Fuel efficiency is basically an imperative factor in the automobile world and global economy. The marketing idea by the automotive company in this case is all about fuel efficiency. Its idea of phasing out large and profitable SUV line of automobiles and focus on the smaller, more fuel-efficient cars will have both financial and non-financial advantages and disadvantages.
One of the financial advantages of this marketing idea is that it will offer personal financial benefits to the customers. Some customers will buy the new vehicles so as to optimize their fuel efficiency and as a result they will save considerable amount of their cash (Riggs 2007). Therefore, the fuel-efficient cars will reduce customers’ gasoline expenditures in both urban and rural environments. In addition, the maintenance cost for both customers and the company will reduce. The other financial benefit of this marketing idea is that fuel-efficient vehicles will qualify for lower fees, taxes, and insurance premiums compared to large, profitable SUV automobiles (United States 2002).
The new marketing idea by the company will also have non-financial advantages. These include the environmental benefits and socioeconomic benefits (Sandhusen 2000). The new fuel-efficient cars that the company will bring will not eliminate exhaust as well as other emissions that are inevitably hazardous to both personal health and environment. In fact, they will help to reduce the environment pollution since they consume less gas for each mile than the large SUV’s. In terms of socioeconomic benefits, these cars will allow the company customers allocate their cash to more domestic areas.
One of the financial disadvantages of this marketing idea is that the more-fuel efficient cars will essentially reduce the profits of the company. This is because Fuel-efficient cars are actually more expensive to buy compared to the initial automobiles. This is caused by their expensive production parts and systems. The financial disadvantage to the customer is that this marketing idea will make the purchase price of these cars to increase hence this will also reduce the sales in the company. The non-financial disadvantages of this marketing idea include limited driving range, insufficient space for the cargo or passengers, safety concerns, and their unproven reliability (Siegel 2000).
Riggs, T. (2007). Encyclopedia of major marketing campaigns. Detroit, MI: Gale.
Sandhusen, R. (2000). Marketing. Hauppauge, N.Y: Barron's.
Siegel, H. M., Burrows, T. M., LaCivita, C. J., United States. & ASL Engineering Inc. (2000). Automobile marketing strategies, pricing, and product planning. Washington, D.C: The Administration.
United States. (2002). Convincing the public to buy the more fuel-efficient cars: An urgent national need, Environmental Protection Agency, Federal Energy Administration : report to the Congress. Washington: U.S. General Accounting Office.