Bentley is a famous luxury brand in the automobile market, where the car designed and manufactured are breathtaking, made for extreme speed and performance, and yet handcrafted with distinctive design for rich people. The car manufacturer is of world class top quality, but the volatile and gloomy economic outlook around the world is hurting the firm’s performance. Prior to the economic crisis in US, which later spread to other corners of the world, the company is making good progress and growth since 1998 (after taking over by Volkswagen). A comprehensive marketing plan is required to ensure the company spring back to profitability and to growth to greater height. In the section below, a formulation of meaningful marketing plan will be performed. Firstly, a review of the business mission for Bentley will be performed. Then a survey of the situation, particularly on the automotive industry will be performed. Sound and practical theoretical framework (i.e., PESTLE analysis, SWOT framework, and internal resources audit) will be used for both internal and external environment analysis. After reviewing the business and industry landscape, a short term marketing objectives, for the next three years will be formulated. Then, a series of marketing strategies will be suggested to achieve these newly formulated short term marketing objectives. Not only that, a series of actions for collecting feedback, control and evaluation purposes in following up the progress of these marketing strategies will be proposed as well. The writing is concluded by addressing the key focus of management and employees to bring the company to greater heights.
The main strategic mission of a firm is highly important. It will provide a strategic direction for a firm and its employees. In theory and practice, these objectives need to be kept firmly in mind, and the strategies and action plans drawn up need to be broadly consistent with these main strategic missions. Any effective marketing plan must include a precise copy of the strategic objectives and the organization mission statement.
The mission of Bentley is ‘to build a good car, a fast car, the best in class’. To be specific, the automobile company is committed for delivering definitive and distinctive car performance and design, and is passionate in developing and crafting the world’s most desirable high performance cars. Such a mission is well translated and communicated from the unmistakable characteristics of all Bentley products – which are capable and aim to deliver a handcrafted luxury, unique design, breathtaking power and performance, to ensure a refined and exhilarating driving experience.
A situational analysis is critical before any useful and practical marketing plan can be carried out. The situational analysis should encompass both external and internal environment analysis. Often, the external environment analysis refer to the business and economic environment as well as the industry structure where the business operating in. The internal environment analysis however often focus on the company’s operational efficiency, weaknesses, strengths, key skills, core competencies, resources available, and ability to execute. Often, the situational analysis is similar to a comprehensive marketing audit.
The situational analysis of the company will be analyzed using three theoretical and practical frameworks. The situational analysis will be performed using the PESTLE framework, the SWOT framework and the Internal Resource Audit methodology. To be more specific, PESTLE analysis will enable us to understand more on the macro environment factors and scenario. SWOT analysis however enables us to understand both the internal and external factor and to derive a proper marketing plan which enables organizational fit between the firm and environment for competitive advantage. The Internal Resources Analysis however, enables the firm to understand the current condition of the firm itself.
PESTEL model is the selected tool for analyzing macro environment. It is widely used and it is a popular concept in strategic and competitive analysis. Perhaps the concept of environmental analysis was already understood since the first merchant. It is commonly agreed that the concept of PESTEL comes from PEST Analysis Model; it is a method of analyzing the macro environment by strategists, which involves all factors that influenced in the industry and organization. Basically, the PEST framework encompasses four factors as follow: Political, Economic, Social and Technological. PESTEL Framework even goes even further to consider the Environmental and Legal factors. In the section below, all the six factors will be discussed, with the analysis concentrate on Bentley possible expansion untapped market place.
Political. The political factors around the world is dynamic, but all these have less impacts to Bentley, as the car industry is mostly characterized by a mature industry, with no new or impactful rules and regulations imposed upon the car manufacturer or dealers. However, the recent political stance in tightening fiscal policies in many countries around the world, which include countries in the Eurozone, US, UK, China and many others are posing great challenge to the company. Traditionally, the tightening of fiscal policy means that the government is spending less, and the growth of economy will be slowed significantly. This is negative news for Bentley, as the company is dealing with luxury cars, which is a car segment highly susceptible to volatility of economic condition.
Economic. Economic factors are always the main factor affecting the automotive industry, as evidences by the cyclical nature of the car sales volume around the world. For Bentley, the situation is even gloomier, as the company is selling top and highest quality class of automobiles, which the sales volatility is of the highest in the industry. Thus, economic factors are most influential categories in PESTLE Analysis to affect the firm. The main pressing issues are currently the sovereign debt crises within the eurozone. The stability of Euro currency is also critically essential and the fall of Euro will destabilize the financial system in many Europe countries. Besides, as mentioned before, as many of the countries around the Europe region as well as the world are beginning to tightening the fiscal policies as a trendy measure, the future economy outlook for the world is gloomy. Not only that, other economic factors negatively affecting the firm is the potential slowdown of China’s GDP growth will also drag the economic growth of the world
Social. The social changes in the recent years are the emergent of knowledge era from the information era. People are now smarter consumers, and are sensitive to the trends and quality offered by a product. However, the business environment is also getting very competitive, due to the recent globalization process, which essentially leveled the business competitive landscape significantly (while at the same time offer much opportunities for well-established firms). From the automotive industry perspective, the product life cycles of cars are getting shorter. The consumer tastes are changing fast, the mass customization trends and demands by the customers are rising, and the concern of environmental friendly products is on the rise as well.
Technological. Many incremental technological changes can be found in the automotive industry. In the technological frontier for automotive industry, hybrid cars for petrol saving purposes and environmental conscious car design are the recent hot cakes in the market place. The industry is currently not only focus on quality and comfort, but is also focusing on the design for the sustainability of larger ecosystem around the world.
The SWOT analysis to be performed will outline both the external and internal environment facing the company right now. Firstly, the opportunities and threats in the macro environment will be discussed. Then, the internal strengths and weaknesses will be outlined.
Threats. Many threats can be found around the worlds. Firstly, the automotive industry is becoming highly competitive, and the profit margin is deteriorating seriously. Secondly, the economic outlook is negative, and this is bad for luxury car segment. Thirdly, many competitors are trying to tap into the luxury car market. Not only is that, the consistently demanding consumers on lower price with higher quality products negative for the firm.
Opportunities. Many opportunities can be found. For example, the rise of affluent society in China is creating new market for the company (although to tap into these market may not be easy and comes with risks). Besides, the changes in globalization process will also enable to company to penetrate other market easier.
Strengths. The main strength of the firm is its brand in the luxury car market. The car reputation is the key asset of the firm, where consumers widely believe that the end products are design to deliver a handcrafted luxury, unique design, breathtaking power and performance, to ensure a refined and exhilarating driving experience.
Weaknesses. The company is suffering from volatile financial performance. Besides, the company does not have the necessary economic of scale, if the competitive forces in the industry persist. Not only that, the key value proposition of the firm is limiting. To serve only the very small fraction of wealthy market does not seems a sustainable and profitable long term strategy.
It cannot be denied that all firms have strengths and weaknesses in the various functional areas of the organization. An internal resources audit will gather and investigate a particular firm’s various departments and functional areas, such as management, marketing, finance, operations, research and development, and applications of information technology. A review of these various departments will enable us to understand the critical success factors for a firm. Apart from that, from such an analysis, the strategic management process can identify potential areas of improvement in terms of better coordination and mutually supportive functional areas. A well-managed coordination between functional areas is highly important to ensure internal competencies, efficiencies and successful delivery of value to the marketplace. The various dimensions of internal audits will be presented as follow.
Management. The management of the firm is committed and experience. Many of the staffs are working in the companies for a long period, and stay loyal to the company. It is notable that the company management is dedicated in crafting perfect and best cars in the world for consumers.
Marketing. Currently, the marketing campaign delivered by the company is satisfactory, in the sense that the promotional materials, the product brochures, the decoration of sales room, the design of website and the branding of the company. However, a huge marketing dilemma exists in the company. The company mission is to make the finest cars in the world, and thus the market of the company is very small. However, it is not reasonable for the company to abandon its reputable high class branding and reputation, to join the middle-end automotive market, as this wills hurt the corporate images seriously. A truly innovative solution, by thinking out of the box, or to utilize the Blue Ocean Strategy to tap into untapped market is necessary. However, this is a daunting task, as the design of the mission of the company is limiting, and precise.
Finance. The financial status of the firm is a volatile one. Perhaps the most positive point is that the company has some financial back up from Volkswagen, but the issue is that Volkswagen itself is also suffering from unsatisfactory financial situations. Due to the economic crisis in 2008, the company is losing money and had to cut off its overhead costs. The company has limited and scarce financial resources, which would be another burden and challenges to growth the company.
Operations. The operation of the company is an efficient one, and handcraft design ensure that the car company can manufacturer among the finest car in the world. Apparently, the company has lesser issue from it operation side. However, when the firm is put into the larger picture for comparative purposes, if the company is compared to many other car manufacturers, the company is losing out the economies of scale. Worst, the efficiency of the company is nothing if compared to other strong and reputable manufacturer such as Honda and Toyota in Japan, or Fort and General Motors in US. All these factors may be unavoidable since the company is competing in a niche market, but they are nonetheless negative factors for the company.
Research and development. Similarly, when the company is compared to other strong firms such as Toyota and Honda, the research and development activities in the company is losing out, judging from the amount of money being spent on R&D activities by the various car manufacturers. For example, the Japanese car manufacturers are spending a lot of resources in researching the next generation cars – which is environmentally friendly and fuel efficient. Although many of the cars sold by Toyota are not meant to compete with Bentley, the launch of Lexus to tap into the upper market in car industry is a very negative event for Bentley.
Formulation of marketing objectives is the central step in the marketing planning process. The marketing objectives to be derived in this section are primarily on the subject of what is to be done to achieve the strategic objectives as mentioned above. It is the detail marketing aims or goals to be pursue in launching the marketing plan. Both marketing objectives and the strategic objectives set should be internally consistent and mutually supportive for high probability of success in the execution phase.
There are several important marketing objectives to be followed by the firm, firstly for sustainability development of the company, and secondly to growth the company in terms of profitability and market share around the world. To state the marketing objectives in clearer form: the firm should tap into larger market by delivering the exhilarating driving and car possession experience to the upper middle class. In return, the company will be able to growth, capture larger market size and to enhance its profitability (both from the magnitude, sustainability and stability dimension).
In contrast to marketing objectives outlined in the section above, marketing strategy is dealing with how to achieve the marketing objectives set previously. The formulation of marketing strategy will be employing the popular but practical framework of marketing mix, which is more widely recognized as the 4 P of marketing. The four P are as follow: products are referring to the benefits to be delivered to the customers; and price is about how the product is priced to attract the right and appropriate customer base; place is referring to the distribution channel and the value delivery process; and lastly, promotion is about how the customers can be reached and how the value proposition of a company is to be communicated to the prospects.
After reviewing the analysis from various theoretical frameworks, a series of marketing strategies can be outlined. The section presented below will be a synthesis of all the ideas from the discussion above. And various strategies will be presented spontaneously without a guided framework, to enable creativity and innovation to flourish in the marketing plan.
Product positioning. The products should be position as noble as possible. It is unreasonable to drop the luxury and high-class image of the brand. However, the market segment in which the product is targeting should be enlarged. The company should not only serve the wealthiest clients, but also slowly move to serve the higher-end middle class. This group of customers is large in size. Many of the customers aspire to possess a car, but the pricing is hindering them from doing so. Thus, to enable them to possess a luxury car, the company should employ innovative strategy such as to sell the luxury car for some customers for a short period of time, so that the customers can possess the car and experience the exhilarating experience for the short period. Besides, the company can also engage in selling second hand car to the higher-end of middle class market. As the selling price will be lower, more people will be able to afford the car. However, this will not hurt the corporate information, as it is reasonable and acceptable for people to understand that the lower selling price is due to the second-hand nature of the car. If the second-hand car is repaired or repaint by the company (and yet the selling price is reasonable), the sales volume can be encouraging as well.
Enter into car rental market. Many people may not have the financial resources to own a luxury car, but they definitely desire to possess the car temporarily for important life function, such as during their wedding or honeymoon. Such a social desire is particularly obvious in countries such as China, where wedding is an important event for both families. Besides, many businessmen may prefer to rent the car for a day or two, to enhance the corporate images in entertaining customers, bringing the customer around, or just to arrive at the client place for negotiation. This is a relatively untapped market that Bentley should focus on.
Word-of-mouth marketing. As marketing events such a promotion, advertising is no longer effective due to the built-up resistance among consumers, the company should employ different strategies to enhance the product brand name. For this, the company can employ direct sales executive, the spiritual leader in a company or other influential people to promote the company product.
It is critical to follow up and monitor the progress of the marketing plan. Two critical points are to be noted here. Firstly, it is crucial to ensure that the key performance indicators or the measures collected for feedback purposes are meaningful and relevant. Secondly, the constant research and marketing survey on the environmental and situational factors should be performed, ands relevant changes should be made to the marketing plan if the business environment changes.
The main problem for Bentley is due to the fact that the company mission is to produce the best cars for the market. Such a mission is limiting in some sense. After years of concentrating on the mission, the company is slowly losing out to other mass market manufacturer, in terms of financial power, research and development, economies of scale and the occupancy of market share. However, it cannot be denied that the reputation of the firm as the best in class manufacturer is widely known across the world. It is critically important to leverage on what the firm has got currently and to adapt accordingly to the changes in environment. Besides, it is also make no sense to continuously engage in increasingly detrimental competitive forces from all corners in the car industry.
The lowest risk and yet profitable marketing strategies for the firm is to maintain is branding, as the reputation of the car is still the core competencies of the firm. To bring the company to greater heights, the company must create a new market space, while at the similar time, to escape from the vicious spiral of competitive cycle. The company should transform itself, from purely delivering driving experience to enhancing human experiences for the wide range of population. To only positioning the luxury car as some sort of driving experience is insufficient, and dangerous, and the car should be position as a noble and prestige class of symbols for people aspire for achievement and self-actualization. It is through tapping into the mass market, on an indirect manner, that can enhance the company profitability in the long term.
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