This coursework entitled "Marketing" is about creating a marketing strategy for a new or existing product. The product I have chosen to do is the new Audi A6.

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AVCE Business Studies Unit 3 - Marketing


Contents 1

Introduction 2

Information gathering 4

Introduction to marketing 5

Market research 8

Analysis of current marketing strategies 14

External influences 16

Marketing planning and auditing 21

Developing a marketing strategy 25

Marketing mix 35

Summary of marketing strategy 48

Bibliography 50


This coursework entitled "Marketing" is about creating a marketing strategy for a new or existing product.

The product I have chosen to do is the new Audi A6, the latest model of car to be made available for order in the UK in April 2004 for delivery on the 12th of June which is set to sell from £24,175 to £42,775 (including VAT).

Audi history

The Audi badge - the 'Four Rings' - is the emblem of one of the oldest car manufacturers in Germany. It symbolises the 1932 merger of the four independent motor-vehicle manufacturers: Audi, DKW, Horch and Wanderer. Together with the NSU brand, which joined in 1969, these companies are the roots of the present-day AUDI AG. The Audi Company currently have a reputation for producing high quality, long lasting cars. Their slogan is "Vorsprung durch Technik" which means "Progress through technology". They made net profit of €816 million in 2003, €5.4 million more than in 2002.

Audi UK

Audi UK is the most successful Audi importer in Europe and its consistently increasing sales reflect this. Having increased sales each year since 1999, the brand broke through the 65,000 sales barrier in 2002 and sold 70,107 in 2003. Their market share in this year was 2.7%, a 0.6% increase on the previous year. Audi UK has been operating as a separate company in the United Kingdom for over 10 years, following wholesale separation from the Volkswagen brand in 1993, although remains part of the Volkswagen Group based at its headquarters in Buckinghamshire. There are currently 131 Audi Centres in the country. Audi UK has helped establish the reputation of the Audi brand making it a member of the prestige group.

The new Audi A6

The Audi Company say about the new A6:

"The creation of a class-leading executive saloon calls for a broad range of abilities. Supple ride comfort, but with precise and clear feedback; power, but with fuel efficiency; an exhilarating driving experience, but with luxurious accommodation for four. The new A6 triumphantly reconciles these apparent opposites through advanced technology and design. From the first glance, you know that the A6 marks a significant step forward for the class. A blend of opposing qualities; but a compromise in none."

The car made its first appearance at the 2004 Geneva Motor Show on the 2nd of March. It has been announced that prices of this car will range from £24,175 to £42,775 which is only a 1% price increase on the old model. The car has many new features both aesthetic and functional such as leather seats and upholstery, V6 and V8 petrol units, six speed gear box and improved dynamic suspension.


To find out about the new Audi A6 I must gather information about it and also marketing theory to enable me to come up with a suitable marketing strategy for the car.

The ways that I have gathered information about the new A6 are:

* Product brochures - I collected a product brochure and price list from an Audi showroom. These contain information about the car; the various types, specification, possible colours, extras, prices, etc.

* Audi website - the Audi UK website is This contains information about Audi cars including the new A6. It contains a lot of the same information about the car, but also tells you about the company in general and has regularly updated information.

* Audi annual report 2003 - this has background information about the company and financial, marketing and product information from the past year. I downloaded this from the Audi website.

The sources of information I used to find out about marketing are:

* Text books - the text books I used most is Intermediate Business by Carysforth, Rawlinson and Neild and The Complete A-Z Business Studies Handbook by Lines, Marcouse and Martin. These both contain information about all aspects of business theory including marketing.

* Websites - there are numerous websites, such as, that contain information about business theory. I mainly used these for information not found in other sources as it is more time consuming.

* Handouts - the three handouts given to me are Marketing, Marketing Mix and Marketing Objectives, Strategy and tactics.

* Notes - class work notes provide background information about the topic of marketing.

I will also carry out primary research to find out more about what the consumer wants from the A6. This is done in the section beginning on page 8.


Marketing - identifying, anticipating and fulfilling the customer needs and wants in a mutually beneficial process. It must be beneficial for both sides; it involves meeting the organization's objectives as well as the customers'.

Identifying customer needs is done through market research.

Anticipating customer needs is done through forecasting.

Fulfilling customer needs is done through the four P's:

* Price - selling at the psychologically right price.

* Production - selling a range of products with appropriate features and branding.

* Promotion - may involve adverts, sales promotion, PR, etc.

* Place - making sure the product is sold in the correct outlets.


Market orientation - the organisation focuses on customer needs and wants. The starting point is planning what the customer wants.


Product orientation - the organisation focuses on what it wants to do and hopes customers will buy it.


Asset led marketing - marketing based on the strengths of the company. Planning starts by considering company's assets as well as customer wants. It is a middle ground between market and product orientation.

Product orientation can be successful in uncompetitive markets (i.e. monopolies), but market orientation is much more common as it focuses on the customer. Market orientation is becoming more important for business due to increased competition, shorter product life cycles, more demanding customers, competitors know customer needs, customers are more informed so can make a better choice and more open markets.

Audi is a highly market orientated company and the A6 is no different. People want high quality, long lasting, efficient cars and this is what they have aimed to produce. The car market is highly competitive so if the company ignored the wants of the consumer they would loose out on sales.

Marketing and other business functions

Marketing links in with every other function in the business. It both influences them and is influenced by them. Some examples of influences are:

* Marketing helps production determine what to produce, when to produce it and what it will cost.

* Marketing generates revenue for the firm to make profit.

* Marketing will influence the number and skills of employees needed.

Some ways in which marketing is influenced by other functions are:

* The size of the firm will determine how much it aims to sell.

* The skills of employees may influence what the company can produce and offer to the market.

* The finances of the firm will influence the price of the product and the marketing budget.

Marketing mix

This is the marketing tactics deployed by a company to help achieve its marketing strategy and objectives.

The four elements of it are:

. Price - how much the product will sell for.

2. Product - what it will do, what it will look like, etc.

3. Promotion - how the consumer will find out about it and be persuaded to buy it.

4. Place - where the product will be sold.

It is important to have a marketing mix in which all elements compliment each other. For example products such as Rolex which are associated with high price are also associated with exclusive distribution. All elements must work together to provide customer satisfaction.


Market research - gathering, recording, analysing and presenting information relevant to the marketing process. It is part of marketing planning at the gathering information stage.

The purpose of market research is to:

* Identify opportunities and threats (such as changes in the market)

* Analyse alternative approaches (such as changing the price)

* Review progress (such as monitoring changes in sales after a promotion)

Before a firm start their market research they will first identify a problem; in Audi's case what people want from a car. As I have already said, they are a market orientated firm so will take great notice of this. They then decide a method of gathering data - primary or secondary. They will then gather the data and analyse it. The findings will be used to try and make the final product, in this case the A6, as profitable as possible. They may also carry out further market research after this to find out how popular it is.

Types of market research

There are two types of market research:

. Primary - research that is gathered first hand. It is expensive, but more likely to meet the precise needs of the company. It is gathered by field research.

2. Secondary - research which uses existing data. It is cheaper, but may be in the wrong format and available to competitors so it does not give you an edge. It is gathered by desk research.

My market research

For this project I have undergone my own market research which will allow me to evaluate Audi's current marketing strategy and make suggestions. As I have already said in the information gathering section (page 4), I have collected product brochures and price lists of the Audi A6 and looked on the company website to gather information about the car. I also downloaded a copy of the annual report 2003. This is secondary research as it is from a pre-existing source.

I have also carried out primary research in the form of a questionnaire. I asked a sample of forty people eleven questions. A sample is a small group which is thought to represent the market as a whole. My sample of forty obviously will not be an accurate representation of the whole market at it is so small and all those questioned are from the same area. However, it was the largest sample that I could practically do. The possibilities to make the results more reliable are to do a census which involves surveying everyone in the country, but this would be very costly and unpractical even for a large firm such as Audi. My sampling method was convenience which means I simply questioned people who were available for interviewing, including my family and friends. This is the easiest sampling method which is why I chose it, but can be unreliable as a sample representing the whole market is not likely to be found.

The results were as follows:

. Do you own a car?

(If yes answer questions 2 to 6, if no go to question 7)

Yes 32 No 8

2. What make is it?

Ford 6 Vauxhall 4

Volvo 3 Hyundai 1

Skoda 3 Volkswagen 2

Toyota 4 Mazda 1

BMW 3 Mercedes 2

Audi 2 Jaguar 1

3. How did you hear about it?

Television advert 10

Radio advert 2

Magazine advert 6

Other form of advertising 1

Friend 4

Review 7

Shopped around 2

4. What was the approximate value of your car when you bought it?

Less than £10,000 13

£10,000 to £20,000 10

£20,000 to £30,000 8

Over £30,000 1

5. What colour is it?

Red 10 Blue 8

Black 4 White 3

Silver 5 Green 1

Yellow 1

6. Is it petrol or diesel?

Petrol 27 Diesel 5

7. What are the most important factors when buying a car?

(May choose more than one)

Price of purchase 31

Cost to run (e.g. fuel consumption, cost to service) 26

Quality 30

Reputation of company 7

Features (e.g. CD player, alloy wheels) 11

Engine size 9

How many people can fit in it 4

Do not know 2

8. Would you consider buying a car over the internet?

Yes 9 No 31

9. What is your opinion of Audi cars?

Quality Price

Very high 17 15

High 16 18

Medium 3 5

Low 1 0

Very low 0 0

Not sure 1 0

Never heard of them 2

0. Did you know Audi were bringing out a new car? (The A6)

(If yes answer question 11, if no end questionnaire)

Yes 7 No 33

1. Where did you here about it?

Advertising 2

Review 3

Internet 1

Car show 1


Here are some of the results shown graphically:

There are a number of conclusions that can be drawn from these results. They give a good idea what the marketing mix should be like as many of the questions relate to the four P's - price, product, place and promotion.

Question four relates to the price of the product. It shows most people bought cars for less than £20,000 - 23 out of 32. The price range given to the A6 by Audi is above this so lowering it should be considered. However, question two shows that very few people own a car from Audi or one of its main competitors - BMW and Mercedes. This means that many people in surveyed are not in the target audience of Audi so are not as relevant to the questionnaire. This demonstrates the unreliability of my information so brings its significance into question. The other side of this argument is that Audi should try to bring these people into its target audience as their existing one is small and so should listen to their wants and needs. In my opinion if Audi bring out a cheaper car it will demean their reputation for producing high quality cars so is not a good idea. It may mean they lose their existing audience so would be a great risk. Question nine also relates to price as it shows people generally think Audi's prices are high. They also think the cars are high quality though so this means in the consumers' eyes they are still providing value.

Questions five and six relate to the product itself. Question five shows people like a variety of colours, but the most popular are red, blue and silver; ten red, eight blue and five silver. A range of colours should be offered for the new A6 particularly those which are most popular. Question seven shows petrol cars are more popular than diesel; 27 people own a petrol car and only five diesel. The Audi A6 will definitely be offered as a petrol car and there are sufficient people who prefer diesel to also make this an option. Audi will be offering the A6 with both petrol and diesel engines.

There are no questions that relate to the place of the product as this will be the same as it is for the A6 as it is for all other Audi cars; they are sold in the company's showrooms all over the country. This is no real alternative to this approach.

Questions three, ten and eleven relate to promotion. Question ten shows that currently very few people have heard of the A6. This suggests that up to this stage promotion of the new A6 has been insufficient. However, the car is not released until June so the firm have time to put this right. It is likely they will advertise much more frequently closer to the release date. The main ways people have heard of the A6 are advertising and reviews. This shows that the car has already been reviewed in a number of car magazines and there has been some advertising. There will need to be more in the future to increase awareness amongst consumers. Question three shows that there are a variety of ways in which people find out about cars. Television adverts (ten people), magazine adverts (six people) and reviews (seven people) are the most common ways for people to find out about cars. This gives an indication of what forms of promotion, particularly advertising, I should chose for the A6.

Surveys like this are useful as they are designed specifically for the purpose they are being used for. However, there are some problems. Most notably, I have used a small sample size so the results will not be particularly reliable. There may also be some bias in the results as most of the people asked are people I know so will probably not be representative of the whole population. Also, of the people I asked many would not be in the target audience of the Audi A6, such as people who do not own cars or who own cheaper cars.
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Firm's market research

If a survey is carried out by a large company, such as Audi, they will use a much larger sample of thousands of people. This will make their results more reliable and more likely to show the truth. They will also use more sophisticated statistical methods in the way they choose their sample and represent results. As I have said, I used convenience sampling which can be unreliable. Audi would be more likely to use quota sampling which is only asking people with certain characteristics. This means they can select their target audience for ...

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