As a marketing manager, I couldn’t help but to notice the company’s upcoming plan to phase out its large, profitable SUV line of automobiles to focus on smaller, more fuel-efficient cars. This plan has a unique set of advantages as well as possible drawbacks, economically and otherwise. The company can stand to profit from this shift in product focus through an increase in customers and sales, however, the company should also carefully consider and design a marketing plan that will maintain current customers while showcasing all of the conveniences and incentives that smaller, fuel-efficient cars can offer.
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One advantage to focusing on smaller, more fuel-efficient cars, for example, is that these vehicles are better for the environment. From a marketing perspective, this focus can boost the company’s reputation amongst consumers and draw a new demographic of potential buyers into the showroom (Greenbiz, 2008). Financially, this plan can increase word-of-mouth advertising for the company as well as generate new sales from the growing number of eco-conscious consumers. The company can also launch special deals on current SUV inventory, which can generate quicker sales and attract new customers who still prefer SUVs. In addition, the company can enjoy the benefits of entering into a select group of automotive dealers known for their “green” efforts.
A possible disadvantage, on the other hand, is long term loss. According to industry analysts, “hybrids are just token models - not a serious attempt to get into the market (“Hybrid Cars -- Pros and Cons,” 2006). This raises the questionability of the staying power of these vehicles in relation to consumer preference. If or when these cars fall out of favor, the company can have a difficult time closing sales and maintaining or gaining profitability. Furthermore, “with only a marginal savings on gasoline and a much higher initial cost,” customers may be less likely to refer others to the company, or possibly complain about the quality of the vehicles, damaging the company’s reputation of reliability (“Hybrid Cars -- Pros and Cons,” 2006).
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