1

Development of marketing strategy

for Motion Drive Sports Car Rental

Master Thesis

at Hof University

Department of Business Administration

German Indian Management Studies

Submitted to Submitted by Prof. Dr. Wengler Alfons-Goppel-Platz 1 95028 Hof Germany

Nareash Anandhapadmanabhan Matrikel Nr. - 00011212 8/5 Thiruvalar Nagar Coimbatore 641023 India

Hof, 30.08.2013

2

I

Executive summary

The essence of the work summarized in this thesis is to find a solution to the problems that

exists at Motion Drive. Motion Drive, a sports car rental company, faced a problem regarding

the pattern of distribution of their sales orders. It was reported that Motion Drive experienced

immense fluctuations in their sales orders. There existed certain periods when Motion Drive

was flooded with orders, while on the other hand there were also times when Motion Drive

received NO orders. This led to a problem wherein Motion Drive could not serve all their

customers during the peak periods and lost out on a potential number of orders, thereby losing

out on revenue.

Upon analysis of the orders received at Motion Drive, it was revealed that Motion Drive

received orders from domestic as well as international customers. Also, while the pattern of

orders was analyzed, it showed that immense numbers of orders were received during the

weekends and a relatively sparse booking during weekdays. The weekend orders were ideally

orders from domestic clients. The orders received during the weekdays were those from

international clients. The problem arose because Motion Drive concentrated on serving only

the domestic clients. It could not serve the international clients due to various internal issues.

Thus, the aim of this thesis is to draft a marketing plan for Motion Drive.

The marketing plan is structured to analyze the current situation (TOWS matrix) along with

the expected future scenario (competitors‟ analysis). A marketing mix is hence developed

based on the data collected combined with the theoretical literature references. Through this

marketing mix an effective management implication is suggested for Motion Drive in terms of

the four Ps‟

II

Table of contents

EXECUTIVE SUMMARY ......................................................................................................... I

LIST OF FIGURES .................................................................................................................. IV

LIST OF TABLES .................................................................................................................... V

1. INTRODUCTION: ......................................................................................................... 1

1.1. Problem description ............................................................................................ 1

1.2. Objective of the thesis ........................................................................................ 1

1.3. Structure of the thesis ......................................................................................... 2

2. MOTION DRIVE SPORTSWAGENVERMIETUNG .................................................. 4

2.1 Company Overview .................................................................................................. 4

2.1.1 Company History ............................................................................................ 4

2.1.2 Turnover /Employees/Locations ..................................................................... 5

2.2. Mission and vision ahead ........................................................................................ 6

2.3. Core Competencies .................................................................................................. 7

2.4. Product Portfolio ..................................................................................................... 7

2.4.1. Vehicle Categories ......................................................................................... 8

2.4.2. Track Day at Spreewaldring .......................................................................... 9

2.4.3. Other Events & offers .................................................................................. 10

2.5. Clientele and Partners ............................................................................................ 11

2.6. Resource utilization notion .................................................................................... 12

3. TOURISM‟S SWAY ON MOTION DRIVE ............................................................... 14

3.1. Introduction ........................................................................................................... 14

3.1.1. Classification of tourist ................................................................................ 15

3.2. International tourism in Germany ......................................................................... 16

3.3. International tourism in Germany facts, figures and current trends ...................... 16

3.1.1. Autobahns in Germany ................................................................................ 18

4. ANALYSIS OF THE INTERNATIONAL SALES ORDERS AT MOTION DRIVE ....... 19

4.1. Order cycle at Motion Drive .................................................................................. 20

4.2. Demand analysis at Motion Drive ......................................................................... 22

4.3. Nature of the confirmed international orders ........................................................ 27

4.4. Summary of the existing scenario at Motion Drive ............................................... 29

5. MARKETING PLAN ...................................................................................................... 30

III

5.1 Situational Analysis: TOWS matrix ....................................................................... 30

5.1.1. Mini-mini strategy ...................................................................................... 32

5.1.3. Maxi-mini strategy ..................................................................................... 34

5.1.4 Maxi-maxi strategy ....................................................................................... 35

5.2. Competitor Analysis ......................................................................................... 36

5.3. Marketing Mix .................................................................................................. 38

5.3.1. Product ........................................................................................................ 38

5.3.2. Price ............................................................................................................ 41

5.3.3. Promotion ................................................................................................... 44

5.3.4. Place ........................................................................................................... 49

6. FINAL RECOMMENDATIONS ................................................................................. 52

7. CONCLUSION ............................................................................................................ 54

APPENDIX A .......................................................................................................................... 57

APPENDIX B ........................................................................................................................... 59

APPENDIX C ........................................................................................................................... 60

APPENDIX D .......................................................................................................................... 62

DECLARATION OF AUTHENTICITY ................................................................................. 65

IV

List of figures

Figure 1: Phillipp Mueller CEO Motion Drive Sportswagenvermietung................................... 4

Figure 2: Sales Turnover of Motion Drive Sportswagenvermietung ......................................... 5

Figure 3: Motion Drive Crew ..................................................................................................... 6

Figure 4 Vehicles offered by Motion Drive ............................................................................... 8

Figure 5: Lamborghini Grand tour .......................................................................................... 10

Figure 6 : Corporate Clients of Motion Drive .......................................................................... 11

Figure 7: Cooperation partners of Motion Drive ...................................................................... 12

Figure 8: Sales order pattern of international clients ................................................................ 13

Figure 9 Classification of tourist ............................................................................................. 15

Figure 10: Reasons why tourists visit Germany ....................................................................... 17

Figure 11: Order cycle flow at Motion Drive ........................................................................... 21

Figure 12: Demand analysis of international clients ................................................................ 22

Figure 13: Reasons behind Motion Drive's failure to utilize market potential ......................... 24

Figure 14: Demand analysis of various products ..................................................................... 26

Figure 15: Nature of confirmed orders from international clients............................................ 28

Figure 16: Importance of Search engine optimization ............................................................. 45

Figure 17: Smart phone application for Motion Drive ............................................................. 48

Figure 18 : Major tourist attractive cities ................................................................................. 50

V

List of tables

Table 1 Rental Structure of Motion Drive .................................................................................. 7

Table 2 Vehicle categories in Motion Drive ............................................................................. 9

Table 3: Inputs for TOWS analysis .......................................................................................... 31

1

1. Introduction:

1.1. Problem description

The tenor of tourism is sprouting at a speed into diversified forms in the recent years. Latest

casts of tourism under labels such as Adventure tourism, Eco-Tourism and the like are

becoming immensely popular. People across the globe who disclose their aspiration towards

these activities are also on the rise. This enthusiasm within the crowd drives them to allocate a

good sum of money and time to get involved in their interests. This paper is to analyze such

ideas and provide a solution for the sales volume enhancement of Motion Drive

Sportswagenvermietung.

Motion drive is a sports car rental company with its nerve centre as rental of flamboyant

sports cars. Despite being very young in this business the company is gaining popularity

widely. The vision of Motion drive is to gain name and fame amongst inbound tourist to

Europe, especially to Germany. Currently the problem faced by this growing concern is their

uneven distribution in the sales volume – maximum orders for rental are received during

weekends and on holidays leaving the weekdays with relatively sparse orders. In order to gain

a balance of this uneven sales volume distribution the company currently suffers from,

Motion Drive aims to shed its spot light on international tourist to Germany and business

travelers visiting Germany. Such customers have the frame of mind to spend lavishly on such

activities and also bookings from such people are expected to last for a longer period of time

(i.e. throughout their excursion) and even through the weekdays.

Thus the objective of this thesis is to draft a marketing plan for Motion Drive which would

focus on making the international travelers, who visit Germany, aware about the company by

offering packages and other add-ins as an attraction. This is expected to facilitate an increase

in the sales of Motion Drive Sportswagenvermietung by evening out the sales pattern.

1.2. Objective of the thesis

Motion Drive Sportswagenvermietung is a company that serves in the niche market of sports

car rental. This small company is active in a path which is less travelled and seldom noticed

by many others in the field of Automotive. Most other companies view this segment as mere

2

rental of cars however to Motion Drive this segment is viewed with the perspective wherein it

can serve the car enthusiasts from all walks of life and thereby fulfill their customer‟s dreams

over luxurious cars.

The market of sports car rental is a playground which is often of less focus amongst many

other giants in car rental business who have over the years established themselves all over the

world. However because of the range products offered by Motion Drive, it maintains an

appreciable track record among the customers within Germany. This consistent response from

the customers has further given a clear picture to Motion Drive about the various

opportunities and potential hidden within this segment.

The vision of Motion Drive today is to effectively tap this hidden potential and increase its

sales volume. Till date the bull‟s eye of Motion Drive has been the domestic market and a

relatively a small volume of international clients. The aim of this paper hence to study about

the current business model of Motion Drive and the markets served and to propose a

marketing strategy to attract the international tourists visiting Germany.

The marketing strategies are anticipated to enable Motion Drive enhance its market share

within the native crowd and attract the international tourists visiting Germany. All the

strategies and proposals made in this paper are made based on studies and analysis made via

formal and informal conversations with the clients from various countries who visit Germany

as tourists and business visitors.

1.3. Structure of the thesis

Theoretically, a strategic marketing plan consists of an internal analysis and an external

analysis. The internal analysis pertains to the analysis made within the company. In other

words, the company‟s mission, vision, organization structure, history, customers, etc. are

studied. The external analysis is a term used to analyze the market attractiveness. The basic

elements that are analyzed in this part include the market trend, distribution structure,

competitive environment, current situation and marketing mix.1

1 Lambin (1993) p. 278.

3

In order to derive a strategic marketing plan which aims at evening out the sales orders at

Motion Drive by attracting international customers, the thesis is structured in such a way so as

to include an internal and an external analysis. Chapter two focuses on internal analysis while

the other chapters shed light on the external analysis. The internal analysis comprises of a

detailed introduction into the company profile. The aspects covered in this chapter include the

company history, turnover/employees, mission and vision of the company, core competencies

and product portfolio.

Chapters three to six focus on the external analysis. Chapter three analysis the trends in the

market and how these trends affect Motion Drive. The chapter begins with a brief explanation

on the classification of tourists. It then focuses on detailing the realistic data pertaining to

international tourists visiting Germany and the reasons behind tourists picking Germany as a

touristic destination and the relevance of sports car rental in this industry. The chapter

concludes with a justification for concentrating on international tourists in order to even out

the sales at Motion Drive.

The next Chapter focuses on analyzing the international orders received at Motion Drive.

Based on the orders received at Motion Drive from May through August, statistical data

relating to the number of orders international orders received, number of orders confirmed,

reasons behind why some orders were not confirmed, distribution structure and product gap

are recorded and analyzed. The aim of this analysis is to create a base for the situational

analysis.

Chapter five focuses on a situation analysis recording the current situation at Motion Drive

with respect to the external environment in terms of strengths, weakness, threats and

opportunities. The contents of chapter four are used a base for this chapter. Also included in

this chapter is a study on the competitors and the prevailing competitive environment. Based

on all the analysis made through chapters‟ three to five, a marketing mix is developed in

chapter six. The four P‟s are elaborated upon in this chapter. The marketing mix focuses upon

suggesting an efficient mix that would satisfy the aim of attracting international tourists to

even out the uneven sales volume distribution.

4

2. Motion Drive Sportswagenvermietung

2.1 Company Overview

Motion Drive is a sports car rental company based in Germany with its headquarters at

Magdeburg in Saxony Anhalt. The main business of Motion Drive is the rental of all modern

multi brand sports cars. Motion Drive serves both B2B and B2C within the domestic market

along with small volume of sales contributed from international clients. The entire fleet of

super cars are controlled, coordinated and maintained from the headquarters in Magdeburg.

Motion Drive‟s headquarters is completely equipped with the required infrastructure which

facilitates the service and maintenance of these super cars.

2.1.1 Company History

Motion Drive was established in the year 2009 by Mr.Phillipp Müller. Currently the Chief

Executive Officer of the company, Mr. Phillipp Müller after completion of his Bachelors in

Economics from the University of Magdeburg wanted to start something of his own for which

his heart always throbbed. Mr.Mueller himself being an automotive enthusiast started the

company with one Porsche 911 Carrera S for rental in 2009.

Figure 1: Phillipp Mueller CEO Motion Drive Sportswagenvermietung2

Later in 2010 and in 2011 it further grew to add another Porsche 911 and couple of Audi R8

quattro V8 4.3L into the fleet. In 2012 this fleet became flamboyant by the inclusion of

Lamborghini Gallardo LP-520 Nera, Ferrari 360 Modena F1, Porsche 911 and BMW M6.

These inclusions helped Motion Drive to showcase a variety in their product range. Today in

2 Motion-drive-sportswagenvermietung (2013).

5

order to maintain a consistent good relationship with clients‟ new presence in places such as

Berlin, Hamburg, Munich, Düsseldorf and Frankfurt have been established.3

2.1.2 Turnover /Employees/Locations

Motion Drive is a company which is merely four years old in this business. Despite being

young in this field of business the turnover of company is also growing in par with its age. In

the year 2009 when the company was started, like any other new face in the business, it

generated 15.000€ in total. The following years of 2010 and 2011 company generated an

increased sales turnover of 120.000€ and 150.000€ respectively. Last year, 2012, the revenue

reached a total of 400.000€. The overall CAGR of Motion Drive over a period of four years

has been recorded to be 221 %.

2009 2010 2011 2012 2013*

Turnover Sales 15 120 150 400 500

0

100

200

300

400

500

600

In 1

00

0 E

uro

s

Turnover Sales

Figure 2: Sales Turnover of Motion Drive Sportswagenvermietung4

As with the number of employees, the team of Motion Drive is relatively small. The total

employees within the company are approximately eight inclusive of those performing

workshop operations and two students pursuing internships.

3 Motion Drive (2013 a).

4 Mueller (2013).

6

.

Figure 3: Motion Drive Crew5

Motion Drive is headquartered at Magdeburg and has its station located in prime cities like

Berlin, Hamburg, Munich, Frankfurt, Stuttgart and Dusseldorf. The stations have their own

fleet of basic sports cars ready for service at any time as required by customers.6

2.2. Mission and vision ahead

Being a service oriented company Motion Drive focuses on customer‟s enthusiasm as its

target. Motion Drive‟s work culture is oriented in a way such that it maintains a close

relationship with the high-valued customers and fulfills their wishes to the best of Motion

Drive‟s abilities. The company offers an unbeatable cost-benefit ratio to its customers through

their service pattern. Motion Drive offers its services within Europe regardless of the time and

place without any issues. The company‟s widespread co-operation across Europe is the key

that enables them to achieve this service benefit. This in turn allows Motion Drive to offer

exclusive facilities such as security training, perfection training, race training, individual tours

with tailor made add-ins to create exciting moments as well as individual benefits, apart from

the task of sports car rental. Such kind of customer benefits offered from Motion Drive makes

it to start apart from other players in this field who function as just a sports car rental

company. Motion Drive‟s vision ahead is to become one of the top rental companies in the

market of sports car rental and offer a complete package of enthusiasm, entertainment and

adventure.7

5 Motion Drive (2013 b).

6 Motion Drive (2013 c).

7 Motion Drive (2013 d).

7

2.3. Core Competencies

The core of Motion Drive‟s business is rental of high end sports cars which automobile

enthusiast dreams to drive at least once in his or her life. Motion Drive offers these valuable

customers a unique experience of realizing their dreams at an affordable cost and benefit

advantages. The company offers a wide range of products to have an unforgettable

experience. The company designs with the help of its expertise in the field of automotives.

Motion Drive has created a niche market of its own by offering different trainings, tours and

individually elaborated offerings for ambitious customers. This portfolio of Motion Drive

helps customers to gain an everywhere unique, individual and reasonable sports car rental.8

2.4. Product Portfolio

Motion Drive offers varieties in their products and thereby are easily assessable to all sorts of

customer segments. Prices of the products ranges from 30,-€ to 5.999,-€ which enables the

company to serve a wide range of customers. All the products offered are developed based on

performance and cost of sports cars included in the package.

Table 1 Rental Structure of Motion Drive9

8 Motion Drive (2013 e).

9 Mueller (2013).

8

The rentals offered are classified into four categories based on the cost and performance of the

sports cars. All the general packages offered are bound to time of rental period and distance

(Kilometers) meant to travel during rental. The basic structure of the offers applicable to cars

from any segment is shown in the table.10

The table depicts the rental programs offered which includes comprehensive insurances and

full tank fuel for the ride. During these rentals the client is expected to pay a security deposit

as a precaution for damage which is refunded provided no damage incurs to the car.

2.4.1. Vehicle Categories

The sports cars offered for rentals are sorted on the ground of certain parameters i.e. engine

size, power etc and price of the cars. The vehicles are categorized into five types Class A,

Class B, Class C, Class D, and Class E.

Figure 4 Vehicles offered by Motion Drive11

Class A category vehicles include the cars with an engine capacity up to 3.8 liters and could

reach a top speed of less than 290 Km/h some of the cars in this category are Porsche 911

Carrera S and Porsche 911 Cabriolet. In Class B type are the cars with engine capacity of 4 to

4.2 liters and can reach top speed of less than 310 Km/h cars in this class are Audi R8 V 8

Coupe. Further details of other categories are described in the table below12

.

10

Motion Drive (2013 f).

11 Motion Drive (2013 g).

12 Mueller (2013).

9

Table 2 Vehicle categories in Motion Drive13

Category Engine Capacity Top Speed Cars offered

Class A Vehicles 2.5 to 3.8 liters up to 355HP > 290 Km/h Porsche 911 Carrera S,

Porsche 911 Cabrio

Class B Vehicles 4 to 4.2 liters up to 420 HP > 310 Km/h Audi R8 V8 Coupe

Class C Vehicles 3 to 3.8 liters up to 480HP > 310 Km/h Porsche 911 Turbo

Ferrari360 Modena

F1,Porsche Panamera

Turbo

Class D Vehicles 4 to 5 liters up to 520 HP > 330 Km/h Lambhorghini Gallardo

LP-520 Nera, Ferrari

F430 F1 Coupe,

Audi R8 V10 Spyder.

Class E Vehicles 4 to 5 liters up to 520 HP > 330 Km/h Lamborghini Gallardo

Lp-520 Spyder, Ferrari

F430F1 Spider.

2.4.2. Track Day at Spreewaldring

This service is designed by Motion Drive to give the clients a flamboyant experience

characterized by an adrenaline rush, thrill and speed. With sports cars that are officially

approved for road traffic, the track day is one of the cheapest forms of rental availed by

Motion Drive to its clients. Clients can enjoy the sports cars in the racing circuit of STC

Motordom or Spreewaldring in Brandenburg (near Berlin). This package is offered once in

spring, summer and in autumn during the months April, July and October respectively. The

13

Mueller (2013).

10

sports cars available for this event are Lamborghini Gallardo, Ferrari 360 Modena, Audi R 8,

and Porsche 911. With a circuit covering 2.5 Kilometers, Motion Drive also has an instructor

who helps in educating the clients about safe riding in the track and also the functionality of

the cars. The clients can try sports cars for any number of rounds in circuit as they wish to do.

Thus, through this package clients are given the opportunity to enjoy the real time experience

of driving sports cars on race tracks and thereby realize their dream of experiencing the thrill

of driving a sports car and living those top speed magical moments.14

2.4.3. Other Events & offers

Motion drive also hosts some seasonal offers like “Start the spring with Ferrari”, “Summer

Farewell”, etc. These are special discounts offered as a weekend packages inclusive of not

just sports cars but along with accommodation at four star hotels in a city of the customer‟s

choice. “Switzerland special” is an offer for the clients in Switzerland. Through this service

customers can rent the cars without any shipping costs. However as already mentioned, such

packages are valid only for a certain period. The event “Cross is more” is a race track event

where auto enthusiasts can try their hands on drifting in race track with high powered engine

cars. The event“Motion Drive at Auto Messe Erfurt - Test Drive” has its own kiosk in the

show which helps the business visitors to test drive the Motion Drive‟s offerings.15

Figure 5: Lamborghini Grand tour 16

14

Motion-Drive Events (2013).

15 Motion-Drive Events (2013).

16 Garret (2013).

11

Apart from the events hosted by Motion Drive, the company also tries to participate in official

OEM meets like “The Lamborghini Grand Tour” organized by Lamborghini for its fiftieth

year anniversary in the Italian city – Milan.

2.5. Clientele and Partners

The clients of Motion Drive generally belong to the elite segment and include people who

carry great spirits of automotive enthusiasm. During its startup, the company was serving only

the domestic market. However in the later years it started serving the international customers.

These international customers are usually business clients and tourist visiting Germany for

recreational purposes. In addition Motion Drive has some corporate clients like Shell

Germany, SIXT, Jorgen Schweitzer and My Days.17

Figure 6 : Corporate Clients of Motion Drive18

Motion Drive joins hands with few cooperation partners for the arrangements of the events

like track day racing, drifting etc. The events are supported by STC Motordom Spreewaldring

Berlin and G force racing academy. Online marketing support is offered by service providers

like Mietmeile and Cx9 systems. Motion Drive by itself supports some of the car rental

companies like US car rentals, Moser Wolfgang and Sportswagenvermietung Prokop.19

17

Mueller (2013).

18 Jochen Schweizer (2013).

19 Mueller (2013).

12

Figure 7: Cooperation partners of Motion Drive20

To cheer the client‟s attitude towards racing and in order to educate them in the sport Motion

Drive seeks the supports from G force racing academy. Through these partners Motion Drive

is quite well equipped to offer a complete package in a way which the customer asks for based

on his or her personal interests.21

2.6. Resource utilization notion

Motion Drive receives an equal share of orders from two types of clients, domestic and

international. Domestic clients refer to the Germans traveling within Germany, while

international clients refer to the tourists of other nationalities visiting Germany. At the

moment, Motion Drive uses a software called C-Rent system to work with the bookings and

also to maintain the customer data base. (Refer appendix A for detailed information about C-

Rent software and sample of sales order data‟s received at Motion Drive). Although this

software is not used to its full potential, currently this software is the only base upon which

Motion Drive processes the orders, be it international or domestic. The past orders received

and customer data maintained in this software were analyzed and based on the observations

made over the pattern of orders received from clients, fluctuations were identified in the sales

cycle. In other words, the orders received were not evenly distributed. Majority of the orders

were received for the weekends. For Motion Drive this meant that during the weekdays the

orders were sparse or none.

20

Motion Drive (2013 f).

21 Mueller (2013).

13

In order to understand this more in depth, the orders were separated into two categories,

orders received from domestic clients and orders from international clients. Most of the orders

from domestic customers lasted only for a short period of time and mostly during weekends

or days clubbed with holidays. On the other hand, the international clients rented cars for a

longer period of time. Generally, the period for which the car was hired lasted from the day

they arrive at the destination airport till the day of departure. In addition to the longer rental

period these rentals covered not just weekends but also the weekdays.

Figure 8: Sales order pattern of international clients22

Upon observing the international orders received at Motion Drive over the past four months,

it was identified that a maximum of these orders were received for weekdays. And more often

these orders lasted for more than just a day. Usually the bookings lasted for a period of a week

or sometimes even an entire month. Thus, at this juncture, with the focus on smoothening out

the order cycles at Motion Drive it makes sense to concentrate on the international orders. The

ultimate aim is to utilize the potential that lies for Motion Drive through the international

orders.

22

Mueller (2013).

14

3. Tourism’s sway on Motion Drive

3.1. Introduction

The experience of tourism or being a tourist is something inevitable and every one of us

would have gone through some form of tourism in our life. However the concept of tourism

and theme behind it varies from place to place. In the previous decades outbound tourism i.e.

travels beyond one‟s own country was a rare and expensive trend. In the current scenario

where the whole world is considered as a global village, cross country travel has become a no

sweat process, especially with the involvement of the online internet media. This part

highlights tourism and its relevance from an economic and strategic perspective and finally

narrows down to tourism within Germany to prove its accent to Motion Drive for targeting on

international customers.

The international definition of tourism quoted by UNWTO defines tourism as

“...consists of trips with a principal destination outside the traveler‟s usual environment or any

principal purpose (business, leisure or other purpose) other than to be employed by a resident

entity in the country or place visited with time duration of less than one year”.15

Tourism is

considered as a global phenomenon with an incomprehensibly massive potential and

infrastructure. When carefully reviewed through facts and figures involved within this

segment one can understand the influence of tourism on society, politics, culture and its

contribution to economy.20

Travel and tourism industry is often not considered equal to many other revenue generating

industries like Automobile, Chemical, Mining and Pharmaceutical etc. But when paid a close

attention it is obvious to encounter billions of dollars and jobs present in this segment. To be

precise tourism industry already provides its contribution of 9 percent of the global GDP, a

total of US$6 trillion, and has given livelihood through 120 million direct jobs and another

125 million indirect jobs in related industries. According to the above numbers it means that

the industry now accounts for one in eleven jobs on the planet, which is forecasted to further

rise in the future.19

In spite of the economic sluggishness and fluctuations with a fragile recovery on a global

15

level, the number of travelers across the globe increased by 4 percent in 2012, and forecasts

that they will continue to increase by 3 percent to 4 percent in 2013. Experts say that this

increasing pattern was the result of demand from the emerging-market middle class and this

scenario is anticipated to be a boon for developed economies.19

In the year 2011 there were

only 995 million international visitors which grew up to 1035 million in 2012.23

3.1.1. Classification of tourist

Based on the concept and nature of the visits from tourists to any nation are categorized as

follows. Travelers or visitors to a country are of two type‟s foreign visitors and domestic

visitors. As the name clearly describes they are visitors who have the citizenship and with no

citizenship in the visited country.

Figure 9 Classification of tourist 24

Further the foreign and domestic visitors are subdivided as same-day visitors and overnight

visitors. Same day visitors are the travelers who visit a country from their home country

where they belong to and return back to home the same day e.g. travelers from countries

neighboring the target country. Overnight visitors are who make an overnight stay in the

visited country. To be more detailed these same-days, overnight visitors in both the

23

UNWTO Tourism Highlights ( 2013), p. 4.

24 Methodology (2012), p. 10.

16

classifications of foreign and domestic visitors branches based on purposes like personal trips

and business trips.25

Leisure travel spending has the majority share of 76% indicating the fact

most of the travel taken up by people are for recreation or leisure purposes. This leisure

spending has generated USD 3,222.1 billion directly to T&T GDP.26

3.2. International tourism in Germany

Europe is considered as the top travel destination by most of travelers and tourism

researchers. Germany enjoying its location in the centre of Europe mainland invites a huge

population of international tourists. While looking through the travel trends over the previous

decade one can notice the change in traveler‟s preference towards Germany from usual

destinations like France and Italy. The three major reasons for tourisms performance in

Germany are Governmental policies, rich cultural heritage and encouragement of business

activities. Another major influential factor favoring Germany is its popularity for business

travels and visits around the world. Germany alone in Europe hosts around 600 trade fairs in

the year 2012 bringing in global business men on the floor. However, compared to the leisure

trips, business trips occupy a rather small portion of the pie contributing to the economy of

travel and tourism in Germany. Around 61.6% of the tourists spending are from leisure

travelers while the remaining is contributed by business visitors.

3.3. International tourism in Germany facts, figures and current trends

Germany grabs the position of second most popular travel destination among the Europeans

in the year 2010 and 2011. Germany is taken a lead by Spain in the same year because of its

popularity and climatic conditions. In this list of popular destinations following Germany are

France, Italy and Austria. Germany on total has encountered 43 million trips in the 2010 and

2011.

25

Methodology (2012), p. 10.

26 Travel & Tourism Economic impact (2013), p. 6.

17

Figure 10: Reasons why tourists visit Germany27

With the umpteen number of trips to Germany, the German National Tourist Board conducted

a survey to identify what was the reason behind these trips. From the survey it was identified

that 75 % of international visitors and 58 % of German visitors chose Germany as a travel

destination in order to have fun. While another 11 % of international visitors and 24 % of

German visitors chose Germany to be active or sporty. And according to the survey to have

fun and being sporty included the experience of driving on the German Autobahns. As a

specific example, a survey conducted amongst Chinese to analyze the trend of tourism from

China to Europe has reported that for a tourist from China, safety is his first priority. On the

other hand, by nature Chinese are known to be risk takers, be it adventure or business. So in a

safe environment the Chinese are bound to explore their adventurous side. And this is likely

to be expressed by the Chinese as a desire to get to know the country and its people and to

enjoy unique, culture-specific experiences which are impossible in China and driving a

European sports car without a speed limit on a German autobahn tops this list.28

27

German National Tourist Board (2011).

28 Z punkt (2012), p. 32.

18

3.1.1. Autobahns in Germany

Autobahn in Germany is considered as the pinnacle of driving experience for all automobile

and speed lovers. Most of automobile lovers around the world carry the dream of enjoying the

German engineered cars on no speed limit road through their life. Though Autobahn is said to

have no speed limits there exist an advisory speed of 130 km/h which is called as

„Richtgeschwindigkeit‟ in German. Thus in reality Autobahn is not completely free from

speed limits there are areas wherein limits are strictly enforced and there are protests by many

organizations to enforce speed limits on the German Autobahns to avoid death toll on

accidents.29

However, an interesting aspect regarding the German Autobahns with minimal

speed limits in comparison to the neighboring countries with speed limits is the yearly traffic-

related mortality. Austria has 8.3 deaths per 100,000 people, France 7.5 deaths per 100,000

people and Switzerland 4.9 deaths per 100,000 people while Germany has recorded only 6

deaths per 100,000 people according to WHO (World Health Organization).30

The fact that

these countries despite their speed limitations have a recorded death rate higher than Germany

naturally makes Germany a safe pick among tourists to visualize their dream of driving on an

Autobahn. It is no doubt that even with no speed limits German Autobahns are one of the

safest roads on earth. With the Autobahn proven as the prime destination for drivers who want

to test their limits,31

it now narrows down to the sports cars which these tourists are on the

lookout for. It is at this juncture the sports car rental firms come into the picture. Firms like

Motion Drive with its range of sports car for rental serves as a pallet to picture the fantasy of

the tourists visiting Germany.

29

Knauf (2013).

30 Sood (2013).

31 Knauf (2013).

19

4. Analysis of the International Sales Orders at Motion Drive

With an umpteen number of travelers visiting Germany with a dream of experiencing the

thrill in driving a sports car on the German Autobahns, sports car rental firms play a

significant role in visualizing these dreams. The vision of any sports car rental firm is to serve

their clients by providing them with a wide variety of sports cars to choose from. However,

with this being the basic notion of all the rental firms within Germany how these firms gain a

competitive edge over their competitors depends on how well these firms utilize the potential

that lie with the tourists visiting Germany. In order to achieve this competitive advantage

rental firms must be in a position to satisfy their client‟s demands. To access how well Motion

Drive makes use of the existing marketing potential, the orders received from international

clients during the past four months are analyzed. The aim of this analysis is to gain an insight

about the overall past performance of Motion Drive with its international clients.

This section of the thesis focuses extensively on the analysis of the sales orders received from

International clients over the past four months (May to August). The aspects considered for

analysis include the total number of orders received per month, how many of these received

orders were confirmed, the reason behind why some of the orders were not confirmed, nature

of the orders (weekend orders or weekday orders, business visitors or leisure) and the type of

cars that were in demand. The aim of this analysis is to identify a trend among the orders

received at Motion Drive. This trend along with the drawbacks and negative aspects are used

as a base to make situational analysis at Motion Drive. The aim of the situational analysis is

primarily to identify the strength, weakness, threats and opportunities for Motion Drive

amongst its' international clients.

The section starts with the analysis of the total number of international orders received. The

first part analysis the international orders that were not fulfilled by Motion Drive. While the

second part of this section analysis the nature of the orders that were confirmed by Motion

Drive. The aim behind analyzing the orders that were not confirmed by Motion Drive is to

understand where they lag in terms of international customer expectations. Similarly analysis

of the confirmed orders helps in determining the factors which serve as a winning stone for

Motion Drive amongst the international clients. The analysis is made based on the

20

international orders received at Motion Drive for the months of May, June, July and August.

All the orders that were received from international clients were recorded with an aim of

understanding and identifying a common trend among these orders.

4.1. Order cycle at Motion Drive

Before analyzing the international orders at Motion Drive, it is important to understand how

the orders are received and processed because how well a firm is able to fulfill its customer

needs depends on the efficiency of the order cycle. In other words, the order-to-payment cycle

is the heart of internal records system at Motion Drive. This part thus aims at giving a glimpse

on the order-to-payment cycle at happening at Motion Drive.

In any firm, the customers send orders to the firm and the sales representatives respond

through quotes and invoices. Marketing managers rely on these internal reports of orders,

sales, inventory levels etc. in order to spot opportunities and problems. Today, companies

must perform these steps quickly and accurately, as customers satisfaction depends on how

well these orders are processed and delivered. An increasing number of firms use internets

and extranets to improve the speed, efficiency and accuracy of the order-to-payment cycles.32

The C-rent software used by Motion Drive is an example of incorporating the use of

technology in the order cycle.

The order cycle at Motion Drive is the base which creates the customer-firm interface and

includes all the processes involved in receiving and sending orders. At Motion Drive the order

cycle begins when orders are received from the customer via e-mail. At the moment, the

company‟s website is the sole means through which the customer is able to learn about

Motion Drive. The clients search the website and get an idea about the product portfolio and

offers made by Motion Drive. He then contacts Motion Drive via the enquiry form available

online. The sales personnel at Motion Drive check these enquiries and look for availability.

The C-rent software enables Motion Drive to look for availability. If the cars requested for are

available on the dates desired by the clients, Motion Drive responds with a possible quote to

the client via mail. If the terms are favorable for the clients the orders are confirmed by the

clients. The confirmation is made secure by receiving an advance payment from the client.

32

Kotler P, et al. (2009).

21

Once the credit card payment is made, the booking is updated in the C-rent software.

Domestic as well as international orders are processed in the same manner at Motion Drive.

Figure 11: Order cycle flow at Motion Drive33

The role of the C-rent software in the order cycle is elaborated in figure 11. The software

ideally helps the sales personnel to check for the availability of cars in the location and time

desired by the clients. All the orders from the clients are received at the headquarters,

Magdeburg. However the availability of cars at the other sales offices are kept up-to-date

using this software.

An obvious loophole in this order cycle is the lack of follow-up with the clients is an

interesting point to be considered. If the client responds when the terms are favorable, the

sales personnel proceed further. However when a client does not respond to the quotation sent

from Motion Drive, there is no effort made to obtain a feedback from the client to identify the

reason behind the clients loss of interest in the offer.

Taking these order cycles as the base, a detailed analysis of the international orders at Motion

Drive is made in the next section. The positive and negative aspects in the processes involved

in the order cycle and the nature of the order cycles are the key aspects focused upon in the

analysis.

33

Mueller ( 2013).

22

4.2. Demand analysis at Motion Drive

The first part of the analysis focuses extensively upon studying the total number of

international orders that were not confirmed by Motion Drive. As mentioned already, the aim

of analyzing the international orders that were not confirmed is to obtain an idea about the

aspects wherein Motion Drive fails to satisfy their international clients. In other words, the

reasons behind why most of these international orders were not confirmed were identified.

This part also sheds light on the customer preference in terms of what type of car the

international clients book for.

Figure 12: Demand analysis of international clients34

The above diagram is a record of the total number of international orders received per month

(from May through August). As shown in the figure, 55 international orders were received for

34

Mueller (2013).

23

the month of May, 9 for the first week of June, 70 in July and 27 in August. It is observed that

a majority of the orders received were not confirmed. Only 11 orders were confirmed in May,

1 in the first week of June, 5 in July and 1 for August. The large number of orders received

proves the demand and popularity for sports car rental in Germany among international

tourists. However, what is more relevant at this juncture is the reason behind why a majority

of the received international orders could not be confirmed at Motion Drive.

Considering the orders received during the past four months, Motion drive received a total of 161

international orders. However Motion Drive could serve only 18 of these 161 clients. It lost 143

international orders in the past four months alone. Upon analyses it was identified that the

reasons behind Motion Drive's failure to serve all the international orders it received were due

to internal issues within the firm. Motion Drive attributed its failure to three main aspects,

logistics problems, lack of car availability, lack of human resource and other reasons wherein

cases clients lose their interests because of personal issues. Logistics problem served as the

prime aspect and Motion Drive lost more than half of its international orders (55%) due to this

reason. Other reasons like lack of human resources, lack of car availability and client‟s

personal issues led to the loss of 17 %, 18 % and 10% of the international orders received.

Personal issues include reasons like change in dates by the clients, canceling of the trip by the

clients, etc.

The logistics problems hinder Motion Drive's service to its international clients in two

aspects, cost and distance. Motion Drive has offices spread through major touristic locations

within Germany and this enables them to serve their domestic clients without any issues. In

case of domestic clients, Motion Drive is able to serve their customers by supplying them

with cars from destinations of their choice. Customers can opt to pick up the car from

anywhere within Germany. However in the case of international clients, often clients are

travelers visiting Europe and not just Germany. Hence they request for cars to be available at

destinations outside Germany, like Spain, Switzerland, Paris, etc. Motion Drive encounters an

extra cost in terms of transportation (in some cases a hanger is hired transfer the car to the

requested location and back after the clients booking period and in some cases the car is

driven to the destination incurring fuel and driver charges). These expenses when added to the

basic rental charge of the car, makes the final cost too expensive for the client. Theory has

24

coined the term 'distribution gap' to represent such situations faced at firms. A distribution gap

is said to arise when there is an absence or inadequacy in distribution within the product

market. Theory states that a distribution gap can be classified into three types, coverage gap,

intensity gap and exposure gap. Motion Drive faces the problem of a coverage gap. Coverage

gap exists when a firm does not distribute the relevant product line in all the desired

geographic regions. It is due to this coverage gap Motion Drive lost a majority (55 %) of the

international orders in the past four months.35

Figure 13: Reasons behind Motion Drive's failure to utilize market potential

In some cases, even if the cost works out to be affordable for the international client, Motion

Drive's insufficient human resource (in terms of personnel to drive the car to the destination)

prevents Motion Drive from serving its clients. In the past four months Motion Drive lost 17

% of its international clients due to lack of drivers to drive the car to the required destination

Apart from this reason, in some other cases in which both the above mentioned reasons

(transportation cost and availability of driver) are not a problem, Motion Drive faces another

problem of date clash, wherein it is not able to offer the car that is requested by the

international client. Often the orders from the domestic clients are weekend orders and when

an international client also requests for a car on the In some cases, even if the cost works out

to be affordable for the international client, Motion Drive's insufficient human resource (in

terms of personnel to drive the car to the destination) prevents Motion Drive from serving its

35

Lambin (1993), p. 213.

25

clients. In the past four months Motion Drive lost 17 % of its international clients due to lack

of drivers to drive the car to the required destination

Apart from this reason, in some other cases in which both the above mentioned reasons

(transportation cost and availability of driver) are not a problem, Motion Drive faces another

problem of date clash, wherein it is not able to offer the car that is requested by the

international client. Often the orders from the domestic clients are weekend orders and when

an international client also requests for a car on the same date with long duration rental,

Motion Drive does not have the car to offer to its international clients. Similar to the

distribution gap, theory refers to such a situation as 'product line gaps'. The product line gaps

is classified into seven types, however in order to limit the scope of this paper only the

classifications that relate to Motion Drive's situation are taken into consideration. The product

line gap existing at Motion Drive is a combination of three types, size-related product line

gap, form related product line gap and options related product line gap. Size-related product

line gap is caused when the firm's product size does not meet the demand. Form related

product line gap is caused when the customer is more attracted to one form of the product

than the other. Options related product line gap is caused when the firm is not able offer

specific features demanded by the clients. As in the case of Motion Drive, although the range

of products offered is quiet sufficient, the lack of availability of certain types cars (caused

because a majority of customers demand for the same car) and lack of sufficient number in

these cars hinders Motion Drive from serving its customers. 18 % of the international orders

at Motion Drive were lost to the product line gap.36

Thus in order to satisfy all the international orders received, Motion Drive is in a dire need to

address these three issues. In terms of getting a more deep understanding about the product

line gap existing at Motion Drive, the trend in the cars demanded by international clients is

studied. The aim behind analyzing this trend is to understand how Motion Drive must alter its

fleet of cars in such a way which would enable them to be better equipped in terms of car

availability and narrow down their product line gap and reclaim their international clients.

36

Lambin (1993), p. 213.

26

Figure 14: Demand analysis of various products

27

espite the fact that Motion Drive offers a wide pallet of sports cars to their clients, the

preference of international clients seemed to follow a regular pattern. The product line gap at

Motion Drive is clearly illustrated when the international orders received over the past four

months were considered. A form-related product line gap is visualized as the majority of

international clients preferred only three cars out of the range offered by Motion Drive. The

Porsche 911 Carrera received maximum number of orders every month. This was followed by

the Audi R8 and finally the Lamborghini Gallardo. These three cars were the cars that the

international clients constantly demanded for. And this scenario was true for all the four

months during which the analysis was made. The size-related product line gap is visualized

when the number of these three cars owned by Motion Drive are taken into consideration.

Motion Drive owns eight Porsche 911 Carreras, eight Audi R8s and one Lamborghini

Gallardo.

4.3. Nature of the confirmed international orders

This part of the thesis focuses on analyzing the international orders that were confirmed by

Motion Drive over the past four months. By analyzing the international orders that were

confirmed, the positive aspects for Motion Drive which make them popular and successful

among international clients are identified. These positive aspects are incorporated into the

situational analyses (refer next section) which is used a base to derive an effective marketing

plan for the international clients of Motion Drive.

As a first step, the international clients were categorized based on the purpose of their visit.

International clients visit Germany for two primary reasons, business and leisure. Although

the preference of both these clients are the same, ' to drive a sports car on German Autobahns'

there arises a difference when it comes to the offers that can be made to attract these

customers from the perspective of a car rental firm. Business visitors are those visiting

Germany with the support of a firm in Germany. So ideally Motion Drive must focus on

designing attractive offers and/or packages that would be suitable for the firms hosting these

visitors. On the other hand, when the travelers visiting Germany for leisure are taken into

account, Motion Drive must focus on schemes and plans that would attract the individuals

traveling as well as firms (like Reiseburos) who plan the trips for such travelers.

28

Figure 15: Nature of confirmed orders from international clients.37

For the month of May, 8 of the 11 confirmed international orders were for tourists visiting

Germany for business purposes while the remaining 3 orders were from leisure tourists. June

and August also received their share of international orders from business tourists. In July, out

of the 5 international orders that were confirmed, 2 were from business tourists. On analyzing

the overall trend, it is observed that the confirmed international orders by business tourists

were marginally higher than those confirmed with tourists visiting Germany for leisure

purposes. Although Motion Drive receives a fair share of international orders from both types

of tourists, due to the existing problems of distribution and product line gap Motion Drive is

unable to serve the leisure travelers.

37

Mueller (2013).

29

4.4. Summary of the existing scenario at Motion Drive

This section aims at summarizing the position of Motion Drive amongst its customers with

respect to international orders based on the analysis that was performed. Based on the analysis

of the past data with respect to international orders are concerned, Motion Drive is currently

in a phase of growth. It receives sufficient number of orders from business as well as tourists

visiting Germany for leisure. However, when it comes to the confirmation these orders

Motion Drive fails. The reasons behind this failure were identified as distribution gap, product

line gap and lack of human resource problems existing at Motion Drive. Thus it makes sense

to focus on an image building communication strategy.38

This demand analysis holds good as far as the international orders are taken into

consideration. However there are many other factors at Motion Drive which must also be

taken into consideration to derive an image building communication strategy. The next

section thus sheds light upon a situational analysis performed at Motion Drive. Although the

records about the international sales orders serves as a base for the situational analysis, other

factors necessary for a firm to project itself as a successful player making full use of the

existing market potential are also taken into consideration.

The purpose of the situational analysis is to identify the strengths, weakness, opportunities

and threats of Motion Drive. How Motion Drive could effectively make use of its strengths

and opportunities by overcoming the threats and weakness are also identified. These results

will be then used as the foundation for building up a marketing plan for Motion Drive.

38

Lambin (1993), p.221.

30

5. Marketing Plan

Conceptually strategic planning is rather simple. Strategic planning follows the four basic

steps, analyzing the current situation, expecting future situation, determining the direction of

the firm and developing means for achieving the mission. However realization of these four

steps is an extremely complex process. To realize a strategic plan the firm must first draft a

systematic approach which would facilitate the identification and analyze factors external to

the firm and matching them with the firm‟s capabilities.39

A marketing plan is derived for Motion Drive along the lines of these four basic steps

mentioned. A situational analysis is performed to analyze the current situation of Motion

Drive. This is followed by a competitor analysis which elaborates the future situation of this

market. Finally a marketing mix is developed which determines the direction along which

Motion Drive must act to realize their mission. However, at this juncture, it is necessary to

understand the positioning of Motion Drive in the relevant market and its targeted customers

prior to stepping into the process of deriving a marketing plan. The following sections

highlight upon the same.

5.1 Situational Analysis: TOWS matrix

Often theory suggests the use of various pre-defined tools or conceptual frameworks for this

purpose. TOWS matrix is one such tool which enables one to formulate a strategic plan

through a situational analysis.40

TOWS is a tool which is very much similar to SWOT, in the

sense that both these tools make use of the same set of variables, strength, weakness,

opportunities and threats. However TOWS matrix does not merely stop with the identification

of these variables as in the case with SWOT. TOWS matrix goes one step beyond and

suggests various strategies that enable one to match the internal situation of a firm to suit the

external market situation. In this thesis the mini-mini, mini-maxi, maxi-mini and maxi-maxi

39

Lambin (1993), p.221.

40 G.Dyson (1990), p. 17.

31

strategies are made use of to analyze the position of Motion Drive. The following sections

focus on applying these strategies to perform a situational analysis at Motion Drive, with the

demand analysis serving as a foundation for the formulation of these strategies.41

The first step for the formulation of a strategy is to identify the strength and weakness of a

firm and the opportunities and threats present in the external environment. This part of the

thesis summarizes the strengths, weakness, opportunities and threats for Motion Drive.

Table 3: Inputs for TOWS analysis

41

G.Dyson (1990) p 18,25,27.

32

5.1.1. Mini-mini strategy

The mini-mini strategy is also known as the weakness-threat (WT) strategy. A firm that faces

external threats and internal weakness is said to be in a precarious position and often firms try

to avoid being in this position. However in reality one must and will suffer from the effects of

weakness and threats. The aim of the WT strategy is to minimize these weaknesses and

threats.42

Although Motion Drive is characterized by a number of weakness (as summarized in section

5.1) lack of human resources, lack of distribution channel, the absence in terms providing

services in major touristic hubs and size and form product line gap are identified as the most

predominant ones. Since this market is similar to an unexplored mine for major sports car

rental firms, it is expected that these markets will soon attract big players with a financial

strength capable of buying this abundant existing potential. Thus it would be beneficial for

Motion Drive if they are able to reduce the threat by the entry of new players by establishing

themselves in major touristic hubs. To narrow down on the form product line gap existing at

motion drive, they could focus on increasing the variety in their product line. This can be

visualized in two ways.

The eco-friendly clients in this sector could be exploited by Motion Drive, by including in its fleet

a range of eco-friendly cars. Motion Drive could plan to invest in hybrid cars, as these cars would

realize the dreams of 'go-green' clients, who would otherwise be reluctant to try out these cars. On

the other hand, Motion Drive must also focus on its tech-savy clients. Sports cars are subject to

frequent technological up gradations. Motion Drive must hence also plan to invest in upgrading

their cars at frequent intervals. This would prevent them from customers losing out interest due to

lack of latest technology. Finally, to narrow the problem of the distribution gap that is currently

causing Motion Drive to lose a number of its customers, they could work out partnerships with

travel agents in other countries outside Germany. This would benefit Motion Drive in two folds,

on one hand it could narrow its distribution gap and on the other hand it could also avoid losing

out clients due to changes in currency.

42

G.Dyson (1990) p. 28.

33

5.1.2. Mini-maxi strategy

It is natural for any firm to identify opportunities in the external environment but have

organizational weakness which prevents them from taking advantage of the market demands.

This strategy is an attempt which aims at minimizing the weakness and maximizing the

opportunities. Hence this strategy is also rightly named as weakness-opportunity (WO)

strategy.43

The growing numbers of clients who prefer to opt for package tours are on the rise. There are

various forms of firms and travel agents who offer a variety of packages like honeymoon

packages, autobahn tour packages, adventure-luxury packages, etc. Motion Drive could add

value to such packages by serving as a supplier to such firms offering package tours. Motion

Drive could serve as a potential value adder for such packages, for example, in the case of

honeymoon packages which are often characterized by a color theme, Motion Drive could fit

in by offering cars which match these color themes. For instance for a white themed

honeymoon package, Motion Drive's value addition could be in terms of a white Audi R8.

Through such agreements

Motion Drive can slowly gain an image for themselves among these clients as well. Lack of

sufficient human resource a Motion Drive is a factor which needs to be addressed. The

obvious solution to satisfy the need at Motion Drive for people to be available to drive cars to

the desired destination is to hire more employees. However, Motion Drive could make this

employment an efficient one by using them to tap the potential existing in these markets. The

nature of these markets makes it necessary for Motion Drive to be constantly in touch with the

trends in the markets and the preference of the clients. The hired employees could be trained

to maintain an extensive CRM system. The system must ensure that customer needs are fully

understood and also keep in touch with customers by receiving feedbacks from them. This

would enable Motion Drive to understand why a particular client is satisfied or unsatisfied

with them. Subsequently these employees can also study the market and the growing changes

43

G.Dyson (1990) p.28

34

taking place, to keep the services at Motion Drive up-to-date. Finally to address the size

product line gap, Motion Drive must increase the number of cars that are constantly

demanded by clients. As discussed already the Porsche 911, Audi R8 and Lambhorghini

receive numerous orders from international clients. Motion Drive must hence plan for an

investment and add more of these cars to its fleet.

It is obvious that all these suggestions require a financial investment from Motion Drive's

side. A feasible option for Motion Drive to generate a part of this investment is to upgrade the

skill set of the employees present at Motion Drive. The employees at Motion Drive who

perform the mechanical tuning operations on the cars are at the moment not well trained. If

Motion Drive could facilitate the training of these employees, the firm could outsource their

services to other rental firms as well. Also, during the winter season when the orders are

sparse, this technical service could generate an income for Motion-Drive.

5.1.3. Maxi-mini strategy

The strengths of a firm must ideally enable it to overcome the external threats it faces in the

market. However, in reality however strong a firm might be it cannot overcome the threats in

the external environment head-on with their strengths. The strength-threats (ST) strategy or

maxi-mini strategy is a means by which a firm can deal with the threats in the environment by

maximizing the strengths and minimizing the threats.44

A massive pillar of strength at Motion Drive is its rising turnover. Motion Drive could

effectively narrow its distribution gap with this turnover. Based on the demand analysis it was

identified that Motion Drive received several orders from international clients from countries

like Belgium, Czech Republic, etc. It was also observed that the clients from these countries

felt that the price range offered by Motion Drive was much less when compared to the price

offered by the rental firms in countries like Belgium, Czech Republic.

However, the distribution gap existing at Motion Drive prevents them from serving these

44

G.Dyson (1990) p.28.

35

customers. Hence Motion Drive could play the role of pioneer in terms of rentals firms

offering cars at a lower price range in such markets. Utilizing the rising turnover in this

direction could make Motion Drive an effective and successful pioneer. Another strength of

Motion Drive are the race track events held by them.

These race track events play a vital role in creating an image for Motion Drive amongst their

clients. However Motion Drive's race track events are restrained to the ones held four times a

year at Berlin. It would be a wise step for Motion Drive to introduce such race track events at

other major touristic hubs. Motion Drive's existing presence in some of these locations could

serve as an initiating factor to hold race track events. In addition, Motion Drive can add some

more color to these track events by bringing in trends relating to social responsibility, eco-

friendly drives, etc. into these track events. This would eventually attract more customers and

also help to project Motion Drive as more than just a car rental firm.

5.1.4 Maxi-maxi strategy

A position in which every firm dreams to locate itself is the place wherein it can maximize

both strengths and opportunities. Enabling a firm to lead with its strengths by utilizing

resources in order to take into advantage the opportunities at the market is the focus of the

strength-opportunity (SO) strategy or maxi-maxi strategy.45

Since Motion Drive has already witnessed the benefits of their race track events, the firm can

further utilize the potential of these effects to acquire the emerging markets. Motion Drive can

plan on designing theme based race track events. For instance, Motion Drive could conduct an

event which in addition to giving the clients the opportunity of driving these cars also

provides them with technical assistance for car enthusiasts. In the sense, the employees at

Motion Drive could educate the clients on interesting technical aspects of the cars. Also, car

enthusiasts could be given the opportunity to learn about the mechanical aspects for cars of

their choice. In terms of offering packages, apart from forming partnerships with the firms

already offering them, Motion Drive itself could design and offer packages to suit their

45

G.Dyson (1990) p.28.

36

clients. Motion Drive can design workshops exclusively for business tourists by working out

agreements with the firms hosting them. These workshops could focus on providing services

based on the interests and requirements of the clients.

As a modified version of track events, Motion Drive can also plan towards creating race

clubs. Since Motion Drive is already equipped with the required assets, cars, trainers, offices

in major hubs, from an investment point of view race clubs are clearly an easy step for Motion

Drive into the future market. The main focus of these race clubs could be limited to satisfying

the needs and interests of car enthusiasts in terms driving, learning as well as practicing some

key technical techniques on these cars. Apart from serving as a source of extra income these

clubs would also raise the popularity of Motion Drive in the market.

Similarly, another source of strength for Motion Drive is its gift vouchers. Currently Motion

Drive offers vouchers in the form of money coupons (like 50 Euros, 100 Euros vouchers)

which the clients could use while renting cars. Motion Drive can further work on these gift

vouchers and add them to the packages offered by other firms. When Motion Drive creates

partnerships with other firms offering packages in addition to their value addition in terms of

cars they can also offer gift vouchers. In addition to serving as an advertising tool for Motion

Drive, these vouchers hence offered would also enable clients to return to Motion Drive to

utilize these offers.

5.2. Competitor Analysis

Having understood the current situation of Motion Drive through the situational analysis, this

section now focuses on understanding the future market scenario in terms of a competitor

analysis. Building a strong brand obviously requires a keen understanding of the competitors.

In today‟s markets competition is inevitable and new competitors constantly emerge from

various directions. The competitors are eager to grow their sales and this ultimately plays a

crucial role and affects the market share held by each player.

Theory suggests the use of different kinds of tools and techniques which enable a firm to

study and understand the strategy used by these competitors. Once the strategy used by the

37

competitor is understood, a firm can then pave their way into the future with an efficient

strategy which surpasses their competitors.46

However for this the firm must possess a stable

situation internally. In other words, a good start to deal with competition is to develop stable

internal conditions within the firm and then focus on studying the strategy of its competitors.

As discussed in the above sections Motion Drive is yet to cross the initial stage of creating a

stable internal situation. Umpteen number of problems which need to be sorted out have been

identified within the firm. However this does not imply that there are no competitors in this

market. Motion Drive does face a loss in the market share due to indirect competitors. Big

players like Sixt, Europe car hire, Avis, Luxury car hire have already established themselves

in the rental market. The major aspect of advantage for Motion Drive is the fact that these

players deal with sports cars from a few major players only. To be precise, these players

concentrate on luxury cars only from two brands, Aston Martin and Benz. However these

players are already well established and financially very stable. Thus with the financial

stability and established brand image entering the sports car rental market is not a difficult

task for such players. And it is expected that these players will soon enter the market of sports

car rental as already some of these players have added a few cars like Porsche, Audi R8,

Ferrari, etc. into their product portfolio.47

But in order to be able to compete with these

competitors Motion Drive must first sort out its internal issues.

Although Motion Drive could be regarded as a pioneer in the rental of luxury sports cars, its

internal problems prevent Motion Drive from competing head on with their competitors.

Thus, it is suggested that for the moment Motion Drive focuses on clearing up all the internal

issues and raises itself to a position wherein it would be in par with its competitors. Once this

position is achieved Motion Drive can then devise an extensive competitive analysis and

develop strategies that would out play the competitors

46

Kotler P, et al., (2009), p. 225.

47 Email from competitor (Appendix B).

38

5.3. Marketing Mix

With a clear idea about the current and future scenarios, the aim now is to highlight the

direction along which Motion Drive must function in order to achieve its goal. The direction

in which Motion Drive must perform is elaborated in terms of the four Ps‟ of the marketing

mix.

Marketing activities come in many forms, however it was McCarthy, an American marketing

professor and author, who classified these activities as marketing-mix tools of four broad

kinds which were named the four P‟s of marketing: product, price, place and promotion.

Marketing mix decisions are used by marketers for influencing their trade channels as well as

final customers. The four P‟s represent the sellers‟ view of the marketing tools available for

influencing the buyers. The marketers make or customize their offers or solutions, inform

consumers through various sources of information, set prices and choose places where the

offerings will be accessible to benefit the customers.48

In other words, the marketing mix is a

set of controllable, tactical marketing tools which are blended to produce a response which

would be suitable for the target market. Theory defines the marketing mix as a collective

blend of everything a firm does (in terms of the four P‟s) that would influence the demand for

its product.49

The following sections aim at detailing the marketing mix existing at Motion

Drive along with suggestions on how the mix should be modified.

5.3.1. Product

Product refers to the combination of goods and services offered by a firm to its target

market.50

Motion Drive falls under the classification of a service provider. Theory defines

service as any act or performance offered by a firm which is essentially intangible and does

48

Kotler P, et al., (2009), p. 24 – 25.

49 Kotler P., Armstrong G., (2010), p. 76.

50 Kotler P., Armstrong G., (2010), p. 76.

39

not result in the ownership of anything. For such firms, the production may or may not be tied

to the physical product.51

Service providers are classified into five categories based on the percentage of service

activities that are part of the total offering. The five categories distinguished by theory are

pure tangible goods, tangible goods with accompanying services, hybrid, major services

accompanying minor goods and services and pure service. In order to limit the scope of this

paper the category which is relevant to Motion Drive is taken into consideration. Motion

Drive is regarded as a tangible goods provider with accompanying services. The offerings by

such providers typically include a tangible good (sports car) accompanied by one or more

services (delivery at hotels and/or other locations, drop and pick up facilities from the airport).

Typically the more technologically advanced the product the greater will be the need for a

range of high quality services.52

Product Range

Motion drive offers products with a strategic insight so that the company can capture wide

array of customers. From the research and analysis made on international sales order

information from Motion Drive over a period of four months (as described in section 4.2.) it

was revealed that there exists three types of product line gaps: size related product line gap,

form related product line gap and options related product line gap. Size related product line

gap is caused because Motion Drive does not have a sufficient number of cars to satisfy the

existing consumer demand. As a result this brings in loss of income as the bookings from

these international clients are quite lengthy orders when compared to domestic clients. Form

related product line gap is caused because customers demand focuses on Audi R8ss‟, Porsche

911s‟ and Lambhorghini Gallardo and Motion Drive does not have enough cars in terms of

number (of these three types) to satisfy the demand. As a result Motion Drive encounters a

loss of orders. The options related gap is caused because Motion Drive is unable to provide

the customers with the features that they request for at affordable prices. For instance, some

customers request for cars to be delivered at specific locations to suit their travel plans. To

51

Kotler P, et al., (2009), p. 338.

52 Kotler P, et al., (2009), p. 340.

40

explain this more in detail, two booking orders received at Motion Drive are taken into

consideration. Customer A requests for a Ferrari to be available for him in Hamburg from

Tuesday to Thursday and Customer B requests for the same car from Saturday until Monday.

The car (Ferrari) is at the headquarters, Magdeburg. Hence, Motion Drive will have to

transport the car to Hamburg on Tuesday for Customer A and bring it back to Magdeburg

after Customer A‟s order on Thursday and once again transport the same car on Saturday for

Customer B. Motion Drive does not have the facility to retain the car at Hamburg from

Thursday until Saturday. Hence, this transportation to and from the headquarters makes the

order expensive. Motion Drive charges extra for this feature to account for the cost incurred

for labour and transportation. As a result customers often back out because of the extra

expenses.

Also, another reason for the option related product line gap is inability of Motion Drive to

provide wholesome packages that clients request for. For instance, customers are not aware

about the autobahns in Germany or which destination would enable them to use the hired car

in the most efficient manner. However, at the moment, Motion Drive does not assist their

clients with this kind of support. Motion Drive restrains itself to just renting out the cars to

their clients. Additionally, Motion Drive can also design packages exclusively for business

clients. These packages include features such as team building events, appraisal vouchers, etc.

and offer them as one or two day packages.

Conclusion

In order to improve the performance of Motion Drive the following suggestions were made to

narrow down the three types of product line gap. The form and size related product line gap

can be reduced by increasing the number of cars in its fleet. At the moment Motion Drive

owns eight Porsche 911s‟, eight Audi R8s‟ and one Lambhorghini Gallardo. From the

demand analysis it is clear that the client preference for these three types of cars is much

higher than the demand for other cars. Thus instead of directing the investment from Motion

Drive towards purchasing new cars and increasing the variety of cars offered, it makes more

sense for Motion Drive to invest more into these three types cars. Having sufficient number of

41

Porsches‟, Audis‟ and Lambhorghinis‟ would enable Motion Drive to meet the demands of

the international clients.

The option based product line gap can be narrowed by offering package tours for clients. As

discussed already in the situational analysis, there is a growing demand for tour packages and

themed packages among clients. A sample tour package was designed and offered to Motion

Drive during the period of internship (refer Appendix C for sample). This package includes a

basic cost estimation for a two or three day trip and suggestions about Autobahn connections.

Motion Drive could further work on creating various forms of such packages and offers the

tour packages at a reasonable cost which would be attractive for their clients. In addition

packages for business clients must also be designed and offered to suitable clients.

Another reason for the options based product line gap is the cost incurred in transporting the

cars to and from destinations that customers request for. The extra cost is incurred as the cars

have to be driven empty (without clients) to the desired locations to make them available for

the clients. In order to avail better services to their clients in terms of transporting the cars, it

was proposed (during the months of May – August) Motion Drive could develop a mobile

application. Among other features, the mobile application also ensures that the cars would be

utilized at the location at discounted prices rather than being driven back to the headquarters.

This ensures that Motion Drive does not lose out on orders due to the extra transportation cost

and at the same time generates an extra income by utilizing the car at discounted prices. A

detailed explanation about this application and its‟ features are elaborated in section.

5.3.2. Price

Price is the amount of money that a customer must pay in order to obtain the product. While

determining the price the firm must take into account the possible discounts it could avail to

customers, allowances, payment period and the credit terms in order to be able to offer the

best possible price to their customers.53

The products from Motion Drive are available at

53

Kotler P., Armstrong G., (2010), p. 76.

42

various ranges of prices depending on the orders placed by the clients. Following is a detailed

description of the pricing strategy followed at Motion Drive.

Pricing Strategy

Numerous pricing strategies are available for marketers which enable them to set the right

price for their products. The pricing strategy followed by a firm ideally depends on the type of

the product.54

Although car rental firms exist in the market, in the field of sports car rental the

products offered by Motion Drive are new to the market. Hence the new product pricing

strategies are taken into consideration while pricing the products at Motion Drive.

Theory suggests two types of strategies that one could follow while introducing a new product

into the market: market-skimming strategy and market penetration strategy. As per market

skimming strategy the product is introduced into the market at very high prices and skims the

revenue layer by layer from the market. On the contrary, the market penetration strategy

introduces the product into the market at a low price and results in attracting a large number

of customers and ultimately a large market share.55

Motion Drive follows the market penetration strategy. The price offered by Motion Drive is

two times lower than the price offered by the indirect competitors in this market (refer

Appendix B). Motion Drive justifies the use of this strategy with the following reasons.

Generally clients are of the mindset that renting a luxurious sports car would be unaffordable.

In order to break this stereotypic mindset among the clients and lure them to try out these

cars, products are offered at a low price. Secondly, although the products offered by Motion

Drive are new to the market, as mentioned already Motion Drive faces indirect competition

from other major, well established car rental firms across Germany. Motion Drive is still in its

growing phase and in order to grab its share from the market, it follows the penetration

strategy. At the moment, Motion Drive offers products that range from 30,-€ to 5.999,-€. The

range is based on the requirements from the customers.

54

Kotler P., Armstrong G., (2010), p. 336.

55 Kotler P., Armstrong G., (2010), p. 336-337.

43

Pricing Strategy for future

Pricing strategy is not constant for any firm, it changes with the life cycle of the product. The

product introductory phase is considered as the most challenging phase. Once the product has

been successfully launched in the market, theory suggests that a firm could change its pricing

strategy to match the scenario existing in the market.56

As with Motion Drive, the firm has

rightly chosen the market penetration strategy. Motion Drive is currently in its growing phase

and the growing turnover generated by the company stands as a victorious proof for this

successful growth. Nevertheless, Motion Drive cannot continue to survive in the market with

the same pricing strategy. With indirect competitors growing with enormous plans, Motion

Drive must look into modifying their pricing strategy.

At the moment, Motion Drive have successfully launched themselves into this market. They

lag in terms of features offered to customers, but price-wise they are positioned in a

comfortable zone. Thus, Motion Drive must now focus on adding value to the products

offered by them in order to raise the price level. The reason behind this suggestion is that,

customer is the final player when it comes to pricing. It is he who decides whether the product

is worth the offered price or not. Therefore, a good pricing strategy arises when the value

offered by the product is rightly understood.57

Thus, to increasing their pricing power, Motion

Drive can gradually shift to value-based pricing strategies once it solves its‟ internal issues

and adds more value to the product offered by them.

Conclusion

Motion Drive, currently in its growth phase, have rightly introduced themselves in the market

with the market penetration strategy. Clients come to Motion Drive because they feel that the

prices are reasonable and attractive. This is well reflected in the turnover generated by them.

Although for the moment this strategy seems to have Motion Drive well, it is strongly

suggested that they shift to value-added pricing strategy once the internal issues have been

sorted out.

56

Kotler P., Armstrong G., (2010), p. 336.

57 Kotler P., Armstrong G., (2010), p. 315.

44

Value-based pricing doesn‟t simply mean changing the price paid by the customer by building

value into their market offerings.58

To rise successfully into the future, in par with their

competitors, it is strongly recommended that Motion Drive gradually glide into the value-

based pricing strategy.

5.3.3. Promotion

Promotion includes all the activities that focus on communicating with the customer. The aim

of these activities is to communicate the merits of the product to the customer and persuade

the target customer to buy the product. Promotion activities include advertising, personal

selling, sales promotion and public relations carried out by the firm to attract the customers to

their product. The goal of these promotional activities is to increase the firms‟ publicity,

strengthen its‟ image and thereby influence the buying behavior of the customers.59

The

promotional activities practiced at Motion Drive are summarized in the following sections.

Instruments of promotion

Apart from the company website (through which clients get to know about Motion Drive)

currently the events held in Berlin by Motion Drive and their participation in messes‟ are the

only two instruments of promotions exploited by Motion Drive. These two instruments are

explained in detail in the following sections.

Events

Motion Drive organizes race track events four times a year in Berlin. Motion Drive offers its

entire fleet of cars that are officially approved for road traffic for rental during these events.

As already mentioned, the track day is one of the cheapest forms of rental availed by Motion

Drive to its clients. Clients can enjoy the sports cars in the racing circuit of STC Motordom or

Spreewaldring in Brandenburg (near Berlin). This package is offered once in spring, summer

and in autumn during the months April, July and October respectively. This event helps

Motion Drive to build an image for themselves among the clients. During such events, Motion

58

Kotler P., Armstrong G., (2010), p. 317.

59 Kotler P., Armstrong G., (2010), p. 76.

45

Drive gives their clients the opportunity to meet their technicians, assist the clients through

driving lessons and key technical aspects about sports cars. Motion Drive receives a good

response from clients towards such events. However this is the only event undertaken by

Motion Drive.

Participation in trade fair

With an aim of building their image among their clients Motion Drive actively participate in

trade fairs like the Autoshow messe and Erfurt Messe. Motion Drive exhibits their cars in

such fairs and clients visiting these Messes have the opportunity of test driving these cars.

Also, visitors come to know about the existence of such sports car rental firms.

Instruments of promotion to be included at Motion Drive

Search Engine Optimization

The company‟s website is a prime source of promotion through which international customers

can reach and learn about the firm. Often clients browse the internet to become aware about

companies that provide products which they are on the lookout for. And when it comes to

international clients, most often they browse in English.

Figure 16: Importance of Search engine optimization60

60

Quality Monitor survey of tourism in Germany 2010/2011 (2012). p.7

46

Also, the use of internet for such activities is on a growing trend these days. Hence, firms

sought out to search engine optimization and make themselves easily available to the clients.

Motion Drive has its company website in both English and German. However, search engine

optimization exists only in the German version.

To showcase the necessity of how important search engine optimization in relevance to

Motion Drive, a report on tourism says that most of the tourists plan their trips with help of

internet. It was reported that 46% of the international visitors rely upon the search engine

optimized results for their target searches. 61

Thus it can be confirmed that internet serves as

an ideal advisor for a majority of international travellers for their travel information. This

becomes a strong reason for recommending Motion Drive to invest on Search engine

optimization packages.

Events

For firms like Motion Drive, events are identified as a strength through which the company

builds awareness among their clients. Such events help the firms to increase their publicity

amongst clients and also create an opportunity for such firms to become popular among

suitable partners. For instance, taking into consideration companies like Motion Drive,

companies like Autobahn Adventures would be ideal partners. Autobahn Adventures is firms

which organizes Autobahn tours. Many such firms exist in Germany and these firms are often

on the lookout for suppliers who would supply them with sports cars that would suit the tours

organized by them. Also, as already discussed (in section 5.1.2) there exist various forms of

such firms and travel agents who offer a variety of packages like honeymoon packages,

autobahn tour packages, adventure-luxury packages, etc. Motion Drive could be a potential

supplier for such firms. Thus, Motion Drive must focus on increasing its publicity amongst

such firms. However Motion Drive conducts only one event near Berlin, three times a year.

Hence, Motion Drive is in a dire need to take part in race track events and conduct many more

events (similar to the ones held in Berlin).

61

Quality Monitor survey of tourism in Germany 2010/2011 (2012). P. 7

47

Motion Drive can also take into advantage the resources available with them to create some

form of events which would further enhance their publicity and strengthen their image. The

existing assets at the headquarters include an indoor motor cross facility and human resource

strong in technical aspects. Motion Drive can plan to effectively utilize these resources for

promotional activities. The activities utilizing these resources could focus on training and

educating interested car enthusiasts on technical aspects sports car. It could also include hands

on mechanical experience on sports cars of their choice.

Mobile Application

For long, the use of computers was out of bound for workers on the move. In particular, sales

people, students, tourists, etc. could not utilize the benefits of computing as they were

constantly on the move. However in todays‟ world mobile computing and commerce is

growing rapidly with the explosive growth of mobile devices and networks. The technology

which enables the use of mobile devices in a wireless environment (referred to as wireless

mobile computing) is considered as a boon to todays‟ common man. This innovation has

miraculously changes the way people use computers. This technology is widely used in

education, healthcare, entertainment, security and much more.62

An effective solution for most of the hurdles faced at Motion Drive is the introduction of a

mobile application. The mobile application designed for Motion Drive focuses on three main

aspects: Mobile advertising, Product locating and shopping and Mobile auction. The mobile

application, along with its major features, planned and designed for Motion Drive is

elaborated in the fore coming session.

62

Turban E., Volonino L., (2012), p.244.

48

Figure 17: Smart phone application for Motion Drive63

Mobile advertising would help Motion Drive to increase their publicity among the clients.

Motion Drive can update their clients with news about events and also advertise their events

through push notifications via these applications. Also, Motion Drive can distribute their gift

vouchers via this application directly to their clients. Product locating can enable Motion

Drive to advertise their events and participation in track events to clients in the city where the

event is taking place through push location based services and commerce which could be

enabled via this application. Mobile auction can solve the problem of extra expense Motion

Drive incurs during the transportation of cars (as discussed in section 5.4.1). Instead of

transporting the cars back to the headquarters in between two orders, Motion Drive can use

this application and offer the cars at discounted prices for the two or three days interval that

exist between two orders.

63

Appendix D

49

Implementing this application as an individual mobile application is expensive and

complicated as Motion Drive is still in its growing phase. Nevertheless this application serves

a blessing to raise the level of Motion Drive in this market. Hence, at this juncture an effective

and efficient solution would be to launch this application as an additional feature to an already

established and popular application in this field (for instance as an additional feature of trip

advisor mobile application).

Conclusion

Based on the above explanation, it is obvious that promotion is the most important marketing

mix tool for Motion Drive. Improving on its promotion activities will help Motion Drive

ascend into the next phase of growth. As a first step towards this Motion Drive must focus on

increasing the number of events held by them. Also, Motion Drive can incorporate features

like drift taxi, stunt activities, assistance for driving and understanding the technical aspects of

sports cars, etc. into their events. Subsequently plan on investing and utilizing the existing

assets to lay the platform to create a social networking club Also, Motion Drive must

implement search engine optimization for the English version of their website, because at the

moment it is their only source of promotion through which international customers reach

them.

Finally, Motion Drive must plan to invest into launching a mobile application as an additional

feature to some already existing application. All the problems like extra cost incurred for

transporting, poor reach without advertisements, lack of popularity amongst tour agents (for

whom Motion Drive could be a potential supplier) can be sorted out with this application. In

short, the mobile application would solve majority of the glitches that Motion Drive faces in

terms of promotion.

5.3.4. Place

Place refers to all the company activities that make the right product available to the right

target customers at the right time. All the distribution strategies that a firm practices are

50

summed together under the term place. 64

Motion Drive, headquartered at Magdeburg, has

sales offices located in Munich, Dusseldorf, Berlin, Hamburg, Frankfurt and Stuttgart.

However, it was already identified that Motion Drive lost 55 % of its orders due to a

distribution gap that exists at Motion Drive (section 4.2). A deeper analysis of the distribution

gap and the possible solutions are suggested in the following section.

Distribution Channels

The most preferred touristic destinations within Germany are depicted in the figure. Often

international clients visiting Germany request for cars to be available in these locations.

Although Motion Drive has structured its distribution channel in a way to serve from its main

office, it lacks the facility to station its cars in such locations. This leads to a coverage

distribution gap and Motion Drive loses many orders (55 % of the received orders were lost)

as clients back out when Motion Drive adds the cost of transportation and lead time to target

locations.

Figure 18 : Major tourist attractive cities65

64

Kotler P., Armstrong G., (2010), p. 76.

65 Incoming-Tourism Germany Report (2012). p. 10

51

Studies on tourism within Germany revealed that cities like Munich, Dusseldorf, Stuttgart

where few interesting places among international travellers. The figure above illustrates the

top preferred locations.

Conclusion

To narrow down the distribution gap and enjoy the benefits obtained when all (or most) of the

received orders are confirmed, Motion Drive must expand its facilities into the cities which

are popular among tourists. It‟s very important for Motion Drive to have its presence in these

cities and maintain a decentralized inventory for the comfort of clients and managerial

purposes. This ensures that Motion Drive is not only able to serve its customers better but also

rise in stature and position amongst other players in this market.

52

6. Final Recommendations

Upon analyzing the current situation at Motion Drive and the expected future scenario of the

market, a marketing mix has been derived for Motion Drive. The following paragraphs

summarize the key management implications for Motion Drive. Comparing the four Ps,

Motion Drive is currently in a secure position with regard to its pricing strategy. However, it

is strongly recommended that Motion Drive gradually shifts to a value based pricing strategy

in order to increasing its pricing power in the future.

In terms of product, Motion Drive must secure its position in the market by reducing the

product line gap. To execute this, Motion Drive must concentrate on increasing the number of

cars (particularly Audi, Porsche and Lambhorghini) rather than increasing the variety in its

product fleet. Additionally Motion Drive must plan and invest on offering pre-designed tour

packages (refer appendix C for already designed packages inclusive of budgets) and business

client packages.

It is in terms of promotion Motion Drive must concentrate upon in order to raise their position

in the market. The instruments of promotion to be included in Motion Drives‟ strategy include

increasing the number of events held and simultaneously incorporating additional features like

hands on experience on mechanical advancements, opportunity to meet race drivers, etc. On

the other hand Motion Drive must also focus on increasing their participation in race track

events which would enable them to gain popularity among existing firms that offer package

tours. Motion Drive can increase their scope of participating as a potential supplier through

such promotion.

Two more instruments of promotion designed for Motion Drive are the creation of a social

networking club (with the existing facilities) and launching a mobile application (based on the

proposal designed: refer appendix D). Although these two instruments require an investment

from Motion Drive, launching them would bring about a remarkable change in their market

position and also help in strengthening their image among international clients.

53

Finally, the distribution channel of Motion Drive must be enhanced which would eventually

reduce the coverage distribution gap existing at Motion Drive. In addition, improving the

distribution channel by focusing on launching facilities in major touristic destinations (refer

section 5.3.4) will also increase the turnover at Motion Drive and help them in realizing their

goal of balancing the sales order distribution.

54

7. Conclusion

The thesis was drafted to create a marketing plan for Motion Drive. The objective of the

marketing plan is to balance the sales order pattern at Motion Drive. Based on the analysis of

the pattern of the orders received it was identified that Motion Drive received orders from

domestic and international tourists. However, the orders from domestic clients were received

mostly during weekends or with holidays clubbed with weekends. This was the main reason

which caused an uneven distribution pattern in the sales orders. As a solution to this, the

analysis of the orders received at Motion Drive revealed that the orders from international

clients were distributed across weekdays and weekends. Hence the marketing plan drafted

aimed at attracting the international clients to Motion Drive. In addition, the retention of

existing domestic clients was not neglected.

The marketing plan is structured to analyze the current situation along with the expected

future scenario and a futuristic marketing mix is derived.

55

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Appendix A

58

59

Appendix B

60

Appendix C

61

62

Appendix D

63

64

65

Declaration of authenticity

I certify that this thesis does not incorporate without acknowledgement any material

previously submitted for a degree or diploma in any university; and that to the best of

my knowledge and belief it does not contain any material previously published or

written by another person where due reference is not made in the text.

……………………………………………………………__________________________

Hof, 30.09.2013 Nareash Anandhapadmanabhan