Title: Audi Global Marketing and Communication Strategy. Audi is an automobile manufacturer based in Germany that distributes, markets, produces, engineers, and designs luxurious vehicles. The manufacturer was founded in Ingolstadt, Bavaria, Germany and is part of the Volkswagen Group. Throughout the globe, vehicles that are Audi-branded are manufactured in nine production facilities. The organisation’s origin dates back to the early 20th-century when engineer August Horch teamed with two other manufacturers in 1932 to form Auto Union. The mid-20th century (the 1960s) saw the commencement of the modern day Audi when Volkswagen acquired Auto Union from Daimler-Benz (Audi, 2019). The Audi brand was relaunched in 1965 by introducing the Audi F103 series to the market. After the relaunch, Volkswagen decided to merge NSU Motorenwerke with Auto Union in 1969 to form the modern day structure of the organisation.
The organisation’s name is a German translation of founder’s surname – Horch. The Audi logo has four rings that signify each of the four automobile manufacturers who merged to establish the organisation’s predecessor, Auto Union. The company’s slogan “Advancement through Technology” implies that the organisation uses the latest technology to manufacture its car (Audi, 2019). In the United States, the organisation’s slogan was “Truth in Engineering” up to the year 2016 from the year 2007. Together with the Mercedes-Benz and the BMW, Audi is among the world’s most sold luxurious automobile brand. The key intent of this report is to look into the global, local and glocal strategies of Audi with regard to price and distribution; additionally, the report will select and discuss the primary target market of the organisation.
Audi marketing mix
Due to the element of globalisation, the concept of marketing has evolved immensely over time, and if companies are not able to keep up with the dynamism, they risk being overtaken by their competitors. One of the major dynamics in the marketing concept evolution is the Marketing Mix strategy that an organisation chooses to adopt (Svend, 2017). Audi being a major player in the automobile industry has managed to keep up with the dynamics in marketing by adopting different strategies in the local, international, and glocal market. It is vital to note that as Audi customers look for relevant and consistent experiences in the organisation’s products whenever and wherever they interact with them, the company is under pressure to find creative and innovative methods of marketing. Additionally, these marketing strategies are supposed to remain relevant locally while they maintain a sense of consistency in owning a global brand.
Glocal pricing and distribution at Audi
Audi recognises the fact that the digital marketing landscape is being taken over by glocalisation. As a result, the organisation has undertaken the initiative of strengthening the global brand of its products with a customised approach and flavour for the global market. However, the organisation faces a major challenge of ensuring that the global marketing campaigns of the organisation are in sync with the tastes and preferences of the local audience (Awan, 2014). In setting the prices for its products and choosing the distribution strategies as relates to glocalisation, the organisation acknowledges the fact that the major customer priorities with regards to these aspects differ from one market to another. Therefore, it is critical that these priorities are taken into consideration to establish an effective pricing and distribution strategy in the glocal market. To effectively penetrate the glocal market, Audi has incorporated hyperlocal and social geo-targeting in its overall marketing strategy.
In employing social geo-targeting in its pricing and distribution strategy, Audi can develop a deeper engagement with its customers, and it can get speedy feedback on its services, releases, and ideas. Through hyperlocal geo-targeting, the organisation can use the most recent mapping and communication technology to deliver the relevant content to their clients across the world. Therefore, this form of geo-targeting has opened up a new world for the organisation’s product pricing and distribution strategies. To ensure that the company’s brand identity is relevant while making certain of the effectiveness and relevance of the local campaigns, the organisation assesses its brand from the customer’s viewpoint, (Feurer, Schuhmacher & Kuester, 2018). This helps in ascertaining whether the company cars and other automobiles are in sync with the local demands. When the brand identity does not resonate with the local demands, the organisation takes the initiative to incorporate these demands in the local brand identity.
In ensuring that the glocal pricing distribution strategy of the organisation is successful, their staffs, working in both the local and the international sphere, has created a close association with the customers and the vision of the brand (Hinterhuber, 2017). The senior leadership of Audi is elevated within the automobile industry, and they are recognised as the face of the brand. Additionally, the staff of the organisation ensures that the local communities get the global concept of the demand, hence, making sure that they recognise with it. This way, Audi creates essential relationships with major local markets in the industry. The Audi brand has done a tremendous job in synching its global brand with local demands by using local ambassadors, sponsorships, and local partners.
Global pricing and distribution
In the global market, Audi cars are considered luxurious by all of its clients. Hence, in cashing its brand in the international market, the organisation uses the premium price strategy. Note that the automobile industry is quite competitive with Audi getting major competition from brands such as BMW and Mercedes-Benz (Sonderegger, 2011). Therefore, the pricing in the company’s marketing mix strategy is majorly founded on the competitive pricing of other manufacturers of premium cars. The company has high brand equity, and all its showrooms are filled with a variety of high-quality automobiles.
To enable customers to buy their products with ease, the organisation has a global and innovative financing option referred to as Audi Finance. Here, the clients pay for the cars using debt financing but at a cheaper rate. Additionally, the organisation has optional pricing strategies whereby its existing clients in the international market can purchase car accessories such as navigation and sound systems, and Audi Bang separately. Note that, the global prices of the organisation are also depended on the economic conditions of a particular country and geographic locations of certain markets.
In understanding the distribution and placement strategy of the organisation, it is vital to note that Audi is one of the largest automobile brands that provide luxurious cars in the world. Although the headquarters of the organisation are in Germany, its production facilities are situated in nine places across the globe. In distributing its products, the organisation explores other markets that have not been discovered by other major players to increase its customer base. As a result, the organisation has made major investments in countries such as India and its market presence in Asia has grown exponentially over time.
The brand’s presence has been established and maintained by putting up an exclusive dealership network and centres that provide after sale services (Steenkamp, 2017). The distribution channel used by Audi in the international market involves producers who supply to distributors who sell to wholesalers than to dealers and finally to the customer. Since the organisation is driven by the urge to satisfy the requirements of the customers, its production proves uses the latest forms of technology. The global vision of the organisation is to become the most successful premium brand.
Local pricing and distribution
In the UK a new Audi A1 costs roughly 14,000 GBP whereas the same car costs 19lac rupees in India; this indicates that the local pricing strategy employed by Audi is the skimming price strategy. Although the price is high, it is justified by the quality of the cars manufactured and the organisation’s brand image. This pricing strategy in local markets is particularly important for effective brand positioning of Audi (Svend, 2017). The reputation of the organisation is good in the international market, and it is reflected on by the number of cars that are produced annually. However, in recent years, the company has experienced poor performance in some local markets, and this is majorly attributed to the increase in rates of foreign exchange.
The local distribution strategy of the organisation is to establish dealerships in various locations. Taking the case of India, Audi has twenty-eight dealerships in eleven states, and this has increased its sales exponentially over the years (Talke, Müller, & Wieringa, 2017). For instance, there was an increase in sales by 81% in 2014 in comparison to 2013. By establishing connections with local dealers, the organisation can push its brand to local customers, and this has enabled it to achieve some of the set long-term objectives.
Audi Target Market
Of the four common bases of market segmentation, Audi utilises three of them, and they include psychographic, demographic, and geographic segmentation. In geographic segmentation, the organisation’s decisions are based on which cars to sell and in which location (Xia, Xiao & Zhang, 2012). For instance, the organisation’s market research shows that Canadians drive larger cars as compared to Europeans. Thus, the cars sold in Europe are smaller in size as compared to those sold in Canada. With regards to countries like India, the organisation geographically segments the market into urban and rural areas. People in rural areas are more likely to purchase the Audi A3 model more than the new Audi A8.
With regards to demographics, the organisation segments its market into age, gender and income. With regards to age, the younger generation is more likely to buy the Audi A8 because it is flashy while the older generation gives little concern to the make or level of technology used in manufacturing the car.
By gender, some Audi models are more preferred by either gender because of their make or design. Income is a major determinant of whether one can afford an Audi car or not due to its prices that are considered to be high; therefore, the organisation has taken the initiative to produce cars for various individuals of different income classes (Xia, Xiao & Zhang, 2012). Finally, psychographic segmentation groups buyers according to personality traits, lifestyle and social status. As an organisation, Audi acknowledges the impact of these aspects on the purchasing decisions that are made by individuals. Since the organisation is famed for making luxurious cars, the major target market based on psychographic segmentation is the upper middle class to high-class individuals.
This report aimed to look into the global, local and glocal strategies of Audi with regard to price and distribution. Also, the report intended to select and discuss the primary target market of the organisation. From the essay, it has been established that Audi was founded in Ingolstadt, Bavaria, Germany and is part of the Volkswagen Group and its slogan is “Advancement through Technology.” Being a major player in the automobile industry, Audi has managed to keep up with the dynamics in marketing by adopting different strategies in the local, international, and glocal market. To effectively penetrate the glocal market, Audi has incorporated hyperlocal and social geo-targeting in its overall marketing strategy.
In the global market, the organisation uses the premium price strategy to keep up to speed with the competitive pricing set by its key competitors. The distribution strategy of the organisation in the global market involves producers who supply to distributors who sell to wholesalers than to dealers and finally to the customer. In the local markets, the organisation uses the price skimming strategy. This strategy helps the organisation in growing and establishing its brand in the market. Locally, the organisation distributes its cars by establishing dealerships in various locations. Finally, with regards to target marketing, the organisation segments its market into psychographic, demographic, and geographic groups.
Audi. (2019). About Us.
Awan, M. (2014). International Market Segmentation: Exploring automobile Market of Young Adults. International Journal Of Trade, Economics And Finance, 5(2), 151-154.
Feurer, S., Schuhmacher, M., & Kuester, S. (2018). How Pricing Teams Develop Effective Pricing Strategies for New Products. Journal Of Product Innovation Management. http://dx.doi.org/10.1111/jpim.12444
Hinterhuber, A. (2017). Implementing pricing strategies. Journal Of Revenue And Pricing Management, 17(1), 1-2.
Sonderegger, S. (2011). Market Segmentation with Nonlinear Pricing*. The Journal Of Industrial Economics, 59(1), 38-62.
Steenkamp, J. B. (2017). Global Brand Equity. In Global Brand Strategy (pp. 243-273). Palgrave Macmillan, London.
Svend, H. (2017). Global Marketing. England: Pearson Education M.U.A..
Talke, K., Müller, S., & Wieringa, J. E. (2017). A matter of perspective: Design newness and its performance effects. International Journal of Research in Marketing, 34(2), 399-413.
Xia, Y., Xiao, T., & Zhang, G. (2012). Distribution Channel Strategies for a Manufacturer with Complementary Products. Decision Sciences, 44(1), 39-56.