Absolutica Drive With

Comfort and Luxury

Marketing Report for

Absolutica, KIA
Motors
University of Roehampton
Instructor: Prof. Hasnan Baber
Report by Sanjay Ghosh
2016

Table of Contents
Part 1
Introduction to KIA Motors

Objectives

Range of Motors

Absolutica

Part 2
Situational Analysis

The 5 Cs of Absolutica

Company

Collaborators

Customers

Competitors

Climate

SWOT Analysis for Absolutica

Strengths

Weakness

Opportunities

Threats

PESTLE Analysis for Absolutica

Political

Economical

Technological

Legal

Environment

Marketing Research

Part 3
Marketing Plan

11
1

Segmentation of Absolutica

11

Behavioural

12

Psychographic

12

Profile

12

Strategies for creating / increasing brand equity

12

Positioning of Absolutica

13

Marketing Communication and Digital Marketing of Absolutica

14

Marketing Mix

15

Product

15

Price

15

Promotion

17

Place

17

Competitive Advantage

19

Part 4
Critical Review of Current Debate in Marketing and Brand Management
Does Innovation lead to Ethical Increased Sales?
References

22
23

PART 1

Introduction to KIA Motors

From its humble beginning in 1944 at Seoul, South Korea (kia.co.uk, 2016), KIA Motors Corporation
has grown into a leading motor vehicle manufacturing in Korea (MarketLine, 2015) and now has a
place in the world market. It now ranks 74 in Interbrand (interbrand.com, 2016) together with winning
Best Value in America Award for its electric/hybrid car. KIA is derived from Chinese characters
meaning to come out of Asia (Ki meaning arise or come out and a referring to Asia).
Objectives
KIA believes in corporate vision of together for a better future. It strives to maximise value creation
and maintain a balance by the growth of shares for its shareholders by believing in respecting people
and processing the environment management. The key value of KIA is Building a new future and
realizing humanitys dreams by thinking creatively and tackling challenges head on (kia.co.uk,
2016).
Range of Motors
KIA manufactures a whole range of cars to suit all age and budget groups. For example: KIA
manufactures Picanto with a starting price of 8,545 (kia.co.uk, 2016) to New KIA Sorento at
28,795 (kia.co.uk, 2016). The car ranges from Estates to SUV, sports and luxury models.
Absolutica
My report is based on KIAs new product Absolutica. I shall draw the situational analysis
(comprising of 5 Cs, SWOT analysis and PESTLE analysis to launch Absolutica in the American
market) and the Marketing plan (detailing the market segmentation, positioning, marketing mix and
competitive advantage).

Part 2

Situational Analysis
Situational Analysis (smallbusiness.chron.com, 2016) is the first step towards the marketing plan and
helps to understand the internal and external environment of the market, the political and economic
factors surrounding the market, the strengths, weakness, opportunities and threats related to the
product. It further provides a better understanding of the customer, their needs and demands and helps
to create a long term relationship.
The 5 Cs of Absolutica
The knowledge of the companys own capability, customers needs and demands, prices and products
laid by the competitors, the availability of supplies of goods (for example: mechanical parts, body
parts, software), market share, shall help to launch the product successfully. This leads us to the 5 Cs
of marketing; Company, Collaborators, Customers, Competitors and Climate.
Company
Product line: Absolutica will be KIAs own manufacturing brand (Jobber & Chadwick, 2013).
Absolutica will be a high end product and will fall in luxury car (Businesstoday, 2016) range.
Image in the Market: With a best value award in hand, I shall consider Absolutica to be in a
leading position when launched in the American market.
Goals: The goal would be to create a market for Absolutica in leading cities of America,
thereby expanding nationally and global market.
Collaborators
KIA has a manufacturing plant in Georgia, US. The market for Absolutica is USA and a
national plant will enable easy of delivery and access of parts and services as and when
needed between dealers and the company. Considering the success of KIA, I consider the
dealers will be proud to stock Absolutica.
Customers
The target customers are Americans. Customers have benefited in the past from KIA motors
and now have the benefit to have a luxury car being manufactured from their favourite and
award winning company.
Competitors
To survive in a competitive market, it is not only important to understand the customers but
also the competitors. Absolutica will strive to exceed the customer satisfaction as compared to
its competitors (Jobber & Chadwick, 2013). Absolutica will face direct competition from
Chrysler, Ford and General Motors.
Climate

The Climate of 5 Cs cover the macro-environment factor. It takes into account the political,
economic, social and cultural part of the market. I have discussed briefly the macroenvironment for Absolutica in the PESTLE analysis.

SWOT Analysis for Absolutica

Jobber et al (2013) define SWOT analysis as a structured approach to understand the current position
of the business by analysing its strengths, opportunities, weakness and threats. The SWOT analysis
for Absolutica are;
Strengths

Weakness

Wide Geographic Locations

Strong Brand Awareness
Outstanding after sales-service
CSR Responsibility

Opportunities

Increase in sales in US market

Venture in BRIC
Luxury car market

Poor Financial report in the past

Has yet to capture luxury car market
Brand Recall in the past

Threats

Lacks innovation and technology

Highly competitive market
Foreign Currency Risk

Table 2.1
Strengths

KIA motors has presence over 150 countries and has strong hold in the US and South Korea
market.
It now appears in top 100 Interbrand listed companies (interbrand.com).
One of the biggest strength of KIA motors is the 7-year warranty.
KIA fulfils CSR in three fronts social contributions, sustainable operations and business
ethics, under the leadership of the enterprise-wide Social Responsibility council (pr.kia.com).

Weakness

KIA Motors went bankrupt in 1997 due to Asian financial crisis and has been bought over by
Hyundai Motor Company which is still fresh in customers mind.
Constant Recall of car every year either due to exterior lighting, steering fault or other.
KIA is more popular among middle class customers and has yet to meet the high end
customers.

Opportunities

KIA has reported increased sales in US with 14.9% in 2012 and increasing steadily since
(kiamedia.com). It has topped 6% market share overtaking Nissan (kia-world.net)
With the crumbling car market in Russia, KIA has used the advantage of low prices to
become the third largest car maker in the country (Reuteurs.com). Hyundai is planning to
share its new plant with KIA in India, giving KIA the opportunity to enter the India market
(business-standard.com).
KIA has come a long way from being bankrupt to top 100 in Interbrand and increased market
share, KIA has opportunities to tap into the luxury car market. KIA intends to introduce
luxury cars by 2017 (content.usatoday.com).

Threats

Although KIA has emerged into international market, it lacks innovation and technology as
compared to German and Japanese car makers.
The market is very competitive and KIA has continuous threats from Ford Motor, Honda
Motor, Mazda Motor, PSA Peugeot Citroen, Toyota Motor, Volkswagen, Daimler, Fiat Group
Automobiles, SsangYang Motor, General Motor, SAIC Motor and Suzuki Motor (Kia Motor
Corporation SWOT Analysis).
With its Global operations, the company is always exposed to foreign currency exchange risk
with the high proportion of export sales. KIA has presence in 168 countries and any change in
the demand, refinancing conditions, fluctuating in currency rates can have major impact in
companys earnings (Kia Motor Corporation SWOT Analysis).

The SWOT analysis forms an internal part of audit. (Jacka, 2015) regard the internal audit department
can better articulate that value through the development of a value proposition. (Wimoonard et al,
2015) have discussed internal audit as an operational control tool.
I feel the SWOT analysis for Absolutica, crosses the strength and threats cell. KIA has managed to
have a global operation, 168 countries, the strength is now a threat from fierce competition.
The after sales-service and low prices are the major strong points of KIA, but by doing so, it has
deterred the high end customers and can turn this into an opportunity as soon as possible.

PESTLE Analysis for Absolutica

PESTLE analysis gives a product a better insight to launch in a new and existing market, while taking
into consideration the current environment of the market. I am considering to launch Absolutica in
few countries. I shall discuss the PESTLE to launch in American market.
Automotive industry is one of the largest industry in the world and is responsible for half of the
consumption of world oil.

Political: The Presidential elections in USA is due in few months. With the poor performance
by GM, Chrysler and Ford, President Obama did everything possible to save the industry and
get back on its feet. It remains to see what opportunities the new President might bring in.
KIA has seen growth in the American market and with its launch of luxury cars, it will be
looking forward for all help and support possible from the newly elected President to keep
thriving the industry.
Economic: The economic factor of PESTLE plays an important role for Absolutica. It will be
cautious of economic factors of inflation rate, interest rate, exchange rate, economic growth
and foreign investments, government regulations towards car industry, the demand for cars
and the impact of export and import.
Social: Absolutica is created keeping in mind of the latest social trend and fashion. KIA has
developed car bearing in mind the budget related consumers. Absolutica is a stepping stone
towards luxury cars and capping the high end market.
Technological: After immense research and innovation, Absolutica is being created. It falls in
line with its competitors and will be one of the most sophisticated car in the industry.
Absolutica intends to mature in technology with time and will try and be ahead in the design
and innovation.
Legal: Absolutica will comply with all the current, national, international and future
legislations as laid down by the government. It will ensure employees are given their rights
and consumers rights are not affected. Due consideration will be taken towards the taxation
system of the country avoiding money laundering and cars will be manufactured as per
industry specific regulations.
Environment: Absolutica is very conscious of reducing carbon footprints. It will work parallel
with environment and ecological regulations and has plans to manufacture electric cars in
future. It will play an important role towards CSR and intends to start a charity Absolute
Environment with the intention of planting 1000 trees from first year onwards.

Marketing Research
Marketing research takes the immediate condition of the market and provides information of
customers likes and reaction to the product, price, distribution and promotion (Jobber & Chadwick,
2013).
KIA has been targeting budget customers with its outstanding service and quality. It felt the necessity
of expanding its wings and through ad hoc research, retail audits, consumer panel and website
analysis by asking customers preferences and intentions, it felt the need to expand into the luxury car
market. This research helped shape market strategy, understand the potential of the market by putting
it into action, understanding the outcome and utilising the results (Pettit, 2008).

Part 3

10

Marketing Plan
Marketing Planning is corporate strategy planning and takes into consideration all the aspects of
business functions (Jobber & Chadwick, 2013). At this stage, Absolutica is considering only one
market, i.e. one brand, one market. Although, there will be brand extensions based on models and
specifications.
Absolutica is at entry market stage and after careful marketing audit (Jacka, 2015), for the success of
Absolutica, I suggest to read further the segmentation, brand positioning, increasing brand equity,
marketing mix, marketing communication and competitive advantage. The marketing audit was done
by understanding the customer, making the right product, recognise and deal with the competitors and
adding value to the product (jacka, 2015).
Segmentation of Absolutica
Press & Simms (2010) define market segmentation as accessible, measureable, actionable and
substantial. (Jobber & Chadwick, 2013) definition of market segmentation is that of identifying
individuals and organizations with similar characteristics with significant implications for the
determination of marketing strategy.

KIA Absolutica Market Segmentation

Behavioural

Purchase Behaviour
Benefit Sought
Beliefs & Values

Psychographic

Lifestyle
Personality

Profile

Demographic
Geographical
Socio-economic variables

Figure: 3.1

Based on the research I would propose to divide the market into three segments.

11

Behavioural: - This segment would form the base of the Absolutica. The key is to target customers
who look out for innovative products and want to be the first ones to get their hands on the product, in
our case Absolutica car. We then have customers who make purchases for the pleasure and comfort
and to be able to show their hands on the latest model. Apart from this, we can also segment to the
customers who already have KIA models and want to upgrade to the latest model.
Psychographic: - There are customers who prefer luxury cars and it is part of their life. Although,
KIA is new in the luxury car market, it can target and segment those customers who have always
sought high end cars.
Profile: - As it is luxury car, the demographic variable will be 40 plus age customers ranging from
managing directors to professionals of higher level. Geographically, I would propose to launch the
product where Kia already holds the market. This would help ease of help with brand loyal customers.
The target market of Absolutica will be countries with high Kia users. That would be USA to start
with followed by South Korea.
Macro Segmentation will be used in this to categorise the main customers based on Behaviour,
Psychographic and Profile. Cities like New York, California, Dallas and New Jersey will form the
main cities in US market.
Strategies for Creating / Increasing Brand Equity
Absolutica will be known as the car with outstanding luxury features. Crisp metallic finish, heated
leather seats, polish wooden interior, state of art technology will be the main features which will make
Absolutica an absolute luxury car. The slogan Drive with Comfort and Luxury is to target the high
end customers.
The brand Absolutica will stand out and differentiate with other brands. It shall bear the 4-cs of
successful positioning; clarity, consistent, credibility and competitive (Jobber & Chadwick, 2013).
Clarity as in the brand will go with the slogan of Drive with Comfort and Luxury. The target markets
are currently countries with high Kia sales, USA and South Korea.
Absolutica will maintain its consistency. The quality and specially after sales service will not be
compromised. Kia has a 7-year warranty and will continue to provide this to Absolutica brand.
Although The Power to Surprise slogan will be replaced by the current slogan to go with the brand.
The brand will be competitive in terms of pricing. Absolutica has everything to offer in terms of
modern cars, yet with good price and 7-year warranty. This will help Absolutica stand out.

12

The credibility of the brand will grow over time as customers will realise it is indeed a car for comfort
and luxury.

Clarity - Drive With Comfort and

Luxury. Target Market - USA and
South Korea

Consistency-quality of the product

and after sales service

Absolutica 4cs
Positioning
Competitive-low price and 7-year
warranty

Credibility-credibility to go with the

slogan. It will grow over time.

Figure 3.2
Positioning of Absolutica
Positioning in a nutshell is a way of standing out from the competitors and appealing to the public by
putting emphasis on its distinctive features and characteristics (Akpoyomare et al, 2013).
One of the first steps to position strategy for Absolutica is to get the credibility and make an impact on
customers memory. I would recommend to follow six stages;
i.
ii.
iii.
iv.
v.
vi.

Know your competitors.

Establish how the competitors are perceived and evaluated.
Establish the position of competitors.
Analyse the customers.
Position Select.
Position - Monitor.

It is important to know the competitors. Absolutica is priced at the range of $ 25,000 to $35,000 and is
ready to compete with the leading brands in USA including Audi, Hyundai, Saab and Volkswagen. It
will be important to understand their approach to the market, their current positioning, analyse their
customers to be able to target our customers accordingly and then select and monitor Absolutica
position.
Once we have managed to step in the market, I would propose Absolutica to stay in limelight by
regular advertisements in TV, social media, hoardings, auto shows.
Advertisements: - Advertisements will highlight the importance of the car being environmental
friendly and the way the car is manufactured to get the customers a feel of how there is manufactured
and how it impacts the environment.

13

Auto / Trade Shows: - Special Guest passes will be sent to current KIA customers, customers who
express interest in Absolutica and other high end users to get a look and test drive the car.
Jobber & Chadwick (2013), have recommended as Market Segmentation, target markets and
Differentiation as the key tasks of Positioning which we have discussed earlier.
To ensure Absolutica gives back to the community, a charity will be established, namely Absolute
Environment. The aim of Absolute Environment will be cleaner and greener environment, for smart
cities and will plant 1000 trees a year at different locations round the world.
Absolutica as a brand will also have work policies and not make any discrimination. It will position
itself at the workplace and ensure it is LGBT friendly. An inclusion programme will be placed
effectively. Diversity will be a work culture. As it intends to launch the brand, it will work internally
with all the employees and business partners to ensure it understands the brand and manufactures
accordingly. Internal recognition of the brand is essential as it expects employees and B2B employees
to speak about the brand with their friends and family and create a propaganda in social networking
sites.
Customers will be able to link Absolutica as a Functional and Representative needs. Functional in
terms of the actual brand as being able to match with other luxury brands, yet competitive with the
price and able to provide the comfort. Representative in terms of able to understand the impact to the
environment and taking measures to work for the global environment. The advertisements featuring
the car being manufactured, the charity work of Absolute environment will also make customers feel
proud of the brand.
Marketing Communication and Digital Marketing of Absolutica
To market Absolutica, I shall recommend to use internal marketing, face-to-face, digital marketing
and content marketing.
Members of Staff, suppliers, dealers, stakeholders, regulators form part of internal marketing. A
special night can be organised or internal memo can be distributed to inform about Absolutica.
Exhibitions, trade shows, special invitations, expo day, opening days would give Absolutica
opportunities to meet potential customers face-to-face.
In the electronic age, Absolutica will not be left behind and will take advantage of digital marketing
and social media. It is believed that digital technology will surpass all areas of marketing
communications and traditional marketing (Jobber & Chadwick, 2013)
The promotional tools used to launch Absolutica:

14

Search engines and advertising in the net.

360degree marketing giving customers to customise their cars online. For example: change
the colours of car or add a specification such as choice of fabric or leather of the interior of
the car.
Use of e-WOM (word of mouth) (LEVY & Gvili, 2015). For example: portraying Absolutica
in animation as more comfortable than the living room.
Mobile marketing and e-mails by sending regular updates and offers to subscribed customers.
Profile targeting customers through social media. For example: using sponsored ad in
Facebook to pass the information and creating a topic of conversation in Twitter.

Content marketing (Baltes, 2015) will be used extensively to give customers a chance to know
more about Absolutica. This will be done by giving options in printed magazines and providing
links while e-marketing and using social media.
Marketing Mix - Absolutica
Customers tastes, preferences, interests and behaviour have changed with the advent of technology,
globalisation, changes in geographical locations and economic influences, Constantinides (2006).
Customers have become less responsive towards traditional marketing approach and with the advent
of social media, it is necessary and important to have a proper blend of marketing mix for
Absolutica. Neil H. Borden had coined marketing mix with 13 related aspects from product planning
to personal selling and marketing research and analysis (Wood, 1963). James McCarthy formulated
the 4 Ps of marketing mix (Sava & Trif, 2013). 3 more Ps were later added, being; People, Process
and Physical evidence.
Product
A product is anything that is capable of satisfying customer needs (Jobber & Chadwick, 2013). At
KIA we have created Absolutica a high end luxury car for comfort and style.
Absolutica will provide the superior, quality driving experience. It will be available in both petrol and
diesel fuel providing maximum mileage per gallon (60 miles / gallon city drive) starting from 2 litre
to 4 litre engine size.
Absolutica is an intelligent car, that understands the adverse weather conditions and adjusts itself with
brakes, speed and balance. It will be extremely agile to sudden road conditions of potholes and ramps
to minimise the damage to suspension and body.
Leather seats, wood carved interior, glass holds, built in sat-nav and Bluetooth, cruise control, auto
door lock, sun-roof, spacious boot, arm rest, bose speakers, Absolutica is designed for comfort and
take away the tiredness.
Price
As compared to other Ps of marketing mix, Price is the only P which generates revenue, Jobber &
Chadwick (2013). Price is not set in isolation and needs to blend in with product, place and

15

promotion, so as not to overcharge or undercharge. We have already witnessed, how K900 product
failed as customers not willing to pay high price, despite being a good product (autoblog.com).
I would consider market-oriented pricing for Absolutica. The factors, I would consider are;
Marketing Strategy, Value to the Customer, price-quality relationship, explicability, Competition,
Effect on dealers and cost.
Marketing Strategy: - As it is a new product, the first step would be to consider the positioning
strategies taking the 6 stages as discussed in the previous individual assignment and use the new
launch product strategy. I shall consider Rapid Penetration with a combination of low price, high
promotion, product and place.

Rapid Penetration for Absolutica

Price

Product

Place

Promotion
Figures 3.3

The conditions to use the low price strategy is to penetrate the market and mark the dominance over
time. KIA has built a reputation of more budget cars targeting middle-class customers. Based on this
fact, I would not suggest to charge high prices, as customers will not favour the product and will
compare Absolutica with its high end successful competitors. Low prices will also increase the sales
output, thereby gaining market confidence, lift the barrier to entry the market and KIA can work with
the idea of making money later.
Value to the Customer: Customer must definitely get value for the price paid for the product. I would
propose experimentation and economic value to the customer analysis. For example: Absolutica can
start by charging low prices for first 50 customers in a particular region or sponsor a car for a reputed
charity, run competitions to allow customers to drive and experience the product. KIA with its
headquarters in South Korea and years of experience can produce economic value to the customer
thereby giving customers more benefit from the product. KIA already has a 7-year warranty in place.
This can be added with low cost on fuel, high end features at low cost, strong body, etc.
16

Price-Quality Relationships: The price-quality relationship has always had an effect on customers
psychological buying perspective. Customers interpret high price with good quality. However,
Absolutica will stand out in this regard and as discussed earlier in rapid penetration low price and high
quality will be promoted.
Explicability: While selling Absolutica, the sales person can certainly bring out the best of the product
and convert it to the best prices as compared to competitors. With right training, sales of Absolutica
should not be hard.
Competition: Absolutica will keep a close a track of its competitors. It will compete positively and
comfortably with its outstanding product, sophistication, technology, knowledge, comfort, luxury and
value as compared with its immediate and linked competitors.
Effect on dealers: This is very crucial part of the orientation. Absolutica will be sold mostly through
dealers and with its low price to penetrate the market, the dealers might have to compromise with low
margin profit. However, this can be dealt by maintaining good relations with the dealers, and giving
out higher margin on other models.
The above should enable to Absolutica to penetrate US and South Korea market. The price can be
increased depending on the response and market research and experimentation and economic value to
the customer analysis can be considered for price change. To increase sales, special offers can be done
at festive periods and ethics will always be maintained so as not to predate or mislead the market.
Promotion
Promotion is a way of informing the customers of the product through various tools. Good promotions
are the lifeblood of successful market-oriented companies and their brands (Jobber & Chadwick,
2012).
Absolutica will implement a successful integrated marketing communication with its customers by
understanding the opportunities in the market and capturing the market accordingly. Hence, the
comfort and luxury of Absolutica will be analysed and based on the product positioning, customers
will be targeted with the message accordingly. For example: A campaign will be drawn to achieve the
communication objective by linking the comfort of bedroom to that of driving the car. This can be
done through creative agency and other similar providers. The agency will provide and come out with
simple, creative and effective message.
Tools: Tools used to promote Absolutica will be mass, direct and digital. For example: Billboards,
advertisements, sales promotions at launch are some of the mass communications that will be used.
Direct communication can be done at exhibitions, sending invitations to current KIA customers,
informing customers about launch of Absolutica when passing through showroom. Digital
Communication is the newest and most effective way of communicating with customers. Twitter
chats, Facebook sponsored advertisement and pages, websites, emails form part of digital
communication.
Place

17

Ensuring the channel of distribution and reaching the customer, is the Place of Marketing Mix.
Absolutica will use the
Manufacturer Dealer Consumer
channel. This will help the customers to approach the dealer, test drive the car, get their queries
answered and make the purchase. I believe this channel will reconcile the need of dealer and

consumer, improve efficiency and accessibility, Jobber & Chadwick (2013). The Channel strategy
would be on market factors, exclusive distribution and Franchising.
Market Factor: As Absolutica is a KIA brand, buyer will prefer to get the best knowledge and
information through their dealer. As the dealer will specialise on KIA models and exclusively on
Absolutica, spare parts and after sales service will also be provided to the customers.
Exclusive Distribution: One dealer will be established in a given city and town. This however depends
on the population on per square mile / kilometre and the demand for other models of KIA. For
example: New York city.
Franchising: Channel integration will take place through Franchising. KIA to Dealers. All help and
support including training, regular periodicals, information and knowledge will be provided to the
dealers as per the manufacturer and dealer agreement and terms and conditions.
The Franchises will be managed by careful selection, training, motivation and evaluation from time to
time and conflicts resolved swiftly.
The manufacturing plant of KIA is in Georgia, USA, which gives the flexibility of distribution.
Conclusion of Marketing Mix
Absolutica is made after careful research, customer requirement and in competition with other brands.
The slogan Drive with comfort and luxury does go with the product. Care is taken with the price to
be able to penetrate the market and providing value to the customers. Different tools to reach the
customer, including use of social media and promotions are given utmost importance. It is also
ensured that products are available on demand and customers are able to test drive Absolutica before
the purchase. The People involved with the Absolutica, the showroom and interior, the whole
experience of buying Absolutica is designed to be exceptional.
All this definitely creates effectiveness of the product. The success can be measured through social
media, enquiries for the product, purchase and demand of the product. The critics and reviews will
also form a good source to measure the success of the product.
The communication objective and marketing and brand management will form a Absolutica and
customer relationship. Customers while relaxing in their homes will compare to the drive of
Absolutica. After stressful meetings, customer will prefer a drive in Absolutica rather than a cup of
coffee. I believe Absolutica brand may have a stronger effect on consumer behaviour when they are

18

anthropomorphized and specific relations that consumer develop with brand uniquely influence the
subsequent behaviour effects (Agarwal & McGill, 2012).
Competitive Advantage

Bargaining Power
with Suppliers and
buyers

Competitors Analysis

Hands on Experience

Figure 3.4

Absolutica Competitive Advantage

Although, KIA has been in the market, Absolutica, is a new type of high end product and shall make
entry into the market. Absolutica will add, that extra value to establish competitive advantage (Jobber
et al, 2013). It will outperform its competitors by ensuring the bargaining power over suppliers and
buyers, the threats of substitutes and new entrants (Prasad, 2011), by developing competitors analysis
and using the hands on experience.
Bargaining Power with Suppliers and buyers: Absolutica will use KIAs years of reputation to
bargain with its suppliers. Absolutica shall bargain with its customers based on its strengths.
Some of the strengths being; winner of best value in America award, 7-year warranty, state of
art luxury car at an affordable price and after sales service.
Competitor analysis: for Absolutica will be done by identifying the competitors,
understanding the competitors in terms of their finance, managerial, technical knowledge,
their strengths and weaknesses, using the strategic objective of built, hold and harvest, use the
competitor strategy of differentiation and cost leadership and finally understanding the
competitors response to retaliate or continue with the strategy.
Absolutica will be facing many competitors in the luxury car market. Absolutica will focus
mainly on cost leadership and differentiation aspect. It will differentiate in terms of quality,
reliability, environment friendly, stylish yet low price.
In terms of cost leadership:
19

KIA has a manufacturing plant in Georgia and this will benefit by the economies of
scale.
With the hands on experience, it will benefit from less faults and outstanding after
sales service.
KIA can develop interpersonal relationship with Hyundai, its parent company.
Absolutica will benefit in location with manufacturing plant within the country.

Hands on Experience: Another way of developing competitive advantage would by based on

the compatibility within the organisation, knowledge transfer (Argote and Ingram, 2000).
Absolutica benefits from the knowledge by manufacturing motors and with the sales
experience, it can benefit to transfer such knowledge from the senior member of staff to the
current staff working on Absolutica.

20

Part 4

21

Critical Review of Current Debate in Marketing and Brand Management

Does Innovation lead to Ethical Increased Sales?

Oxford dictionaries define Innovation as crucial to the continuing success of any organisation.
Baskaran et al (2016), acknowledge technological innovation playing a critical role in the economic
development of the world and improving the standard of living of the world.
With a staggering $102 billion (autoalliance.com) spent annually on R & D and working parallel with
Silicon Valley and Codaholics (autoalliance.com) innovation is definitely encouraging growth,
development and profits for business. I believe, although innovation is compulsive, it should also lead
to ethical means of sales rather than just revenue increase for the business.
Innovation in car industry has led to high performance in the mechanism of the cars. Car
manufacturers now boast of their cars being equipped with 6 gear stick and reaching maximum miles
in seconds. Lamborghini has claimed to reaching maximum speed in 3.3 seconds (auto-facts.com,
2016). Other car companies have made similar claims (thesupercars.org 2016). Toyota, Volkswagen,
Golf and many other car manufacturing companies are catching up with the speed of the car.
Although, such claims are impressive and does create a desire to possess high speed cars, it is also
leading to increased accidents. (swov.nl, 2012) have discussed the relation between speed and crashes.
The author has discussed of speed playing an important role in crashes as compared to other factors.
Why do drivers speed? Being on the driver speed with high performance car, drivers usually have the
urge to feel the power of the car. It is easy to get tempted to check the performance and capability of
the vehicle. (Richter et al, 2016) have highlighted of how over-taking leads to serious accidents.
Drivers over-take as they have the speed in the car. Young drivers contribute towards the increased
statistics of accidents. (Curry et al, 2014) have portrayed the behaviour of young driver leading to
accidents. I believe, young drivers are lured by the speed innovation and the marketing and sales
approaches used to lure them.
My argument is although, innovation is good and leads to growth, car manufacturers should be more
responsible in creating awareness among drivers. Government round the globe have taken the
responsibility and run campaigns and speed awareness courses to tackle the issue. Greater Manchester
(drivesafe.org.uk, 2014) run campaign to educate, train, publicise and enforce the people to drive
safely. (drive-safely.net, 2016) gives tips on driving safely and other things related to traffic and
weather conditions.
Further, arguments can be developed on innovation of software, which permits manufacturers to cheat
and increase their sales. Volkswagen (Lancaster, 2015) was recently involved in such scandal of
cheating with emissions. Although, innovation was software was a good thing, Volkswagen mis-used
for their profits thereby harming the environment.
Care has to be taken not to take the innovation for granted, but consider it as a boom. Manufacturers
should take the responsibility of being ethical with business practice and create awareness along with
ethical sales.
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