Essay on Waltz Automobile Company Marketing Plan in Hungary

Executive Summary

The advancement in technology and the rapid digitization in the modern world has led to several inventions in various industries. The Waltz automotive company majors in manufacturing and producing cars, and the firm have recently innovated electric car production. This idea emanated from the urge to manage the environment by controlling human activities. Climatic challenges and concerns have caused tensions in the world as human activities have been marked as the main causative agents. By creating electric cars, waltz forecasts about the world, which is environmentally sensitive, as this trend will help in managing climatic challenges, among other human satisfactions. Identifying a marketing environment for a new product with a favorable business climate is crucial to the company’s success and the adoption of the product. Hungary provides such an environment worthy of analysis. This report encompasses a marketing proposal plan for this brand, squarely delving into the Hungarian automotive industry’s analysis, concentrating on SWOT analysis, the culture in the country, the country’s economic situation, and its general market. The SWOT analysis aids in defining whether the waltz company will succeed in the marketing of its product. The competitive analysis establishes the projected competition and key brands in the Hungarian market that help the company position itself for the expected competition and roll out its product. The marketing plan encompassing the product, pricing, place, and promotion is effectively analyzed to gauge the company’s success rate in Hungary.

Introduction

Waltz Automobile Company is a multinational company that was started in 1980. Headquartered in Germany, Waltz deals in the manufacture and production of electric cars. As an international company, the firm has the capability to market and sell its products in countries across the world. Also, it has the ability and sustainability plan that enables its successful competition with major players in the automobile industry and effectively manages and cope with technological advancements and trends within the sector. The company is currently working on a marketing plan for its newly-established product, electric cars. The firm’s expansion strategies have led to its establishment and introduction of its highly rated and prospective Hungary product.

Electric cars are cars propelled by an electric motor(s). The number of electric motors depends on the car’s capability and size. The electric propulsion of cars was an idea that was first generated and led to the production of the first electric car in the mid-19th century. Modern society is comprised of advanced technology and the need to create a sustainable environmental setting and surroundings. Changes in climatic conditions and the rise in global warming concerns have led to the development of environmentally friendly human activities and utilities (Font Vivanco et al. 12068). The use of renewable and green energy is of the essence. This way, the firm has been recognized for its environmental awareness, as it was awarded a trophy of the same last year. The production, marketing, and utilization of electric cars is a viable idea and the invention of an environmentally friendly product that humans need to embrace. Electric vehicles, compared to the vastly used internal combustion engine cars, are quiet. Have fewer emissions with no exhaust emissions, thereby environmentally friendly. Electric cars are convenient, and they concur with global climate change concerns.

The company’s choice of Hungary as its target market for electric cars is strategic, both economically and socially. A Hungarian, Anyos Jedlik established the first electric propelled automotive. This idea has advanced broadly in the modern-day, noting several countries in Europe and North America have adopted the technology. The USA has also seen a full launch and use of electric cars. Hungary is known for its developed automobile industry. The country produces over 400 thousand cars annually through its assembly of foreign brands, such as Audi, Mercedes Benz, Volkswagen, and Suzuki, among others. Waltz automobiles are determined to establish a manufacturing base in Hungary in order to produce locally made electric cars for its citizens, market them, and capture the market.

Hungary’s infrastructural capability and government policies on business and investment puts the country in a pole position for investment. As well, the favorable investment conditions lure investors and the urge to try out an emerging technology. Hungary is a free economy and provides governmental support for investors, especially on environmentally friendly and climate change modulation ideas and products.

Cultural Analysis

Hungary is situated in central Europe and operates as a member of the European Union. The country is landlocked, thereby providing opportunities regarding trading partners from all parts of the country: That is, east, west, south, and north of the country. Hungary exhibits an open economy, thereby providing investment opportunities to foreign investors and collaborative business strategies between foreign investors and the Hungarian government and business people. The country’s open economy supports foreign direct investment. The Hungarian business culture enhances the improvement of the business environment through establishing strategies and policies that support business and investment in the country (de Zepetnek and Louise 42). Waltz company targets to position its main manufacturing outlet in Budapest, inhabiting over 1.7 million Hungarians. The youths and active working groups for a major part of the Hungarian population. This statistic provides key information regarding human resources and a viable market. Leading on from this viewpoint, the success of any business in a country, especially a foreign investment, depends on analyzing its culture. The knowledge of how people socialize, behave, and carry out their affairs is key in establishing trust and transparency in an investment.

Cultural analysis aids in determining how well to interact with the locals, introduce a new product in their market, and avoid any cultural clashes. Personal relationships are essential for the Hungarians. Establishing face-to-face communication within the business structure is crucial for creating a trusted market and business success in the country (Szegedi et al. 268). Hierarchical organization structures that provide avenues for formal dealings and business interaction are an important culture in Hungary. The Hungarians and the target market, therefore, value formal business relationships. Waltz Company is determined to improve its organizational structure and incorporate a skilled Hungarian human resource in its inception and development. Therefore, on a personal level, building an open, trustable, transparent, friendly business atmosphere with the target customers is crucial for the success of a venture in Hungary. Geographically, Hungary is classified among central-eastern Europe. Cultural relationships in Hungary regarding its population and dialects allow the embracement and open discussion of several aspects, such as sports, family, food history, and the country’s economy. However, there are some aspects that must be discussed with significant reservations, and they include religion, minority issues, country politics, and workforce salaries. Identifying such sensitive information helps determine the firm’s building blocks and create workforce culture and strategies.

The Hungarian population comprises well educated. Hungarians are well known for their culture of embracing technology and any other pertinent innovations. Currently, the country is rated at 74 % regarding its population literacy, a mark above the OECD average. 81 % of the country’s workforce are educated and skilled (Szegedi et al. 263). Hungary champions climatic awareness and embraces all the measures to curb and manage climate while enhancing environmental conservation. The Hungarian automobile industry is one-sided, as it has allowed the industry’s domination by a few large international automotive companies, such as Audi and Mercedes Benz. In this sense, the culture provides a business environment for small-medium enterprises, such as the third and fourth-tier automotive suppliers. International automotive companies are dominant in Hungary and operate with the embracement of environmentally friendly innovations. The companies depict environmental awareness, focussing on promoting ecologically sustainable innovations. Operating within the focus of creating environmentally friendly products is within Hungary firms’ scope, as this idea is one of the main agendas of all international automobile companies in the country (Helmers and Patrick 14). The automotive companies in Hungary show a developed traditional supply chain. Therefore, the strategy is to work with a traditional supply chain that can create awareness of a new invention and aid market the company’s new product within a short time, thereby ensuring the company’s firm establishment in the industry.

Economic Analysis

The automotive industry is among the first rising and most important industry in Hungary. Among the EU countries, Hungary has the highest share in its Gross Domestic Product (GDP). It exhibits a 4% GDP due to the automobile industry, which significantly increases to 10% after taking into account the industry’s overall production, including accessories and automobile spare parts. The key factor in the country’s automotive industry is foreign ownership. 90% of the automobile companies in Hungary are foreign-owned (Tamási and Balázs 56). The statistic stands positive towards the establishment and operation of Waltz Company in Hungary. The development and attraction of foreigners in Hungary are attributed to the country’s human resource availability and transport infrastructure. The labor in Hungary is cheaper compared to other countries, especially in Western Europe. Labour is a vital factor in the establishment and operation of a business. The availability of such resources has influenced the establishment, development, and domination of the automotive industry by foreign investors. Waltz Company would thereby target and utilize the country’s labor provisions to establish its roots and promote its product. The country is a hub of infrastructure ranging from well-integrated road and rail networks in its cities, especially Budapest. Hungary is strategically placed to link central Europe and the post-soviet area.

The positioning thereby provides enough viable market that attracts foreign investment. The country exhibits a rich tradition regarding the automobile since the invention of the first electric automotive by a Hungarian. The automotive industry’s development occurred majorly in the 19th century, and Hungary was a key area for the development (Tamási and Balázs 43). The country has a large number of technical universities that enriches its students and human resource. Foreign investors are attracted to skilled and innovative oriented labor, which attracts many people to consider investing in the country. The automotive industry in Hungary plays a vital role in the country’s export and industry, making it be among the country’s economic key determinants. The government of Hungary is focused on a gradual re-industrialization strategy and emphasize automotive industrialization since the industry is among the rapidly developing industries together with Information technology and telecommunications. The Hungarian government’s prioritization of the automobile industry provides the basis for establishing a company. Foreign investment and business terms and regulations are favorable since the government supports the reconstruction of the industry. Among the key policies of the government is the labor code.

The government has emphasized the need for flexible labor codes in consultation and full inclusion of investors and training institutes. The government has established and implemented the German labor model that incorporates theory and practical learning skills. Such policies ensure the realization of a skilled, productive human resource that enables the development of industries such as the automotive industry. The automotive industry in Hungary is undergoing several restructuring occasioned by various factors. Digitalization and technological innovations and changes, changing consumer habits, and environmental responsibilities are key definers of restructuring in the industry. Economic concern and significant effect in the automotive industry in Hungary is influenced by the factors such as the Us – China trade war, the Brexit agreement in Britain, the decline in vehicle sales in China, and the coronavirus pandemic that has shaken the global economy. The combination of these factors would lead to a significant impact on the country’s automotive industry.

The government prefers the re-establishment of the automotive industry in the country to strengthen its ties with European car leading manufacturer country, German. German automotive companies have hugely invested in Hungary and, as of 2012, had invested 4.7 billion euros. The waltz company, thereby like the other big automobile brands from Germany, will ride on the conducive business climate in Hungary and establish its roots and promote its product. The introduction of Waltz Company would improve the country’s employment rate in the market. As of 2017, the industry’s overall employment opportunities stood at 170,000 people directly employed in the sector (Tamási and Balázs 106). Consumers will acquire a different product, preferably due to their liking of cars and thereby electric cars will be an improvement to their preference. The buoyant domestic demand in Hungary positions the market at a key target for Waltz’s product. The third quarter of the 2018 Hungarian financial year envisioned a strong wage gain and improved retail sales in the automotive industry. The statistic pointed to the controlled consumer spending that largely depends on consumer preferences and capability. The last quarter of the financial year estimated an increase in inflation, which consequently interrupted consumer confidence. Hungary provides a suitable automotive business climate and thereby a key investment area for the Waltz automobile company.

Market Audit

The automotive market in Hungary is developed and expanded to sustain several players. The foreign domination of the market provides a considerable basis for investment regarding the favorable business climate and the sector’s economic contribution to the nation. Cars manufacturing and consumption are positively rated in Hungary. The Hungarian population has a huge consumption of cars in comparison to other automotive. The development and marketing of electric cars will have a significance regarding the reception and consumption of the new technology. The market comprises technologically aware consumers since the country has well-structured labor codes and a schooling system that ensures the equipment of skills to every citizen. The availability of skilled resources and consumers makes it easy to market a technologically oriented product that also counters the rising climatic concerns. The Hungarian market comprises cheap labor with low wage rates, thereby suitable for establishing an automotive company. As of 2018, the Hungarian automotive industry registered a 17.4% growth with an annual sale of vehicles recorded at 136. 534 units (Antalóczy and Magdolna 78). Competition for automotive space and establishment is high in Hungary. The country exhibits a 90% foreign investment in the industry, and thereby major international automotive companies are established in Hungary.

SWOT Analysis of the Market

The market analysis of the automotive industry in Hungary is based on the strengths, weaknesses, opportunities, and market threats. The market has a well-established and emphasis on a completely built unit. The strategy has seen companies establish full plants in Hungary and expanded their commitment towards the development of the industry. The location of Hungary in central and Eastern Europe has placed it strategically for manufacturing industries and the availability of a skilled, cost-effective human resource. The key weakness in the Hungarian automotive industry is the controlled consumer spending by the government that has seen reduced rates of car consumption. Poor backdrop in the economy and especially due to the global coronavirus pandemic has significantly impacted consumers’ consumption-ability across all the industries. The favorable opportunity that would spur investment into the automotive industry in Hungary is the subsidies and incentives offered by the government in an effort to restructure the automotive industry. Foreign investment is thereby encouraged by the conducive business climate set by the government. The threats to investment in the Hungarian market include the uncertainty surrounding a new government’s policies if the current supportive government is not elected. The policy concerns and implementation strategies from a new government would lead to a new business climate and may not be favorable to the automotive industry. Other EU countries embrace automotive production, and the increase in production in such cases would lead to a decline in the domestic market and a fall in demand for the products. Taxation measures and projected sluggish Eurozone economic growth are a threat to investment in Hungary’s automobile sector.

Competitive Analysis

Among the critical competitors for automotive space in Hungary include Volkswagen and Audi. Volkswagen, as a brand, has established its operations in Hungary. Annual sales of Volkswagen cars in Hungary are high, and the brand production plant’s strategic location is key to its success. The brand has a production plant in Gyor and has produced the best selling cars in the country over the years (Antalóczy and Magdolna 57). The pledge to inject a nine hundred million euros fund for investment by the brand is a pointer to how much success the brand has encountered in the industry in Hungary and a positive future market outlook for the brand. Such investment and brand would offer a competitive edge for Waltz Company and thereby the necessitation for the development of a different, unique product from what is already available in the market. The Bayerische Motoren Werke (BMW) is another established automotive company in Hungary. The company has a Germany Origin and has established its production plants in Debrecen. Over time, the company has had success in Hungary and committed over one billion euros in car production and investments in the country. The huge financial muscle and the big brand that the company rides on has popularised its operation and market control in Hungary.

Therefore BMW stands as a competitor for the Waltz Company. Mercedes Benz manufacturing company in Hungary also pose competition for the Waltz Company. The Mercedes Benz is an established automotive brand globally and poses stiff competition on that aspect alone. The company is strategically positioned in Hungary and has control of a large share of the market. Other key competitors in the automotive industry in Hungary include Ikarus, Csepel Holding, Credo, and Raba. Csepel Holding is a unique competitor to Waltz Company since it produces electric buses and almost a common idea to the waltz company. The company aims to establish the production of electric cars to aid wade the competition and attract a massive market in Hungary in the minimum time possible.

Marketing Plan and the Marketing Mix for Electric Cars in Hungary

Marketing plans are aimed at increasing the overall sales of the company by overcoming the market challenges and withstanding the market competition. The realization of the key aims of the plan will ensure the company meets its sales objectives and is geared towards the success of the company. Crucial factors to the development of any successful marketing plan are the determination of the company’s product, ensuring its uniqueness, the analysis of the target market regarding the competition and the business environment (Blythe and Phil 98). The Waltz Company is focused on promoting electric cars in Hungary. Electric cars are a new innovation in line with drastic digitization and technological advancement in the modern world. Climatic challenges and concerns have led to the invention of quiet, fewer emissions, and no exhaust emissions cars that are convenient to use and environment friendly.

The electric cars provide a unique idea into the Hungarian only facing competition from the Volkswagen brand and the Csepel Holding. Csepel holding produces electric buses, thereby not a direct competitor to the Waltz company product. Volkswagen recently started producing electric cars in Hungary, but at the inception, stage poses manageable competition provided the company’s product proves sustainable and unique. The effective way to manage competition and compete positively in a stiff competitive environment like the Hungarian automotive industry is to engage the consumers and provide effective and reliable communication channels that assure them of safety and convenience in operating with the company. Promotion plans are also effective in marketing a new brand and product, which makes it part of the company’s strategy.

Marketing Mix Tactics

Waltz Company will launch the electric cars in Hungary in different models. The models will exhibit additional capabilities regarding performance. The company’s product will provide high performance. As a technology-oriented invention, electric cars are far beyond combustion engine cars, as these features ensure quality, safety, and convenience to consumers. The difference provided by the electric car is a marketing tool and would aid win a sizeable market for the car excited Hungarians and markets around Hungary (Futo 51). The climatic challenge is a global challenge, and therefore, the design of a product to curb this issue is itself a marketing plan. The pricing of a product determines its marketability. Waltz Company intends to price its products at affordable prices and level with other similar products already in the market. The Hungarian government offers a subsidy for consumers purchasing electric cars, which increases cars’ consumption rate and overall product marketing. This approach promotes environmental awareness throughout the country.

As a new player in a competitive market and with a new product, the promotion will help in marketing a new product. Waltz plans to promote its product by reducing the cost price, thereby influencing customers’ loyalty to the brand. This way, the firm plans to capture a large market base for its electric cars. The identification of a strategic location for the company’s manufacturing plant is vital in the marketing of a product (Futo 43). The establishment of Waltz’s production plant in Budapest will be strategic, given the city’s large population, promoting a fast and effective marketing strategy. Other company outlets will be distributed within the nation’s cities, the size of which will depend on the city’s population.

Conclusion

Overall, electric car production in Hungary is set to succeed as a business opportunity. With effective marketing strategies and the conducive business climate accorded the automotive industry in Hungary, Waltz company product will succeed. The Hungarian government’s establishment of favorable business policies, the countries’ strategic location in Europe, and the skilled, low-waged human resource are crucial factors for enhancing Waltz’s success regarding marketing its products. The competition enables the production of high-quality products. Since there are several other competitors in Hungary, the plan to market this item in the country will enhance environmentally feasible innovation. This way, the firm will position itself appropriately in the competitive market. The viability of the opportunity regarding the product is based not only on the sustainable business environment in Hungary but also on incorporating an effective marketing plan and teamwork in the company.

Works Cited

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Blythe, Jim, and Phil Megicks. Marketing Planning: Strategy, Environment and Context. Financial Times Prentice Hall, 2010.

de Zepetnek, Steven Tötösy, and Louise O. Vasvári, eds. Comparative Hungarian Cultural Studies. Purdue University Press, 2011.

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