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PEST Analysis Definition Research Paper


Pest Analysis

PEST analysis is a strategic management tool used to analyze the political, economic, social, and technological environment in the operational setting of a business (Daughtry & Casselman, 2009). The political environment that surrounds the marketing of the Nissan GTR in the Middle East varies depending on the country. The Arab spring upset the balance of power in the region (Perry, Chase, Jacob, Jacob, & Von Laue, 2012).

Some countries have undergone regime change to usher in more open and democratic governments. In other countries where old regimes survived, the systems of government have become more open due to the Arab spring. This means that consumers have a bigger say in the things they can buy. Government control over the private life of citizens has reduced.

The economic environment bears marks of the 2009 global economic crisis and the economic impacts of the Arab spring (Perry, Chase, Jacob, Jacob, & Von Laue, 2012). The region is economically subdued because of the events of the last four years. However, some countries such as the United Arab Emirates are registering growth brought about by the increase in oil prices, and trade (Ortiz & Clark, 2012).

The social environment is becoming more and more receptive to the open display of wealth (GroupM Knowledge & CIC, 2011). This is an opportunity for Nissan GTR because it is a high-end vehicle. As countries in the Middle East produce more millionaires, the demand for luxury vehicles such as the Nissan GTR will increase.

The technological environment in the Nissan markets may affect the ability of consumers to service the Nissan GTR. The car requires specialized servicing which is not available in all the countries of the world. Therefore, this means that Nissan needs to invest in the provision of services and spares in all the markets where it would like to sell the Nissan GTR.

Key Competitors

The main competitor of the Nissan GTR is the Porshe 911, the Audi R8, the Ferrari F-430 Scuderia, among others. These cars represent what enthusiasts call “supercars” because of their performance specifications (Rosner & Shropshire, 2011, p. 42). They are very fast and they have utilities that are unique to sports cars to support their driving requirements.

The differences in the performance of supercars include fuel efficiency, the overall weight of the car, and the power of the car. Some of them also compete on price. This demonstrates that the Nissan GTR is not alone in the market. There are other cars of similar quality and comparable performance competing for market share.

Value Proposition

The value proposition of the Nissan GTR is mainly in its technology and cost. Nissan is one of the car manufacturers that have managed to keep production costs down. The company’s association with Renault is also a big factor in this. The two companies share distribution channels and service locations.

This gives the Nissan GTR a big advantage over most of the other supercars because Nissan and Renault have a large footprint in the global automobile market. Sales and servicing are one of the key considerations that customers in the high-end segment take into account when making the decision to buy a car.

The customers usually plan to take the car for a test drive before making the purchasing decision. They also need assurance that they can access services and spares when the need arises.

Overall Product and its Marketing Strategy

The overall value proposition of the Nissan GTR is its price and performance range. The Nissan GT-R is one of the best-priced supercars arising from Nissan’s reputation as a car manufacturer that can control its cost.

The company spends a lot of time in research to find ways of reducing the production costs of its cars in order to reduce the price of its vehicles. The performance of the Nissan GTR compares well with many of its rivals. Consequently, the performance meets the expectations of the customers at a price that is attractive.

The company appears to be using its capability to make good quality cars at a low cost in the production of the Nissan GTR. This conclusion arises from the manufacturing plans and arrangements between Nissan and Renault.

The Nissan GTR is positioned as a high-end luxury sports car. Carmakers such as Porsche and Ferrari serve the same niche. The positioning of the Nissan GT-R is such that it makes a supercar available to a larger audience at a slightly lower price compared to the competitors.

This has the effect of extending the market to suit consumers who may have failed to win a supercar because of high costs. In one move, Nissan has managed to produce a supercar that meets the threshold for luxury sports cars, and at the same time, the company has made it available to a large audience.

Target Customers

The target customers for the Nissan GTR have the following characteristics. First, the car is meant for people who can afford to buy and maintain it. Luxury sports cars such as the Nissan GTR are expensive to buy and maintain (Rosner & Shropshire, 2011). Therefore, this means that Nissan is looking to sell the car to customers who have the financial muscle to buy and maintain the car.

Secondly, the car is attractive to people who want to make a social statement (Nissan, 2013). This situation usually arises when someone finds new wealth or finally achieves a certain level of status in society. The car is very visible and stylish. It is also unique.

Anyone who buys the Nissan GTR has an underlying need to make a social statement. The third characteristic of the target market is that the car is meant for people looking to project an image of youth and virility. The look and feel of the car make it a unique player in the automobile market.

These characteristics in the Middle East belong to actors, athletes, politicians, and business tycoons. The region is growing in wealth. The number of millionaires is increasing. The presence of hotels such as the Burj in the UAE is a testament to this fact.

Marketing Mix

Overall Brand Position and Strategy

The overall brand position of the Nissan GTR has the following characteristics. First, the Nissan GTR gets is brand strength from the Nissan Company. Nissan is one of the biggest car manufacturers in the world (Nissan, 2013). Nissan operates in almost all countries of the world. This means that the Nissan GTR is riding on the overall brand strength of the Nissan Company.

However, Nissan does not have a strong reputation in the development of luxury sports cars. However, the automaker is known for efficiency and very good cost management. This makes the brand position of the Nissan GTR strong on two elements. First, a well-known and respected car manufacturer makes the car. Secondly, customers know that Nissan produces cars using very competitive pricing structures.

Product

Nissan as a company produces a wide range of cars ranging from mini cars to transit trucks and buses. However, the company is best known for its production of family cars and mid-range sports utility vehicles. It also produces some high-end SUVs such as the Nissan Patrol and the Nissan Murano. This makes it difficult to pick one product line and call it the company’s core product.

The two main differentiators of Nissan cars in the market are the cost and the efficiency of the cars. The carmaker has developed the reputation of providing high-quality cars at a very reasonable cost. Nissan can match the performance of their cars with the performance of cars made by competitors, at a lower cost.

The technologies Nissan uses to produce its cars have changed over time. Nissan produces cars that run on petrol and diesel. Its engine technologies compare well with those of competitors. The latest engine technology from Nissan was the Variable Valve Event and Lift (VVEL) (Nissan, 2013). This technology increased the efficiency of Nissan Engines.

Price

The 2013 release of the Nissan GTR costs 97,000 dollars (The Automobile Magazine, 2013). Its closest match is the Porsche 911 that costs 84,300 dollars (The Automobile Magazine, 2013). The third car in the same class is the SRT Viper that costs 97,395 dollars (The Automobile Magazine, 2013). This shows that the price of the Nissan GTR is above the price of the Porsche 911.

The Porsche accelerates faster because it is lighter than the Nissan GTR. However, the Nissan GTR is more stable at high speeds. Customers have complained that the Nissan GTR is heavy, therefore making it inefficient.

For its weight, the Nissan GTR is priced competitively for its market, especially considering that it is possible to own the Nissan GTR in more places around the world because of Nissan’s worldwide sales and service network (Dalic, 2007). Porsche cannot compete with this.

Promotion

The promotion of supercars usually takes place in high-end magazines targeting the high-end auto market. The promotion also takes place in annual car fairs held to promote new cars and to exhibit concept cars that are yet to hit the market. In addition to these promotion efforts, the Nissan GTR also maintains a website dedicated to the marketing of the Nissan GTR.

The message from the Nissan GTR website is that the Nissan GTR aims at giving every customer passion and elation when driving the supercar (Nissan, 2013). Nissan also calls the Nissan GTR, “the first true supercar for everyone” (Nissan, 2013).

Distribution Channels

The main distribution channel for the Nissan GTR is the Nissan and Renault worldwide dealerships. These channels are used to deliver all Nissan and Renault vehicles to customers worldwide. Nissan usually gives entrepreneurs the license to operate dealerships and to carry our servicing and repairs.

Opinion and Recommendations

Overall Product and its Marketing

The recommendations to the Nissan GTR marketing team about the overall product and its marketing are as follows. The overall value proposition of the Nissan GTR needs to stress the ability to access services and repairs from any Nissan dealership, or Nissan service outlets.

This will increase the geographical appeal of the car. One of the biggest competitive advantages that Nissan enjoys is its global presence. This should form the basis of marketing the Nissan GTR on a global scale and especially in the Middle East.

The Target Customers

The current target customers are people seeking to make a social statement, and have the financial ability to buy and maintain the car. These people include politicians, sports personalities, and actors based in the region. It also includes businesspersons in the Middle East region. The choice of the target market is fine. However, it is important to create a following around the car to tap into the emerging market.

There is a need to look at the people who will attain a high social status and wealth in the next few years and to conduct targeted marketing campaigns to get their attention (Rad & Aghajani, 2012). This will insure the future of the Nissan GTR. This means that there is a need to target university students, young executives, and wealthy heirs who are in a position to influence the purchasing decisions of their superiors and families.

Marketing Mix

Recommendations concerning the marketing mix are as follows. First, the company needs to do more work in the branding of the Nissan GTR. A case in point is the management of the dedicated Nissan GTR website. The website seems to be outdated in regards to recent developments in the production and use of the car. It does not have any news items written after 2012 (Nissan, 2013).

The information on the website also needs to be updated to include performance specifications of the car. The current marketing campaign on the website is incomplete. More importantly, the website lacks external links to sites where there are good reviews of the car. This is a limitation to the branding effort (Pearce, 2005). Secondly, the website seems to market the car as just another Nissan car.

It robs the Nissan GTR of its status in the supercar arena. Nissan needs to make it clear that this is a status car. The target market will buy the car for status. It, therefore, needs to be clear to everyone that anyone who owns a Nissan GTR is a person of status.

One of the main criticisms against Nissan as a company is that it is slow to innovate. While this allows Nissan to make the best out of a target market, it robs the company of the opportunity to expand market share through the introduction of features that clients demand. For instance, Nissan needs to think about a Nissan GTR convertible.

The price of the Nissan GTR is equal to, or above the prices of cars made by competitors. This comes from the fact the Nissan GTR has a few features that the other cars lack. However, the higher price can make the Nissan GTR experience a competitive disadvantage.

The company can deal with this by differentiating the car, even more, to make it unique, or finding ways of matching the price to that of the competitors. It is always better to compete on quality rather than cost (Pratali, 2003). Therefore, more differentiation is the best option for the car.

The current tactics used in the promotion of the car seem to be working well. However, a full review would help the company to decide whether it is taking full advantage of all the avenues available for promoting the product (Thomas, 2011).

The current distribution channels are also fine. In fact, Nissan has a stronger distribution channel in comparison to its competitors (Clute, 2012). The company simply needs to consolidate its marketing to take the Nissan GTR to its full potential.

References

Clute, B. (2012). An Eye on Ergonomics. Automotive Design & Production, 42-43.

Dalic, T. (2007). Globalisation of Marketing Strategies in Light of Segmentation and Cultural Diversity. Norderstedt: GRIN Verlag.

Daughtry, T. C. & Casselman, G. L. (2009). Executing Strategy: From Boardroom to Frontline. Herndon, VI: Capital Books.

GroupM Knowledge & CIC. (2011). The Voice of Luxury: Social Media and Luxury Brands in China. New York: GroupM Knowledge.

Nissan. (2013). Nissan GTR: The Legend is Real. Nissan GTR. Web.

Ortiz, D. & Clark, R. (2012). Productivity Standards. Sacramento, CA: Carlifornia Primary Care Association.

Pearce, J. A. (2005). Strategic Management: Formulation, Implementation, and Control. New York: McGraw-Hill.

Perry, M., Chase, M., Jacob, J. R., Jacob, M. C., & Von Laue, T. H. (2012). Western Civilization: Ideas, Politics, and Society. New York: Cengage Learning.

Pratali, P. (2003). Strategic Management of Technological Innovations in the Small to Medium Enterprise. European Journal of Innovation Management, 6(1), 18-31.

Rad, A. F. & Aghajani, S. (2012). The relationship Between Tourism and Environment. Iranian Journal of Tourism and Hospitality, 36-48.

Rosner, S., & Shropshire, K. L. (2011). The Business of Sports. London: Jones & Bartlett Publishers.

The Automobile Magazine. (2013). 2013 Nissan GTR Comparisons. Web.

Thomas, A. (2011). Strategies for Branding Success. New York: eBooklt.com.

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