Marketing - A study of Daewoo by Steve Reed
Factors in the 'wider environment' which influenced Daewoo's marketing decisions prior to UK launch in 1995.
Factors in the 'wider environment' which influenced Daewoo's marketing decisions prior to UK launch in 1995.
Socio - cultural :
Daewoo discovered, through their robust information gathering surveys, as well as environmental scanning that the demographic profile of new car purchasers, both current and potential, was changing. This was mainly in areas such as gender and age. It was however cultural influences which played one of the strongest contributory factors in Daewoo's rise to glory. Beliefs and attitudes about the established car sales market allowed Daewoo to exploit major failings by the 'establishment' to provide the 'whole product package' many people wanted. Even a modest shift away from the 'norm' of new car purchasing could allow many peoples beliefs and attitudes to be changed in Daewoo's favor.
'Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action'.
Daewoo discovered, through their robust information gathering surveys, as well as environmental scanning that the demographic profile of new car purchasers, both current and potential, was changing. This was mainly in areas such as gender and age. It was however cultural influences which played one of the strongest contributory factors in Daewoo's rise to glory. Beliefs and attitudes about the established car sales market allowed Daewoo to exploit major failings by the 'establishment' to provide the 'whole product package' many people wanted. Even a modest shift away from the 'norm' of new car purchasing could allow many peoples beliefs and attitudes to be changed in Daewoo's favor.
'Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action'.
Technical :
Technical influences, certainly with regard to new technology, did not play a major role in Daewoo's marketing strategy. They were essentially offering a competent but unexciting range of vehicles, none of which were at the cutting edge of technology. Neither did they introduce new, advanced features in their cars; everything was available to all of Daewoo's competitors.
What Daewoo did introduce was a radical mix of extras, CD players, air-conditioning, free insurances and breakdown cover, as well as computers to provide instant answers to availability queries. As Sony had done when they re-invented the audio cassette player as the portable Walkman in the 1980's, Daewoo used old technology packaged into an exciting new product.
Daewoo stayed ahead of the competition by providing a fresh angle on customer service and offering products which made them stand out as different from their competitors.
Economic :
The economic environment has many areas which will affect the marketing strategy of a company. Types of markets, types of competition, at what stage the business cycle is, both within the industry and in the national economy as a whole. Inflation rates, international exchange rate, levels of unemployment and the disposable income of the targeted customer groups should all influence the marketing strategy. One also needs to consider this on a global basis as well as within the target country.
Daewoo erupted onto the UK car market at a time when interest rates had risen 1% on the previous year, and the CBI was asking for interest rate drops to support manufacturing industry. Disposable income was still rising and consumers felt that times were fairly good, having suffered the high interest rates of the late 80's and early 90's.
Daewoo would certainly have had to consider who this 'feel good factor' applied to when they chose their target market. Disparity in wealth between the rich and poor in the UK had widened. These divides affect attitudes, priorities and in particular the ability to consider the purchase of luxury products such as new cars.
All of the above issues will have influenced the 'marketing mix' which Daewoo applied to their target segments.
Political and Legal :
It is impossible for any legitimate business to not be affected by political and legal influences. At its most basic level, companies need to comply with a wide range of laws. These include Health and Safety legislation Employee rights Consumer protection law Legislation governing selling practices Advertising standards Local bye laws Environmental protection laws.
Many of these laws have been updated and added to in recent times. Minimum wages, laws regulating working hours, discrimination law and strengthening of consumer protection etc have all happened in recent times. In 1995 some of these regulations did not exist but it was still vital for Daewoo to comply with existing legislation. Operating in different countries, with differing legislation means that companies must ensure compliance with a wide range of political and legal protocols. For Daewoo, UK vehicle safety legislation would certainly have needed monitoring from a very early stage in their strategy. Daewoo would have needed to consider all the relevant legislation and codes of practice to make sure that the economics of their plan made it a viable proposition.
Technical influences, certainly with regard to new technology, did not play a major role in Daewoo's marketing strategy. They were essentially offering a competent but unexciting range of vehicles, none of which were at the cutting edge of technology. Neither did they introduce new, advanced features in their cars; everything was available to all of Daewoo's competitors.
What Daewoo did introduce was a radical mix of extras, CD players, air-conditioning, free insurances and breakdown cover, as well as computers to provide instant answers to availability queries. As Sony had done when they re-invented the audio cassette player as the portable Walkman in the 1980's, Daewoo used old technology packaged into an exciting new product.
Daewoo stayed ahead of the competition by providing a fresh angle on customer service and offering products which made them stand out as different from their competitors.
Economic :
The economic environment has many areas which will affect the marketing strategy of a company. Types of markets, types of competition, at what stage the business cycle is, both within the industry and in the national economy as a whole. Inflation rates, international exchange rate, levels of unemployment and the disposable income of the targeted customer groups should all influence the marketing strategy. One also needs to consider this on a global basis as well as within the target country.
Daewoo erupted onto the UK car market at a time when interest rates had risen 1% on the previous year, and the CBI was asking for interest rate drops to support manufacturing industry. Disposable income was still rising and consumers felt that times were fairly good, having suffered the high interest rates of the late 80's and early 90's.
Daewoo would certainly have had to consider who this 'feel good factor' applied to when they chose their target market. Disparity in wealth between the rich and poor in the UK had widened. These divides affect attitudes, priorities and in particular the ability to consider the purchase of luxury products such as new cars.
All of the above issues will have influenced the 'marketing mix' which Daewoo applied to their target segments.
Political and Legal :
It is impossible for any legitimate business to not be affected by political and legal influences. At its most basic level, companies need to comply with a wide range of laws. These include Health and Safety legislation Employee rights Consumer protection law Legislation governing selling practices Advertising standards Local bye laws Environmental protection laws.
Many of these laws have been updated and added to in recent times. Minimum wages, laws regulating working hours, discrimination law and strengthening of consumer protection etc have all happened in recent times. In 1995 some of these regulations did not exist but it was still vital for Daewoo to comply with existing legislation. Operating in different countries, with differing legislation means that companies must ensure compliance with a wide range of political and legal protocols. For Daewoo, UK vehicle safety legislation would certainly have needed monitoring from a very early stage in their strategy. Daewoo would have needed to consider all the relevant legislation and codes of practice to make sure that the economics of their plan made it a viable proposition.
posted by Abd ur Rehman
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