Bentley Motors Case
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Company Case: Bentley Motors: Differentiation and Positioning in International Market
The mission of Bentley Motors, the definitive British luxury car company, to produce best cars in their class, has remained unchanged since it was expressed eloquently by its founder Walter Owen Bentley in London in 1919. Located in Crewe, England, since 1946 and owned since 1998 by Volkswagen AG, Bentley Motors is an international company developing and crafting one of the worlds most desirable luxury cars.
There are many unmistakable characteristics that define a Bentley – distinctive design, handcrafted luxury, supreme comfort, ultimate performance, and a refined and exhilarating driving experience. Yet it is the companys brand imaging through differentiation and positioning that makes the quintessentially British brand unique today. To many, owning a Bentley is not about getting from A to B but about getting there with flair infused with advanced technology and classic hand craftsmanship at the pinnacle of British luxury motoring. Based around the concept of “Britishness” in image and design.
Bentley has succeeded in differentiating its position in the global luxury car market through a market-drive strategy based on responsive cross-market segmentation.
The traditional markets of Bentley Motors are the United States, the United Kingdom, and Europe, which were identified by the company using two of the traditional market segmentation variables: the level of a nations economic development and per capital gross domestic product (GDP). Bentley had enjoyed high sales in these economically developed markets, especially in the boom of the 1980s. In the 1990s, it struggled to reach similar level of sales, which led to a major investment in the facility, new-product development, and brand re-positioning in 1999. The brand reached the height of its heyday in the 1920s and 1930s, and the Bentley Boys winning the 24-hour race in Le Mans in 2003 seemed to emulate victories of the past. Its new Arnage T luxury sports sedan won critical acclaim by the motoring press worldwide soon after, and the Continental GT, launched in 2004, was seen as one of the most successful launches of any car in Bentleys history.
However, sales in its traditional markets slumped in 2008 due to the global financial crisis triggered by the collapse of Lehman Brothers in September 2008. Some orders for its cars were cancelled immediately, and sales dropped by 24 percent that year compared to 2007. When the company was forced to stage a seven-week production shutdown in the spring of 2009 due to the slump, it started to search for new markets to increase sales. It realized that the use of the more traditional market segmentation variables such as age, gender, education and level of economic development does not seem to reflect the real aspect of market behavior, especially the burgeoning purchasing power of the well-to-do in the big emerging markets such as Brazil, Russia, India, and China. The result of the search was the identification of a thriving consumer segment that transcends the national boundaries of these nations. Despite being located in nations featuring low per capita income, this segment of consumers has the greatest global consumption growth and represents rapidly growing buying power for luxury goods ranging from ultra-luxury cars to designer handbags.
Operating in markets of both developed and emerging economies presents challenges for Bentley. It was clear from day one that it targeted high-income groups who want to buy into the symbolism and history of the Bentley brand, even though the prospect customers would inherently know that they could purchase a vehicle with similar performance and specification for less than half the price. Bentley is aware that the needs and preferences of its target groups in the emerging economies may differ from those of its prospects in developed economies, who are typically older or retired males, highly educated, and high earners. In comparison, Bentleys target consumers in emerging markets are often the young, less educated entrepreneurs who share a number of important commonalties. They have a strong appetite for Western-branded luxury goods, from which they expect superior quality as a fundamental attribute associated with these goods-quality may mean design, materials, technology, performance, and craftsmanship, but also attributes such as the tradition and the heritage of country of origin, uniqueness traits, and perceived superiority and exclusivity. Recognizing the differences and the opportunity to be had from differentiating its targeting efforts, Bentley launched its value proposition based on “Britishness” in its newly found markets while refreshing its original value proposition of luxury, performance, and exclusivity in its traditional markets.
Differentiation and Positioning
The Bentley brand concept is based on the premise that a consumer who regards luxury car brand characteristics as important or desirable, and is in the market for such a luxury product, should be attracted to the brand. Bentley is aware that for its brand to be unique, it must have imagery and symbolic meaning to a consumer. In other words, it must stand for a lifestyle or an attitude and communicate this to its cross-market consumer bases.
Although owned by the German Volkswagen AG group, which enjoys a perception of creditability and originality, Bentley brands itself as a quintessentially distinctive luxury brand originating in Crewe, England, with a fusion of heritage and cutting-edge technology. It defines its cars by the important attributes of tradition and hand craftsmanship, relative to those of speed and performance used by its competitors. It focuses on the emotional benefits of its cars and has stayed true to this proposition through an integrated, high-touch differentiation and positioning program tailored to the carefully defined well-to-do group in each of its markets.
Bentley offers an exclusive collection of limited non-motoring products produced under license from its equally exclusive partners. Ettinger for Bentley offers luxury leather travel products in vibrant colors from the Bentley color palette, hand-stitched in England from Bentleys own hides. Through Estede, Bentley offers a limited edition, high-end range of sunglasses and ophthalmic frames featuring the famous winged B emblem and presented in a Bentley leather presentation box. Through Zai, a Swiss maker of luxury ski equipment known for its craft and exclusivity, Bentley offers innovative ski products handmade in Switzerland