Strategic Brand Positioning in a recession for Opel


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Strategic Brand Positioning in a recession for Opel

  1. 1. An Investigation of Strategic Brand Positioning during a recession<br />a Case Study of Opel<br />
  2. 2. Impacts of economic recession<br />Auto Industry one of the hardest hit<br />In order to remain competitive brands must adapt<br />Introduction<br />
  3. 3. Analyse and make recommendations for Opel’s marketing activities<br />Develop a marketing mix to foster growth in the current economic crisis<br />Aim of the report<br />
  4. 4. Wholly owned subsidiary of GM from 1929<br />GMSA is GM’s largest market in Africa<br />5 manufacturing facilities in Africa<br />5,000 employees<br />Produce Opel and Chevrolet, Isuzu and the HUMMER H3<br />Market Chevrolet, Opel, Isuzu and the premium brands HUMMER SAAB and Cadillac<br />Background of Opel<br />
  5. 5. Filed for bankruptcy in 2008 in the US<br />GMSA however is not affected<br />No longer produce the Hummer SUV<br />GM Europe sold its Opel/Vauxhall arm to Magna and Sberbank<br />Magna plans to inject €500 - 700 million into Opel and cut 10,000 jobs in Europe<br />Background of Opel<br />
  6. 6. External Audit<br />
  7. 7. Political<br />South African politics remained stable throughout recession<br />Infighting within ANC formed COPE<br />Prudent banking legislation shielded South Africa<br />
  8. 8. Despite Apartheid, South Africa has a modern infra-structure<br />Not without problems<br />Unreliable Trains<br />Expensive Ports<br />2008 Electricity Crisis<br />Transnet and Eskom development<br />2010 Injecting capital in development<br />Infrastructure<br />
  9. 9. Diverse population<br />Main problems:<br />Aids<br />Unemployment<br />Rich vs. Poor gap<br />Social democratic<br />
  10. 10. During recession South Africa fared relatively well compared to US<br />Still had adverse effects<br />GDP retracted 1.4% in 2008 (Fourth Quarter)<br />GDP retracted 6.4% in 2009 (First Quarter) <br />Remains financial hub of Sun-Saharan Africa<br />Economic<br />
  11. 11. Global recession more exacerbated<br />USA hardest hit<br />6.9 Million Jobs lost during recession<br />216,000 jobs lost in August 2009<br />Exports have fallen<br />Foreign Investment Decreased<br />Less Demand for SA minerals<br />International<br />
  12. 12. industry analysis<br />Global and Local industries hit<br />Consumers do not want to enter into credit<br />Vehicle Sales in SA decreasing<br />Certain un-established Brands have left the industry<br />
  13. 13. Customer Analysis<br />Perfect Competition<br />Identified Segments included<br />Budget Consumers<br />Passenger Vehicles<br />Luxury Vehicles<br />Commercial Vehicles<br />
  14. 14. Segment Analysis vs. Competitive position matrix<br />
  15. 15. Porters 5 Forces of Competitive Rivalry<br />Bargaining Power of Suppliers<br />Threat of Substitutes<br />Degree of Rivalry<br />Bargaining Power of Buyers<br />Threat of new Market Entrants<br />Competitor analysis<br />
  16. 16. Brand Audit<br />
  17. 17. Brand History<br />
  18. 18. Product Portfolio<br />
  19. 19. Versatile use of space<br />Flexible Interior<br />Responsive Driving Dynamics<br />Contemporary styling<br />Product Related Attributes<br />
  20. 20. Positioned as “the German pedigree at the right price”<br />Determined to bring the German technology to the broadest, most diverse range of customers<br />Brand Positioning<br />
  21. 21. Prices at mid-range levels<br />Dealership network<br />Aggressive TV advertising<br />Legal dispute with VW in 2003<br />Online advertising with MSN Autos<br />Changes in brand image<br />1990: Joy to Technology<br />1994: We Understood<br />2002: Fresh Thinking-Better Cars & Discover Opel<br />2009: &quot;WirlebenAutos“ (We Live Cars)<br />Price, Place, Promotion<br />
  22. 22. Customer Knowledge<br />
  23. 23. Brand name: Opel<br />Brand logo<br />A silver flash inside a ring as a subtle reminder of the speed and power of the German-made cars<br />The ring also represents the letter “O,” the first letter of the brand name<br />Clear communicator of openness, freedom and connectivity<br />Functional benefits<br />Corporate social responsibility<br />Sources of Brand Equity<br />
  24. 24. Customer Based Brand Equity Model<br />
  25. 25. German Heritage<br />High Brand Awareness<br />International Market<br />Favorable brand logo<br />Competitive Pricing<br />Customer awareness of Brand<br />Environmental track record<br />Strengths<br />
  26. 26. Too many changes in brand positioning<br />No clear brand message to consumers<br />Target market is still limited in demographics<br />Limited product portfolio <br />High variable costs<br />Lack of brand engagement among consumers<br />Weaknesses<br />
  27. 27. Stable political atmosphere<br />Revamping of infrastructure<br />There are still many untapped consumer segments<br />Opportunity<br />
  28. 28. Slow economic recovery<br />Exports affected<br />Intense competition from low-cost car makers<br />Banks not willing to loan capital<br />Threats<br />
  29. 29. Recommended Strategies<br />
  30. 30. Limited Portfolio<br />Low-cost and luxury segments<br />Competition from GWM and Tata<br />Utilise German brand identity<br />Economies of scale<br />Additional market share<br />Target market over segmented<br />Product<br />
  31. 31. Elastic demand curve<br />Disposable income ↓, demand ↓<br />Reducing prices  brand image affected<br />Having value-added features and services<br />Magna’s injection used to compensate for high labour costs<br />Price<br />
  32. 32. Forth party logistics (4PL)  efficiency <br />Value engineering<br />Domino effect  increased profits or reduced costs<br />Port demurrage charges are still high<br />Effective stock management<br />Making use of infrastructure from 2010 Soccer World Cup preparation<br />Place<br />
  33. 33. Promotion<br />Change of brand mantra 5 times in 20 years<br />Confusion and no clear brand message<br />Weaken brand image<br />Little brand engagement and sense of community<br />“Opel Owners Club” to increase brand resonance<br />Promotions focus on long term brand building<br />Online media<br />
  34. 34. End of Presentation<br />Questions or Comments<br />