LUXURY BRANDS Name Roll No. Manoj Gupta 21 Fauzia Hasan 22 Vinod Iyer 23 Pramod Jadhav 24 Sameer Jadhav 25 Nilesh Jain 26 Rajesh Jain 27 Fazeel Kazi 29 Prashant Kokare 31
Luxury Brands – A Life Well lived “Luxury brands are more than the goods. They give people the opportunity to live a dream. The goods are secondary because first of all you buy into a brand, then you buy the products.”Robert Polet - CEO of Gucci Everyone wants but nobody needs, Huge Comfort, Best of the Best Global Market Size = $1.6Tn growing 7.9% Indian Luxury Market = $20Bn growing 20% US market for luxury cars
SUCCESS STORY BMW Bayerische Motoren Werke GmbH The BMW Group is the leading provider of premium products and premium services for individual mobility
1916RMW (Rapp Motoren Werke ) is founded as an aircraft-engine factory in Munich. In 1917, Changed to BMW. BMW – The Company 1923The first BMW motorcycle leaves the Munich production site. 1928The first BMW automobile, the Dixi 3/15, developed in Munich. 1955The BMW 503 and 507 sports cars are today’s 'golden oldies'. 1962The 1500 model establishes the trend for the "new class" of sporty compact touring cars. 1977BMW introduces the first 7 Series car. The 733i sets new standards in technology, design and equipment. 2008 More than 140 countries, 28 plants 1.5Mn cars, 107,593 employees $70Bn revenue $2.2Bn Net Profit 1981 BMW becomes the first European carmaker to establish a subsidiary in Japan.
Brand Identity - Logo The blue & white circular logo BMW still uses alludes to the blue & white checkered flag of Bavaria and also indicates a spinning white propeller on a blue-sky background.
Three Authentic Premium Brands Sheer driving pleasure Customer Deliveries 2008 Brand Extension • Vehicle related Products • Car Finance • Lease • Fleet Management & Consulting • Automotive Insurance • Extended & Used Car Warranties 1.3 Mn Units Most exciting premium small car brand 200k Units • Non Vehicle related Products • Real Estate Loans • Credit Cards • Fixed-Term Deposits The pinnacle of automobile luxury 1000 Units
Brand Positioning strategies THE ULTIMATE DRIVING MACHINE Head-On Positioning (comparative positioning) • BMW - Little comparison between BMW and Mercedes • Comparison only in customers mind Innovation Positioning • Practices continuous innovation. • Eg :redesigned 3-series model with better power , stiffer suspension, taillight lenses. Product Differentiation • communicate valued differences and distinguished by image (premium brand) • quality (cutting edge technology) & design (sleek and unique) Brand Leadership Positioning • BMW- maintained leadership for many years • consistent strategy • oriented towards meeting customer needs Residual Value
Brand Positioning strategies Lifestyle Positioning Young urban professionals (YUP) “status” associated with it. Price Positioning Caters to high end customers High price supreme quality Range:Rs. 2.6Mn to Rs. 70Mn (RR Phantom Coupé) Overall Strategy Respect for the individual Brand Promise:Any road, any conditions, any timeMore than just a luxury car One Word Equity (O.W.E) – Saatchi & SaatchiBMW – Driving pleasureVolvo – Safety Ferrari – Living-on-the-edge Lexus – Perfection
Brand Identity Prism Brand Values • Young • Fun to drive • Desirable • Sleek • Exclusive • Sporty Physique Personality Rational Sensory Emotional Symbolic • German – Competent & • Serious , Quality • International • mindset • Brings ‘excitement’ • to life Culture Relationship Stylish, Attractive Efficient Exciting, Trendy Aspirational, Status-conscious • Cars for man's • pleasure • Prestige Consumer self- projection Consumer reflection • Status • Esteem
Brand POP & POD • Point of Difference • Strong, favorable, unique brand associations - Exclusivity • Types: • Attribute Based -Performance • Image Based - Affective, experiential, brand image Point of Parity • Associations that are shared with other brands -Luxury Types: • Category: attributes to include BMW as amember of Luxury Brand • Competitive: POP that negate competitors PODs –Affluence, Fun to drive 1991 1985 1975 1971 Luxury prestige Funto drive Affluence Exclusivity • Economical • Excitement to life • International • Desirability
BMW– “Always Compete & Perform” BMW MENTAL MAP PERCEPTUAL MAP Élégance Efficiency A car prestigious to own Opulence High * Jaguar Stylish * Mercedes High price * Alfa BMW * Toyota(Lexus) * Comfort Low A financially effective car High Prestige * Audi Honda(legend)* *Saab Volvo Quality Engineering Élite dealership * Low Sophisticated Perform Resale value BMW Fuel Economy Fuel consumption [Ltr./ 100 km] 6.4 Ltrs Competitors 8 Ltrs * EU Test
Brand Resonance Pyramid Dominates the luxury car category Resonance Elegance Exhilarating driving experience Enhances the joy of driving Judgments Compete & Perform Feelings Fun to Drive Has superior handling Understands high performance Imagery Dependable, Luxurious Performance Any road in any condition Best Performance Salience Innovative Innovation Engineering & Technology
Brand Failures The Edsel Biggest Luxury Car failure in American history Introduced in 1957 by Ford Motor Company Produced in 4 models, Ford’s investment of $400m in its development Innovations:" rolling dome" speedometer, self-adjusting brakes Aggressively marketed and hyped: “Edsel Show", teaser advertisements Sold through a new network of 1,500 dealers EDSEL backronym: "Every Day Something Else Leaks!
Why it failed: Hyping untested product: • “Never build up enthusiasm for unseen, unproven product” - PR Director Edsel • Named after Henry Fords son • Sounded like Edson- an unpopular tractor • Weasel(mammals) • Dead cell • Ugly ducklings don’t always become swans • Nothing uniquely different • Cultural issue with grill Name matters: Looks count:
Why it failed: : High price not justified in public’s mind : Competing against its own sister divisions : Priced within Mercury’s market price segment :Little market research : Huge sums to decide name instead( poets hired) : Bad quality control : Parts missing when reached dealers :Too big when small was in, not fuel efficient :Robert McNamara new Boss : Cost cutting and cost containment ideas : Saved Ford but Edsel discontinued Pricing Right research important Product Quality Recession Internalpolitics
: High price not justified in public’s mind : Competing against its own sister divisions : Priced within Mercury’s market price segment :Little market research : Huge sums to decide name instead( poets hired) : Bad quality control : Parts missing when reached dealers :Too big when small was in, not fuel efficient :Robert McNamara new Boss : Cost cutting and cost containment ideas : Saved Ford but Edsel discontinued Pricing Right research important Product Quality Recession Internalpolitics