Land Rover North America, Inc.
Essay Preview: Land Rover North America, Inc.
Report this essay
BRANDING:LAND ROVER NORTH AMERICA, INC.
Statement of the Problems
Taking into account the role of Discovery vis-а-vis other models in the Land Rover line, the brands strengths and weaknesses versus formidable U.S. competitors, and potential differences in target audience perceptions of brand and category equity in the United States versus the United Kingdom, which of the three following positioning options should be introduced for the new $30,000 Land Rover Discovery:


The Definitive Family 4X4

The Evolved Land Rover or

The More Affordable Range Rover
How should Land Rover North America, Inc. (LRNA) allocate its marketing funds across LRNA brands?
What should the elements of the marketing mix be recognizing the positioning decision that is recommended?
What should be recommended for the companys proposed retailing strategy and experience marketing initiatives?
How can LRNA successfully and profitably introduce the Discovery into the U.S. and meet or exceed its objectives?
Situation Analysis
U.S. sales of cars and light trucks totaled 15298538 units in 1993 with SUVs comprising 8 percent of the total or 1,402,558 units. Cars comprised 56 percent of the market in 1993 or 8,517,859 units with light trucks at 36 percent of the total or 5,378,121 units. SUVs are contained within the light truck category and are categorized into three categories, mini, compact and full-size, with the compact category being the largest group at 1,040,704 units or 74.2 percent of the total in 1993.

Trends
The industry as a whole is growing by 9.0 percent from 14050855 units in 1992 to 15298538 units in 1993. This growth is primarily due to the 15.5 percent growth of light trucks from 4,655,043 units in 1992 to 5,378,121 units in 1993 and within this category the 18.6 percent growth of SUVs from 1,182,699 units in 1992 to 1,402,558 units in 1993.

Technological Changes
Emissions, Fuel efficiency, Alternative power sources, Safety, Navigation devices, Legal/Regulatory Issues, Emissions, Fuel economy standards, Safety such as bumpers, seat belts and airbags, Brand and trademark development protection, Tariffs and taxes, Content of ads and commercials.

Competitive Analysis
The top three competitors, Jeep, Ford, and Chevrolet, comprise 73.6 percent of the total SUV market:
Jeep, with its two Cherokee and Grand Cherokee vehicles, lead the compact SUV category sales at 338,007 units or 32.5 percent of the total. After adding in the Jeep Wrangler, Jeep unit sales in 1993 totaled 403,655 units or 28.8 percent of the total SUV market. The Jeep Grand Cherokee had the highest ad recall of 46 percent and an overall opinion at 80 percent, tied with the Ford Explorer, when compared to major SUV brands. In 1994 Jeep spent $105.3 million in advertising with a $67.8 million advertising budget supporting the Grand Cherokee and $37.5 million behind the Cherokee.

Fords most popular SUV was the Explorer with sales in 1993 of 302,201 units, which comprised a 29.0 percent market share of the compact SUV category. With the addition of the Ford Bronco in the full-size category with sales of 29,729 units, Ford sales of all SUVs totaled 331,930 for a 23.7 percent market share of the SUV category. The Ford Explorer had the highest brand awareness at 92 percent, overall opinion tied with the Jeep Grand Cherokee at 80 percent, and the highest likelihood to purchase at 81 percent when compared to major SUV brands. The advertising budget for the Ford Explorer was $24 million in 1994 backed by a $1 billion corporate advertising campaign.

Chevrolet SUV sales in 1993 totaled 295,740 for a 21.1 percent market share of the SUV category with the Chevrolet S-10 Blazer in the compact category and Chevrolet Suburban, Tahoe and Blazer in the full-size category. The advertising for Chevrolets SUV brands totaled $71 million.

SUV Manufacturer 1993
Compact SUV Unit Share 1993
Total SUV Unit Share 1994
Advertising Spending in Million $
32.50%
28.80%
105.3
29.00%
23.70%
$24+$1 billion corporate
Chevrolet
16.10%
21.10%
Other competitors in the mini category included the Geo Tracker, Suzuki Sidekick and Samurai and Isuzu Amigo. Land Rover competed in all three SUV categories with the Defender 90 in the mini category, Discovery in the compact category and Range Rover in the full-size category. Total Land Rover sales of 4,906 units in 1993 equated to a 0.35 percent market share in the SUV market. By 1994, over 30 SUV models were available with prices ranging from $10,000 to $60,000. All Japanese manufacturers claimed less than a 20 percent share.

Customer Analysis
People pay thousands of extra dollars for 4WD capability but most SUVs sold contain 2WD with their owners imagining a sort of “4WD halo” that benefits all vehicles in the category. The majority of SUVs are used as sedans for family transportation, not as off road adventure machines.

Regarding consumer perceptions of major SUV brands, the Land Rover Discovery shared the highest score on quality of 7.4 with the Ford Explorer and Toyota 4Runner. Additionally, the Discovery enjoyed the highest rating of 7.6 on safety. Having the highest score on the two most important factors in the SUV purchase helped position the Discovery very strongly despite its lack of awareness.

The Discovery also enjoyed the highest rating of 7.4 on off-road capability, but received the lowest rating on economics compared to all competitors.
Buyers are wealthy professionals (median income $63K versus $31K on average with professionals at 38% versus 13% on average).
As the market grows, the buyer profile is changing. Families, arguably the largest potential growth segment, want different things from the SUV, as judged by an index of attribute importance versus SUV segment averages.

Data suggested that the 4X4 leisure sector was comprised of the following two user segments:
The first

Get Your Essay

Cite this page

Percent Growth Of Light Trucks And Category Equity. (July 6, 2021). Retrieved from https://www.freeessays.education/percent-growth-of-light-trucks-and-category-equity-essay/