Land Rover
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Case Analysis: Land Rover North America, Inc.
Background Analysis:
General Market Assessment: In the 90s, the SUV was looking to become a highly contentious market, however, with a new emphasis on the Leisure SUV. This was where LRNA will be able to maximize its market share, and perhaps grab a foothold on the market.
Competition and behavior: The SUV industry in North America was becoming increasingly competitive, with “over 30 SUV models, their prices ranging from $10,000 to $60,000. Market leaders were Jeep and Ford, with Jeep having a strong heritage in the USA much in the same was as Land Rover did in the United Kingdom. Jeep itself had three lines; much in the way Land Rover was trying to carry various lines for different segments of the market. The international impact on the North American SUV sales was modest, and the luxury segment of the SUV class was about to become more competitive with new products from the likes of Mercedes and Lexus.
Company Analysis: Land Rover started off in the UK and was able to market itself on its heritage. When it made the jump to North America, it had banked on this British heritage. Land Rover North America (LRNA) had initially started off in respectable terms as a somewhat boutique firm, with a staff of 15 and 60 dealers. Recently they have taken a decision to move from a niche player with unit sales of 5,000 to a bigger player in the US SUV market. One of the key areas that they are focusing on is the introduction of the Land Rover Discovery.
Current: Currently, LRNA has switched from a corporate identity based solely on the Range Rover, to the overall umbrella brand of Land Rover, which it self has multiple sub brands (or vehicles) one of which is the Discovery. With the decision of branding and introducing the Discovery, LRNA needs to decide to whom the vehicle most appeals to.
Decision: It is my recommendation that LRNA decide to market the Discovery towards the family sect as the The Definitive Family 4 x 4. This strategy is based upon the surveys and brand perception of the Discovery line amongst their competition as well as within the Land Rover umbrella. The SUVS had a perception of being more safer to drive and also hit an increasing pragmatism within the market. I shall expand my decision in the recommendation segment.
2) Recommendation:
The target for my recommendation, as I have said above, is the Family buyers “who needed versatile and practical transportation solutions” and as the definitive family 4×4. If one were to look at Exhibit 8 as provided in the study, it shows as part of the conjoint analysis that out of the highest SUV intenders, who preferred Quality and Safety, with Mean importance ratings of 4.5 and 4.3, were most important to people with children, with ratings of 4.5 and 4.4. Of the least importance to anyone was Status/Image, at 2.9. The importance of status and image had waned from the 80s, and the 90s now stressed on experiences and pragmatism. In line with this we see that from a mean importance of 4.1 for Off-road capability, of which was valued pretty evenly by all concerned.
And so it is with this target in mind that positioning should concentrate on the family unit. The positioning would benefit from the fact that the Discovery came with alternative body configurations, which made it easily adaptable. As the case points out, the five-door version would be made available to the family sect. LRNA would have to emphasize the car-like feel of their SUV, with its refined interiors as compared to the competition.
I would suggest an approach that targets the families, or adults about to start families, with an emphasis on the mix of quality and safety while stressing the Discoverys off-road capabilities. As suggested in the study, there was an overall budget within the $20-30 million dollar range. I would recommend a higher level of advertising spending to emphasize not only the Discovery, but to also drive home the fact that the corporate identity was no longer simply Range Rover, but Land Rover North America, under which there were several sub-brands. There would be a need to shift concentration from general business magazines to more family specific publications as well as television. Perhaps a break down of 30-20-20 for the Discovery, Range Rover and Land Rover Defender respectively, with the remaining 30 percent going towards greater brand awareness. A re-evaluated corporate sponsorship and PR program would have to be implemented. I have suggested a break down in Exhibit 2.
I would recommend the use of a company website, and would suggest building upon the brand culture that had already existed internationally with Land Rover range of products, encouraging social gatherings and social clubs. This may take a little investment on LRNAs part, but I believe it would be a relatively small investment in exchange for continual returns and generally cost free publicity. As part of the experienced marketing, I would implement the new retail strategy of Land Rover centers, as this will ultimately add to the corporate culture and identity as of the greatest quality.
3) Basis for Recommendation:
The Discovery would be introduced with a price tag of $29,350, which would put it above the most expensive version of the Market leader in SUVs, Jeeps Grand Cherokee, which sold at $21,000. However, LRNA must be careful not to introduce a product that is a) under-priced in regards to their corporate image, or b) that is seen as a striped down version of their masthead vehicles, the Range Rover and Land Rover Defender.
An appropriate program would have to be introduced to justify this price discrepancy. An effective way to do this would be to emphasize the areas in which the Discovery excelled. Looking at the Consumer Perceptions of Major Brands, it is evident that the Discovery excelled in the categories of Quality, Safety and Off-Road capabilities with mean ratings of 7.4, 7.6 or 7.4. The Ford explorer came within 0 to 3 points for each of these categories.
There are two other possible positions that could have been adopted, one which would have positioned the Discovery as a more affordable Range Rover, and the other which would have marketed the discovery as the evolved Land Rover to 4×4 enthusiasts. I would not choose either. Firstly, the idea of a more reasonably priced Range Rover would perhaps cannibalize Range Rover sales. Secondly, Land Rover already experimented with a reasonably priced Range Rover, called the Hunter, and that was a resounding failure, being pulled shortly after inception.
As far as the positioning as the evolved 4×4 go, I would not recommend it because the Discoverys strengths