Type: Definition Essays
Sample donated: Pamela Dennis
Last updated: April 18, 2019
Subaru’s mission and objectives can be summarised with the following 3 statements:1. We will strive to create advanced technology on an ongoing basis and provide consumers with distinctive products with the highest level of quality and customer satisfaction.2. We will aim to continuously promote harmony between people, society, and the environment while contributing to the prosperity of society.3. We will look to the future with a global perspective and aim to foster a vibrant, progressive company.
Subaru also makes the following statement in reference to its quality policy;”… considers customer satisfaction as the first priority, and will work constantly to improve products and services to provide world-class quality.”In reference to the environmental policy for Subaru the following policy is in place;”…
recognize the integral relationship between the environment and its businessactivities and strives to provide products that are friendly to the earth, society and people” and by doing so is ensuring our future.Definition of the MarketThe Subaru Forrester is within the medium sized Sports Utility Vehicle (SUV) or the Four Wheel Drive (4WD) market. They are also referred to as “soft-roaders” and are part of the cheaper, smaller 4WD’s.In the early 1990’s, after being taken over by the Japan based Fuji Heavy Industries, Subaru undertook an image change. The importance of marketing was realised and the company focused on its core competencies, namely it’s pioneering of the revolutionary all-wheel-drive technology on passenger cars. It was this technology that allowed for maximum grip and handling capabilities thus strengthening Subaru’s reputation on consistency and reliability. All Subaru model cars take advantage of this technology.Also, the Australian vehicle market has seen a growth in the number and variety of imported vehicles since the Government’s gradual reduction of import tariffs and the abolishment of quotas in 1988.
Imported vehicles now account for more than 60% of vehicle sales in Australia.In recent years the Reserve Bank has kept interest rates low and with the strengthening Australian dollar, the Australian automotive industry has been able to continue its growth in sales.Subaru identifies its target customers through occupational, lifestyle and activity interest segmentation. The advertising budget Subaru relies on is relatively small compared to industry standards with the advertising cost per car being more than $100 less than the industry norm.Market Size, Potential and StructureAccording to predictions by Federal Chamber of Automobile Industries, 875,000 new vehicles totalling sales of $27 billion will be sold in Australia in 2003 that translates to a growth of 7%. Internationally, new vehicle sales are expected to be around 17 million new vehicles with one third of these being SUV and light trucks.
The demand for the smaller 4WD’s is up 5% with the leading manufacturers as Nissan, Toyota and Subaru respectively. However, the potential for growth is quite attractive with the larger 4WD’s being referred to as ‘dinosaurs’ for four main reasons. Firstly, the safety is becoming an issue with tests showing larger 4WD’s to be more likely than passenger cars to be involved in roll-over accidents as they are more unstable due to their higher centre of gravity. Secondly, the larger 4WD’s consume more natural resources and produce more toxic emissions.
The Government’s new emission standards to be introduced next year will become an issue for the larger 4WD’s. Also, the larger 4WD’s inflict eco-damage when they are used off-road. Finally, they do not provide value for the financially astute buyer as they are expensive to fuel, insure, service and repair. The move away from larger 4WD’s is also substantiated by VFACTS that confirmed a drop of 8.
1% for the heavy vehicle market.The following chart is a summary comparison of motor vehicle sales for August 2002 and 2003:As seen, there has been overall increase in motor vehicle sales. However, the passenger car market comprises of the majority of sales in Australia and we believe that Subaru needs to focus on targeting this market.An interesting factor pertaining to market is promising for Subaru with reference to total imported vehicles. In Australia, 50% of the import market constitutes imports from Japan, compromising a sales value of $8.442 million dollars.Australia is the third biggest market for Subaru after Japan and United States.
Subaru has seen an increase of 11.9% in sales between June 2002 and June 2003.As can be seen, Subaru has had a steady growth in the market place. Its direct competitors Honda and Toyota have experienced fluctuations. However, as the current number 1 seller in Australia and Subaru’s biggest indirect competitor, Holden has increased its market share consistently to become market leader.External EnvironmentEconomic Forces:ScenarioThe value of economic production in Australia as measured by the GDP in 2001/2002 was 3.
8%. The average full time weekly earnings of an Australian as at May 2002 was $ 859. (ABS) The Gross Disposable income (GDI) for Australia in 2001-2002 was $695 billion. Australian households incurred 76% of its consumption and the government incurred the remaining 24%. Householders spent 12% of the GDI on recreation and culture (Australian National Accounts, National Income, Expenditure ; Product, 5206.0, ABS).The unemployment rate in June 2003 increased by 0.1 percentage points to 6.
2 in July 2003. (add info on p.5 of section 1-labour force). As at September 2003, one Australian dollar will buy 0.6443 US Dollar, 75.87 Yen and 0.4098 U.K Pound, (Financial Review, September 6-7, 2003).
The last 4 years of the twentieth century saw the value of the Australian dollar plummet against the U.S dollar, Japanese Yen and UK Pound. Following it’s decline against the abovementioned currencies, the Australian dollar began to recuperate and began to show a slow and steady improvement after the attacks on the WTC in N.
Y.C in September, 2001 (International Trade in Goods and Services, Australia 5368.0-ABS) Insert Table.The last decade of the twentieth century saw the overall rate of inflation as fairly stable except for a marked increase from 1995-96. Such a stable rate naturally included peaks and troughs, was due in part to the rise and fall of an array of goods and services; and declining computer prices with the added boost in quality and power of computer systems. The Consumer Price Index (CPI) indicated that inflation returned to lower levels and slowing economic growth at the end of the twentieth century.
However, the implementation of The New Tax System (TNTS) resulted in a marked increase in the CPI between June 2000 and September 2001. Furthermore, high petrol prices due to the international price of crude oil contributed significantly to the rise in the CPI during this period. Insert CPI Graph (Consumer Price Index, Australia, ABS Cat No.6401.0)Demographic:The Australian population ranked 53rd largest when recorded in June 2001 and was estimated at 19.4 million people (ABS, Year book Australia 2001, Cat No.1301.0, ABS, Canberra).
In Australia, there are 2 people per square kilometre, with the majority of the population living in t he east to south-east regions and the minority in the south west part of the country. A third of the total population estimated in 2001 was in New South Wales and rapid growth rate increases in Queensland (23%) and the Northern Territory (19%) were evident in the last decade of the twentieth century 1991-2001. The slowest growth in population over this period was evident in South Australia (less than 4%) and Tasmania (less than 1%), (ABS 2001-Australian Demographic Statistics, Cat no. 3101.0, ABS Canberra) (Should also add projected population stats for each state, see ABS 1996-2041, Social Trends).
The Total Fertility Rate (TFR) has been falling since the early 1960’s which in 1961, at its highest stood at 3.55 as compared to the year 2000, when Australia had a TFR of 1.75 babies per woman. Such a decline in TFR over the past 4 decades demonstrates a shift in cultural value placed upon the importance of having a family, moving towards a more individualistic society. (Expand on this-perhaps need to comment on study about busy lifestyle of Australians-insert a graph on family size trends etc.)Over the past century, the 65 and over proportion of the population has increased astonishingly from 4% of the population in 1901 to 12% in June 2001 (ABS, Measuring Australia’s Progress, Population, 2003). Comment on population by Age Groups and Australian Demographic Statistics 3101.0, and on the largest age market segment.
Include “population age structure table”.Furthermore, the proportion of males to females has decreased over the last century, in comparison to 1901 where there were 110 men for every 100 women. Recent figures as at June 2001 suggest that there were fewer men than women, in fact 100 men for every 100 women.
Social/Cultural:Over the past decade, employment trends indicate that females have increasingly been employed full time, from 1,900,400 in August 1993 to 2,270,100 in July 2003. In comparison, the trend estimate of males employed full time has generally fallen. Figures have fluctuated from 3,938,900 in December 1992 to a slight increase to 4,510,200 in March 2003 and a drop in trend to 4,490,600 in July 2003.Natural Environment:Since the concern for environmental problems among Australian households was measured in 1992 at 75%, there has been an astonishing drop in concern for environmental problems among Australian households to 62% in 2001. Those states that demonstrated higher levels of concern for environmental problems were: Western Australia (69%), South Australia (70) and ACT (71%). New South Wales demonstrated particularly reduced levels of concern from 73% in 1998 t0 59% in 2001. The standards set by the United Nations Economic Commission (UNECE) in April 2000 have been addressed by the Australian Automotive Industry to aim at providing high levels of environmental protection, through revised emission standards and environmental safety protocol. Additionally, the recycling of steel, non-ferrous metals, polyurethane fabric granules is being practiced by the industry to ensure that these environmental regulations are strictly enforced.
(Federal Chamber of Automotive Industries, 2002).Technological Advances:Dramatic changes to the automotive industry are expected as technological advances illuminate the endless re-invention of more modern, efficient and environmentally conscious vehicles.The increased use of the internet as a research tool will aid marketers in building information systems on important market data such as: demographic indicators, consumer and socio-cultural behaviours, sales figures of goods and services, and competitor activity. The current usage of the Internet amongst Australians tends to be more research-based rather than purchase seeking oriented. However, there does appear to have been a slight increase in adult Internet usage for purchasing goods and services from 12% in 1999 to 15% in 2000.
The key constraint limiting such behaviour is the perceived risk of security associated with the disclosure of personal information (ABS-Household use of computers and the Internet. Furthermore, the intangibility of goods and services being purchased over the Internet impedes on Australian consumer’s interactivity (test drive and touch) with a product prior to its purchase.