Executive Summary
This paper analyses the market position of the KIA Cadenza in the motor market. The brand has continued to face competition from other brands in the market, which has made its sale and profit to decline in the past year. From the market analysis, the brand has a very small share of the motor market compared to other brands that are offered by the KIA motors.
Currently, the share of the brand in the market is 5 percent; a low percentage compared with other brands such Taurus from the FORD Motors, which has more than 20 percent of the market share.
Though the volume sales of the product in the market have been consistently increasing in the last financial years, the sale volume is still low compared with that of other brands offered by the KIA Motors as aforementioned.
The market segment of the brand is still small compared with other brands that need to be expanded as a way of increasing market share of the product. Most of the sales are rental and mostly through retails thus limiting the market maximisation of this brand.
It is therefore important for the management of the company to implement the recommendations given in this report. These recommendations include increasing the sales to the government and corporate businesses, serious implementation of 2011 Action Plan, increasing brand awareness and finally increasing fleet and dealer sales.
Introduction
KIA Cadenza is one of the brands that are offered by the KIA motors in the market. The brand just like other brand in the motor market faces a lot of competition from rival brands offered by different companies in the market.
Currently, the market share of the brand in the market is 5 percent, which is relatively low given the number of brands that are offered in the market. The brand faces a lot of competition from other different brands offered by the same company and from other brands offered by rival companies in the market. The aim of this study is to analyse the position of KIA Cadenza brand in the motor market.
Literature Review
Market analysis involves analyzing the position of the product in the market through carrying out various analyses such as SWOT analysis and PEST analysis. These analyses will help to show how the product of a given company is fairing in the market compared to other similar and identical products that are offered by different companies.
The SWOT analysis usually focuses on the strength, weaknesses, opportunities and threats of the company. “Swot analysis will help the managers to understand the optimal health of a business”, (Simoneaux and Stround 75).
Strengths of a company may include resources that a company is endowed with such as capital and human resources that will give the company a competitive advantage in the market. For instance, KIA Motors Company, which manufactures Cadenza, has a number of strengths that has enabled it to maintain its market share.
These include a strong brand image, product specifications, a good network, warranty policy and a strong marketing position. All these strengths have enabled the company to have a competitive advantage in the market.
The company also has a number of weaknesses that have also affected its performance in the market including sharing segments with other brands from Japan, has many branches that affect its sales channels, and low brand awareness among other weaknesses.
On the other hand, the company has a number of opportunities that it can utilise to increase its sale volume. Poor stock availability for the competitors, strong yen, availability of Korean brands, availability of new sls channel by the government and improvement of KMC products.
Furthermore, the company also faces some threats that may include price competition from the rival companies as well as new products launched by these companies.
PEST analysis focuses on how the performance of the company is affected by external factors such as political, economic, social, and technological environment. The company is favoured by factors such as political and social stability that have enabled the company to continue with its operations in all the branches.
Japan has been experiencing a stable political environment for long time that has enabled many businesses to thrive in that country. Government has created a business friendly environment by enforcing only the necessary regulations, a move that has attracted many investors as well as favouring businesses in the region.
These favourable factors have enabled many businesses to increase their sales. However, the global recession experienced in the past few years has affected the performance of the business in many ways. The company experienced economic pressure, which lowered the sale volume the company.
There were minimal operations in the economy that affected the performance of the company in both short and long run. The company had to look for ways of minimizing costs such as reducing the number of staffs to survive in the times of financial crises.
Empirical Study
Though the position of the KIA Cadenza brand in the market is not so badly off, its share in the market of 5% is still low compared with the performance of other companies’ brands such as Toyota, which has a market share of 39%, and Hyundai that has a market share of 15%.
Again, from the analysis of the company’s performance records, the sale volume and profit of the company is low. Market segment of the company’s product is 6.8%; a small segment compared with the market segment of other brands. Thus, the company needs to come up with ways of increasing its market segment.
The analysis also shows that the largest percent of the company sales are retail, with low percentage sales in fleet and dealers. This may have contributed to low total sales since all the market segments are not fully utilized.
From the analysis of the market segment of the company, most of the products are sold to local people who buy about 89% of the product with the rest of the products sold to foreigners. The analysis also shows that most of the company’s products are rental, which comprises about 95% of the total sales.
Corporate sales comprise 5% of the total sales while government and taxi sales have 0%. This may help to explain why the market share of the company is still low compared with the sales of other companies.
KIA Cadenza has also continued to face stiff competition from rival brands of other companies such as Taurus from FORD, maxima from Nissan and Azera from Hyundai. However, the volume of the sales of Cadenza has also been gradually increasing with a percent growth of about 7.5 in the financial year ending 2011.
This has come because of several marketing strategies employed by the company in the last few years as way of increasing the sale of this brand. These strategies are stipulated in the Cadenza Action Plan for 2011 that clearly states the action to be taken, when and how.
These strategies include service campaign meant to promote the sale of this brand, special discount, display activities, use of social media among other strategies that will help to promote this brand in the motor market. The Action Plan also provides a price policy that will be used to convince more customers to buy the product.
“Good marketing strategies will enable the company to meet its objective” (Varadarajan, 119). Good marketing strategies will help to improve brand awareness of Cadenza in the market. Though one of the strengths of the product in the market is its strong brand image, there is need to improve its awareness in the market.
Customers only buy a product they are aware of and it is difficult to convince them to buy a product they do not know. Thus, the marketing strategies of the company need to be focused on improving product awareness.
Recommendation and Conclusion
In addition to the action plan that has been implemented by the company to increase the market share of this brand, the recommendations below will help to promote this brand in the market, thus making it a choice to many motor customers.
- The company may increase the percentage of the product sold through fleet and dealer as a way of increasing its market segment.
- The company may also increase their sale to the government, taxi and corporate businesses.
- Brand awareness is also important to the sale of the product and company may consider ways of improving it.
- Implementation of the 2011 Action Plan is also crucial to the performance of the product and therefore the company need to give it all the weight it deserves.
Works Cited
Simoneaux, Sarah, and Stroud, Chris. SWOT Analysis: The Annual Check-Up for a Business. Journal of Pension Benefits: Issues in Administration 18.3 (2011): 75-78.
Varadarajan, Rajan. Strategic Marketing and Marketing Strategy: domain, definition, Fundamental issues and foundational premises. Journal of the Academy of Marketing Science 38.2 (2010): 119-140.