Marketing Management

Final Project

Submitted By:

AaizahTahir (L1S11BBAM2079)ArslanHameed (L1S11BBAM0101)TayyabaBangash (L1S11BBAM0081)

Submitted To:Prof. AwaisQadeer

Submission Date:29/05/14

Acknowledgement

We would like to express my special thanks of gratitude to our teacher Prof. Awais Qadeer who gave us the golden opportunity to do this wonderful project on the Marketing concepts of Volvo, which also helped us in applying practically all the learned concepts and we came to know about so many new things. We are really thankful to him.

Secondly, we would also like to thank our class fellows and acquaintances who helped us a lot in finalizing this project within the limited time frame.

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Executive Summary

This report analyzes all the Marketing Management Concepts studied in this course. The organization in consideration is a renowned automotive company, Volvo. We have applied various concepts of Marketing Management like marketing research, Competitive Advantages, Core and supplementary products, Communication channels, competitive strategies, positioning, relationship management, ho0listic marketing, marketing mix and value chain of Volvo. Volvo has implemented all these concepts very well.

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ContentsAcknowledgement.........................................................................................................................................1

Executive Summary.......................................................................................................................................2

Introduction....................................................................................................................................................8

History of Volvo............................................................................................................................................8

Corporate Mission........................................................................................................................................10

Moto.............................................................................................................................................................10

Vision...........................................................................................................................................................10

Objectives....................................................................................................................................................10

Product & Services by Volvo......................................................................................................................10

Products: (DETAIL IS PROVIDED IN THE SECTION; CORE PRODUCTS)....................................11

Trucks:.................................................................................................................................................11

Buses:...................................................................................................................................................11

Aero:....................................................................................................................................................11

Construction equipment:......................................................................................................................11

Marine Power:..........................................................................................................................................11

Industrial engines & systems:..................................................................................................................12

Services....................................................................................................................................................12

Aero......................................................................................................................................................12

Other:...................................................................................................................................................12

Holistic Marketing Concept.........................................................................................................................12

i) Integrated Marketing........................................................................................................................12

ii) Relationship Marketing....................................................................................................................13

a) Relationship with customers........................................................................................................13

b) Culture support.............................................................................................................................13

c) Relationship with stakeholders....................................................................................................13

The Volvo Group’s commitment to CSR and sustainable development rests upon the following principles:.................................................................................................................................................13

iii) Internal Marketing...........................................................................................................................14

a) Working with people....................................................................................................................14

b) Promoting diversity......................................................................................................................14

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c) Competence development............................................................................................................14

d) Freedom of association................................................................................................................14

iv) Performance Marketing...................................................................................................................14

Integration of Marketing Mix Concept........................................................................................................15

Product.....................................................................................................................................................15

Price.........................................................................................................................................................16

Place.........................................................................................................................................................16

Promotion.................................................................................................................................................16

Facebook......................................................................................................................................16

Twitter..........................................................................................................................................16

YouTube......................................................................................................................................17

Instagram......................................................................................................................................17

Internet Marketing Campaign......................................................................................................17

Marketing Research at Volvo......................................................................................................................18

Volvo’s approach towards Marketing Research......................................................................................18

Using Marketing Research in Decision Making......................................................................................18

Marketing Research & Business Strategy................................................................................................18

Key Competitive Advantages......................................................................................................................18

Safety of Volvo Cars as a core value.......................................................................................................18

Safety innovations:.......................................................................................................................19

The new Volvo FH series:...........................................................................................................19

Quality as a Competitive Advantage.......................................................................................................19

Environmental Care.................................................................................................................................19

Using CRM Systems................................................................................................................................19

Service 2.0................................................................................................................................................19

Using Informational Technology as Competitive Advantage.................................................................20

Core and Supplementary Elements of Products...........................................................................................21

..................................................................................................................................................................21

Core Products...........................................................................................................................................21

1. Volvo Cars.......................................................................................................................................21

2. Volvo Trucks...................................................................................................................................22

Volvo............................................................................................................................................22

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Renault Trucks.............................................................................................................................22

UD................................................................................................................................................22

Mack............................................................................................................................................22

Eicher...........................................................................................................................................22

3. Buses & Coaches.............................................................................................................................23

4. Construction Equipment..................................................................................................................23

5. Marine Power...................................................................................................................................23

6. Industrial engines & systems...........................................................................................................23

7. Financial Services............................................................................................................................23

8. Industrial IT solutions......................................................................................................................23

9. Logistics solutions...........................................................................................................................23

Supplementary Products & Services............................................................................................................23

Spare Parts...............................................................................................................................................23

Corporate Program...................................................................................................................................23

Volvo Car Finance Services.....................................................................................................................23

Volvo Car Insurance................................................................................................................................23

Volvo Car Extended Warranty.................................................................................................................23

Accessories..............................................................................................................................................23

i. Accessories Bluetooth Hand Free................................................................................................23

ii. GPS Portable Navigation System................................................................................................23

iii. Complete Wheels.........................................................................................................................23

Physical & Electronic Channels Used.........................................................................................................23

Electronic Channels.................................................................................................................................23

Global News.................................................................................................................................23

Global Magazine..........................................................................................................................23

Volvo Group on YouTube...........................................................................................................23

Volvo Group Linkedln.................................................................................................................23

Physical Channels....................................................................................................................................23

How Company Promotes its Products & Educates Customers....................................................................23

Promotion/Advertising.............................................................................................................................23

i. Mobile Apps.................................................................................................................................23

ii. Videos..........................................................................................................................................23

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iii. Billboards.....................................................................................................................................23

iv. Volvo Spirit Magazine.................................................................................................................23

v. Volvo Driver Magazine...............................................................................................................23

vi. Many Other Magazines................................................................................................................23

Public Relations.......................................................................................................................................23

Direct Marketing......................................................................................................................................23

a) Interactive Website......................................................................................................................23

b) Target Online Ads........................................................................................................................23

c) Catalogue Distribution.................................................................................................................23

Sales Promotion.......................................................................................................................................23

Personal Selling.......................................................................................................................................23

Competitive strategies..................................................................................................................................23

Market development................................................................................................................................23

Product development...............................................................................................................................23

Volvo’s product development process.................................................................................................23

Diversification..........................................................................................................................................23

Differentiation..........................................................................................................................................23

Innovation............................................................................................................................................23

Joint ventures...........................................................................................................................................23

Dongfeng Nissan and Volvo to Engage in a Joint Venture.................................................................23

Eicher-Volvo joint venture plans to enter mini trucks segment..........................................................23

Positioning brands........................................................................................................................................23

Volvo was always in the lead with ‘Safety’.........................................................................................23

Volvo made ‘Safety’ a priority............................................................................................................23

Introduction of air bags........................................................................................................................23

Standard for safety today.....................................................................................................................23

Brand equity.................................................................................................................................................23

Brand awareness......................................................................................................................................23

Brand image and Brand Associations......................................................................................................23

Brand loyalty............................................................................................................................................23

Managing relationships and building customer loyalty...............................................................................23

Volvo Loyalty Bonus Offer.....................................................................................................................23

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VINE; Online customer platform.............................................................................................................23

Effective After-Sale Services...................................................................................................................23

Value Chain Model......................................................................................................................................23

Product development...............................................................................................................................23

Purchasing................................................................................................................................................23

Production................................................................................................................................................23

Distribution and Service..........................................................................................................................23

Product in Use..........................................................................................................................................23

Re Use......................................................................................................................................................23

Integration of Value Chain and Value Delivery Network...........................................................................23

Value Delivery Network..........................................................................................................................23

SWOT Analysis...........................................................................................................................................23

Strengths..................................................................................................................................................23

Global presence....................................................................................................................................23

Leader in “safety”................................................................................................................................23

Environment friendly...........................................................................................................................23

Weaknesses..............................................................................................................................................23

Less market share.................................................................................................................................23

Identity confusion................................................................................................................................23

Opportunities............................................................................................................................................23

Serving the un-served market..............................................................................................................23

Further innovations/technology...........................................................................................................23

Threats......................................................................................................................................................23

Increasing prices of raw material.........................................................................................................23

Slowdown in World Economy.............................................................................................................23

Increasing Competition........................................................................................................................23

References....................................................................................................................................................23

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IntroductionThe Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service. The Volvo Group, which employs about 115,000 people, has production facilities in 18 countries and sells its products in more than 190 markets. In 2012 the Volvo Group’s sales amounted to about SEK 304 billion. The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden. Volvo shares are listed on OMX Nordic Exchange Stockholm.

Since the streamlining towards commercial vehicles was initiated more than ten years ago, the Volvo Group has significantly strengthened its positions outside the traditionally big markets of Western Europe and North America. Positions have been moved forward by acquisitions in primarily Asia and expansion of the distribution and service networks in for instance Eastern Europe and South America. In the year 2000, markets outside of Western Europe and North America accounted for 16% of Group sales. In 2012 that share had grown to 47%.

History of VolvoVolvo was incorporated in 1915 as a subsidiary of AB SKF, the Swedish ball bearing manufacturer. In 1924, Assar Gabrielsson and Gustaf Larson founded the company, to manufacture Swedish car.

A trial series of 10 cars was built in 1926 and in 1927, the first Volvo (the V4) rolled out of the factory in Lundby, Gothenburg. A total of 297 cars were produced in 1928. Truck production also started that year, a business line that would dominate Volvosales in the early decades.

The company acquired PentaverkenSkovde, an engine manufacturer, in 1930. By 1934, the company began producing bus chassis and marine engines and manufactured its first bus, the B1, in the same year. Volvo was listed on the Stockholm Stock Exchange in 1935.

In 1941, Volvo acquired a majority holding in SvenskaFlygmotor, now Volvo Aero and acquired KopingsMekaniskaVerkstad, a gearbox manufacturer, in 1942. The company produced the first small agricultural tractor in 1946.

By the mid-1950s the company began shipping Volvo cars to the US and acquired BolinderMunktell, a construction equipment manufacturer (now Volvo Construction Equipment).

In 1963 the company started a car assembly business in Halifax, Canada, and Volvo Belgium established a car plant in Torslanda and a truck plant in Alsemberg, near Brussels. In 1965, Volvo established a diesel engine plant in Skovde, Sweden. In the same year, the company opened a plant in Ghent, Belgium, to manufacture cars.

The company manufactured the first modified agricultural tractor, Grus-Kalle, in 1966. Volvo also commenced truck assembly operations in Australia and its car manufacturing operations in Malaysia in 1968. The company also acquired the Olofstrom plant in 1969.

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Volvo opened its first plant in the US, The Kalmar Plant, in 1974. In the following year, Volvo opened its second truck manufacturing plant in Belgium.

The company opened a new plant for producing bus chassis and trucks in Curitiba,Brazil, in 1980.Volvo acquired White Motor Corporation in the US and AB Hoglund&Company in Saffle, Sweden in 1981.

The company acquired GM Heavy Truck Corporation in 1986. Volvo established the Uddevalla Plant in Sweden in 1989.

In 1990, the company entered into an alliance agreement with Renault and VME and acquired Akerman’s Excavators and Zettelmeyer’s Wheel Loaders in the same year. Volvo dissolved its alliance agreement with Renault in 1993.

In 1994, the company shut its Kalmar plant in the US and adopted a strategy to concentrate on core operations and to divest all operations not associated with vehicles and transport in the same year.

The company’s subsidiary Volvo CE purchased the bulldozer manufacturer, Champion of Canada, in 1997, and signed an agreement with Mitsubishi to extend their joint venture to include truck business operations.

The company sold its auto manufacturing business to Ford Motor Company in 1999 and acquired the truck manufacturers Mack and Renault V I in 2001.

In 2002, the company was de-listed from the Tokyo Stock Exchange. Volvo CE opened its new factory in Poland and established its production facilities in Shanghai, China, in the same year.

The company opened its assembly facility for heavy trucks in Moscow, in 2003. Volvo CE also began production operations in China and purchased the assets of Volvo distribution business from LB Smiths in mid-2003.

In 2004, the company divested its holding in Scania to Deutsche Bank. Volvo also opened its factory China National Heavy Truck Corporation (CNHTC) in Jinan, China during the same year. Volvo Construction Equipment acquired the engine remanufacturing related assets of ECHO Industries later that year. Volvo acquired the remaining 50% stake of the North American bus manufacturer Pervost Car, also in 2004. Volvo Lietuva UAB, a wholly owned company of Volvo Truck Corporation, acquired the aftermarket operations for Volvo trucks and buses in Lithuania from UAB Autosabina later in 2004.

In late 2004, Volvo Aero acquired Aero Craft through its strategic alliance with Carlton Forge Works. Volvo sold its reinsurance company Volvo Group Re (Luxembourg) SAtoIkano SA during the same period.

Volvo Penta acquired its independent importer, Marco Motors in December 2004.

In January 2005, Volvo Penta expanded its engine plant in Shanghai, China, thereby increasing its annual production.

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Corporate Mission“Create the safest, most exciting car experience for modern families”

By creating value for our customers, we create value for our shareholders We use our expertise to create transport-related products and services of superior quality, safety and environmental care for demanding customers in selected segments We work with energy, passion and respect for the individual. We limit the impact, but also take advantage of macroeconomic developments under stipulated risk mandates.

MotoVolvo believes in their motto:

“Volvo for Life”

Vision“To be the world’s most desired and successful premium car brand.”

To be a world-class provider of treasury services, valued as the natural and integrated business partner to the Volvo Group companies. Volvo also aims at being the World Leader in sustainable transport solutions. They expect to stand out in the market by:

o Creating value for customers in selected segmentso Pioneering products and services for the transport and infrastructure industrieso Driving quality, safety and environmental careo Working with energy, passion and respect for the individual.

ObjectivesVolvo has set their objectives which they are striving to achieve by the year 2020. Volvo purposes the following objectives:

o To become the most profitable in our industryo Become our customers’ closest business partnerso To capture profitable growth opportunitieso Become proven innovators of energy-efficient transport solutionso Present themselves as a global team of high performing people

Product & Services by VolvoAB Volvo and its subsidiaries are engaged in the manufacture of trucks, buses, leisure boats and workboat engines, construction equipment and financial services.

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The company’s products and services are categorized under the following different segments:

Products:(DETAIL IS PROVIDED IN THE SECTION; CORE PRODUCTS)

Trucks:o Volvo FL serieso Volvo FM serieso Volvo FH serieso Volvo NH serieso Volvo VHD serieso Volvo VN serieso Volvo VM series

Buses:o City buseso Intercity buseso Coacheso Used vehicles

Aero:o Aircraft engineso Space propulsion

Construction equipment:o Backhoe loadero Wheel loaderso Articulated haulerso Motor graderso Skid steer loaderso Excavators

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Marine Power:o Marine leisure boatso Marine commercial work boatso Power generating equipmento Fork lifts

Industrial engines & systems:o Irrigation unitso Forklifts and tractors in harbors and terminalso Generating sets providing powero Combined heat and power systems (CHP)

Serviceso Customer financingo Insuranceo Treasuryo Real estateo Financial consultingo Fleet managemento Insuranceo Financing and leasing options

Aeroo Maintenance, repair and overhaul serviceso Leasing optionso Defense solutionso Regional airline solutionso Commercial airline solutions

Other:o Logistic solutionso Industrial IT solution

Holistic Marketing Concept

i) Integrated Marketing75 percent of social media users prefer email as the method for companies to communicate with them Volvo uses ExactTarget as its targeted email marketing provider. ExactTarget’s email solution allows Volvo to power data-driven messages everything from transactional email sends and abandoned cart campaigns to dynamic content and live offers. Volvo has mastered the product, and uses it to deliver monthly newsletters and targeted offers. Big data is now mainstream, moving from the supercomputing environment managed by data engineers, to enterprise IT applications used by much broader audiences. For digital marketers and advertisers in particular, the benefits of bringing big data mainstream are unmistakable; it provides access to a goldmine of untapped, previously unusable information.

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This is the type of information Volvo Construction uses to enhance its email campaigns. By integrating its ExactTarget-managed email marketing campaigns with data from other parts of the enterprise, the company is able to deliver highly personalized communication to prospects and customers

Volvo's using customer order and location preference data to help local distributors and resellers deliver highly personalized content. Instead of a generic email listing construction equipment inventory at a macro level, the company's ExactTarget, data-rich emails include local dealership location data, logos, listed events, and inventory. A local dealership manager need only include a personal note, photo, and signature for his local prospects and customers to receive a very personalized and actionable email.

ii) Relationship Marketing

a) Relationship with customersVolvo launches ‘My Volvo’ – A Unique New Online Customer Service Experience

Volvo Car UK launches new web portal to communicate direct with its customers Unique ‘My Volvo’ portal designed specifically around individual customers and their cars Bespoke news, product information and offers delivered direct to customers online Volvo Car UK is transforming the way it communicates with its customers with the launch of ‘My Volvo’, an innovative new web portal. My Volvo, which launches this week, is a new service that enables customers to establish an online relationship direct with Volvo Car UK that is personal to them and their car. Existing customers can simply register their details via the portal at www.volvocars.co.uk/myvolvo to access a huge library of information, product news and exclusive offers and see information about their own car.

Even more exciting, for customers new to the brand, they can keep in touch right from the start of the experience, by tracking their car’s progress from the factory to its new home here in the UK.

b) Culture supportSelective sponsoring of culture is important for corporate and brand visibility, and gives Volvo opportunities to enhance their relations with customers, employees and other stakeholders. It is an effective tool to reach certain target groups and thereby promoting the business in a cost effective manner. Care for the employees is an important aspect when Volvo chooses projects in the cultural field.

c) Relationship with stakeholdersAt the Volvo Group, we believe that we have a responsibility towards our employees, business partners and stakeholders, when it comes to our impact on the environment and on the societies where we operate and how we do business. We are committed to conducting business in a responsible manner and to creating value for our shareholders and society.

The Volvo Group’s vision is to become the world leader in sustainable transport solutions. Their Corporate Social Responsibility (CSR) approach is based on our vision, core business, operating context, stakeholders’ expectations as well as their core values and company culture. Our approach to CSR encompasses risk management and value creation dimensions. CSR enables the Volvo Group to contribute to sustainable development and to make a positive contribution to society.

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The Volvo Group’s commitment to CSR and sustainable development rests upon the following principles: Strong and visible leadership in this area Accountability and responsibility within our sphere of influence CSR and sustainability are integral parts of our business, strategy and processes Performance is measured and followed up Resource efficiency Transparency; reporting shall be conducted transparently based on the international standard

Global Reporting Initiative (GRI) To engage stakeholders and take their expectations into account Work proactively and focus on potential risks Partnerships and cooperation

iii) Internal Marketing

a) Working with peoplePeople are the primary engine in our company. They make it possible to achieve our long-term goal – to be successful as a global company with a strong presence around the world.At Human Resources you will work with taking the global strategy and business plans for the organization and translating it into a human resources strategy that will help and guide the employee’s individual and organizational development. The human resources strategies involve performance management, learning and development, rewards, compensation, career development and good management. The career developments can for example be leadership, project management or a specialist career. This also involves all the opportunities for international assignments that our employees get. Both they, and the company, benefit from the experience they get when working deep in other cultures and having colleagues based in countries all around the globe. Human Resources offer challenging and broad career development across the Group, around the world.

b) Promoting diversityWe strive to promote a diverse workforce. No form of discrimination is tolerated. We actively work to recruit and retain a broad spectrum of employees with different backgrounds, experience and perspectives.

c) Competence developmentSecuring and enhancing competences is crucial to being competitive and profitable. A Human Resources function works at Group level to secure and develop our employees, our culture and the organization. A safe place to work

Health, workplace safety and employee wellbeing is a priority for Volvo Group. We are committed to developing work places that increases productivity, reduce costs and contribute to an attractive workplace.

d) Freedom of associationVolvo Group recognizes everyone's right of freedom of association and collective bargaining. Cooperation with unions complies with national laws and regulations in each country.

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iv) Performance MarketingApproximately 90 percent of the total environmental impact of Volvo Group’s trucks is generated during use, mainly through fuel consumption. Fuel consumption also represents a large cost for our customers. We focus our product development on increased energy efficiency and engine and vehicle technology for renewable fuels. Lowering the operating costs makes business and environmental sense; it improves the profitability of our customers while reducing the environmental impact. Volvo commitment is permeated by three aspects:

o environmental careo business ethics o social issues

Volvo takes the environmental impact at all stages of the product lifecycle into account – from the first sketches on the drawing board, throughout its service life until it is recycled. At the same time, energy-efficient products and solutions mean significant savings for our customers. We also strive to improve efficiency and minimize the negative impact from our own production. The long-term ambition for our production is to become carbon dioxide neutral. human rights and. Volvo are committed to significantly reducing our environmental impact, and to raising awareness about environmental issues among our stakeholders and society at large, especially those issues related to the transport industry.

Integration of Marketing Mix ConceptWhen marketing their products, Volvo needs to create a successful mix of:

o The right producto Sold at the right priceo In the right placeo Using the most suitable promotion.

ProductVolvo offers a wide countless range of products under different brands, product varies from place to place or we can say market to market. Volvo offers every kind of transport product with financial services too so that its targeted customers can have an easy access to Volvo’s products. Volvo has nine different brands under which there products are developed:

o The Volvo brand o The Renault truck brand o The UD truck brand o The mac brand o The Eicher brand o The Volvo Penta brand o The SDLG brand o The Prevost brand o The Nova bus brand

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Each product is designed at three core company dimension safety, quality, and environmental care. As Volvo deal in transportation, marine, financial, construction equipment that why they have different model were built to fulfill the customer requirement, Volvo ensure the repair warranty beside that Volvo prepare CPS customer preparation service it is the comprehensive key part of maintenance schedule developed by Volvo for you vehicles.

1. Oil and Filter Change Interval(per mile ) 2. IntervalCabin Air Filter All Models ,3. Service support (discuss your vehicle special servicing need your Volvo retail service staff they

can tailor the maintenance program based on your requirement)

PriceVolvo price of each product varies from country to country, Volvo introduces low price car in last few years back, and Volvo offers Volvo Owners Club Car Purchase Affinity Scheme due to this scheme every member got special discount over many products every year discount rates are changed. Volvo cars also offer special discount over military cars upgrades rewards, this offer is especially for the military related persons, Volvo also announced different good deal and rebates over many selected products, and it gives incentives over many car models.

Volvo provide a finance over purchase of car on lease it also provide discount in lease and in down payment Volvo provide an payment estimator service which actually estimate the total payment period for you on choosing of your product maximum time given by them to leased person is 72 months.

PlaceThe Volvo Group has established a global industrial structure with manufacturing, sales and distribution channels on all continents. We have 67 factories in 18 countries and employed 95,533 employees and 14,794 temporary employees and consultants at the end of 2013. We are present in more than 190 markets and sell over 300,000 trucks, buses, construction equipment machines and engines every year through wholly-owned and independent dealerships.

PromotionVolvo has created a global social media director role as part of a strategy to more closely align digital, online and social PR activity with its global marketing strategy.

Volvo has opted different mediums to promote their products. They are using:

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FacebookUpdate profile timeline daily and share photos posted by consumers. Also create interest groups and a fan page to help drive targeted traffic to Volvo main webpage.

TwitterEncourage customer feedback by directly tweeting at Volvo, to gain consumer insight. Through every advertising channel implement #Volvo to promote discussion about the brand in the Twitter community.

YouTubePost updated videos frequently including commercials, giveaways and quality interviews with CEO Stefan Jacoby, to share new and exciting information about the company.

InstagramCreate contests and giveaways for consumers uploading the best photos of their Volvo to increase excitement about the brand.

Internet Marketing CampaignBeside that by launching an internet marketing campaign, Volvo is having benefits such as; increased sales, greater consumer purchasing intent and increased buyer recommendations. Other than this Volvo is using Google AdWords and reaching more customers directly by purchasing keywords used by niche audience. Volvo is designing personal and creative advertisements and choosing keywords directly related to Volvo. And with an increasing number of people using smartphones, Volvo has established a mobile marketing strategy. It includes an app for people to download where Volvo can send promotional deals directly to consumers to reach them instantly. Consumers can interact in a Question & Answer forum while on the go -Consumers can be involved in competitions, such as an Instagram photo contest.

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Marketing Research at Volvo

Volvo’s approach towards Marketing ResearchGlobal spending on marketing research is over $16.6 billion, with the United States accounting for about 38 percent. The auto-motive industry is one of the biggest users of marketing research information. Volvo Cars, based in Goteborg, Sweden, is no exception. The company conducts about 400 major marketing research studies a year. Volvo employs a wide variety of methods to collect customer information. The research conducted at Volvo Cars is best seen as part of the new-product development (NPD) process.

Volvo spends a significant amount of money on sales and service satisfaction tracking to assess customers’ satisfaction with their sales and service experiences at the dealerships. Although Volvo is famous for its positioning on safety, the company has recently tried to shed its traditional “boxy” design in favor of trendier designs uncovered through marketing research. The Volvo XC90 and S40 are examples of Volvo models that were designed with help from marketing research. In designing its SUV model, Volvo recruited a group of female customers in California and sought in real time throughout all phases of its NPD process, to come up with a truly customer oriented design, Moreover, Volvo undertakes a variety of customer relationship management initiatives to strengthen its link with Volvo owners. Volvo managers acquire customer information through formal research studies as well as informal talks with customers and industry colleagues.

Using Marketing Research in Decision MakingThe aforementioned information-gathering activities are glimpses of marketing research at work. Volvo and other automakers, as well as companies in other industries, conduct a wide range of marketing research activities to help them plan and evaluate their marketing strategies. Volvo uses a methodical research approach to identify winning concepts generations’ beings with market analysis for potential opportunities, as well as concept engineering and concept testing with customers and specific target groups. As the design process moves forward, customers and intimately involved in identifying key wants and needs for the new vehicle. Simultaneously, research continues to support the business case for introducing the new vehicle. Positioning, profitability and communication strategies are researched before, during, and after the launch. And dealers provide critical after-sale data regarding customer behavior, product satisfaction, and servicing issues.

Marketing Research & Business StrategyVolvo is a perfect example of an organization that successfully blends marketing research with its overall business strategy. Aspects of its research demonstrate Volvo’s awareness of its target market and the importance of tailoring its marketing mix to the needs of that target market. Let’s take a more detailed look at the role of marketing research in strategic planning and decision making.

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Key Competitive Advantages

Safety of Volvo Cars as a core valueAs they say, “Safety is our soul”. Safety has been Volvo’s guiding star since 1927. The Volvo founders stated that “Safety is and must be the basic principle in all design work.” Their vision of “Zero Accidents” has given them a competitive advantage. They have worked diligently for more than 8- years to develop increasingly better protection for people in the case of an accident.

Their Accident Research Teams have given them a good insight into the causes of accidents and injuries and what can be done to prevent them. Their products are built to minimize the consequences of accidents. In recent years they have launched intelligent safety systems with the potential to prevent accidents from happening in the first place. Their ultimate goal is zero accidents with Volvo Group products. This vision of zero accidents guides their product development. They are committed to work hard to prevent accidents, but they are also aware of the fact that most accidents involve factors that are out of their control. Therefore, the Volvo Group cooperates with users, authorities, scientists and other actors in society who wants to create a safer world.

Safety innovations:A series of pioneering safety innovations has made Volvo a world leader in automotive safety over the years. It is our firm ambition to maintain this position.

The new Volvo FH series: “The world’s safest Volvo.”The new cab is Volvo’s strongest so far. And the world’s toughest crash tests show that drivers have a good chance of survival in a 50 mph crash with a stationary object.

Quality as a Competitive AdvantageQuality is an expression of Volvo’s goal to offer reliable products and services. In all aspects of their operations, from product development and production, to delivery and customer support, the focus shall be on customers’ needs and expectations. Their goal is to exceed their expectations. With a customer focus based on everyone’s commitment and participation, combined with a process culture, our aim is to be number one in customer satisfaction. This is based on a culture in which all employees are responsive and aware of what must be accomplished to be the best business partner.

Environmental CareVolvo believes that it is self-evident that their products and their operations shall have the lowest possible adverse impact on the environment. They are working to further improve energy efficiency and to reduce emissions in all aspects of their business, with particular focus on the use of their products. Volvo’s goal is that the Volvo Group shall be ranked as a leader in environmental care. To achieve this goal, they strive for a holistic view, continuous improvement, technical development and efficient resource utilization.

Using CRM SystemsAnother, mainstream point of Volvo is heavily using analytics for competitive. Volvo collects terabytes of data from a multitude of embedded sensors in their cars in the field, from their CRM systems, from dealerships and from their factory test beds. These various data streams are combined and analyzed to yield early predictive information, such as on manufacturing defects that haven't even shown up yet. All vertical industries can benefit from analytics, some more than others.

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Service 2.0This is a supplementary service offered by Volvo. It says, “We want your life to be uncomplicated and that you’ll always get the most out of your Volvo. That’s why we offer Volvo Service 2.0 – a service beyond the ordinary. We offer free software updates (that can make your Volvo a little better at every servicing), alternative transport and a complimentary health check of your car.

We will also wash your Volvo, offer a service contact and extend your Volvo Assistance at no extra charge. And, naturally, your Volvo will be taken care of in the best possible way, by expertly trained Volvo technicians, using Volvo methods and Volvo Genuine Parts. Just like always.”

A new competitive advantage to differentiate after sales service, Volvo has introduced this new service which includes the free update of the car's software. This update is now free, even after the end of the warranty. The update is done pro-actively as a preventive operation and not only as a solution tool for a reported problem.

Using Informational Technology as Competitive AdvantageVolvo Car Group strives towards using IT as a competitive advantage–this means that they foremost would like to leverage IT in order to drive customer benefits and customer loyalty via their products. This also means they have a focus on having the right solutions in the whole value chain to support a profitable partnership all the way from suppliers to dealers and the aftermarket. In order to be competitive over time they are also investing heavily into the shortening lead times in the process of developing new cars, models and platforms. This development of more rapid business processes would not be possible without more virtual and integrated development which is highly enabled by hardware, software and skilled people who know how to leverage them. The last and final area for them is to leverage IT into making the company more efficient internally within traditional areas like manufacturing, logistics, finance and HR.

With all the great business opportunities they have available today based on technology, software and business disruption happening in other industries, one of the things that is amusing about the company, is the ability for them as a company to act quick enough. In automotive, they have fairly long and complex development cycles for their products/services but the world around them with modern technology gives them an array of opportunities for improved customer benefits.

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Core and Supplementary Elements of Products

Core ProductsVolvo offers broad range of cars, trucks, construction equipment, and buses to work for you. They also provide engines for leisure and work boats as well as diesel-powered generator sets.

The Volvo Group has products with strong brand names that have been built up over a long time. The Volvo Group’s mission includes “using our combined expertise to create transport-related products and services of superior quality, safety and environmental care for demanding customers in selected segments.”

Beside this Volvo Group is also offering such services as financing, leasing and insurance, action services, warranty, rentals, IT solutions and logistical operations. They also offer various forms of service agreements, accessories and spare parts to support core products. The Volvo Group's increasingly broad range of these soft products now has evolved into a more distinct competitive advantage.

1. Volvo CarsThe company released its first model, the Volvo OV 4, in April 1927. This model featured an open carriage, 4 gears (including reverse) and could reach a maximum speed of 56 mph. The company produced its first truck the ‘Series 1’ in 1928 - this vehicle was instantly met with critical acclaim and success on the commercial market. The Series 1 was also the first Volvo vehicle that garnered interest from other countries. By mid-1932 Volvo had reached the milestone of producing 10,000 vehicles. During this period the company also focused on the production of marine engines with the development of engines such as the U-21. Volvo also added public transport and aircraft to its portfolio during the

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Supplementary ProductsCore Products

1940s. This included the manufacturing off the B1 bus. To deal with the increase in manufacturing and demand Volvo opened the Volvo Halifax Assembly plant in Canada – this was the company’s first outside of Sweden.

During the 1950s the company enjoyed success with models such as the PV444. This car earned Volvo a place on the American market. Throughout the 1960s the company continued to build on its reputation for producing fine quality sports cars. A prime example of this would be the P1800 which became something of a cult icon thanks to its inclusion in the popular TV show ‘The Saint’ with Roger Moore. In January 1999 the Volvo Group sold the Volvo Car Corporation to the Ford Motor Company for $6.45 billion. Subsequently Volvo Cars was then sold to China’s Zhejiang Geely Holding Group in 2010. Currently the company is enjoying success with vehicles such as the C30 Coupe, the S60 saloon and the V50 estate.

2. Volvo TrucksAll brands in the Volvo Group’s truck operations have a unique and distinct brand-specific character that attracts customers in their market segments.

The trucks are sold and marketed under the brands:

VolvoVolvo trucks maximize driver productivity and availability without compromising on safety, and their wide range of services makes your transport duties as efficient, trouble-free and economical as possible. All in all, we provide all the tools you need to achieve the bottom line results that enable you to stay ahead of competition.

Renault TrucksFrom light commercials to international haulage, Renault Trucks' solutions find an exact match for the needs of all transport businesses, no matter how complex or varied. Renault Trucks puts customer service at the heart of its priorities, offering much more than just high performance trucks; real global transport solutions.

UDUD Trucks is marketing a wide range of light, medium and heavy-duty vehicles and also provides various services associated with its primary business.

MackThe phrase "Built like a Mack truck" signifies strength and durability. As America's first integrated truck and engine manufacturer, we hold ourselves to higher standards, and practice balanced design, in which components are engineered to function perfectly with one another. Our dealers are dedicated to helping customers use our vehicles in the most productive, profitable ways with parts and service, leasing options and emergency assistance.

EicherEicher Trucks is one of the largest players in the Indian Commercial Vehicle Market and the obvious premium choice in the value and mass market segments for business minded customers, with high demands on profitability, flexibility and driver effectiveness. Built on 50 years of local presence and international partnerships, the Eicher brand will continue to be the pioneer driving modernization in the Indian transportation industry.

All offer customers a broad range of products and services for efficient and economic transports.

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3. Buses & CoachesVolvo Buses is a subsidiary and a business area of the Swedish vehicle maker Volvo, which became an independent division in 1968. It is based in Gothenburg. It is the world's largest bus manufacturer, with a complete range of heavy buses for passenger transportation. The product range includes complete buses and coaches as well as chassis combined with a comprehensive range of services.

The bus operation has a global presence, with production in Europe, North/South America, Asia and Australia. Former production facility was located in Irvine, Scotland (closed in 2000) and India (closed in 2008).

4. Construction EquipmentVolvo Construction Equipment develops, manufactures and markets equipment for construction and related industries. Its products are leaders in many world markets, and include a comprehensive range of wheel loaders, hydraulic wheeled and crawler excavators, articulated haulers, road machinery and a wide range of compact equipment.

As part of Volvo Group, Volvo Construction Equipment is the world’s third largest construction equipment manufacturer. With its headquarters in Brussels, Belgium, Volvo Construction Equipment is mainly engaged in manufacturing excavators, wheel loaders, articulated haulers, motor graders, compactors, pavers and milling machines. In 1995 Volvo Construction Equipment became an exclusively-owned subsidiary of Volvo Group. In the same year, Volvo Construction Equipment also purchased French Pel-Job Group which manufactured light construction machinery and equipment. In 1997, the company merged with Canadian motor grader manufacturer Champion Company. In May 1998, it took over the business line of South Korean Samsung Heavy Industry Construction Equipment.

5. Marine PowerVolvo Penta manufactures engines and drive systems for marine applications, for both leisure and commercial craft, with an engine range of 10 to 900 hp and has a global service network of approximately 4,000 dealers. Volvo Penta also supplies industrial engines ranging from 75 kW to 640 kW for irrigation pumps, generator units and other industrial applications. Volvo Penta provides power systems for customers who produce leisure boats, workboats, power generating equipment, forklifts and much more. Their products are found all over the world and are well known for their quality, reliability and good environmental performance.

6. Industrial engines & systemsVolvo supply people with industrial engines for stationary and off-road applications and engines for the electrical power generation. Technical quality, reliability and worldwide support are key factors why builders of equipment, machines and vehicles choose Volvo power. Volvo Penta's network of qualified and skilled service dealers provide everything from spare parts and advice to extensive and tailor-made agreements.

7. Financial ServicesVolvo Financial Services (VFS) was formed in 2001 when Volvo consolidated a number of smaller finance units from its various business areas into a single business area with sales financing as its core

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competence. The primary focus of VFS is to provide a full range of financial services to customers and dealers of the Volvo Group.

Headquartered in Greensboro, North Carolina, VFS is active throughout Australia, Europe, the Americas and Asia. VFS's global team of about 1,250 professionals manages approximately US$13.7 billion of assets; located in 40 countries VFS supports Volvo Group customers and dealers with financing solutions through all stages of the business cycle. We partner with our sister product companies to provide a full range of finance and lease products.

VFS provides financial services for Mack Truck, Volvo Truck, Volvo Bus, UD Truck as well as Volvo Construction Equipment products. VFS plays an important role in Volvo's strategy for becoming the world's leading provider of commercial transport solutions.

8. Industrial IT solutionsVolvo IT is a competent and reliable provider of IT solutions. With heritage in the complex and demanding automotive industry the company is today delivering information technology to several major corporations and organizations.

We feel strongly about environmental and social issues, with a focus on sustainable IT. Since we have the means, we believe it’s our responsibility to seek creative and innovative ways to make a difference through technology.

9. Logistics solutionsAfter more than 50 years within this industry Volvo understand their customers' needs and are capable of delivering logistics solutions that work smoothly in their day-to-day reality. By providing world-class supply chain expertise and services they secure rational production, reliable deliveries and dependable spare parts supply, thereby enhancing profitability and competitiveness for global automotive companies.

Volvo Group Logistics Services is a part of Volvo Group Trucks Operations and they have approx. 5 000 employees on more than 60 locations world-wide. As part of the Volvo Group they share the core values quality, safety and environmental care. It also means they have a long-term philosophy and the strength to develop sustainable solutions.

Supplementary Products & ServicesIn addition to vehicles and machines, the Volvo Group’s offering includes various types of financing solutions, insurance, rental services, spare parts, preventive maintenance, service agreements, assistance services and IT services. The range and flexibility of the offering means that the solutions can be customized for each customer.

Since a large part of the offering within the aftermarket business is requested as long as products are being used, they contribute to balancing the fluctuations in the business cycle for the Group. By strengthening the aftermarket offering, profitability and revenue sustainability can improve for the Group throughout the business cycle. The strategy to increase sales of services and aftermarket products is an important element in the Volvo Group’s effort to achieve targets for profitability and growth, both in

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mature markets and in the Group’s new markets. During 2013, the services and aftermarket products business (soft products) represented approximately 27% of the Volvo Group's net sales, which was unchanged compared to 2012.

The supplementary products and services which support the core products of Volvo are listed below:

Spare PartsThe Volvo ownership experience is made up of many parts. Some are obvious, some are not. If you think about it, a Volvo owner probably wouldn't want your workshop to exchange the genuine parts that make their Volvo a Volvo, for something else that is not 100% guaranteed to support original safety and quality. What they'd probably want is to have their Volvo professionally serviced, with Volvo genuine parts, the only spare parts that are always guaranteed to carry the same uncompromising promise as the car itself. Parts that you know have been designed, tested and manufactured according to Volvo's detailed specifications, in order to interact optimally with all the other parts in the different systems of the car.

Corporate ProgramAs a Volvo Corporate Program member, you will enjoy not only a unique driving experience but also service that exceeds your expectations. This is the Volvo promise, extended to you in both work and life, and expressed through exhilarating performance, pure luxury and obsessive attention to detail. Volvo's classic Scandinavian design - encompassing an exceptionally comfortable ergonomic driver's environment and the world's most effective car safety systems - ensures your workday driving is as pleasurable as your weekend road trips.

Volvo Car Finance ServicesChoosing the right vehicle and finding the right financial package has been made easier with Volvo Car Financial Services. As you would expect, Volva has a flexible range of financial products, tailored to make your life easier.

Whether you are a private purchaser or you are choosing a Volvo for business, they have a wide range of flexible finance and lease products. After all, the right car needs the right financial package to complement your lifestyle.

Volvo Car InsuranceVolvo Car Insurance is designed with Volvo Owners in mind. Volvo insures you for accidental loss, damage or liability which happens arising out of the events set out in your policy during the period of insurance.

This cover will be given on the basis:

that you have paid or agreed to pay us the premium for the cover you have selected when you applied for cover and which the current schedule indicates is in force,

of the verbal and/or written information provided by you which you gave after having been advised of your Duty of Disclosure either verbally or in writing. If you failed to comply with your Duty of Disclosure, we may be entitled to reduce our liability under the policy in respect of a

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claim or we may cancel your policy. If you have told us something which is fraudulent, we also have the option of avoiding your policy from the effective date stated in the current schedule.

Volvo Car Extended WarrantyAt Volvo, the guiding principle behind everything they do is safety. From the manufacture of Volvo vehicles, parts and accessories, to servicing, warranties and the Volvo Roadside Assistance Program, your peace of mind is always our first concern.

Before the three year warranty ends on your vehicle, Volvo offers a number of options which can minimize the expense of maintaining your Volvo to the highest possible standards and ensuring continued trouble free motoring and better resale value when you replace it with another Volvo. After the initial new car warranty period has expired, you can continue to enjoy 'new' car peace of mind and 24 hours Roadside Assistance by purchasing an Extended Warranty Policy. You can choose from one or two year coverage with unlimited kilometers.

In order to take advantage of this offer, the Extended Warranty Policy must be purchased prior to your new car warranty expiring. In general terms the warranty covers mechanical failure due to manufacturing or material failure. While it cannot be claimed to be a 'new' car warranty it is in many ways very similar. As with new car warranty, service and maintenance should be carried out by an Authorized Volvo Retailer.

This warranty does not affect any of your statutory rights. It is most important that you understand what is covered by the warranty and what is not. For that purpose, the list of items covered and the list of exceptions follow:

Engine Transmission Steering Brakes Cooling System Air Conditioning Drive Axle Housing Electrical Engine Management Systems Audio/Sound Equipment Genuine Volvo Accessories/Factory Options Supplementary Restraining System – SRS Volvo Roadside Assistance

AccessoriesVolvo has created a whole range of accessories that look good and come in handy every day. If you would like to stay connected in your car, their accessories provide the answer. Not to mention their Pack & Load accessories, which are great if you carry sports equipment, pets and other cargo. The accessories include:

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i. Accessories Bluetooth Hand FreeThe Accessory Volvo Bluetooth Hands-free system with voice control is a wireless system that is easy to use. Simply press the call button and it listens to your commands via voice control. The system also has good sound with interference reduction, giving a great call experience. For incoming and outgoing calls, sound from the car’s audio and navigation system are automatically muted.

ii. GPS Portable Navigation SystemWith the Garmin nüvi, you get an easy-to-use, intelligent portable navigation of award-winning design. The Garmin nüvi 3790 comes preloaded with full-coverage European mapping, complete with Volvo dealer locations, and it's the perfect choice for you who want to make the most of your Volvo driving experience. Positioned at the left of the dashboard, the Garmin nüvi is always easy to view and operate. Removing it and putting it back is easy too. The nüvi is placed on a special mount, installed by your Volvo workshop. The mount has a built-in speaker, making it easy to hear directions while driving.

iii. Complete WheelsVolvo offers complete wheels for the best driving experiences. These wheels are selected to fit each model and tested for rolling resistance, wear and tear and connection to the road under various conditions.

Physical & Electronic Channels Used

Electronic ChannelsThere are easy ways to learn more about the Volvo Group. You can find them in a wide variety of channels, where you can get an in-depth look at various aspects of the company and join conversation.

Global NewsOn Global News, you will find articles, photo stories and TV reports covering a wide variety of subjects related to the transport and infrastructure industries.Visit Global News to catch up with the latest news from the Volvo Group, to meet the people behind our products and services and our customers. The stories on Global News are issued in English and target a global audience.

Global MagazineGlobal Magazine is a publication for all employees within Volvo Group with a circulation of approximately 80,000 copies. Editor in Chief: Susanne Hanssen

Volvo Group on YouTubeOn Volvo Youtube channel, you will find a range of entertaining videos - new innovations, cool stunts, adventures around the world, and much more.

Volvo Group LinkedlnOn Volvo Linkedln, you can leverage your professional network, and get hired.

Beside these Volvo has website of every region and they also have a web store which sells genuine Volvo parts. Volvo Parts Web store is your source for OEM Volvo Parts. You can directly make purchases from there with available catalogue they provide.

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Physical ChannelsThe Volvo Group has an established and strong position in Europe, North America, and South America. Through the acquisitions of UD Trucks and Lingong and the cooperation within trucks and buses with India-based Eicher Motors the position has been strengthened in many markets in Asia. Through its acquisitions the Volvo Group has also established a global industrial structure with manufacturing as well as sales and distribution channels on all continents.

Volvo performed some careful market research and they understand the nature of the target market’s demand for service. Specifically, Volvo found that customers use replacement parts in two distinctly different situations: scheduled maintenance and emergency roadside repairs. Volvo existing distribution system works well because customers’ needs varied little, so the need for parts could be anticipated, ordered, and delivered on a regular basis. Volvo grasps the nature of the target market’s demand for parts on an emergency basis; Volvo is able to develop a distribution strategy to meet the needs of its customers. Working with FedEx Logistics Services, Volvo set up a warehouse in Memphis, Tennessee that shocked the full line of truck parts. Now when a dealer needs parts for emergency repairs, it simply calls a toll-free number or goes online to place an order and the parts are shipped out via air, often on the same day, and are available to dealers in the evening. Parts can also be delivered directly to a roadside repair site if need be. As is obvious, such a high level of customer service could be provided only through meticulous attention to distribution strategy and the superbly functioning marketing channel that resulted from such attention to target market needs.

How Company Promotes its Products & Educates Customers

Promotion/AdvertisingBecause every company in any industry uses advertising to promote their product we decided to come up with this following advertising strategy.

i. Mobile AppsVolvo has their own mobile apps and they are divided in three categories: Product Apps, Owner’s App, and Campaign App.

ii. VideosThey have commercials on Television (mainly channels for automobiles) but not only. The video commercials can also be found on YouTube.

iii. BillboardsThey are being used as a way of advertising almost in every country where they are selling their products.

iv. Volvo Spirit MagazineSpirit magazine is Volvo Construction Equipment’s company magazine, full of Volvo news and business updates. It is intended for every Volvo enthusiast.

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v. Volvo Driver MagazineIt is a magazine for Volvo members, which contains information about Club meetings and events, technical information and advice, topics of general interest, all the latest Volvo news, and articles by Members, and a Sales & Wants section. It is being distributed once a year, only to Volvo members.

vi. Many Other MagazinesVolvo is advertising in variety of different magazines, especially in the ones specialized for automobiles, such as Top Gear, AutoCar, AutoExpress and so on.

Volvo Cars of North America rather than creating just a marketing sponsorship or promotional program, they developed a multi-level marketing partnership that now extends far beyond the promotional arena. This includes cross promotions, joint advertising, a dealer component, marketing exposure on the national auto show circuit, a life-size Volvo LEGO car placed in high-trafficked areas, Volvo cars placed at LEGOLAND California, LEGOLAND marketed in the Volvo auto dealer channel, special events, corporate/employee programs, as well as safety awareness activities.

As a result of this partnership brand marketing program, Volvo can now reach customers in a channel where it does not compete—the theme park industry—and LEGOLAND California and the LEGO brand can now reach customers in a channel where it does not compete: automotive.

Public RelationsFor their PR strategy they have decided to get into media through:

A press release on our website A press conference

On their press release and the conference they will emphasize their new ecological and safety direction and will also announce their plans for moving into the new developing markets. Further, they will organize and sponsor events about ecology. There we will introduce their research and innovation towards more ecological vehicles.

Direct Marketing

a) Interactive WebsiteSince the consumers are very connected with the internet, this is a good opportunity for VOLVO to create a direct channel with the customers. With an interactive website, VOLVO will provide a service, where possible customers will have the possibility to make question and receive answers in real time. This service will help the customers to create a better idea about the products that VOLVO supplies.

b) Target Online AdsSocial networks and internet have become very popular in the last years. This trend can be used by VOLVO to advertise its products as much as possible. Being in a constant contact with the VOLVO ads, will make the consumers more aware of the products that VOLVO produces.

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c) Catalogue DistributionThe printed media is also a good marketing tool that VOLVO might use. They can give free catalogues to possible consumers, so that they can become more familiar with the products. Consumers can see all the products and they can get detailed information on the products they are looking for.

Sales PromotionIn order to maximize sales, Volvo Company considers the car warranty that will cover for any mechanical or electrical repairs needed on the car or parts of it. Tactical promotion warranty’s strategies can be adopted by manufacturers to maximize sales in peak trading periods, for example seasonal offers or new product launches. At the same time, company should consider offering new extended packages, which will last longer and covers fixing more damages than other car manufacturing companies do.

Personal SellingAs Volvo has a skilled and highly effective staff service, we want to take advantage of this characteristic. The in store experience of Volvo should be perfect. Our sales teams have been train to engage the customers and persuade them that Volvo is the safest and most environmentally friendly car they can get on the market. Personal selling is our way to create a relationship with our customers. We want to install trust and loyalty. By providing them with valuable information and by showing them that we care, they will more likely come back in the future. We understand that buying a car is an investment and for that very reason we engage with the customer through a personal as well as professional relationship.

We will not engage through telemarketing or telephone marketing sales strategy as we want Volvo to be seen still seen as a “luxurious” with responsible and respectable concerns of our customers.

In summary, Volvo has a high skilled staff and high quality service and because they are selling expensive products with very high specific values, the company has to:

Install trust with customers, which will lead to loyalty Provide valuable information Persuasion and very effective sales methods

Competitive strategies

Market developmentIn 1927 the first series-manufactured Volvo car in Sweden and after the huge success in Sweden they moved out to different geographical regions. After the continuous expansion efforts now in 2013 the Group employs 110,000 people, has production facilities in 18 countries, and sells its products in more than 190 markets as mentioned in their annual report 2013.

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Product developmentVolvo kept on developing its products since it placed its roots in the automobile industry. It has worked hard to achieve the superior quality with the safest transport. They have the developed their products through consistent innovations and improvements. They have utilized technology to break through the product development. They promise to make their products safer and more environment friendly. A series of pioneering safety innovations has made Volvo a world leader in automotive safety over the years. It is their firm ambition to maintain this position.

They are spending heavily on the RnD for product development. Costs for research and development amounted to SEK 14.8 billion (13.3) for 2012, corresponding to 4.9% (4.4) of net sales according to the annual report.

Volvo’s product development process

Product development in six stagesThere are six stages to our product development cycle. Each stage has different environmental, quality and safety objectives that need to be met before proceeding to the next stage.

Global product development process overview

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The scope of the project is defined by balancing project targets, development requirements and alternative solutions.

The concept is chosen through a process of market research, environmental impact assessments, and the business case.

The applied research phase, which includes the technical feasibility study. The development phase includes building, verifying, validating and ratifying the product

solution. Market, aftermarket, manufacturing and assembly solutions need to be refined by conducting feasibility studies.

The industrialization and commercialization phase where the industrial system has to be installed prepared and verified to enable production.

The launch of the product and the aftermarket products.

DiversificationVolvo started up with the cars and then pursued related diversification with Trucks, Buses & coaches, Industrial engines & systems, Logistics solutions. And it further pursued unrelated diversification with Construction equipment, Marine power, financial services and Industrial IT solutions.

Different types of investments perform better under different market conditions. By investing in more than one type of investment you diversify, which can help reduce the risk for your overall investment portfolio. This diversification allows customers to have an excellent customer service, hence acquiring a service along with their products. Diversification helped Volvo gain a competitive advantage over its competitors and strengthen its position.

DifferentiationVolvo has been differentiating itself with the focus based on safety, quality and environment care. It’s trying to differentiate itself from others by utilizing the technology, using the holistic approach and concept of safety which is hard for any competitor to imitate.

InnovationIt is differentiating on the basis of continuous innovation. Some of which include:

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Lean manufacturingIn order to ensure sustainability and to increase efficiency Volvo is looking into manufacturing process needs with minimum use of energy, materials and water. This concept fits well with the principles of lean manufacturing.

Drive EVolvo's Drive-E encompasses a sustainable, efficient and clean manufacturing process (including the use of recyclable materials) as well as more efficient low-emission powertrains. But its most visible elements will be these new Drive-E engines, which are designed to deliver pleasing performance along with frugal fuel efficiency. They are also designed to be teamed with electrification in future hybrid vehicles.

Sensus; You and your car, connectedSensus is a philosophy technology that connects you with your car – and the world around you. The elegant solution is designed to give information, entertainment and support just when you need them, allowing us to effortlessly and instinctively control and personalize every aspect of the drive.

IntelliSafe; Redefining safety, every dayIntelliSafe is a complete approach to car safety. By using smart technologies it protects the passengers. It makes driving a Volvo simpler, more enjoyable and less stressful. Volvo has been leading the way in safety since 1927, and by 2020 their vision is that no one will be killed or seriously injured in a new Volvo.

Joint venturesVolvo keeps itself involved with other companies to revolutionize things in the field of automobile industry. Some of which include:

Dongfeng Nissan and Volvo to Engage in a Joint VentureDFG intends to establish more competitive alliances with Nissan and AB Volvo respectively, in order for all the parties to achieve the best development in their specialized field.

DFG, Nissan Motor, DFL and AB Volvo have signed a non-binding framework agreement with the intention of AB Volvo to invest on heavy and medium duty commercial vehicle and engine business while on the part of Nissan Motor it remained committed to the long term cooperation with DFG especially with regards to passenger vehicles and light commercial business.

Eicher-Volvo joint venture plans to enter mini trucks segmentVE Commercial Vehicle, a joint venture between Eicher Ltd and Volvo, is exploring the possibility of entering the small commercial vehicle segment with a range of mini trucks, a move that could pit it against bigger rivals Tata Motors.

Positioning brandsBrands exist to convey a degree of consistency in the consumers mind. For a successful positioning, brands must focus on a target, own one main benefit area that no one else can own and then shout it from the mountain top.

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Al Ries is a marketing professional and author. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries&Ries. Along with Jack Trout, Ries coined the term "positioning", to the field of marketing, and authored Positioning: The Battle for Your Mind, an industry standard on the subject.

A few years ago he challenged all marketers to get your brand down to one word. That’s a hell of a lot better than the excessively long-winded 5-page briefs. Now, that’s what a successful positioning is.

When you ask consumers one word to describe Volvo, without hesitation they say “Safety”

Volvo’s core positioning has been safety, but it also promises other benefits, including a long-lasting car and good service. Volvo (and every brand) must represent a promise about the total experience customers can expect. For Volvo safety is not just a claim or demo in their TV ads, but is everything they do. But the real beauty for Volvo is their obsession with safety.

Volvo was always in the lead with ‘Safety’Volvo first featured the safety angle in the 1940s and became completely focused in 1960s even before the consumers cared about safety and wearing seat belts was an unknown concept. But the market place has enthralled since. Now, the website; Car and Driver states safety as the #1 benefit that consumers are looking for in a new car.

Volvo made ‘Safety’ a priorityIn 1958, Volvo came up with the 3-point seat belt. They could patent it and made millions, but Volvo preferred to share the technology with all the other car manufacturers because they believed so strongly in it. That says much about Volvo’s conviction and authenticity.

Introduction of air bagsVolvo has always been way ahead of car safety regulations. In the 1990s, Volvo was ahead of the curve on the introduction of air bags and side-air bags. In TV ads, we got so used to seeing the crash test dummy ads re-enforcing Volvo’s ownership over safety.

Standard for safety todayVolvo continues to set the standard for safety today. The 2012 IIHS (Insurance Institute of Highway Safety) had 3 Volvo models in the 10 Top Safety Picks, the most of any car brand. The Euro NCAP collision test has recognize 2012 Volvo V40 as the best car they’ve ever tested, giving it the top rating of five stars in the Euro NCAP collision test.

Brand equityBrand Equity can be expressed as the amount of loyalty a customer has towards a brand, in other words it is a set of assets and liabilities linked to a brand, its name and symbol that add value or subtract from the value provided by a product or service, to a firm and customers respectively.

Researchers see brand equity as a key asset of a firm which comprises of– brand awareness, brand loyalty, and brand associations – are the key issues which have to be actively managed.

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Brand awarenessVolvo has wide brand awareness. It is mainly about safety and the aim of the management is to create above all, one association in the consumer’s minds: “Volvo = Safety”. The depth and breadth of brand awareness were clear.

The consumer is aware that Volvo “designs cars for a better life” and this is a unique offer in the premium segment. It is the aim of Volvo that their customers see a different kind of premium experience in their offer, an experience based on sharing and caring. They claim that every Volvo customer is unique and expects to be treated personally. The people should be aware that all of their cars are premium in design, build, fit and finish.

Brand image and Brand AssociationsThe brand image is established in people’s minds/memories and brand associations make up the brand image. Volvo wants to create an image in consumers´ mind which involves safety, quality and ecology. These are the three main dimensions of the brand and it is their target to achieve the best customer satisfaction world-wide. Hence, it is obvious that it is their marketing strategy to make up a positive brand image with those three dimensions.

Brand loyaltyBrand loyalty is an important issue for Volvo Cars. Swedes are pretty loyal and they feel a certain sense of loyalty to their brands.

Historically, brand loyalty is significantly higher among Volvo owners versus other automobile manufacturers. Owners are often proud of achieving prodigious mileages. According to some figures the average age of a Volvo being discarded is second only to Mercedes at 19.8 years. Reliability is considered better than average and in the USA Volvo dealers are listed by Forbes as one of the best among all car makers (9th) and luxury car makers (6th).

Figure shows a brand pyramid built by Volvo Cars Corporation to analyze the most important values and attributes Volvo Cars have in the different classes.

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Brand Equity

Brand Awareness

Brand Associations

Brand Loyalty

At the bottom, premium quality, customer experience and driving dynamics are the basic attributes which a car brand should have if they want to compete in the premium market segmentation. Volvo cars have these qualifications. In the middle of the pyramid is environmental care which makes Volvo cars different from other car brands. This can also be seen as a new attractive point to customers. On the top of the pyramid is safety. This means safety is the most important attribute and best advantage Volvo has. What makes Volvo Cars unique in the automotive world is its focus on human values in life. Caring about yourself and others, the safety concept encompasses not only the passengers of the car, but also passengers in other cars, and pedestrians. Environmental care goes beyond legislation and consideration for customers. This figure gives a clear and general image of brand positioning of Volvo cars group.

Managing relationships and building customer loyaltySatisfaction is an indicator of met or exceeded expectations. Satisfaction is one driver which results in recommendation and repurchases intentions. If a customer received what she or he expected, the customer is most likely to be satisfied. Volvo is a company with many loyal customers who spend more and more money with the company. Their findings show overall satisfaction and loyalty in Volvo’s satisfaction-loyalty-performance indicator.

So, Volvo understands each customer’s business is different. Volvo understands their unique requirements and to find the most appropriate solution that matches their expectations and current business needs. It takes several steps to maintain relationships with customers and gain loyalty in return.

Volvo Loyalty Bonus OfferVolvo has a loyalty bonus for its loyal customers. With the Volvo Loyalty Bonus, if you currently own or lease a Volvo, or have owned or leased a Volvo within the past 6 months, you get up to $1500 towards the purchase or lease of a new 2014 or 2015 Volvo. That means you get a brand new Volvo, and a little extra cash. This offer is also available to eligible customers who currently own or lease a Saab vehicle.

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VINE; Online customer platformVolvo wanted to promote brand loyalty of lessees who, by virtue of their short-term relationships, were more likely to move on after their terms expired. Volvo owners love the brand, partly because Volvo treats them like family. By also treating new lease holders like “family,” Volvo could inspire the same kind of loyalty.

They developed VINE (Volvo Inspired Network of Enthusiasts), an online social community designed to connect lessees with the Volvo brand.

The campaign improved brand loyalty among lessees reinforcing the sincerity of Volvo’s commitment. The program further evolved to become the center piece of a robust CRM engine, hosting sustained dialogue and providing an important line of communication for customers old and new.

Effective After-Sale ServicesTo enhance customers’ competitive edge, Volvo increasingly provides financing, insurance, rental services, spare parts, components, maintenance, reliable IT solutions and other business services. This is how they create value for customers and enhance loyalty.

Value Chain ModelTaking responsibility for what Volvo produces, how they produce it and how they act is the core of the Volvo Group’s Corporate Social Responsibility and sustainability commitment. They look at the entire value chain and manage sustainability issues at every stage of the lifecycle of our products – from the product development to recycling.

Product development

The first step includes the development of the product. The Volvo Group has a long history of developing pioneering products and services for the transport and the construction industries. Its research has resulted in cutting-edge technologies in the areas of safety, energy efficiency and emission reductions.

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In 2012 investments in R&D amounted to SEK 14.8 billion, which corresponds to 5.0 percent of net sales.

PurchasingThe second step is to purchase raw material and parts from the suppliers. In 2012 the Group purchased goods and services for SEK 211 billion, including direct material for SEK 101 billion. Since 1996 the Volvo Group has gradually increased requirements on suppliers regarding environmental issues, business ethics and social responsibility aspects.

The Volvo Group responsible sourcing program aims to manage risk, promoting responsible behavior and building long-term relationships with suppliers to improve social, environmental and business ethics in the supply chain.

ProductionFor more than 85 years the Volvo Group has produced trucks, buses, machines, engines and drivelines. The Group has 61 wholly owned production sites in 18 countries around the world, and 98,717 permanent employees and 16,548 temporary employees at the end of 2012. Of these, 48,152 permanent employees and 7,548 temporary employees and consultants work within production.

In 2012 the Volvo Group produced 224,000 trucks, 10,700 buses, 78,500 units of construction equipment, 17,200 marine engines and 17,600 engines for industrial applications.

Distribution and ServiceA strong dealer network is essential to provide the Volvo Group’s customers with the best parts availability and service. Significant investments in this area have been made over the years.

They encourage teamwork and build team spirit and pride. Since the start it has also served as a great way for aftermarket personnel to increase their knowledge and the quality of their work.

Product in UseVolvo developing engines with innovative technologies to reduce fuel consumption is not enough. Driver and operator behavior also has a direct impact on the fuel consumption of vehicles, and plays a key role when it comes to preventing accidents from happening.

More than 2 million trucks and 100,000 buses, which the Group manufactured in the past ten years, operate on roads worldwide. At construction sites, there are more than half a million units of construction equipment that they manufactured the past ten years

Re UseRecycling of material and remanufacturing of spare parts is a growing part of the Volvo Group’s activities. It minimizes the need for raw material and limits the depletion of earth’s mineral resources.

Integration of Value Chain and Value Delivery NetworkVolvo‘s value chain model shows all actors and operations across the supply chain. The customer or dealer places the order in virtual order bank (VOB), and the order of the customer is tracked through the order tracking system with all the requirements placed upon the system, which are:

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Feasibility check Order booking Order status information

The customer and dealer are external actors in this, who produce the order load within the system. In the production network, the internal actors are final assembly plants (FAPs), external assembly service provider (EASPs), BTO suppliers and build to stock (BTS) suppliers, and for these actors, customer and dealer, the following requirements were identified:

Car configuration Order configuration Order tracking

The sequencing is the result of the interaction between the actors of production network and the VOB. This figure gives the basic understanding to the readers about the order arrival, order processing, production at suppliers end and final assembly of the vehicle.

Externally and Internally IntegratedSo, the internal and external operations of the firm are integrated. Customer orders externally received through the order tracking internally. The order is transferred to the dealer which responds to the customer’s order. The dealer confirms the specifications from the customer and the suppliers are informed about the order and customer’s order is confirmed.

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Value Delivery Network

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SWOT Analysis

Strengths

Global presenceVolvo Group has significantly strengthened its positions outside the traditionally big markets of Western Europe and North America. Positions have been moved forward by acquisitions in primarily Asia and expansion of the distribution and service networks in for instance Eastern Europe and South America.

Leader in “safety”Volvo is a leader in transport safety. No other car manufacturer has beaten Volvo in providing the safest driving car than Volvo. And they are continually making innovations to make safety even better. And they claim that till 2020, no person will die or be seriously injured in a Volvo.

Environment friendlyVolvo is one of the car manufacturers who really care about the environment. Volvo is working hard on designing a car which harms the environment the least. It is designing cars which consume less fuel and they recycle their products. And this has earned Volvo a very respectable place in the hearts of customers.

Weaknesses

Less market shareVolvo is lacking behind in terms of market share especially in luxury, high priced cars. Its competitors are having more market share in luxury cars. It needs to work on the premium segment to earn the market share.

Identity confusionThe two acquisitions of Volvo previously by Ford and then recently by a Chinese company, Geely has made the identity of Volvo vague and confusing for the brand itself and their respective target market.

Opportunities

Serving the un-served marketThere are further untapped markets available for Volvo to be served. Volvo also has an underserved segment lying below the higher end and above the basic segment. There is a great potential for Volvo to capture that market.

Further innovations/technologyVolvo can evolve itself through further innovations and by looking for new technology. It must also make new innovations and apply technology other than safety, which would help it compete with the other competitors.

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Threats

Increasing prices of raw materialThe increasing inflation is increasing the prices of raw materials and parts used in the manufacturing which increases the cost of producing the product, which in return shrinks the profit margins. It can be a threat to the growth of Volvo.

Slowdown in World EconomyThe slowdown in the world’s economy can be a big threat to the growth and profitability of Volvo. We never know how the economic environment may turn around and form unfavorable conditions. Slowdown in the economy can decrease the demand and hinder the growth potential of the company.

Increasing CompetitionThe competition is increasing a great deal. There are many other car manufacturers featuring latest technological feature, sleek designs and rich looks. Volvo needs add something more of value.

Citing Articles

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• Global Presence• Leader in Safety• Environment Care

Less Market share Identity Confusion

Intense Competition Increasing raw material Prices Slowdown of World Economy

Underserved Markets• More Innovations

Strengths Weaknesses

Opportunities Threats

Article 1:

Link: http://online.wsj.com/news/articles/SB10001424052702303848104579310102957284632

Scenario: Sales of Volvo declined 6% in 2012 in US and led to financial losses

Companies Strategy: Chief Executive Håkan Samuelsson, handled it by a series of costs cuts, and was able to lower the break-even point for Volvo to around 425,000 vehicles sold. At the same time, he ramped up the company's focus on China, helping the company meet its volume target.

Explanation: Volvo engaged in a cost reduction strategy and a focus strategy on china to face the declining sales. And it recovered itself and the sales increased 1.4% in 2013.

Article 2:

Link: http://www.nancap.com/?p=1246

Scenario: GEELY’S VOLVO MANAGEMENT CHALLENGE: SELLING MADE-IN-CHINA VOLVOS

Company’s Strategy: The credibility of the brand Volvo was in question when the Chinese Company acquired Volvo. People were losing trust because China is known for the cheapest, quickest, sometimes poor-quality products. The people were rejecting it because its quality standards don’t match U.S. safety and other standards. Now, Volvo needed to clarify and clean up its image. Furthermore, they also faced the challenge of cultural conflicts. They solved it by keeping the management of Volvo separate of Sweden.

Explanation:

The company decided they will cut production costs, not safety and quality at any cost. They will ensure and respect the safety image of people.

And to gain the trust of people and maintain the brand’s credibility, the owner of Geely decided to keep it a separate company with its own management in Sweden, while keeping control. This way they can also avoid the cultural clash.

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References

http://www.volvogroup.com/group/global/en-gb/researchandtechnology/transport_society/enhancing_safety/Pages/Intelligent%20safety%20for%20transport.aspx

http://www.volvogroup.com/group/global/en-gb/volvo%20group/ourvalues/Pages/volvovalues.aspx

http://www.logodesignlove.com/volvo-logo logo Background

http://m.marketingweek.co.uk/3029514.article?mobilesite=enabled

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http://articles.economictimes.indiatimes.com/2006-03-22/news/27457903_1_volvo-nissan-diesel-carlos-ghosn

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http://www.slideshare.net/TabataSch/report-on-volvo

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http://www.industryweek.com/product-development/volvo-eyes-no-death-goal-its-new-cars-2020

http://online.wsj.com/news/articles/SB10001424052702304632204579340481063811074

http://www.somesso.com/casestudies/social-crm-and-promoting-brand-loyalty

http://www.volvocars.com/us/sales-services/sales/offers/Pages/VolvoLoyaltyBonusOffer.aspx

http://www3.volvo.com/investors/finrep/sr12/en/valuechain/distributionandserv/supportingthecustom/supporting-the-cust.html

http://socialmarketingfella.com/an-exacttarget-case-study-volvos-integrated-crm-and-email-marketing-success/

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