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Creating A Marketing Strategy For A New Product Marketing Essay


This coursework entitled "Marketing" is approximately creating a online marketing strategy for a new or existing product.

The product I have chosen here because of this assignment is the new Audi A6. Audi A6 is the latest style of the company to hit the street of the united kingdom in Apr 2004.


The badge of Audi which displays the 'Four Bands' is the emblem of 1 of the oldest car manufacturers of Germany. This Four Jewelry emblem instructs about the merger which took place in 1932 among the list of four car producer. These were Audi, DKW, Horch and Wanderer and can be said as the root of current AUDI AG. The Audi Company current contain the trustworthiness of producing high quality and long lasting automobiles. Technology is the Audi Slogan. Their quality resulted with the net income of 816 million in 2003, that was 5. 4 million more than when compared with 2002.

Audi UK is the most effective and successful importer of European countries which has its increasing sales proportion every year since 1999 as with 2003 the sales boomed to the figure of 70, 107 and made a 2. 7% of market talk about. Audi UK can be an 3rd party company in UK since a decade after it separated from Volkswagen Group in 1993. About 131 Audi centres are proudly providing in UK currently.

The new Audi A6

Let's see What Company say about the new A6:

'The creation of a class-leading exec saloon calls for a broad selection of abilities. Supple ride comfort, but with exact and clear responses; vitality, but with fuel efficiency; an exhilarating travelling experience, but with luxurious accommodation for four. The new A6 triumphantly reconciles these evident opposites through advanced technology and design. From first glance, you know that the A6 signifies a significant step forward for the class. A mixture of opposing qualities; but a bargain in none'

The car made its first appearance at the 2004 Geneva Electric motor Show on the 2nd of March. It has been released that prices of this car will range from Ј24, 175 to Ј42, 775 which is merely a 1% price increase on the old model. The car has many new features both cosmetic and practical such as leather seats and upholstery, V6 and V8 petrol devices, six speed equipment box and better dynamic suspension.


To find out about the new Audi A6 I must gather information about it and also marketing theory to permit me to come up with a suitable marketing strategy for the automobile.

The ways that I have compiled information about the new A6 are:

Product brochures - I collected something brochure and price list from an Audi showroom. These contain information about the automobile; the many types, specs, possible colors, extras, prices, etc.

Audi website - the Audi UK website is www. audi. co. uk. This is made up of information about Audi vehicles including the new A6. It contains most of the same information about the automobile, but also tells you about the company in general and has regularly up to date information.

Audi annual report 2003 - this has background information about the company and financial, marketing and product information from days gone by time. I downloaded this from the Audi website.

The resources of information I used to find out about more developing process are:

Text literature - the text catalogs I used most is Intermediate Business byCarysforth, Rawlinson and Neild and THE ENTIRE A-Z Business Studies Handbook by Lines, Marcouse and Martin. These both contain information about all aspects of business theory including marketing.

Websites - there are numerous websites, such as www. bized. co. uk, that contain information about business theory. I mainly utilized these for information not within other resources as it is additional time consuming.

Handouts - the three handouts given to me are Marketing, Marketing Combine and Marketing Aims, Strategy and strategies.

Notes - school work notes provide backdrop information about the topic of marketing. I am going to also carry out primary research to determine more in what the consumer would like from the A6.


Marketing - identifying, anticipating and fulfilling the customer needs and would like in a mutually beneficial process. It must be beneficial for both attributes; it involves

meeting the organization's aims as well as the customers'.

Identifying customer needs is performed through market research.

Anticipating customer needs is done through forecasting.

Fulfilling customer needs is done through the four P's:

Price - advertising at the psychologically right price.

Production - advertising a variety of products with appropriate features

and branding.

Promotion - may require adverts, sales promotion, PR, etc.

Place - making sure the product is sold in the correct outlets.


Market orientation - the company focuses on customer needs and

wants. The starting place is planning what the customer wants.

Market Research

Market research - gathering, tracking, analysing and presenting

information highly relevant to the marketing process. It is part of marketing

planning at the gathering information stage.

The reason for general market trends is to:

· Identify opportunities and dangers (such as changes in the market)

· Analyse alternative techniques (such as changing the price)

· Review progress (such as monitoring changes in sales after a


Before a firm start their market research they'll first identify a

problem; in Audi's case what people want from an automobile. As I have already

said, these are a market orientated organization so will need great notice of

this. Then they decide a way of gathering data - key or

secondary. They'll then gather the data and analyse it. The findings

will be used to make the final product, in cases like this the A6,

as profitable as is possible. They may also perform further market

research after this to find out how popular it is.

Types of market research

There are two types of general market trends:

1. Primary - research that is compiled first hand. It really is expensive,

but much more likely to meet the correct needs of the company. It is

gathered by field research.

2. Supplementary - research which uses existing data. It really is cheaper, but

may maintain the wrong format and available to competitors so it does not

give you an advantage. It is collected by table research.

My market research

For this task I have been subject to my own general market trends which will

allow me to evaluate Audi's current marketing strategy and make

suggestions. As I've already said in the info gathering

section (web page 4), I have accumulated product brochures and price lists

of the Audi A6 and appeared on the business website to assemble information

about the automobile. I also downloaded a backup of the total annual record 2003.

This is supplementary research as it is from a pre-existing source.

I also have carried out most important research by means of a

questionnaire. I asked an example of forty people eleven questions. A

sample is a tiny group which is thought to represent the market as a

whole. My sample of forty definitely will not be an accurate

representation of the whole market at it is so small and all those

questioned are from the same area. However, it was the major sample

that I possibly could practically do. The options to help make the results

more reliable are to execute a census that involves surveying everyone in

the country, but this might be very costly and unpractical even for a

large organization such as Audi. My sampling method was convenience which

means I simply questioned people who had been available for interviewing,

including my children and friends. This is the easiest sampling method

which is the reason why I decided to go with it, but can be unreliable as a sample

representing the complete market is improbable found.

After a SWOT examination has been produced, the company may take one of two


1. Matching - this calls for building on the firm's talents and

taking advantages of opportunities.

2. Change - this calls for creating strategies that flip the

company's weaknesses into strengths and threats into opportunities.

As well as creating a SWOT analysis a company must examine

market conditions before creating a online marketing strategy. The main

things which evaluated are:

· Market size - the full total size of the market the company is working in.

it is measured in terms of volume or value (volume level x price). The car

market is currently a sizable one.

· Market show - the percentage of sales one brand has compared to the

total market. In 2003 Audi had 2. 7% market show in the UK which seems

small, but it must be taken into account how many car companies there

are and Audi's market show in Germany, the house country of Audi, is

three times this.

· Market growth - the pace at which the size of the market is

increasing. From 2002 to 2003, Audi UK experienced more sales of 6. 9%,

but only increased market share of 0. 6% therefore the market must be

expanding with a significant fast rate.

· Segmentation - attractive to different sections of the marketplace in

different ways by changing the marketing mixture. For instance, changing

features of the product so it attracts different people - more

luxuries for those better off, different size engines, etc.

The next stage is to create the marketing aims considering the

corporate objectives. This gives goals for the team. I have

not been able to learn the marketing targets of Audi, but they

are apt to be increase market show and earnings (both with

quantitative beliefs). My marketing targets for Audi would be these

things and to improve the brand reputation which I imagine is a

vital part of Audi's success; it provides them with a unique selling

point and so is important to identify the merchandise from those of


After this, a online marketing strategy is selected taking into account the

marketing objectives, conclusions of the SWOT evaluation and market

conditions. This will then be integrated through marketing practices -

the marketing mixture. So to attain the marketing aims all aspect

of the marketing mixture must be right - the automobile must be sold at the right

price, in the right places, marketed well attractive to the target

audience and designed and produced well.

My SWOT research of the A6 implies that one of Audi's main advantages is

the company's reputation. This should be built on through producing a

high quality car and using top quality pricing. There is also a very

large spending electric power because they are a sizable multinational company who

have been very profitable before. Which means that they can spend

a whole lot on promotion of the A6 to provide it a competitive benefits. This

would give them an advantage, but all of their main rivals can

boast equal or increased spending power so that it is essential to spend

highly on campaign and making the product as effective as can be done by

adding additional luxury features. Audi also have durability in the

success of these previous cars, like the old A6. This enhances

the company image and helps it be easier to establish a fresh product, like

the A6, as people know it'll be good quality. A high price will have

to billed for the A6, but this may very well be less important as to

the market this is not the most crucial factor. A higher must

be charged to protect production, carry and promotional costs.

The final part of the process is critiquing the marketing plan after it

has been put in place. This is something to be achieved at a later date

after the merchandise has been available for a suitable length of time. It

can be done through further general market trends into customers' opinions

of the automobile and how well it includes sold. To properly examine the

marketing plan, there must have been clear goals with time

restrictions. This shows the importance of having established good goals.

The information out of this is then used to create new corporate and business objectives

and the company's position must be reassessed.

The value of experiencing a good marketing plan, created through the method

shown above, is:

· Ensures continual analysis of goals and strategies

· Ensures successful use of resources

· Establishes conditions for success; this can help motivate and makes it

easier to monitor progress

· Improves decision making

· Involves people in debate so helps improve their commitment

· Involves examination so makes organisation better prepared for change

· Coordinates activities

· Avoids wasteful or conflicting activities

· Involves rational decision making based on quantifiable data.

The marketing plan will have an impact on other functions within the business.

One example is the marketing plan decides what is produced, how it

is produced so when it is produced which influences the production

department. It establishes the quantity and skills of employees required

which affects individual learning resource management. Also, it can determine the

design of the product, the cost to make the product (through choice of

material, production methods, etc) and the price of the product which

affect the funding department.


There are many different marketing strategies which may be adopted by

the company and often many are being used at exactly the same time for different

products. For example the marketing strategy of the new A6 will e

different for that of the A3 which is a cheaper car and is already

well established in its market. The marketing strategy greatly depends

on which kind of product it is ideal for. This can be assessed using the

Ansoff's Matrix.

Ansoff's Matrix - this it could be used to analyse marketing strategies

Existing New

Existing Market penetration New product development


New Market development Diversification


As you can see there are four areas to the Ansoff's Matrix:

1. Market penetration - attempt to gain a greater market show of an

existing market. Involves changing marketing blend.

2. New product development - creating a new product for an existing


3. Market development - introducing a preexisting product into a new


4. Diversification - stepping into a new market (the one that that firm is not

yet in) with a new product. This is can be quite risky.

The Audi A6 falls into the group of new product development as it

is a new product that is developed, but is market where

Audi already remain competitive. The brand new product development process starts with

idea generation both internally from research and development and

externally from traders, opponents or consumers. Then they analyse

the suggestions to assess their feasibility and develop them through

prototypes. They are then analyzed for safe practices and quality. Within the case

of automobiles there are strenuous safety assessments as the automobile must meet certain

requirements. There is then test marketing in selected outlets before

the launch nationally.

Another effect on the online marketing strategy employed is the type of

market the product is contending in. You will find two main types of


1. Niche market - a small market in which major makers are not


2. Mass market - market with a big amount or value of sales.

The main benefits of a distinct segment market are it will fit with limited

resources, avoids competition with major organizations, comes back are relatively

high and fits with a distinctive feature (USP). Advantages of

mass marketing are higher profits, can exploit a brand, economies

of range and less susceptible to changes in market.

The car market is clearly a mass market as the worthiness of sales is high.

However, there is a wide range of quality and price available and Audi

is in top of the range which means this market is an extremely differentiated mass

market. The main rivals to the A6 in the forex market are BMW and

Mercedes, who also produce quality value cars.

As Audi are competing in a mass market, it is essential on their behalf to

undergo extensive advertising. This will try to give the A6 a

competitive advantages over its competitors as consumers notice the

advantages the A6 offers. They ought to promote using the brand name as

it is currently has a good reputation and so will help improve sales.

If the brand is improved through the A6, it will help Audi in the


There are also lots of business models and diagrams that can be

used to help determine the marketing strategy chosen by the business.

Two such models will be the Product life cycle model and the Boston Matrix.

Boston Matrix

The Boston Matrix is a way of product stock portfolio research. This is

used to examine the prevailing position of the organisations products in

their market segments to permit better decision making on aspects including

marketing strategy. The value of it is the fact it examines all the firm's

products together, provides an overview and helps with marketing


The Boston Matrix shows what ratio of the market each product has

and the rate at which industry keeps growing.

The car market is a fast growing one and the A6 is a fresh product, so

would currently certainly be a question make. However, it is likely

that it would soon turn into a legend if it markets well. The Boston Matrix

shows us that the A6 will require investment (much will already have been

spent on design and development) in campaign and other areas.

In standard, after a company have evaluated a product in the Boston Matrix

they can do one of four things:

1. Maintain - attempt to keep up with the existing market position (with

strong cash cows).

2. Build - invest to build up position in market (with question marks).

Involves sacrifice of short-term profit.

3. Harvest - goals for short-term revenue to get the most out of the

product (possible with cash cows).

4. Divest - get rid of the product (with puppies).

It is probable that and advisable for Audi to develop for the A6. This

will help increase market share and result in long term income and

targets being found. This will involve major short-term investment so

reduce short-term profit. One of many ways to develop market position would be

through heavy advertising. Making the consumer aware of the product and

persuading these to buy it. They must also set a price which is

competitive and right for the product's market.



The factors that impact the price of a product are:

· Costs - the firm will want to cover costs to make a profit. The

costs for making and testing an automobile including the A6 are extremely high;

therefore the price may very well be high.

· Price elasticity of demand - how very sensitive the product is to change

in price. If it is sensitive then reducing the price will lead to an

increase in turnover. It is probable that products of a highly

reputable company, such as Audi, will be price inelastic as the market

they charm to price is not the most important factor. This means

price should be quite high.

· Competition - are there any similar products available?

There are no new immediate rivals to the new A6, but there are

existing competitors. This means they should try and place the price

similar to or lower than those.

· Level of product life circuit - chances are a product in the growth

phase will have an increased price than one in the drop phase. The A6

is a new product therefore the price can be high as it offers cutting edge

design features.

· Authorities - government adds duty to products making them more

expensive which must be looked at. VAT is charged on cars.

· Other exterior factors - PESTE (political, economic, social,

technological and environmental factors). These have previously been

discussed in the External Influences section, site 16.

· Slumber of marketing mix - the price must go with other elements of

the combination.

The costing method chosen will also be afflicted by the price

elasticity of demand of the product. This steps the responsiveness

of demand for a product to change in cost. (Both measured as

percentage of total. ) It really is determined using the formula:

Price elasticity = % change in demand

% change in price

If percentage change in demand is increased that ratio change in

price then the product is price elastic. Raising the price will result

in a loss of revenue. When the percentage change popular is less than

the percentage change in price then your product is price inelastic.

Raising the price will bring about a gain of revenue

The A6 will be price inelastic because it is an extremely differentiated

product. This implies that folks will be happy to pay more for the

benefits it provides - reputable brand, added luxury feature,

good performance, etc. Also, they are simply regularly purchased as company

cars so if another person (i. e. the business) is paying for it price will

not be so important. Selling price inelastic is generally considered a

good thing by a company as it allows these to increase the price and gain

revenue. If something is price stretchy lowering the purchase price should

result in an increase in income, but this is a risk as it depends on

demand increasing. If this will not happen as a result of external

factors, the company could lose big money. As a result of being

price inelastic, Audi have increased prices by 1% typically from the

old A6 that ought to lead to increased earnings. Also, this price

increase is only small so people will not feel like they are simply being

overcharged, so that it is psychologically the right price.

Audi will demand a higher price which seems a good idea. High price is

usually associated with:

· Heavy branding - Audi is an established brand.

· Few competition - no new automobiles in the A6's school.

· Unique feature - brand reputation, no new opponents, quality

design features including the latest in-car technology and new engines.

· High unit cost - building prototypes, testing and development are all


· Limited distribution - only sold in Audi showrooms and on website.

The A6 should shoot for product differentiation. This implies Audi should

try to tell apart the car from its competition in the eye of the

consumer. This can be an attempt to get customers from the

competition. It will be done by adding features to the car which add

value. Something provides value will boost the price of the

product by more than it costs to create. Types of this are alloy

wheels, Compact disk player, sixth items. If an attribute costs more to produce than

it increases the value of the product it ought to be removed.

Audi have added features to the A6 to boost its performance

enjoyment to drive. It runs on the new engine design which is renounced for

its responsiveness and high speed cruising ability. You will find numerous

safety features on the A6 including anti-lock brakes, traction control

system and programmed tyre pressure monitoring. These features appeal

to people's feeling of dread so gives the car another selling point.


The channel of distribution represents how the name of ownership

passes from supplier to consumer. A company is likely to set

distribution targets such as range of areas and outlets the product

is bought from and number or value of sales in each region. The first two

will be the same for the A6 because they are for each and every other Audi car. Audi

are a well established company in all of their marketplaces so expansion

into new marketplaces or amount of retailers in existing areas won't be

required. The number or value of sales will be dependant on supply

(must be equal to demand), other areas of the marketing mixture and

external factors (e. g. income).

Audi must use both above and below the brand promotion to promote the

A6. In my opinion the most suitable ways to the A6 are on tv set,

in mags, in national newspaper publishers and on billboards. I've chosen

television as it includes an extremely large potential audience and uses both

images and sound so will be more memorable. Audi are a very large

company so are able the high costs associated with it. The most

suitable time could be the evening as this is when most people are

watching. The primary benefit of magazines is the advertisement will be seen by

the target audience. Additionally it is cheaper so can be carried out more regularly.

More information can be placed in adverts as people can spend longer

reading them. Newspaper publishers have the same advantages. They still appeal

to the prospective audience as different newspapers appeal to different

socio-economic groups. Broadsheets like the Times and the Financial

Times would be the most suitable. Billboards are cheap and show the

aesthetics of the car. They will be eye catching to people,

particularly if indeed they use bright colors. They aren't the simplest way to

communicate information about the A6, but will make potential

customers alert to it and can get the automobile in their minds.

As you'll expect from a firm with a big marketing budget and

they also promote through product brochures and on the website. The

A6 may also get promoted at special car shows like the Geneva Motor

show where it was unveiled to the public. In addition they ensure they appeal

to the target audience and must examine the potency of their



The following stand shows the choices I have designed for the marketing

mix for the new Audi A6:

Decisions for the marketing mix

Reason for decision

Should be customer orientated.

The product should charm to the wants and needs of the buyer so

they do not decided to go with competitors product on the A6.

Primary general market trends will be achieved by means of a questionnaire.

This is possible method of market research for me, a person, to

carry away and I could make it relevant for the task. This can then be

analysed to help devise the marketing mix.

The price of the A6 should be established high (the business chose Ј24, 175 to

Ј42, 775).

This is basically because it is price inelastic, is a superior quality product and

has a reputable brand. It has been derived utilizing a combination of

competitor based prices (similar price to BMW and Mercedes similar

cars), demand centered prices (what they have found people were willing

to pay for the old A6) and emotional prices (this price is

neither too much nor too little). Premium prices is used anticipated to the

reputable brand name, particularly in today's good economic

climate (higher income, A6 is income elastic).

The product should aim for differentiation through the brand name Audi

and features, including new machines and the latest in-car technology,

which add value.

Audi have always directed for product differentiation rather than cost

management so this should be prolonged. It can be done through a

reputable brand name and a high quality product numerous additional

features. Differentiation will probably lead to increased market share

and so increased turnover and profit.

Distribution of the product should be limited to exclusive Audi

dealerships and website.

Exclusive circulation is associated with high quality, high priced

speciality goods like the A6. This preserves this image. The

website will provide an extra market for sales and targets for this

should be placed.

Audi should use zero level circulation.

Zero level distribution cuts out the middle man so reduces costs and

helps exclusive distribution.

The A6 should be marketed frequently and in an array of places,

mostly tv, billboards, newspapers and radio.

The firm has great financial resources at their removal so can afford

a large advertising budget (found from previous years spending in annual

report). Advertising in this way will ensure people, particularly the

target audience, here about and know the benefits of the merchandise.

Other types of advertising, including personal selling, are to be done


The A6 is a consumer good so advertising to the ultimate consumer is most

important. Personal offering is not as important as this is employed to

sell products to stores. However, Audi do need to use personal

selling in their showrooms to persuade perspective customers.

All components of the marketing strategy and marketing combine compliment

each other so they work together effectively to attain the marketing


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