The Marketing mix of Volvo analyses the 4Ps of Volvo, including the Product, Price, Place, and Promotions. Volvo Cars is a Swedish luxury automotive manufacturer that was established in 1927. The company is today owned by Geely Sweden AB and is headquartered in Gothenburg, Sweden. Volvo was founded as an SKF subsidiary, but SKF later sold most of its shares in 1935 when Volvo was introduced into the stock markets.
It is one of the most metamorphosized companies, as it has changed ownership many times within less than 100 years. Some of its subsidiaries today are Volvo Cars of North America, Volvo Cars of Asia Pacific, and Volvo Cars of Canada.
About Volvo
- Type: Multinational manufacturing corporation
- Industry: Trucks, buses, marine, and industrial drive systems
- Founded: 14 April 1927, Gothenburg, Sweden
- Founder: Assar Gabrielsson and Gustaf Larson
- Headquarters: Gothenburg, Sweden
- Area served: Worldwide
- Key people: Martin Lundstedt (Chairman) and Jim Rowan (CEO)
- Number of employees: 102,000
Table of Contents
Volvo Product Strategy
Volvo is popularly known for its zeal in manufacturing and subsequent marketing of various types of vehicles, including station wagons, compact executive sedans, sport utility vehicles, coupes, and sedans. Its subsidiaries include several brands, such as Volvo construction equipment, Volvo Trucks, UD Trucks, Mack Trucks, Volvo Buses, Renault Trucks, and UD Trucks.
The new Product Mix of Volvo in 2023 is as follows (Source).
- Trucks: Volvo is renowned for its heavy-duty trucks used for transportation and logistics globally. These trucks are known for their reliability, fuel efficiency, and advanced safety features.
- Buses: The company manufactures city and intercity buses and coaches. These vehicles are designed for public transportation and are often equipped with environmentally friendly technologies.
- Construction Equipment: Volvo produces various construction machinery, including excavators, wheel loaders, and articulated haulers. These are used in various construction and mining projects.
- Marine and Industrial Engines: Volvo Penta, a subsidiary of Volvo, specializes in engines and complete power systems for marine and industrial applications.
- Financial Services: Volvo provides various financial services, including financing and leasing solutions for its customers and dealers.
- Aerospace: The company develops and manufactures components for aircraft engines and space rockets through its subsidiary Volvo Aero.
- Volvo Cars: Although Volvo Cars was a part of the Volvo Group, it was sold to Ford Motor Company in 1999 and later acquired by Geely Holding Group. Volvo Cars, now separate from Volvo Group, specializes in manufacturing premium cars known for their safety, quality, and environmental care.
Volvo Place Strategy
The company has over 2,300 local dealers all over the world. These are spread through the over 100 national sales companies in at least 100 countries. Today, the largest consumers of Volvo cars are China, The USA, Sweden, and most countries within the European Union bracket.
In 2015, the company made record sales, releasing more than 500,000 cars into the market. Such a success was attributed to the excellent performance in all its three-core global target market regions. These include Europe, where sales rose by 10%, the USA, with upward sales of 24%, and China, with an 11% upward percentage in the last quarter of the year.
Volvo’s primary production plants are in Chengdu, China; Ghent, Belgium; and Gothenburg, Sweden. On the other hand, its engines are mainly produced in Skovde, Sweden, and Zhangjiakou, China. The body components are produced in Olofstrom, Sweden.
Here’s the place strategy of Volvo.
- Global Manufacturing and Assembly Plants: Volvo has strategically located manufacturing and assembly plants worldwide, including Europe, North America, South America, Asia, and Africa. This global presence allows Volvo to cater to regional market demands and reduce logistical costs effectively.
- Dealer Network and Service Centers: Volvo maintains a strong network of dealerships and service centers worldwide, providing easy access to sales, maintenance, and customer support. This extensive network ensures a high level of customer service and brand accessibility.
- Partnerships and Joint Ventures: Volvo engages in strategic alliances and joint ventures, especially in emerging markets, to enhance its market reach. These collaborations often involve local companies, enabling Volvo to leverage local expertise and establish a stronger foothold in these regions.
- Online Sales and Digital Platforms: Embracing digital transformation, Volvo utilizes online sales platforms and digital marketing strategies. This approach expands its reach to tech-savvy consumers and caters to changing buying behaviors and preferences, especially in the post-pandemic era.
- Sustainability and Environmentally Friendly Locations: Volvo emphasizes sustainability in its place strategy, opting for environmentally friendly facilities and processes. This commitment is reflected in the choice of locations for their plants and offices, focusing on minimizing environmental impact and aligning with their corporate responsibility goals.
Volvo Pricing Strategy
The Volvo models get credit for being dependable and safe. The wide range of brands and categories in which Volvo produces its cars also makes the price lie in a wide range. Their cars mainly cost an average of between $25,450 and $40,800. The vehicles are reputed for their quality and safety and the technological advancements that come with them.
Volvo employs an optimal pricing and marketing strategy via precise segmentation. The company aims to optimize profit in the after-sales market segment with a structural balance of a global company. Consulting group implementation has been credited with developing worldwide pricing and marketing tools with a segmentation model, thereby improving Volvo’s profit potential in the after-sales segment.
Volvo’s pricing strategy is multifaceted, focusing on customer satisfaction, delivering value, sustaining brand prestige and customer satisfaction, and adapting to market dynamics. Here are critical aspects of Volvo’s pricing strategy:
- Value-Based Pricing: Volvo adheres to a value-based pricing model, where the price of its products and services is determined by the perceived value they offer to consumers. This strategy aligns with Volvo’s emphasis on quality, safety, and environmental sustainability, which resonate with their target market, who are willing to pay a premium for these values.
- Premium Pricing: Consistent with its positioning as a manufacturer of high-quality, reliable, and innovative products, Volvo adopts a premium pricing strategy. This approach reflects their products’ superior features and benefits and reinforces Volvo’s brand image as a luxury and prestigious marque in the automotive and equipment industries.
- Competitive and Market-Oriented Pricing: Volvo remains sensitive to market conditions and competitor pricing while maintaining its premium status. This sensitivity allows them to adjust prices in different markets to stay competitive, especially in regions with intense competition or varying economic conditions.
- Dynamic Pricing for Services and After-Sales: Volvo employs dynamic pricing in financial services and after-sales support. This strategy considers factors like the cost of financing, service packages, warranty extensions, and other value-added services, tailoring prices to meet specific customer needs and market situations.
- Strategic Pricing for New Technologies and Innovations: As Volvo introduces new technologies, particularly in electric vehicles and autonomous driving, they adopt a strategic pricing approach. This involves setting prices that reflect the innovative nature of these products while also considering the cost of research and development, aiming to establish a strong market position in these cutting-edge segments.
Volvo Promotion Strategy
The most important aspect of the Volvo brand promotion has been its prowess in the production of efficient machines with world-class safety standards being put in place. The variants of car models it manufactures are also a way of reaching a wide range of customer bases. Volvo’s marketing mix strategy incorporates world-class standards to showcase their station wagons at key international car shows, ensuring precise segmentation within the market. Volvo’s marketing mix efforts extend beyond the conventional, embracing essential international car shows to showcase their innovative approach and solidify their position in the industry.
For a long time, Volvo has been using a conservative marketing strategy. This has been its greatest misdoing, but results can be seen since the recent introduction of a new strategy geared towards Volvo’s needs. The strategy, dubbed “Volvo Way to Market,” focuses on four areas: digital leadership, marketing tools, service, and dealership. Volvo plans to concentrate its digital leadership on critical international car shows in the US, Europe, and Asia. Together with this, an annual Volvo showcasing event is also a great marketing strategy.
Some Recent Video ads and Print ads for Volvo are:
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