Unit No: Unit 7 – Assignment Brief #2 - Applying Strategic Marketing Management Techniques to

a Market Situation

Introduction
The growth of an organisation relies on its capability to adapt on changes and evolving demand of
the industry. Growth strategies such market penetration, product development, market development,
diversification, etc are some of the strategies that organisations utilise to stay competitive and achieve
growth target. It is also necessary that the organisation is aware of its internal and external
environment so they can be considered in formulation of strategies.

Nissan is one of the leading automotive brands in the Philippines. Adapting some of the above-
mentioned growth strategies had been beneficial for Nissan since its market share rose from 3.5%
(7th) in 2015 to 11.5% (3rd) in the first quarter of 2019 (Parnelos, 2015; Co, 2016; 2017; 2018; 2019).
The main challenge for Nissan is to come up with new marketing techniques for its marketing
strategies to maintain its growth and further increase its market share. The subsequent part of this
essay will analyse the internal and external environment of Nissan and formulate some marketing
techniques that can support its marketing strategies. The essay will also create a plan on how Nissan
can use the relevant marketing strategy options to stay competitive and sustain the growth.

Task 1: Be able to use strategic marketing techniques.

Some of the growth strategies that Nissan could adapt are based on Ansoff’s matrix. These are market
penetration, market development, product development, and diversification.

Market penetration is about selling products to the existing market. This growth strategy focuses on
the products and markets that the organisation already knows and familiar with. Market development
focuses on selling existing products to a new market. Product development is the growth strategy that
focuses in introducing new product to the existing market. Diversification is the growth strategy that
concentrates on introducing new product to a new market (McDonald, 2006; Whalley, 2010).

Nissan has risen market share ranked from being 7th in 2015 to 3rd in the 1st quarter of 2019 (Parnelos,
2015; Co, 2016; 2017; 2018; 2019). Some of the marketing techniques that Nissan has adapted to
penetrate the market is price war. The experience and capability of the management enabled them to
perfectly time in when to enter the price war. Nissan was able to lower down the price to increase the
volume of sales and increase market share without sacrificing its profitability. Further, through market
research and feedback from existing clients, Nissan was able to come up to new models such as the
Terra and Almera that were patronised by the current market (Torres, 2019).

And now, for the company to continue to grow and expand, they can still go for market penetration
since it has given Nissan success in the previous years. However, they need to come up with new
marketing techniques that will sustain this strategy. One marketing technique they can use is to make
partnership with child seat supplier. Since the government has pass the bill requiring the use of child
seat, it will be an attractive promotion include free child seat/s for every purchase of car. This will
attract buyers that are starting a new family.

Another growth strategy that Nissan can adapt is the market development. Inquirer.net has release a
news article saying that developer giant Ayala Land is going to build a new central business district
(CBD) in Kawit Cavite (Dumlao-Abadilla, 2017). Nissan can increase its brand presence in this new
upcoming market by aggressively marketing to target homeowners/tenants for the new subdivisions
and residential units. Mall display will still be an effective marketing technique to promote brand
awareness in this new market since malls will also be featured in this development. Included also in
the development are the school, hospital, and commercial spaces (Dumlao-Abadilla, 2017). This are
potential markets for Nissan to promote its commercial/business vehicles such as Urvan and Navarra.
One marketing technique is to strategically give significant discounts for bulk buying as corporate or
business fleets to increase volume of sales.

Some of the relevant data that played a key factor in the strategy formulation are as follows;

a. According to www.autoindustriya.com, the sales volume, growth, and ranking of Nissan are as
follow;

Year No. of Units Sold Growth Market Share Rank

2015 11,420 52.8% 3.5% 7th
2016 16,897 47.9% 4.2% 7th
2017 24,995 47.9% 5.3% 7th
2018 34,952 39.8% 8.7% 4th
2019** 11,239 81.8% 11.5% 3rd
** First quarter of the year.
 In the last 5 years, the number of units sold, and market share of Nissan is continuously increasing
which proves that the marketing strategies and techniques are so far effective.

b. According to Mr. Raymond Torres, general manager of Nissan Dasmarinas, their main source of
sales is distributed as follows;

Mall display = 66%

Walk in (showroom) = 24%

Others = 10%

And the volume of sales from past few years are as follows;

Year No. of Units Sold Growth

2015 493 36%
2016 670 20%
2017 899 34%
2018 916 1.8%

The volume of sales and growth continuously surging, though it slows down in 2018.

There are many growth marketing strategies that Nissan can use to sustain its growth. It is important
for Nissan to plan on how use these strategies. Based on the Nissan’s current product portfolio and
the market that it serves, the best strategy to start with is the market penetration. Since market
penetration involves selling product to existing market, it will be the least risky strategy option.
Nissan has already stablished its brand in the current market and is already one of the most popular
brands in the automotive industry. However, to be able further increase shares in the current market,
Nissan should be able to come up with marketing techniques that will support this strategy.

Another strategy option that Nissan can consider is the market development. Due to the continuing
progress and development in the country and including its population growth, new potential market
will always emerge. As such, Nissan should constantly review its strengths and weaknesses and scan
thoroughly the external environment for the opportunities and threats that these new markets will
bring. This internal and external analysis will enable Nissan to explore the feasibility of entering these
new markets, or when to enter. It will also help in preparing and deciding for the pricing, promotions,
and formulation of marketing techniques.
The third strategy option that is relevant to Nissan is the product development. Over the years, Nissan
has come up with new models or updated their existing models to satisfy the customers or to stay
competitive. According to McDonald (2015), the major steps for product development are;

1. Idea generation
2. Screening
3. Concept testing
4. Business analysis
5. Product development
6. Testing
7. Commercialisation

Based on the product portfolio off Nissan, their target market will differ depending on the which
model. Some of the models of Nissan which are out in the market are the Urvan, Navara, Almera,
Juke, Sylphy, Terra, Patrol, and G-TR. Each of these models have target market and are marketed
differently.

Almera and Sylphy are the sedan type which are perfect for individuals or families looking for a
convenient form of transportation. Almera aims to cater for those with low level to middle level
income because of its low price while Sylphy aims to cater for those middle-class earners who are
looking for much bigger space and leg room when driving. The G-TR on the other hand is a sedan
sports car targeting those sports car lover that belong to executives and high level of income and can
be considered as a luxury car.

Juke and Terra are SUV type which are perfect for adventurous individuals and growing families due.
Nissan Patrol is also an SUV, but it targets more on the clients that belong to high income earners.
And while Navara and Urvan can be attractive for personal and private use, their main targets are
those who are looking for vehicle for commercial or business use.

With this line up of vehicle models and market standing, the marketing objectives for this year are as
follows;

For Nissan Motors Philippines as a whole;

- To maintain the 40% growth in terms of sales by the end of 2019.
For Nissan Dasmarinas;
- To reach 90 units per months sales for 2019.
- To achieve 5 units online sales per month.
Task 2: Be able to respond to changes in the marketing environment.

There are external forces that affect the marketing strategy formulation of an organisation. For the
case of Nissan, the external factors are;

Political

Proof of Parking Act

Promotion and improvement of public transport

Economic

Implementation of excise tax on brand new vehicles

Real estate / Urban development
Exchange rates

Social

Population growth rate

Family size, structure, income level

Technological

Internet and social media

Technological advancement in terms of transportation.

Government policies such as “Proof of Parking Act” can restrict customers from buying cars since
they will need to have a garage or parking lot for them to purchase a car. Government initiatives
which promote and improve public transport also affect the car industry. People who are just looking
for a safe and convenient way to travel to their everyday jobsite will be able to have these benefits
via public transport. Hence, buying a car is not a necessity anymore.

As for the economic factors, implementation of excise tax will indirectly increase the price of the
vehicles since Nissan will have to pass the cost to its buyers. Currency exchange rate also affects the
production/manufacturing cost of the organisation because the cars and spare parts are exported from
the other countries. Another economic factor that can affect the Nissan’s marketing strategy is the
continuing growth of the real estate development and establishment of new central business district
which creates new communities that will house potential customers or create new market.
There are also social factors that can affect the marketing strategy of Nissan. One being the population
growth rate. Growing population means increase in potential car buyers. Family income level and
lifestyle can also affect Nissan’s marketing. Nowadays, malls have become part of many Filipinos
lifestyle. People visit malls for shopping, eating/dining, watching movie, and for many other
purposes. Hence, malls are always crowded and always a good place to advertise products.

Technological advancement can also affect how Nissan do its marketing. Through the expansion on
the availability of internet connection, use of social media has become a popular mode of
communication. Social media like Facebook has now become one the fastest and easiest way to
advertise products. Online stores like Ayosdito, OLX, Sulit.com are internet platform that facilitate
buy and sell of a lot of things including cars. Nissan can utilise these platforms to increase visibility
among car buyers. Advancement in public transport can also affect the decision making of car buyers
thus it should be considered in the marketing strategy of Nissan.

Conducting an internal analysis is also necessary in order for an organisation to capitalise the
opportunities and mitigate the threats that the external environment presents.

The strengths and weaknesses of Nissan according to Mr. Raymond Torres, General of Nissan
Damarinas are as follows;

Strengths
a. Competitive new line up of models.
The release of new models, Almera and Terra, has pushed up the sales of Nissan in terms of
number of units sold for 2017 and 2018. This will build a good image for these models to compete
in a highly competitive market.

b. Good relationship with major banks.

Having this good relationship with major banks has help Nissan to have a higher rate of approval
in car loans. This relationship also allows Nissan to collect in time or even in advance their
proceeds/payments from the banks. It also serves as a co-branding partner as banks will feature
Nissan cars in their car loan advertisements.

c. Dealership location.
Nissan Dasmarinas is in a good location since Cavite is one of the most prominent cities in the
Philippines due to its proximity in Metro Manila. It has become a convenient place to settle for
those people who are working in Metro Manila.
d. Brand reputation.
Nissan is one of the largest vehicle manufacturers in the world. In 2018, it has become the third
leading car dealer in the Philippines in terms of number of units sold. Having this good portfolio
will help Nissan in attracting more buyers. Nissan also has a good reputation for its durable and
efficient car air-conditioner. Nissan also takes pride for its spacious models.

Weaknesses
a. Inefficient commission processing/releasing.
Not getting the commission in time will demotivate sales agents from working hard. Hence, it
lowers down their efficiency/productivity and tend to support and sell for other brands.

b. Limited space of dealership e.g. parking, lunge, delivery or preparation area.

This limits the capability of Nissan to display various models at the same time. Limited parking
in showrooms might also discourage potential buyers from entering because of the hassle in
searching a place to park.

Knowing its strengths and weaknesses, Nissan will be able to respond accordingly to whatever the
external environment presents. Say for the case of urban/real estate developments, these are potential
source of clients that Nissan can target. A good example is for the case of Kawit, Cavite. Inquirer.net
has released a news article saying that one of biggest developer in the Philippines is planning to build
a new central business district (CBD) in Kawit (Dumlao-Abadilla, 2017). Being in a good dealership
location, such as for the case of Nissan Dasmarinas, will be useful in entering this new marketplace.
By launching a satellite office in Kawit, or neighbouring towns of Kawit, will be a good marketing
move for Nissan Dasmarinas. It will put Nissan in a strategic position to penetrate this new market.
Further, its new models that are currently doing well in the current market does have a potential to
thrive in this new emerging market.

Social media and ecommerce are now becoming part of people’s everyday lives. Nissan can exploit
these avenues to market their existing and future models. They can intensify the use of social media,
such as Facebook, to promote their products. Using Facebook, Nissan can roughly filter their target
market by age, location, and social preferences. Online buy and sell of second-hand cars are also
becoming more attractive to car buyers because of its convenience. It is also easier for car
traders/resellers to reach out to potential buyers due to the availability of internet in most part of the
country. Nissan can explore using these platforms to sell brand new cars to increase volume of sales.
Conclusion

Marketing strategies such as market penetration, market development, and product development are
the strategies Nissan can utilise to ensure its continuous growth. Its marketing techniques in the past
years had lift the market share of Nissan from 3.5% in 2015 to 11.5% in the first quarter of 2019
(Parnelos, 2015; Co, 2016; 2017; 2018; 2019). It is evident that the marketing techniques that they
formulated were effective and were able to support their marketing strategies.

Setting up the marketing objectives and clearly identifying the external and internal factors,
formulation of marketing techniques for Nissan was attained.

Word count = 2483

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