Bucks New University: Strategic Marketing Report on Tianjin FAW

This report, prepared for Bucks New University's Strategic Marketing module, analyzes the potential for Tianjin FAW, a Chinese automobile company, to launch its Xiali Luxury Sports Utility Automobile in the UK market. It begins with an executive summary that provides a concise overview of the report's objectives and findings. The report then delves into a detailed PESTLE analysis to evaluate the political, economic, social, technological, environmental, and legal factors influencing the UK market. Furthermore, it explores various modes of market entry, market segmentation strategies, and target buyer profiles. The discussion section incorporates Porter's Generic Strategies to determine the best competitive approach for Tianjin FAW, with a specific focus on the focus strategy. The report concludes with recommendations for Tianjin FAW to successfully enter and compete in the UK automobile market.

Running Head: MARKET STUDY FOR NEW PRODUCT OFFERING
Market study for new product offering
Name of the Student
Name of the University
Author’s Note

1MARKET STUDY FOR NEW PRODUCT OFFERING
Executive Summary
The very sole purpose of this report is to evaluate each of the available alternative option and
select the best marketing strategy with regard to the assistance of the marketing advisor
addressed as the 'Ashanti Marketing Solutions (AMS)'. It is a marketing advisor that provides
market related guidelines and advices to the start-up firms. Taking into consideration the market
issue as of which of the product segment to be targeted and which product is required to be
introduced, the advisory firm Ashanti Marketing Solutions (AMS) make efforts by
recommending the Chinese company named as Tianjin FAW. It is one of the leading company
within the region of the china, it is an automobile company. The advisory company proposed to
bring the automobile segment of Xiali Luxury Sports Utility Automobile within the region of
the UK. However, before suggesting so a proper evaluation of the international market was
undertaken in regard to the business prospects available for the automobile company. A through
audit was undertaken by the advisory firm. The various market risks were thoroughly evaluated
from each of the various possible perspectives. By means of the Tianjin FAW's activity in
Britain, various marketing activities were studied and evaluated in terms of the corporate
environment.

2MARKET STUDY FOR NEW PRODUCT OFFERING
Table of Contents
Introduction...............................................................................................................................................3
Tianjin FAW PESTLE Model:.................................................................................................................4
Modes of market entry:...........................................................................................................................11
Market segmentation and target buyers:...............................................................................................14
Discussion.................................................................................................................................................16
Porter's Generic Strategies-....................................................................................................................16
Focus strategy-..........................................................................................................................................18
Conclusion................................................................................................................................................19

3MARKET STUDY FOR NEW PRODUCT OFFERING
Introduction
The report findings include the strategic marketing standards which are accepted by
corporate marketing, and which helps in setting the structures equipped for upgrading their
general income and return on investment (ROI). The firm carried on the business activities in
accordance to a leading and reputed Chinese Automobile Company within the region. The
business firm makes use of innovation and development to be successful in penetrating within
the Great Britain automobile sector. To penetrate the market and to cope up with the present
market pattern Tianjin wandered into a sport utility vehicle as it set to present.
The plan is to bring about a new innovative product that will be known as the Xiali
Luxury Sports Utility Car within the region of the UK market in the year of 2018 -2019
budgetary year. To meet the marketing targets the and the various objectives, the firm needs to
know different market operation tasks, regulation and marketing forms preceding the starting
function. To penetrate the market, there is a need for an adequate amount of market-related
information’s for which the firm takes the help of a marketing advisory firm addressed as the
Ashanti Marketing Solutions (AMS).
The use of the marketing tools such as the PESTEL analysis tool will be undertaken, the
study of the various market segment will be undertaken to find out the most suitable segment of
the market to introduce the business. Finally, the use of the PORTER’s generic methodology will
be used in order to undertake survey as of which one may be suitable for the organisation to
acquire competitive advantage.
However, the business surrounding of the automobile based Tianjin FAW company was
audited with the application of the PESTEL analysis. This marketing model helps in evaluating

4MARKET STUDY FOR NEW PRODUCT OFFERING
the political, economic, social, technological, environmental and legal aspects of the business
environment in the UK. However, the various threat and opportunities that lie in the hand of the
company are also being evaluated. Making use of Porter's Generic strategic theory, the
researcher undertakes measures to investigate the effect of marketing strategies on the launching
activity of Tianjin FAW within the region of the UK market (Faw 2017).
Tianjin FAW PESTLE Model:
Within the region of the UK market, the PESTLE analysis outlays the various facts which
may exude from the external forces around a business activity particularly while operating
abroad. This model is primarily used for evaluating the political, economic, social, technological,
environmental and legal aspects of the business environment in the UK. Besides, it also outlays
the various macro-environmental factors regarding the business unit that supports its present
areas of locations. However, the PESTLE analysis regarding the Tianjin’s FAW within the
region of Great Britain is carried out as:
Political-
2016 United Kingdom European Union membership referendum is one of the key facts
for the occurrence of the favourable market within the region of the UK market. The political
conditions of the region are stable as introduced by the Brexit referendum. Because of the impact
of Brexit Union membership referendum, it has created a great impact over the global economy
in regard to trade as well as upon the business relationship with Britain. Thus, Tianjin’s FAW
needs to understand its various existing risk and other political issues before investing in the UK
automobile sector. The company, Tianjin’s FAW, has its headquartered in China that operates in
100 nations, and the automobile business firm also intends to penetrate the UK automobile
market sector (Browne, M., 1985).

5MARKET STUDY FOR NEW PRODUCT OFFERING
However, it is a matter of concern regarding the various ongoing political campaigns and
the political issues within the region of Great Britain that may bring about huge uncertainties
upon the automobile industry. AT present situation the European countries are facing a lot of
political issues. Thus, making the entry of new business prone towards the economic and
political threats.
However, the uncertain consequences emerging out from the EU may empower the UK
to present new fiscal policies, trade tariffs and taxes capable of affecting the Tianjin's dispatch in
the UK market. It is because of the import policies, rules, and regulations the purchasing activity
by the consumers will be adversely affected. The inauguration of the new product category of the
automobile company Tianjin FAW and cost may increment when British strategy policies are
more grounded.
Economic –
In terms of the economic factors the pricing of the new product segment and that of the
business activities of the automobile business firm Tianjin FAW will be adversely affected
because of the changes in the economic aspects. The aspects are that of the economic conditions
of the country whether poor or healthy in terms of money, state of the recession, and that of the
depression (Smallbusiness.chron.com, 2019). The economic growth potential of the country is
also another factor to be taken into consideration. The employment factor and the job growth
potential that exists within the region of the UK market are some of the key aspects that are
required to be taken care of before formulating business in the new regions of the country. In
terms of the national boundary unemployment rates affect buyer trust in a numerous ways,
including the desire to purchase things. They fail to possess a particular commodity because of
the low income factor (Schaub, 2016).

6MARKET STUDY FOR NEW PRODUCT OFFERING
However, a business firm can act strategically by employing some employees as long as
it results in positive changes in the consumer responses towards the business services, fair wages
working hours, rates exchange, inflation and living cost. One of the common example as of such
is the Brexit referendum Pound sterling which was unstable in the exchange market showing
shifting within the curves as such moving up and down. Before entering a new market, there is a
need for the business firm to study the UK inflation margin and the buying power that stays in
the hand of the consumers. As such, the inflation rate might directly cause the cost of the
production because of the hike in the prices of the raw materials. This gets most affected when
the value of the money falls. A proportion of the consumer's segment within the society will lose.
However, some will even gain, and some will stand in between, this will adversely affect the
sales of Tianjin FAW vehicles. The luxury segment of the product offerings in terms of the new
sporty look vehicles will be considered as extravagance because of the higher pricing nature.
However, the automobile business firm Tianjin’s FAW must consider the economic
aspects such as the supply and demand forces within the prevailing market structure. On the
other hand aspects like that of the financial measures, importing and exporting conditions are
also to be taken into consideration. The business practices of the automobile industry like that of
the Ford, Nissan LEAF and Volkswagen must be considered to generate better business
structure, market, revenue, and sales. However, priority should be given to the fact that within
the international and the global market if the value of the Pound sterling expense decreases to a
certain level, then the exchange of Tianjin will get adversely affected. This will result in the
negative impact upon the Tianjin FAW automobile industry. When the UK exchange rate is high,
sales will be reduced to an extreme level because the purchasing power lies very few in the
hands of the deserving consumers with the region of Great Britain (Economic Outlook, 2016).

7MARKET STUDY FOR NEW PRODUCT OFFERING
Social-
The social factors that should be undertaken and would hamper the normal business
undertaking of the business environment, they are health, safety perception, growth in
population, demographics, and cultural characteristics. The consumer market within the region of
Great Britain comprises of the high as well as poor earning people. Hence, this fact is to be taken
into consideration. The population of 40% to 50% earns on an average of eighteen to twenty-five
thousand pounds per annum. Purchasing power that stays in the hand of Britain differs from one
individual to other individual consumers.
The proportion of the consumers that can afford the price of the vehicle will be reviewed
to suggest appropriate costs price of the product, the network of supply, and the services to be
adopted by the automobile industry Tianjin’s FAW in the UK market. As a consultant, the
automobile business firm Tianjin’s FAW will require to introduce their product within the
market of Great Britain with a lower price strategy as this will help the new start-up firm to
capture the interest of the consumers and generate new prospects and then conversion of these
prospects into leads and then into end consumers. This pricing strategy will help in competing
with the other rival firms present therein, brand such as the BMW, Ford, and Nissan. The present
economical state within the region of the UK market has decreased buyer purchasing power.
Besides there is some competition within the market. Hence, it is essential for the new firm to
make the qualitative product available to the consumer market (Schaub, 2016).
Technological-
The frequent changes in terms of the technological advances that are taking place within
the globe may outdate the present technology of the business firm. Hence, the firm is required to

8MARKET STUDY FOR NEW PRODUCT OFFERING
introduce such a product that has the potential to bear innovation at least for another 8-10years of
time. Innovation results in an opportunity for any business firm irrespective of the nature of the
product offerings. Till there is presence of innovation, the business firm is successful, as soon as
the product gets outdated there is an immense need for the introduction of the innovation to
sustain the market within the competitive phase. However, the Tianjin’s FAW Technology
Bundle is reasonable for the UK environment which includes distinctive models of vehicle.
Speaking in terms of the product offering made by the business firm, it comprises of advance
application technology, making it maintain a competitive advantage over the rival business firms.
Example, the product offering made by the rival brand such as the Ford, the cars as
manufactured by the brand Ford comprises of features like real-time processing data related to
traffic and providing constant traffic detail. Within the region of the UK market, the automobile
industry Tianjin’s FAW should make use of the innovations to introduce the consumer market
with electric vehicles, and with different models that will fit into individual’s extravagance needs
at moderate costs prices. The firm makes efforts for introducing innovation in term of consumer
safety while driving through the road at high speed. The use of the improved and advanced
technologies will enable the Tianjin’s FAW business firm to have unique features and abilities
that will in return contribute towards the competitive advantage of the business firm over the
other rival business firms. However, this will in return helps in the maintenance of the social
status and reputation of the consumers within the UK region. Moreover, when the consumers
arouse the feeling of reputation and that of the social status because of the consumption of the
product offering made by the business firm Tianjin’s FAW the consumer is more likely to
increase in terms of the number. This will further help the business firm to generate brand equity
and goodwill.

9MARKET STUDY FOR NEW PRODUCT OFFERING
Legal-
Taking into consideration the legal aspects. The rules and regulation that exists within the
UK market are favourable for making a positive business environment for any business unit.
However, it is mandatory and a matter of ethics that the existing rules and regulations are to be
followed by the Tianjin’s FAW business firm. For instance, the exit of the UK from the
European Union, Brexit may bring a new set of guidelines within the business sector especially
regarding the import of the equipment’s and sales of automobile products.
Factors like that of the safety of the drivers operating in the geographical boundary of the
UK region, commercialisation, health and safety standard and work regulations are to be given
priority. All these factors are required to be considered before stepping forward. The business
firm needs to check in general safety significant angles with the utilisation of "12-point agenda,
for example, braking process, tyres, auto-drive, crash tests, steering and lighting systems.
Resulting in a business firm that manufactures the product, maintains the employee safety and
that of the drivers will enable the new business firm to evolve with the present rules and
regulations of the economy and avoid the sanctions.
Moreover, the worker's regulations execution must be appropriately overseen by Tianjin
FAW to avoid discrimination and low pay for staff. The issues regarding the selection,
recruitment, health, and retirement bundles for labourers must be guaranteed. The staff fulfilment
is given trustworthiness at the firm. The organisation guarantees the most extreme security of
customer rights while delivering tasteful vehicles.
Environmental-

10MARKET STUDY FOR NEW PRODUCT OFFERING
It is basic ethics of any business firm to have concern towards the environmental safety
aspects of the economy. As such that many organisations and business unit contribute towards
the environment safety programmes to denote their contributions and efforts towards the
environment. Making use of harmful chemicals, and plastic wastage directly affects the
wellbeing of the country and that of the environment. Dumping of deleterious chemicals and
wastage directly into the river channel is polluting our water system for consumption. It is a
threat towards the human life as well as towards the animals.
However, the automobile business firm Tianjin’s FAW makes use of recycling and
different advancements to protect the earth. Within the various sub-department of the Tianjin
FAW's plants, wind and hydro control structure form sources of energy. In UK environmental
pollution is a major problem; the government is considering a solution by suggesting making use
of the eco-friendly materials. However, financing this criteria’s like making use of the eco-
friendly raw materials or equipment’s all these may be a limitation too.
SWOT analysis model:
Making use of the SWOT analysis model, Tianjin FAW is moving globally to the region
of Great Britain to launch its new sport utility product. However, it is to be understood in terms
of the business aspects that the automobile business firm is exposed to some opportunities as
well as threats.
Opportunities-
Speaking in terms of the overall global economy, China is the leading dominator in the
business environment. The scope of the business firm Tianjin’s FAW is huge as they have
adequate knowledge in terms of business working and strategy. They understand the dynamic

11MARKET STUDY FOR NEW PRODUCT OFFERING
nature of the business environment. Moreover, they take place from one of the competitive
markets where exists some rival firms.
From the startup itself, the firm has been facing huge competition that has made them
stronger in terms of business activities. Since Chinese firms operates within the international
market too, they have an adequate set of knowledge in regard to international business culture.
Hence, much of the success opportunity lies in the hand of the Chinese firm. As such that the
business firm may be productive and effective in terms of the business undertaking within the
region of the UK market.
Presently the business firm Tianjin’s FAW operates in 100 different countries where its
brands are accessible to Algeria, Costa Rica Russia, Ghana, Sudan, United Arab Emirates, China
among other European, African and Asian countries. Tianjin’s FAW automobile firm understand
the global environment market trends, empowering it to strategize better in the UK. The issue of
Brexit has made the best UK vehicle firm to be at crossroad, permitting new entries, for example,
Tianjin to enter the market effectively.
Threat-
The Brexit referendum may create some the unfavourable business environment for the
Tianjin FAW automobile industry. New financial and the economic conditions may be
formulated which might be unfavourable for the automobile firm. The tax structure if
restructured the business firm has to redesign the budgeter plan as formulated keeping in mind
the business activities. The new budgetary plan may be favourable or maybe not. The new law
regarding the import and export activity will be introduced which will furthermore affect the
business undertaking of the concerning business firm (Faw 2017).