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The Overview & Target Market of Subaru Company

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The Overview & Target Market Of Subaru Company

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Table of Contents

  • Introduction
  • External Environment
  • Target Market

Introduction

Subaru is the world’s 22th largest automaker by volume in 2012, which was established in 1953, owned by the automotive division of Fuji Heavy Industries (FHI) and the headquarter is placed in Tokyo. The main business of Subaru is the manufacture, repair as well as selling cars and components for passengers. Their products focus on a number of specific subjects, especially outdoor enthusiasts and sports car enthusiasts at affordable prices. Total output of Subaru’s cars sold last year in Australia has broken their annual record with 48,379 cars sold, it actually recorded the highest growth with 13% growth per year over the famous brands Audi 10%.

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However, with the tough competitors from this heavy industry, Subaru needs to create a solid development and work harder in order to gain competitive advantage in the market. Therefore, we will discuss and analyse the external environment and customer profile of Subaru, as it can identify the opportunities and threats in an organisation regarding a firm’s strengths and weaknesses to see how well does Subaru will operate and serve the customers better in the future.

External Environment

There are two main types of external environment such as: microenvironment and macroenvironment. In terms of microenvironment there are various factors which can affect the company’s operation: customers, suppliers, marketing intermediaries, publics and competitors. These five factors are considered the most important elements must be taken into account because it directly impact the organisations’s development. Subaru’s customers are aimed to consumer market and international market with thousands of branches across more than 70 countries and topped the list of the most loyal customers in the world in 2016 with 67.7% of consumers who own a Subaru return to buy another Subaru by focusing on its designs and technologies in order to manufactor a few cars that consumers really want. Subaru’s suppliers play important roles in their’s operation, some typical subaru’s suppliers are Hitachi, Denso, Continental, Honeywell, Bridgestone Americas …etc.

These are the main suppliers to some of the best selling Subaru models such as Legacy, Outback and Impreza. Marketing intermediaries of Subaru are the dealers or retailers, Subaru relies on them to sell their products more effectively as well as serving the customers better on their behalf, so that the company can put more effort into advertising and increasing the productivity. Moreover, publics are groups that have a significant impact on Subaru’s activities and word of mouth can influence buyers, for comparison, it sold 47,018 cars for all of 2016, 43,600 for all of 2015 and in 2017 is 48,379 cars. As we can see, the Subaru’s annual sales increase over the year in Australia, which means they have manufactured the products with the best quality and so they sell more products to consumers through positive word of mouth, this is a crucial key to success.

Furthermore, in order to exist in this industry, they have to compete to other competitors. From this perspective, there are several competitors have the products as Subaru in their class like Honda, Nissan and Toyota, these are the big names in the car industry. However, Subara has their own strategy to gain some competitive advantages over the others by committing to reasonable prices, excellent engines and vehicle quality as well as the best fuel economy in the sports segment such as Subaru WRX, BRZ…Therefore, they have achieve 3.76% of market share in the car industry by recent reasearch, this means they are on the right track in their business.

Regarding macroenvironment, it consists of general factors beyon the control of an organisation such as economic, technogical, cultural, political and natural environment. Economic factors include many elements: supply and demand, taxes, interest rates as well as government spending. Firsly, there is a huge number of consumers these days change their cars every year in Australia due to the economy is growing which led to the arrival of many wealthy immigrants, especially from Asian countries and Subaru has benefited a great deal from the contribution it made to its annual vehicle sales thanks to the Asian community. Secondly, technogical and cultural environment are also very important key in order to satisfy customer’s expectation. Fortunately, Subaru has advantages in these aspects because australian people today seem to like sports cars as they love beauty and Subara’s models are suited to their budget.

Simultaneously, there is a team of market technology analysts who specialise in upgrading and updating the ultimate technology to fit the consumers’s expectation. In terms of politics, the australian government policy levies a high tax on luxury with a value over 60,000 $, nearly all Subaru models are priced below that. Hence, the customers who love sports cars with affordable prices no need to worry tax rates for these vehicles. However, there is a drawback for Australia’s Subaru because the fluctuation of Australian politics in recent years has often been unpredictable, with many important politicians fired and replaced, which can have a significant impact on Subaru’s long-term operational policy in this potential market.

Finally, natural environment is also considered a very essential aspec. For example, lack of raw material, pollution and environmentally sustainable strategy. Subaru has applied advanced technology to minimise CO2 emissions from their cars as well as using modern engines to cut fuel consumption, so they can meet government standards and help customers save more.

Target Market

A customer profiles is an analysis undertaken to gain information in order to indentify who is a potential customer or conversely, who is not willing to buy the company’s products or services. Consequently, every organisaions need to determine the market before investing and avoiding the risk of failure. Generally, there are four main types of customer profiles, which are geographic, demographic, psychographic and behavioural. Geographically, Subaru’s products are the most consumed in the Americas market, then is Europe, Asia and Oceania. They have a plan to boost sales in China as well as Southeast Asia such as Malaysia, Thailand and Vietnam.

Demographically, Subaru’s target is for both sex, but men tend to buy their car more because of its mix of youthful design and sportiness. According a recent report, Subaru’s SUV is top selling models in 2017 as the size is suit for family and prices are in consumer’s budget. In psychographic segmentation, consumers are mainly young to middle aged with middle social class, especially the office workers and the young people. For example, Australians are very passionate about outdoor activities and the intellectuals are very active, so they like the speed and sporty design, which drives the sales of Subaru.

As regards behavioural segmentation, people who has strong and assertive personality usually be attracted by Subaru’s models. Particularly, Subaru WRX and WRX STI versions are the most popular sports editions in Australia. In addition, the usage rate and the loyalty of Subaru in Australia is at the number one position with 35% beating Honda and Toyota with 19% and 13%, respectively. In conclusion, with the statistics mentioned above, Subaru is doing very well their job in both Australia and internationally. However, their market share compare to other brands in the world is no really impressive. Therefore, they need to put forth effort in their products and services in order to hold the initiative as well as gain competitive advantage in the market. As a result, Subaru will set their name among the top automakers brands in the world in the near future.

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