Renault KWID: Product Analysis
Renault is a French automobile manufacturing company. The company is known to design some of the best luxurious cars that provide comfort for the people purchasing it. However, earlier, the company had been known to manufacture trucks, tanks, buses and vehicles for auto rail. Renault was founded in 1899 by the industrialist Renault brothers. The headquarters of the company is located in Boulogne in France (Group.renault.com 2018). Over the years, the company have manufactured luxury cars, automobiles and commercial vehicles. As of recent survey, it has been seen that the company have a widespread area in which it operates. Renault has its branches in over 118 countries worldwide and a total strength of 127.086 employees (Group.renault.com 2018). Apart from luxurious cars, the company have many other divisions that specialise in racing sports cars that are used in international competition such as Formula One. Recent reports also confirm that the company had earned a total revenue of €58.77 billion with over 3,373,278 units of production (Group.renault.com 2018).
The report analyses the marketing environment of Renault and the success of its products in foreign countries. The product in focus is Renault KWID. It is a multi-purpose vehicle designed for carrying a minimum of 5 people per ride. The car is set to be launched in 2018 at a price ranging from €6,250 to €10,000. Some of the key features of the car include a mileage of 25.17 KmpL and a tank capacity of 28 litres. This can be considered as a big step towards elevating the company and the product as none of its competitors has managed to attempt such a drastic step in the past. The report highlights the external as well as the internal factors that may play a big role in the success or failure of the car. Apart from this, a SWOT analysis is also provided that highlights the capabilities of the company. The competitors have been analysed that highlight the differences with Renault. The report provides some recommendations that take into account the target market along with the position that the company may have after the launch of the product in the market. The marketing mix is also taken into consideration.
To understand the external environment of Renault it is important to conduct a PESTEL analysis that may help to determine the capabilities of the company.
Political: The political factor of a country plays an important role in the success of a company or product. Strict government rules are important to consider so that the business does not violate any rules set up by the government (Grant 2016). For example, if Renault is to set up business in India, then the company need to analyse the political climate of the country. This is important as the political factor of India plays an important role in the success or failure of any business.
PESTEL Analysis
Economical: According to López-Gamero and Molina-Azorín (2016), the economic factor of a country denotes the income level of the people and the fluctuation that the economy receives. This can be a huge factor for setting up the price of a company as the income level of the society needs to be kept in mind. The fluctuation of the economy tends to diminish the purchasing power ability of the customers. Hence, the economic factor of a country is important before investment. For Renault, this factor can be important as the prices of the product need to be kept at a competitive parity.
Social: The social factors include the interests of the people to a particular product. Renault needs to identify the target market based on the interest shown by the people about the product. This includes people that have interest in luxury cars and aim to have an outing with the family (Wheelen et al. 2017). Renault needs to target such people and ensure that the demands of the target market are met so that the company can achieve success in the international market.
Technological: In the modern day, technology is an important factor that creates a difference between competitive advantage and disadvantage (Bennett and Chorley 2015). Renault can install modern technology in its product such as digital inbuilt navigation system, one-touch reverse gear so that competitors find it difficult to imitate the product. This can provide a huge competitive advantage for the company.
Environmental: The environmental factor is a big issue in the case of an automobile. This is because environmentalists single cars out as an item that creates excess pollution. Hence, Renault needs to ensure sustainability of the product is maintained so that it can mitigate the risks posed by the Government rules and the legal rules. This can be a huge strategy for success (Hill, Jones and Schilling 2014). Renault needs to develop the product by ensuring that the method of pollution control is installed within the car.
Legal: The legal factor of a country is important needs to be abided by an organisation. Every country posses certain laws related to the company and the method of conducting business. In the case of Renault, the company need to ensure that the legal laws relating to the environment are strictly followed. For example, if the company is conducting business in the UK then it needs to abide by the rules stated in the Environment Protection Act 1990.
VRIO Analysis
Having conducted the external analysis, the internal capabilities of the product is determined by conducting VRIO analysis.
|
Resource or capability |
Valuable |
Rare |
Imitable |
Organised to exploit |
Impact on competitive advantage |
|
Materials used for production |
Yes |
Yes |
Yes |
Yes |
Competitive Disadvantage |
|
Innovation |
Yes |
Yes |
No |
No |
Competitive advantage |
|
Price of the product |
Yes |
No |
Yes |
No |
Competitive parity |
Table 1: VRIO analysis
(Created by author)
|
Strength · Strategic alliance · Strong R&D · Innovative |
Weakness · Operational system · Cannot penetrate rich markets · Reliance on one territory |
|
Opportunities · Growth in Asia · New model · Increase in demand |
Threat · Economic climate · Competitors · Cost of fuel |
Table 2: SWOT analysis
(Created by author)
|
Competitors |
Comparison |
|
Tata Motors |
No new cars each year |
|
Ford |
Expensive prices |
|
Toyota |
Lack of market penetration |
|
Honda |
Fails to drag in more customers |
Table 3: Competitor analysis
(Created by author)
a. Target market
The target market of the company can be the people middle-class people residing in a society. It has been widely renowned that the prices set by Renault are not as expensive as that of its competitors like Ford. It has also been seen that the revenue earned by the company is quite stable that makes it possible for Renault to try to conduct experiments with the price of the product. Thus, it can be said that targeting the middle class of the society can help the company gain a good reputation in the market. Opportunity regarding entering the Asian market can be grabbed by reducing the prices suitable for the middle-class people. Consequently, the higher class of the society can even benefit from the prices. Thus, this can ensure a high rate of sale of the product.
b. Positioning
Based on the analysis of the external factors as well as the competitors, it can be said that Renault can achieve the top rank in the automobile industry with the launching of Renault KWID. The features of the product are designed for the ride of a full family that is always a wanted characteristic particularly in a country like India. The competitors of the company have certain disadvantages that may prevent them from posing a huge threat. The lack of innovative cars in the case of Tata Motors as well as the expensive nature of cars manufactured by Ford can help Renault to gain a competitive advantage in the market. The market of Honda has also dropped as it fails to drag in more customers. Thus, keeping these factors in mind, Renault can establish itself as the biggest car manufacturer in the world.
c. Marketing mix
After analysing the possible competitive advantage that Renault may obtain from the launching of Renault KWID, it can be said that a marketing mix analysis can be done that highlights the manner in which Renault can implement itself in the market.
Product: It has already been established that the features of the product are of high quality and can provide a huge advantage for the customers. However, it needs to be kept in mind that the quality of the product plays an important role in customer satisfaction. Renault has to ensure that the fuel capacity of the car is increased so that customers do not have to spend much on fuels.
Price: The price of KWID is set to be from €6,250-€10,000. This can be lowered so that the middle class may have an opportunity to purchase the product. This can provide the company with an opportunity to become a success in the community in which it conducts its business. The prices play an important factor for the position of the company in the global market environment.
Place: The place of a business organisation is important as it dictates the popularity with the target market. Renault needs to conduct a proper analysis of the external environment of the business market so that it can gain popularity in the country. Countries with fluctuating economy or strict political rule need to be avoided so that the target of the company can be achieved.
Promotion: In the modern day, promotion plays an important role in the success of a company or a product. In the case of Renault, the company needs to ensure that a proper method of promotion is adopted that can help KWID to gain popularity in the market. One such method can be promoting the product via television by getting a celebrity to endorse it.
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