It will target youth and business oriented people who
travel across the country for business purpose and required rental cars. The main marketing
objective of the company is to increase its market share in UK and earn maximum returns from
the business. It will also opt for providing high quality services so that they can become loyal to
the brand. Moreover, Penetration or Skimming pricing can be adopted to attract maximum
number of customers towards the enterprise. Moreover, it can be interpreted that, it can opt for
event sponsorship, airport location services, etc. as a distribution strategy for their application. In
the end, it can resale its old car models to earn additional revenue for the entity.
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UK Automotive. 2016. [Online]. Available through <https://www.smmt.co.uk/industry-topics/uk-
automotive/>. [Accessed on 19th July 2017].
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