Primo Motors: The Marketing Plan


Primo Motors is the third largest car vehicle dealer in the United Kingdom, dealing with pre-owned and late model vehicles, dedicated to matching buyers to their needs. It intends to introduce a new hybrid car in the market to diversify its portfolio of products and capture a larger market. To suffice for the company’s competitive capability, a three year marketing plan has been prepared. This marketing plan provides strategies that cover a three year period for the introduction of the hybrid model to the maturity stage of the product in the market. The purpose of the plan is to provide a directive on ways of increasing value to customers at a profit, increasing revenues and return on investment, while managing costs.

The marketing plan lays emphasis on several strategies, such as investment in research and development, production of high model volumes and corporate social responsibility, while focusing on the benefits (Kotler 2003, p. 89). R&D spending could deliver cost effective modes of production and shipping, and enable the use of green technology, which would save on the cost of late adaptation in the future (Tanaka 2004, p. 106). Investment in volume car production would create economies of scale, where the cheap per unit production cost could be passed on to the consumer and thus enable an increase in sales and market share.

External Environment

Macro-environment (using PESTLE)

The general political environment is stable, save for the recent change in government, which brought in several new policies to tackle debt issues and tackle job creation. Though stable, UK’s political environment cannot be said to be favorable towards the manufacturing sector, where even employment laws have made it easier to shut down manufacturing plants. Should a manufacturing company fail to abide by the UK British act and other regulations, then such a firm can easily be closed by law. Introduction of new business laws will force Primo Motors to change its policies and regulations pertaining to quality production.

The UK’s economy is somewhat stable, but growing at a sluggish pace. The slow economic growth does little in boosting demand for new vehicles. High interest rates coupled with the high energy costs deter investments for most manufacturing firms due to the negative effect on the bottom line. Companies have also found it expensive to invest in the United Kingdom due to the high costs of labor, which hamper profitability. The strong British pound makes it cheaper to import supplies, but exporting becomes difficult because of the translated price in terms of foreign currency (Sinkovics & Ghauri 2009, p. 144). Fluctuations on the cost of fuel have influenced energy conscious consumers in the choice of fuel efficient vehicles rather than luxury brands.

Several critical social factors arise in the macro environment, such as demographic and geographic issues. British consumers are known to purchase vehicles designed by small engines so as to save on energy. The UK is characterized by an ageing population, and as such, new vehicle sales have been on the decline. The ageing population has made it expensive for Primo Motors to operate pension programs, while the decline in new families has decreased demand for traditional family cars, which comprise small saloons and hatchback vehicles. Availability of credit facilities has opened up the choice of SUVs (sports utility vehicles) to modern families. The decline in the size of families in modern couples has led Primo Motors to develop smaller, sporty and sleek family vehicles in an attempt to capture this market segment.

Technological factors are of immense significance in the automobile industry, where customer satisfaction leads to an automatic market share. The UK car manufacturing industry is among the fifth largest when it comes to R&D spending, alongside sectors such as pharmaceuticals and biotechnology, aerospace and defense, software and computer engineering firms and fixed line communications, which accounted for 60 percent of R&D in the UK850 (2008 R&D scoreboard, BERR and DIUS). New innovations are vital for unit production time, computer aided designs, improvement of quality and reduction in production costs. Technology in the UK also affects online sales and assessment of customer credibility when it comes to financing. Primo Motors and other competing companies are investing in hybrid technology, which could be viewed as the way of the future as vehicles abandon the use of fossil fuels.

Different laws in the UK affect Primo Motors in a variety of ways. Consumer laws enacted by parliament protect consumers from deceptive information in promotions, thus companies have to evaluate how they market their vehicles. Competition laws in the UK protect smaller companies from being forcefully acquired by bigger entities, so Primo Motors has to be careful in its M&A activities (Ring & Perry 1985, p. 95-112). Such laws also protect consumers from monopoly activities such as price fixing. Employment laws give more power to employees. The UK has one of the highest minimum wages in the world, which means that companies in the country have high labor costs which reduce profitability. Health and safety regulations increase costs for Primo Motors, as the company ensures that the workplace is safe and employees are trained on safety issues. Safety laws discourage discretion in reporting accidents. The society of motor manufacturers and traders limited has a major influence on laws pertaining to the industry.

Environmental factors such as weather, climate change and global warming have placed responsibility on the manufacturing industry to reduce carbon emissions and encourage the use of green technology. There is greater environmental awareness in the UK, where customers intend to buy hybrid vehicles in order to do their part in conserving the environment. There are propositions among countries in the G20 to tax carbon emission, while government subsidies have been given to promote innovation in green technology.


Primo Motors is located in the Midlands (UK), with strategic dealership agreements across the country. Customers for the small saloons and hatchbacks include individuals as well as corporate customers such as taxi company operators, car rental agencies and delivery and carrier companies. As such, these customers demand quality at affordable rates thus influencing pricing policies for the company. Corporate customers have strong bargaining power (Kotler 1999, p. 47) hence increase in turnover is not directly proportional to profitability due to quantity discounts demanded by these customers. There are no boundaries to entry in the UK saloons and hatchback industry in the UK, since the market is characterized by perfect competition.

There are several vehicle parts suppliers in the market, which gives Primo Motors more flexibility in the choice of a suitable part provider depending on costs and quality. Some suppliers provide freight services, which reduces transport costs for the company. Competition in the supplier market has also led to a decline in costs, resulting into a drop in production costs (Case 2008, p. 120). There has been a change in consumer buying behavior, with consumers emphasizing on cheap prices which has led in an increase in demand for Asian vehicles at the expense of local car companies such as Primo Motors. The company has had to react by investing in volume car production. The small saloon and hatchback market is growing at a slow pace. Such cars are bought by families as a second vehicle but because of tighter household budgets, families are content with only one vehicle.

SWOT Analysis


Primo Motors has a strong brand image associated with quality and safety, thus encouraging repeat purchases for satisfied clients. The motoring manufacturer’s high range of cars and vans makes sure a wider variety of customers are catered for, thus leading to an increase in revenue streams for the company. Primo Motors has specialized in the manufacture of large cars and vans, hence it can quickly and efficiently realign processes to suit the productivity of hybrid vehicles, as opposed to its competitors who manufacture a wider range of vehicle types. The hybrid model places Primo motors in a higher competitive edge and an increase in its products count.


The company has not been involved in extensive and efficient marketing practices in later years; hence customers lack sufficient information that could influence buying behavior. For a new product like the hybrid model, Primo would be lacking the marketing advantage and product awareness strategies. Primo Motors could be viewed as a foreign company, with the parent company being based in Texas (United States). Although the company has a manufacturing plant in the UK, it may not necessarily generate enough patriotism to push for customer loyalty for those consumers who prefer local brands.


By introducing a new model in the market, the hybrid model, Primo has a higher competitive advantage, with a focus on green technology which the world is willing to embrace. The hybrid model is cheaper in terms of initial cost and maintenance cost, considering the current financial times; it is expected to draw a lot of customer enthusiasm.

Considering that most car manufacturers in the UK are biased towards luxury niche vehicles or engine manufacture such as Rolls Royce, McLaren, Jaguar, Land Rover and Aston Martin, there is room for Primo Motors to capitalize on quality vehicles for the cost-conscious middle class families, who form large share of the vehicle consumer market. Hybrid vehicles do not require high investment on differentiation hence cost savings may be experienced in the lower market segment. Consequently, Primo Motors could capitalize on economies of scale by focusing on volume car production, which would lead to an increase in turnover and decrease in costs (Baumol & Blinder 2007, 142). Furthermore, the strong British pound makes it cheaper to import vehicle parts from suppliers based in other countries.


The major threat facing Primo Motors UK is the importation of cheaper vehicles from China. This may lead to a decrease in sales given that production costs in China are lower than here in the United Kingdom. Competition from other car makers could affect Primo Motor’s market share. Toyota, Nissan and Honda have all invested in high volume vehicles and green technology, and this may dampen the future financial outlook for the company if it chooses to act reactively instead of proactively. Rigorous marketing campaigns by competitors also increase pressure on the company to spend more on the same.

While advantageous, the strong British currency discourages exports for the car manufacturer since UK vehicles will be expensive. The prevailing high interest rates moderates profitability for the company, while the use of financial leverage cannot be discouraged due to tax purposes. The House of Commons’ Business and Enterprise Committee, during a launch of The Automotive Assistance Programme in January 2009, recognized that there was an absence of a consistent long term government policy framework that would encourage productivity in the sector.

Resource Analysis

Primo manufacturing is a leading motor vehicle company in the UK, although it has never defined itself either as a small saloon car and Hatchback Company or a van manufacturing company, allowing the company to diverge in wide range vehicles. Since its founding, the company’s strategy has been built on its expertise in the development and manufacture of a diversified range of vehicles. Though the company has undergone many transformations, there has been a consistence focus on small saloons and hatchbacks, which allows the company to serve its fundamental customer needs and instinctively deploy resources and capabilities in other markets.

Primo resources are essential for the company to tackle competition in the UK, while indicators within the company indicate that the vehicle manufacturer is well poised in the market. Primo is able to enhance its unique capabilities and resources especially through its production system. The company has developed both tangible and intangible structures for all team members within the company to develop. This will ensure a constant flow of competent and experienced human resources to part of Primo UK operations, leading to the development of quality products for the market. The company takes measures to motivate, inspire and educate its employees so as to increase productivity (House of Commons 2009, np).

The UK automotive industry has a strong competition; hence Primo motor manufacturers could be able to gain competitive advantage and position in the market by adhering to the needs of the customers needs. Primo is able to build on its brand image by adding more product lines in the market, such as the proposed hybrid saloon car models. Consequently, the assurance of quality vehicles will lead to customer satisfaction and loyalty, translating to increased future sales and profitability for Primo manufacturers.


The sales goal of this marketing plan estimates the new hybrid model sales in terms of units to be 5 percent of Primo’s market and boost revenues in subsequent years at a steady rate of 15 percent on a year on year basis, all this while ensuring healthy profit margins. Increase in sales could lead to an increase in market share (Baumol & Alan 2007, p. 68). The sales targets are achievable, since Primo Motors has the capacity to produce in excess of 120,000 hybrid vehicles annually. This will be further be boosted by the volume car production initiative throughout the period of the plan.

The second objective, but of equal importance, dwells on increasing customer satisfaction, which can be measured from feedback, awareness levels as well as re-purchase rates for the new hybrid vehicles. This can be done by stressing on quality products and service, by 2012.



The company intends to develop new high quality hybrid vehicles that offer high performance standards as well as security features. The hybrid design could be modernized so as to attract younger car buyers, who form the largest share of new car sales. Security is primal for family vehicles, thus all modern safety equipment and technologies are to be used in such vehicles. The hybrid model being a new product in the market, its spare parts need to be made available nationwide, which would lead to significant cost savings for the company’s customers, in the process increasing loyalty (Kourdi 2009, 106).

The hybrid saloon vehicle would be introduced on several platforms that would enable customers to make choices based on their preferences. In this case the platforms will be based on small and medium sized engines, with more emphasis on small engine vehicles. Hatchback hybrid versions production could start as soon as 2015, pending the success of the saloon division, board recommendations and prevailing market conditions. Vehicles from volume production will be rebranded so as to preserve perceptive value in innovative vehicle models. Product lines will therefore be introduced on the basis of technology used in the vehicles, as well as the benefits customers can expect to receive from those models.


The company intends to target two broader segments of the hybrid vehicle division, that is, corporate and individual customers. In case of individuals in the UK, the market could be divided into young, middle age and old consumers. The old consumer segment can only grow marginally since these customers do not require frequent transport. Middle and young individuals present an opportunity for growth, given their rising income levels. Young individuals could comprise of college students, recent graduates and young families aged 18-34 years, while middle class customers would be between the ages of 35 and 45 years, which represent the largest share of new vehicle sales. Individual customers look for benefits such as affordability and quality in vehicles.

Middle class customers are keen to cut down on their expenses thus fuel efficiency is vital for the regular usage of their vehicles. Demographically, women have more need for hatchbacks, where vehicles can be used for shopping or taking children to school. Hatchbacks would be ideal for families with 2-3 children. These middle class families could be professionals, associate professionals, administrators and other skilled trades with income levels ranging from £20,000 to £45,000 per year. Regions within the UK that provide opportunities for Primo include East Midlands, East, South East and South West of England, London and Scotland, areas in which most residents fall into the aforementioned income levels.

Corporate clients can offer more solid revenues streams due to the contractual nature of car orders. Such customers could include taxi companies, tours and travel, car rental firms and delivery and carrier companies, especially new companies or those seeking to expand their fleet. Geographical segmentation is possible but not feasible for the company because customer data is almost consistent across the UK.


Primo Motors can use a multi-segment approach, by targeting middle aged customers and corporate clients, thereby hedging against a risk in a particular segment. Corporate clients could be enticed by quantity discount offers (10 percent discount on purchase of 15 vehicles or more), and timely delivery on orders. Customizing vehicles depending on the user could lead to customer satisfaction, for example designing delivery and carrier vehicles differently from vehicles meant for taxi operators.

Differentiation is necessary in the consumer market (McDonalds 2003, p. 38). The middle aged consumer group could be captured by capitalizing on vehicle features, such as NAV systems, security and pedestrian friendly bumpers, which would also form a basis for differentiation from other competitors. A small amount of four wheel vehicles could be manufactured per year for consumers who drive in rugged terrains. With the ever fluctuating oil prices, fuel efficiency in the small saloons and the hatchback vehicles is likely to increase demand in the middle class market. Primo motors could develop appropriate financing packages that are appealing to individuals with tight budgets.


Price and quality are critical factors that should be concentrated on in the implementation of the 3-year marketing policy. From the perceptual map, Primo Motors vehicles are viewed as of significant value and marginally expensive. Primo Motors would benefit from increasing value to customers through quality vehicles at an affordable price, leading to customer satisfaction. First basis of increasing value to customers would be by investing in technology, specifically hybrid and fuel efficient vehicles.

By increasing awareness, customers would be certain that Primo Motors is dedicated towards delivering value to end users, using simple price policies that are meant to make the vehicles readily available for all. Comfort in vehicles will also derive customer satisfaction (Steiner 1997, p. 184). Affordability of the vehicles, coupled with investment in technology would undoubtedly increase Primo vehicle sales. Hatchback division may invest in safety and comfort in the first three years of implementation of this plan, while the saloon division delves into innovative technology.

Other strategies include fuel efficiency in vehicles, affordable prices and appropriate financing arrangements, timely production and delivery of vehicles to new owners and showrooms, investment in R&D and safety, and corporate social responsibility programs. These strategies would put Primo Motors within sight of Volkswagen’s position in the market, and perceptual map. Consistency will be a major driving factor for Primo Motors’ advances in more market share, by implementing adequate control procedures. If successful, these strategies will ensure customer satisfaction and loyalty, and an appropriate perception in the market, which will consequently increase sales and market share.

Perceptual map

The perceptual map (figure 1), indicates the perceptions of several car consumers regarding vehicle quality and affordability. Primo Motors ranks well within the map, which illustrates that the market perceives the company’s vehicles as high quality, and a bit costly but in a justifiable way. Primo’s vehicles are perceived to have higher performance qualities than immediate competitors Toyota and Nissan, which provides an incentive to charge a premium on prices charged to customers. Volkswagen vehicles also pose a threat. The VW Golf vehicles have been successful in the UK, and thus Primo should react accordingly in the hatchback division. Primo Motors has an incentive to improve on the quality of its vehicles, where it would be able to charge a higher price.


Price: A penetration policy could be implemented in order to gain ground fast in the market. The strategy is intended to undercut the price offered by competitors for similar products, but ensuring the same quality, if not better. The pricing policy would be directed towards the hybrid car, though prices could be marginally higher than those charged by direct competitors Toyota and Nissan. Appropriate financing could be suitable so as to capture young individuals who have only attained a recent income stream. Price levels could vary from £11,650 to £17,000. 10 percent quantity discounts could be given to corporate customers who purchase in excess of 10 vehicles, 5 percent for five cars. Financing will be flexible according to prevailing circumstances.

Product: the hybrid car will come in a variety of sizes and features. Auxiliary features could be inserted into the vehicles in order to increase attractiveness, and give the company more leverage in the determination of pricing policies. Quality and safety will be stressed on in the production and marketing departments, a process that would reduce the risk of future vehicle recalls that would affect Primo Motors brand image (Brassington & Pettitt 2006, p. 46-134). Primo vehicles would be of good quality, fuel efficient and safe to drive. Primo manufacturers will also market hybrid vehicles, with more emphasis laid on small engines.

Promotion: Promotions will be communicated through the mass media and the marketing portal, with more information being displayed in the later so as to encourage its usage, at the same time saving on air time expenses. The internet is also a reliable source for customer information (Brown 2006, 116). Seasonal discounts, for example during the Christmas festive period, could be used to boost year end sales. Newspapers can be used as an advertizing medium during weekdays, while television advertizing could be applied during weekends, when most families are in their homes.

Place: Strategic partnerships with dealerships will ensure that the company’s vehicles are widely available and accessible. Online purchasing will also increase accessibility to vehicles, where the marketing portal will provide all relevant details so that customers can make informed decisions. The online portal will also enable customers to view vehicles before they are shipped, thereby increasing satisfaction.

People: A trained sales force will go a long way in providing information to customers, making the decision making process easier for them. In most family settings, women have a major role in influencing car purchase decisions, and more so in family cars. More female sales personnel could be trained so as to cater to these women, and make them feel more comfortable, rather than being intimidated by male personnel.

Physical environment: Primo Motors branches and dealerships will use an ambience of lighting, making sure that customers feel welcomed. Signage is to be used, displaying useful information, but should be kept simple so as to avoid overwhelming visitors (Kottler & Keller 2006, p. 132). Vehicles are to be arranged in thematically, which will make it easier for visitors to find what they are looking for.

Process: Delivery of services to consumers will be conducted in a professional manner, in a way that communicates the integrity and high quality standards of Primo Motors. More personnel will be allocated to areas of interest within showrooms in order to avoid queues which bring about customer dissatisfaction. The queues could be as a result of promotional activity or debut of a long awaited brand. Personal selling used on current clients maintains relationships, which will secure future earnings (Heding, Charlotte and Mogens 2009, p. 27-88). Primo Motors will review its shipping policies so as to shorten the delivery time of vehicles to their new owners, preferably 4 days for customers located in distant areas.

Action Plan

2011: Primo Motors to increase R&D spending in the third quarter of 2011 in the green technology, while the sales task force initiates awareness campaigns on vehicle models, features and safety as well as financing and availability of vehicles (Brigham & Houston 2009, p. 164). The HR department trains sales teams across various distribution outlets on effective communication skills and Primo Motors quality standards. Consequently, customers choose firms that provide services that will help realize desired benefits (Case 2008, 180-236).

Public relations will be geared towards informing stakeholders on the efficiency and safety of the hybrid vehicles, and promote after sales service. Auxiliary products can be fitted into existing stock to induce customer spending. The finance department finalizes on cheap and flexible means of financing for car buyers, so as to enable credit for young families (Hedley 2002, p. 31). Shipping procedures should also be modified, where customers will be allowed to view products before they are shipped. The management will develop a set of milestones which will be used to measure both implementation and performance of the marketing plan.

2012: The R&D department to improve on current models and develop better performing hybrid vehicles, with bias towards high model volume vehicles which will lead towards high productivity while keeping a check on productivity (Bennet 2006, p. 62). The marketing department can implement a marketing portal; open to both customers and potential car buyers. The marketing portal will be useful in communicating company related events and receiving feedback from customers. Investment should also be stressed in the development of hybrid vehicles. The company can also look forward to launching the first hybrid saloon vehicles by the end of the last quarter. The management can involve the company in a series of special projects, such sponsorship programs in the community and the corporate world. Here, such plans could include sponsoring a local football club, educational agendas for communities and schools, which would signify that Primo Motors gives back to the community.

2013: The last year of the marketing plan signifies the start of sustainability reporting for the motor company. Corporate Social Responsibility reporting is already evident in sector leaders, whereby the published documents illustrate how the company is relating with all its stakeholders, and reasons for change, thereby improving the company’s image (Crane and Matten 2007, 45). The Gantt chart (figure 2) demonstrates the timeline of critical activities in the marketing plan.

Financial Budget and Forecast

Supposing Primo Motors is able to sell around 15000 units at an average price of £16,125; small saloons and hatchback sales for 2011 are expected at £246,375,000. With the price stabilized, revenues are predicted to rise by an average 20 percent in 2011 and by approximately 15 percent in the following years (figure 3). 65-75 percent of the sales are attributable to small saloons, since they have more market demand than hatchbacks.

Marketing activities include advertisements in mass media and costs related to the presentation of the showrooms (figure 4). Other expenses include training costs, salaries, sponsorship agreements, administrative costs and social responsibility programs. Only expenses pertaining to marketing activities have been included.

Control Measures

The marketing department will constantly evaluate its performance levels, analysis being made in comparison with forecasted revenues and achievement of set forth objectives. Use of milestones will be of great importance (Johnson, Scholes & Whittington 2008, p. 115), where simple short term goals will be established, in alignment with long term strategic objectives of Primo Motors. Follow up is to be done on a periodical basis, in order to ascertain that programs deliver the intended results, and that the 3-year marketing strategy is on schedule (Wheelen & Hunger 2002, p. 249). Though the marketing department is responsible for the implementation of the strategy, senior management has oversight over the whole program, and may offer directive where it deems necessary (Koontz & Weihrich 2009, p. 94).

The most conclusive control measure that should be used is through key performance indicators. Primo Motors should monitor sales volumes on a quarterly basis, where vertical and cross-sectional analyses are to be used to measure performance. Appropriate figures include sales volumes in various distribution outlets across the UK, quarterly revenues, and month to month industrial data through out the period. To monitor market share analysis, Primo could evaluate data on annual fluctuation of the market share and ascertain the causes for the same. If decreased market share is as a result of competitor action, the company should be strategic in its response and be careful not to be drawn into price wars or overly aggressive rollout of new vehicle brands.

Feedback from customer satisfaction surveys will be used to measure the progress of Primo’s quality strategy. Expense analysis through the total marketing expense to sales percentage ratio will illustrate whether marketing efforts are effective. Where the ratio increases in the entirety of the marketing plan, then management could opt to cut back marketing costs or call for a review of the marketing plan. Ineffectiveness of the plan could be causes by changes in the external environment so management could review changing environment conditions. Budgetary controls are he most effective as it will assist in deciding on priorities in the marketing plan. The budget will also express performance of the company against anticipated results (Trott 2008, p. 54).


The strategies put in place would all contribute to the attainment of Primo Motors’ objectives, but the company chose those realizable in the 3-year time frame (Kourdi, p. 59). The recommended approach therefore involves strategies that will make a direct impact on the market share, such as volume car production. Investment in quality and safety in the hybrid vehicles would increase customer loyalty, consequently increasing repurchase rates (Goodstein et al. 2003, p. 67). By setting a low profit margin in the first 3-years, the decrease in price will cause an increase in sales. The strategies recommended will reduce contribution margins in the first two years of implementation, but subsequent years are expected to generate higher profits. The whole organization should work towards realizing the targeted goals (Felkins et al. 1993, p. 53).


Perceptual Map
Figure 1: Perceptual Map
Gantt Chart Indicating Marketing Plan Timeline
Figure 2: Gantt Chart Indicating Marketing Plan Timeline
Gantt Chart Indicating Marketing Plan Timeline
Figure 2: Gantt Chart Indicating Marketing Plan Timeline
Sales Forecast
Figure 3: Sales Forecast

Figure 4: Expense Budget

2011 2012 2013
Advertisements £4,500,000 £4,500,000 £5,000,000
Promotions and discounts £24,000,000 £22,500,000 £17,500,000
Training costs £1,500,000 £1,500,000 £750,000
Salaries £4,000,000 £5,500,000 £6,500,000
Shows £2,500,000 £2,500,000 £3,000,000
Literature, catalogs and websites £1,000,000 £1,000,000 £500,000
Sponsorship agreements £2,000,000 £2,000,000 £2,000,000
Administrative costs £3,000,000 £3,500,000 £4,000,000
Social responsibility costs £500,000 £500,000 £1,000,000
Total Sales and Marketing Expenses £44,000,000 £43,500,000 £36,750,000
Sales and marketing expenses/sales (%) 17.86% 14.71 9.56
Contribution margin £202,375,000 £252,150,000 £347,595,000
Contribution margin/sales (%) 82.14% 85.29 90.44

Key figures and budget were based on assumptions basis them on Toyota Ltd, as per requirements


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