Situational Analysis and Target Market of Mitsubishi Motors

This report provides a detailed analysis of Mitsubishi Motors, including its strengths, weaknesses, opportunities, and threats. It also discusses the target market and decision-making process, social and psychological factors affecting buying behaviour, and recommendations for improvement.

REPORT

REPORT :1
Contents
Introduction................................................................................................................................2
Situational analysis of Mitsubishi Motors..................................................................................2
Strength...................................................................................................................................2
Weakness................................................................................................................................2
Opportunities..........................................................................................................................3
Threats....................................................................................................................................3
Target market.............................................................................................................................3
Target Market Decision Making Process...................................................................................4
Social factors affecting buying behaviour..................................................................................4
Psychological factors that influence buying behaviour.............................................................5
Personal factors affecting customer behaviour..........................................................................6
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................10

REPORT :2
Company background
It is recognised as sixth largest automobile manufacturer in Japan and sixteenth in the world.
The corporation`s subsidiaries are diverse organisation that are engaged in wide variety of
actions and activities on a global level. Mitsubishi motors is headquatered in Tokyo
(Mitsubishi, 2017). The mission is to provide new customers with creative service. The vision
is to create vibrant society that realise the potential of mobility. In 2017, the market share was
lying approximately 103.686 and nearly it remains from 55 percent to 60 percent (Mitsubishi,
2017).
1. Situational analysis of Mitsubishi Motors
PESTLE analysis
Political factors  The Japan’s government has limited
the number of cars that slowly effect
the sales.
 The government is interested in
attracting foreign organisations to
invest in Japan (Mitsubishi, 2017).
 Legal framework, risk of invasion,
intellectual property, and trade
regulations affects before entering in
a particular market (Mitsubishi,
2017).
 Pricing regulation due to
government enforcement can be a
regulatory mechanism for

REPORT :3
automobile industry.
Economic factors  Investing and selling in Japan will
not add to the cost of extra tariff.
 Petrol cost had to accommodate for
market to bring economical cars in
market.
 As Japan is very prone to natural
disasters and it erodes the
purchasing power.
 Inflation decreases the purchasing
power of the population due to
fluctuation in currency.
 Discretionary income,
unemployment rate and business
cycle stage affects the operations of
Mitsubishi Motors.
Social factors  USP of Mitsubishi is easily modified
as per the performance (Durmaz,
2014).
 Social dynamics is comprised of
urbanisation, demography, rate of
growth and social preferences that
fluctuate the sales.
 Demographics and educational skill
set level of people around (Durmaz,

REPORT :4
2014).
Technological factors  Technology has evolved taxi
industry very conveniently
(Tanriverdi, & Uysal, 2015).
 Uber and Ola is dominating the fast
moving automation.
 Electronic car revolution, which is
disrupted by Tesla, will have greater
effect on manufacturing (Tanriverdi,
& Uysal, 2015).
Legal factors  Anti-trust law in money banks affect
the competitive edge of Mitsubishi
Motors.
 Health, safety, employment, patent,
and intellectual law leads when it
considers entering in new market
(Mitsubishi, 2017).
 Mitsubishi motors has to analyse
some partnership policies,
copyrights, and patent issues. This is
important to know the procedure of
registering the organisations at
different location.
Environmental factors  External ecological concerns such as
low-carbon trend, climate changes,

REPORT :5
and reduced oil reserves affect the
business.
 Even if the operations of the
company do not affect the
environment, it has to consider and
take care of its surrounding.
 Enough resources can flourish the
automotive industry (Mitsubishi,
2017).
 Japan is mostly suffered by the risk
of natural resources and it takes time
to grow the resources again.
SWOT analysis
Strength-
 The biggest strength of Mitsubishi
Motors is that it is customer-centric
which focuses on customers.
 The company has strong presence in
Asian market especially in Japan.
 The high growth rate is assisted by
diversification in market and
industry (Chen, Kim, & Yamaguchi,
2014).
 The company has started
manufacturing electric cars. The
Weaknesses-
 Even when it had taken many
initiatives to transform its previous
image, which is still seen as old and
expensive.
 Company have excessive
dependency on its domestic market.
 Most Mitsubishi products lack space
means it has smaller cars in sedan
and SUV category (Shehzad,
Ahmad, Iqbal, Nawaz, & Usman,

REPORT :6
company enjoys the advantage for
good advertising and branding.
 Mitsubishi Motors offer a wide
range of products from SUVs to
sedan to motorsports.
2014).
 Mitsubishi motors is affected and
suffered by Asian crisis and fuel
mileage issues.
Opportunities-
 The company has the opportunities
to develop factory automation
outside Asia and other geographical
areas.
 Smart energy system and electric
appliances present a market to
Mitsubishi to expand into new
sectors.
 It have increased the demand of
elevator infrastructure.
 By alliancing with automobile
manufacturer, it will easy to enter in
other country.
 By developing the hybrid and fuel-
efficient cars, future sales can be
boosted due to Mitsubishi
operations.
Threats-
 The company faces immense
pressure from Chevrolet, Toyota,
Nissan, Hyundai etc.
 The company faces threat from the
increasing cost of fuel and other
material practises (Grigolon,
Reynaert, & Verboven, 2018).
 Many factors in environment are
detrimental to business growth.
 Government policies in the
automobile sector differs among
different countries.
 Intense competition from the global
brands can reduce the revenue of
Mitsubishi.

REPORT :7
2. Target market in Singapore Be very specific but choose what is relevant
Demographic- The company has different market segments for its vehicles, which it offers
such as Micro car, family car, sports car, premium car, compact car, and road off. The current
target market caters the niche market that considers (Generation X and Y). The company
focuses on middle-classed and high-class income people with active lifestyle.
Psychographic- This strategy help the company to segregate and classify the consumers on
the basis of population lifestyle. The company identifies the perception of the customers
regarding hybrid cars. Hybrid cars such as outlanders.
Behavioural- Moreover, the company has focused on tech savvy people of the market. The
brand tries to create a standout image in the market with hot product designs that looks
sporty, masculine, and youthful. The company targets young and diversified people. The
company has efficient target market for its newly designed product that are called Outlander
PHEV and also it has a range of characteristics that give a high level of comfort.
Geographic- the company has selected different countries such as US, Australia, and japan
in which it offers. The demand for hybrid cars has been increasing. People are looking for
fuel-efficient vehicle with an aim to reduce transportation cost. The company adopts
segmentation strategy to fulfil the demands and needs of specific country.
3. Target Market Decision Making Process
It is the aim of the organisation to penetrate the heads of the consumers. This process figures
out how consumer make decisions and reach to finalise the decision to purchase a product.
Below are the five steps decision making process-
3.1a- Problem / Need recognition- The steps include recognition of problem; searching the
appropriate product that can best meet the need, compare the available brands of automobile

REPORT :8
including the trait which company or brand that provides most comfortable car with least
price because the market do not lack substitute goods and alternative brands.
3.1b- Market included- While going through retail factors and process of purchasing, the best
price-based car in Mitsubishi ranging between 5-10 lakh can be Mitsubishi Lancer and Cedia,
ranging between 15-30 lakh can be pajero and so on (Lee, Chang, Lin, & Cheng, 2014).
3.1c- New stage in life- The consumer evaluate all the car brands that can satisfy needs and
they have begun to get the best deals.
3.2- Information search- Today consumers have many sources through which it can gather
information while purchasing vehicles. The customer started relying on fewer sites and focus
more on manufacturer. C2C websites and less on third-party information sites and e-tailer
sites. Outlanders of Mitsubishi offers an array of features without being most expensive, a
three-row vehicle. It also undertakes status symbols while purchasing a car.
3.2a- Level of risk- The Mitsubishi Motors arrange its raw material from number of suppliers.
Any fluctuation in manufacturing cost of Mitsubishi Motors due to changes in supply,
demand, and different market condition that affect the operating results and financial
position.
3.2b- Level of product/knowledge- consumer should have the knowledge of convenient
features and how it delivers great mileage and offers mobility. The body style and certain
mechanical features allow the manufacturer to target the right population.
Quality of information- Internet has enabled the customers to look at the reviews, compare
prices, and finally choose the product.
3.3- Evaluation

REPORT :9
3.3a- List of evoked set and why- Apart from Mitsubishi, a consumer analysis the attributes
of each car brand under a specific brand that brings competition to Mitsubishi such as
Chevrolet, Fiat, Nissan Motors, Hyundai motors, Volkswagen, Tata Motors. In the list of
Mitsubishi, customers decide their evoked set according to their budget. It includes Eclipse
Cross, Lancer, Mirage, Outlander, Outlander sport, Xpander and Pajero. Each of them has its
own features.
3.3b- Compensatory and non-compensatory rules- Individual follow the alternative strategies
and other decision rules that considers utility maximisation and raising doubts. Making
decision can be non-compensatory even when good performance for one-evaluation criteria
does not compensate the poor performance (Citeman, 2010).
3.3c- Rational, emotional or cognitive- Emotions plays an important role in purchase decision
making. The criteria involves love, sentiments, pride, vanity, and entertainment. For
emotional purchase decision, the needs do not necessarily matter. Rather, it is created by
external sources (Hellenkemper, 2017).
3.4- Purchase- A person who has a limited sum of money and can buy only one car rely on
Mitsubishi Outlanders. Many families today buy a vehicle, which aims to get best thing that
he can afford (Managementstudyguide, 2018). Moreover, the web has become standard
resource that affects the shopping process for 90 consumers out of 100.
3.4 a- Availability of substitute products- Competition always provide a range of products
and cars from other maunfacturers.
3.4 b- Retail factors- Retail factors are already included acceptance from internet sources,
age, buying habits, disposable income levels affects the purchase decision of Automobile.
3.5- Post purchase evaluation

REPORT :10
3.5a- Undoubtedly, customers thinks before buying and also considers reviews from the near
ones but it is necessary that this will drive to happiness always. Sometimes, the customer
might not get a level of satisfaction due to catering of damaged product and post purchase
experience can be bad.
3.5b- While dealing with post purchase cognitive and handle consumer and marketers view
should be taken in positive way
A suggestion for improvements should be taken in positive way. A company should take
feedback after the customer have used it at least for six months.
4. Social factors affecting buying behaviour
A high-class person would think of car that can represent his status symbol and also the
sports car that looks according to young preferences such as Mitsubishi Proudia is a
sophisticated car and positioned as a flagship dignified in company`s range (Armstrong,
2018).
4.1- Family - Every individual is influenced while deciding what he need to buy especially
car or building. Co-worker, family member, seniors at the workplace, friends, and neighbours
are some of the references groups (Tanner, 2018).
4.2- Social class - Apart from references group, primary groups include relatives, family
member, and friends. For example- a friend who influences one’s behaviour and if he
recommends a car or even buying behaviour is affected if most of friend group purchase a
same car. A married man would always show a strong inclination towards buying product
that would benefit not only himself but also the family (Marketing Wit, 2018). Many social
factors influence consumer purchasing behaviour and the factors are- Reference groups,
relative groups, role in society, and immediate family group.

REPORT :11
5. Psychological factors that influence buying behaviour
There are many theories and factors that influence buying behaviour such as motivation,
Maslow`s hierarchy of needs, and learning and socialisation. Inclusive of these factors, there
are small and consumer affecting factors.
5.1- Motivation- Motivation is an activated internal state of leading an objective-oriented
behaviour that satisfy need. If the marketers know well and succeed in creating motivation
that would affect the internal stimuli and able to form marketing tactics to affect customers.
During the last purchases, a friend may be very glad who suggests the goods and services as
priority, which influences the recent purchase of potential customers. Maslow`s theory of
motivation suggests that basic human needs are arranged in an hierarchy from initial (basic
needs) to higher levels.
5.2- Perception- Sometime markets use reinforcement to provide good product performance,
rewarding experiences, and post-purchase services. Social interaction among friends may
enforce them to acquire, reward, and due to these marketers take advantage of employing
people who are outspoken and spokespeople that have a strong credibility with the target
consumers (Durmaz, 2014).
5.3- learning- The level of hierarchy starts with the realisation of physiological needs, which
are the most basic needs such as food, sleep, and warmth. Step by step, a stage is attained
when a person set his or her social needs and these may enforce him to buy a car as per his
status (Durmaz, 2014).

REPORT :12
(Source: Marketing Wit, 2018)
6. Personal factors affecting customer behaviour
Many personal factors influence buying behaviour such as age, income, occupation, and
lifestyle. While considering the personal factors, it also includes reliability, price, fuel
economy, and safety.
6.1- Personality- Consumer rank their preferences and factors, which affect vehicle choice for
example- young respondents are likely to rate the ability to search information on internet.
Moreover, women tries to rate most factors which a men do such as cash-back incentives,
low financing, fuel economy, additional warranty coverage, and environmental issues
(Business jargons, 2018).
6.2- Age- Older and aged consumers tend to emphasis on safety concerns for their children
and young people. Moreover, demographic factors such as gender and age that accounts for
variances. The occupation also influences the buying behaviour for example- the product
choice may differ among different professionals whether it is lawyers, businessperson,
teacher, and doctor (Business jargons, 2018).

REPORT :13
Importance of several factors of customers while choosing vehicle
(Source: Armstrong, 2018)
Marketing strategies recommendation (4P`s)
Product
Although, Mitsubishi`s workforce works to build its strength in four wheel drive and sport
utility vehicles. The company invest more in research and development to expand the product
line and launch new car models. To move towards the sustainable growth, boosting the sales
is necessary. The company has to move forward aggressively to product development and
launch new products as per the consumer`s needs. The company should enhance the brand by
more robusting the marketing strategies (McDonald, & Wilson, 2016). The company can
introduce new models with improved technologies to retain new customers in the market. The

REPORT :14
company should adopt innovative security features to upgrade the models of hybrid, which
will help to satisfy the changing needs of customers (Claudy, Garcia, & O’Driscoll, 2015).
Apart from improving the product quality especially where the market is highly competitive.
The company should buy raw material from renowned automobile suppliers and
manufacturer. In addition to this, a company should adopt JIT (just in time) order approach to
improve product quality (Martin, 2014). The company started the shipping operations as the
core business and is diversified in related fields. Company is indulged in organisations such
as warehousing, banking, and insurance. Mitsubishi Motors is a multinational company that
have handles in modernization of Japan automobile industry.
Price- Intense competition in the automobile demands to attain competitive advantages so
that a company can stand out from the competition. Increased competition have made tough
competition in sales incentives and other effective publicity campaigns that indispensably
promoted sales and retain market share. Mitsubishi should understand how serious operating
results have affected operating results and the financial standing of Microsoft Management
Console group (MMC). Moreover, the company should improve its supply of new products
and respond to customers on timely basis (Tanriverdi, & Uysal, 2015). The pricing strategies
differ from product to product. The pricing starts from 28.20 lakhs for the low priced car
named as Pajero sport and goes up to 32.27 lakh for the latest and topmost model “Mitsubishi
Outlander.” Mitsubishi pajero has a good quality, come with dual tone, and has a black pillar
with roof (Zigwheels, 2018). Economic conditions and market trends are two important
factors that affects pricing policies. The company has the effective management team that eye
on several competitor`s price with customer`s ability of spending a particular amount. It has
various products in portfolio and have different pricing strategies. Some of the products such
as luxury vehicles have premium pricing that have value-added policies.

REPORT :15
Place- Mitsubishi Motors give a wide range of dealers in international market that helps the
company to distribute cars. Consumers visit show rooms of the company to purchase the
products. Mitsubishi Group has forty companies, which have individual recognition even
without a parent company (Martin, 2014). Mitsubishi is a globally giant with regulating the
operations in other countries and it has established plants and extended distribution policies
in the world. Mitsubishi places emphasis on dealership and distribution channels that has
impact on fast and effective services for product sales. Technology plays an important role in
distribution policy of customer products that comprises of wholesaler, retailer with proper
warehouses and transportation facilities (Martin, 2014). Mitsubishi group has approximately
40 companies that all have individual identities even without a parent company. Each
company have substantial amount of market share but does not run interference in running.
The company is global giant with operation in various countries and it has manufacturing
plants and distribution channel policies in the world (Mindtools, 2018).
Promotion- the Company should consider providing promotional offers in order to get
competitive advantages. Mitsubishi should increase and offer discount offers to attract the
customers. The company can provide free car accessories to increase the value of its
products. Several car accessories such as car cover, cleaning accessories, seat cover attracts
the customers that how obliged the company is to provide basic requirements of car
(Mindtools, 2018). With an aim to gain competitive advantages, Mitsubishi should introduce
Hybrid cars in international market. On the other hand, the demand for the hybrid product has
increased. In order to promote the sales of Outlander PHEV, the company should consider
internal organisational process. As a recommendation, company should launch new model of
hybrid cars. In order to attain competitive advantage, the company can conduct online
advertisement. This mode of advertisement can reach consumers globally that help company
to reach potential customers. Mitsubishi should take initiates towards conducting social

REPORT :16
media advertisements to target the customers. The company should make family videography
and banner advertisements as a part social media campaigns. The company should reduce the
size of its videos to attract more visitors as advertisements can be given even before YouTube
videos (Mindtools, 2018).
Conclusion
From the above discussion of several factors that affect the marketing strategies, it can be
said that social, psychological, and personal factors have high influence on buying behaviour
of customers. While concluding above the marketing concerns of Mitsubishi,
recommendation becomes an important part. It is important to identify the target market,
which differs as per the model and its designing. The process of identifying potential
customers and decision-making process of target market is important to be considered. As a
recommendation, the company has to make its products as per the changing demand of the
customers.

REPORT :17
References
Armstrong, M. (2018). Most important factors when purchasing a car. Retrieved from:
https://www.statista.com/chart/13075/most-important-factors-when-buying-a-car/
Business jargons, (2018). Personal Factors Influencing Consumer Behaviour. Retrieved from:
https://businessjargons.com/personal-factors-influencing-consumer-behavior.html
Chen, W. M., Kim, H., & Yamaguchi, H. (2014). Renewable energy in eastern Asia:
Renewable energy policy review and comparative SWOT analysis for promoting
renewable energy in Japan, South Korea, and Taiwan. Energy Policy, 74, 319-329.
Citeman, (2010). Non-compensatory decisions rules. Retrieved from:
https://www.citeman.com/11867-non-compensatory-decisions-rules.html
Claudy, M. C., Garcia, R., & O’Driscoll, A. (2015). Consumer resistance to innovation—a
behavioral reasoning perspective. Journal of the Academy of Marketing
Science, 43(4), 528-544.
Durmaz, Y. (2014). The Impact of Psychological Factors on Consumer Buying Behaviour
and an Empirical Application in Turkey. Asian Social Science, 10(6), 194-204.
Grigolon, L., Reynaert, M., & Verboven, F. (2018). Consumer valuation of fuel costs and tax
policy: Evidence from the European car market. American Economic Journal:
Economic Policy, 10(3), 193-225.
Hellenkemper, M. (2017). Emotional VS rational purchases- How social media triggers
consumers` buying decisions. Retrieved from:
https://blog.influencerdb.com/emotional-vs-rational-purchases/

REPORT :18
Lee, Y. K., Chang, C. T., Lin, Y., & Cheng, Z. H. (2014). The dark side of smartphone usage:
Psychological traits, compulsive behavior and technostress. Computers in human
behavior, 31, 373-383.
Managementstudyguide, (2018). Social factors affecting consumer behaviour. Retrieved
from: https://www.managementstudyguide.com/social-factors-affecting-consumer-
behaviour.htm
Marketing Wit, (2018). 4 Key Factors That Influence the Buying Decisions of Consumers.
Retrieved from: https://marketingwit.com/factors-that-influence-buying-decisions-of-
consumers
Martin, (2014). Understanding the Marketing Mix Concept – 4Ps. Retrieved from:
https://www.cleverism.com/understanding-marketing-mix-concept-4ps/
McDonald, M., & Wilson, H. (2016). Marketing Plans: How to prepare them, how to profit
from them. US: John Wiley & Sons.
Mindtools, (2018). The Marketing Mix and the 4Ps of Marketing. Retrieved from:
https://www.mindtools.com/pages/article/newSTR_94.htm
Mitsubishi, (2017). Annual report, 2017. Retrieved from: https://www.mitsubishi-
motors.com/content/dam/com/ir_en/pdf/anual/2017/annual2017.pdf
Shehzad, U., Ahmad, S., Iqbal, K., Nawaz, M., & Usman, S. (2014). Influence of Brand
Name on Consumer Choice & Decision. IOSR Journal of Business and Management
(IOSR-JBM), 16(6), 72-76.
Tanner, J. (2018). Psychological Factors That Affect People’s Buying Behavior. Retrieved
from: https://2012books.lardbucket.org/books/marketing-principles-v1.0/s06-04-
psychological-factors-that-aff.html

REPORT :19
Tanriverdi, H., & Uysal, B. V. (2015). When IT capabilities are not scale-free in merger and
acquisition integrations: how do capital markets react to IT capability asymmetries
between acquirer and target?. European Journal of Information Systems, 24(2), 145-
158.
Zigwheels, (2018). Mitsubishi Cars. Retrieved from:
https://www.zigwheels.com/newcars/Mitsubishi