Strategic Brand Positioning in a recession for Opel

An Investigation of Strategic Brand Positioning during a recession
a Case Study of Opel

Impacts of economic recession
Auto Industry one of the hardest hit
In order to remain competitive brands must adapt
Introduction

Analyse and make recommendations for Opel’s marketing activities
Develop a marketing mix to foster growth in the current economic crisis
Aim of the report

Wholly owned subsidiary of GM from 1929
GMSA is GM’s largest market in Africa
5 manufacturing facilities in Africa
5,000 employees
Produce Opel and Chevrolet, Isuzu and the HUMMER H3
Market Chevrolet, Opel, Isuzu and the premium brands HUMMER SAAB and Cadillac
Background of Opel

Filed for bankruptcy in 2008 in the US
GMSA however is not affected
No longer produce the Hummer SUV
GM Europe sold its Opel/Vauxhall arm to Magna and Sberbank
Magna plans to inject €500 - 700 million into Opel and cut 10,000 jobs in Europe
Background of Opel

External Audit

Political
South African politics remained stable throughout recession
Infighting within ANC formed COPE
Prudent banking legislation shielded South Africa

Despite Apartheid, South Africa has a modern infra-structure
Not without problems
Unreliable Trains
Expensive Ports
2008 Electricity Crisis
Transnet and Eskom development
2010 Injecting capital in development
Infrastructure

Diverse population
Main problems:
Aids
Unemployment
Rich vs. Poor gap
Social democratic

During recession South Africa fared relatively well compared to US
Still had adverse effects
GDP retracted 1.4% in 2008 (Fourth Quarter)
GDP retracted 6.4% in 2009 (First Quarter)
Remains financial hub of Sun-Saharan Africa
Economic

Global recession more exacerbated
USA hardest hit
6.9 Million Jobs lost during recession
216,000 jobs lost in August 2009
Exports have fallen
Foreign Investment Decreased
Less Demand for SA minerals
International

industry analysis
Global and Local industries hit
Consumers do not want to enter into credit
Vehicle Sales in SA decreasing
Certain un-established Brands have left the industry

Customer Analysis
Perfect Competition
Identified Segments included
Budget Consumers
Passenger Vehicles
Luxury Vehicles
Commercial Vehicles

Segment Analysis vs. Competitive position matrix

Porters 5 Forces of Competitive Rivalry
Bargaining Power of Suppliers
Threat of Substitutes
Degree of Rivalry
Bargaining Power of Buyers
Threat of new Market Entrants
Competitor analysis

Brand Audit

Brand History

Product Portfolio

Versatile use of space
Flexible Interior
Responsive Driving Dynamics
Contemporary styling
Product Related Attributes

Positioned as “the German pedigree at the right price”
Determined to bring the German technology to the broadest, most diverse range of customers
Brand Positioning

Prices at mid-range levels
Dealership network
Aggressive TV advertising
Legal dispute with VW in 2003
Online advertising with MSN Autos
Changes in brand image
1990: Joy to Technology
1994: We Understood
2002: Fresh Thinking-Better Cars & Discover Opel
2009: "WirlebenAutos“ (We Live Cars)
Price, Place, Promotion

Customer Knowledge

Brand name: Opel
Brand logo
A silver flash inside a ring as a subtle reminder of the speed and power of the German-made cars
The ring also represents the letter “O,” the first letter of the brand name
Clear communicator of openness, freedom and connectivity
Functional benefits
Corporate social responsibility
Sources of Brand Equity

Customer Based Brand Equity Model

German Heritage
High Brand Awareness
International Market
Favorable brand logo
Competitive Pricing
Customer awareness of Brand
Environmental track record
Strengths

Too many changes in brand positioning
No clear brand message to consumers
Target market is still limited in demographics
Limited product portfolio
High variable costs
Lack of brand engagement among consumers
Weaknesses

Stable political atmosphere
Revamping of infrastructure
There are still many untapped consumer segments
Opportunity

Slow economic recovery
Exports affected
Intense competition from low-cost car makers
Banks not willing to loan capital
Threats

Recommended Strategies

Limited Portfolio
Low-cost and luxury segments
Competition from GWM and Tata
Utilise German brand identity
Economies of scale
Additional market share
Target market over segmented
Product

Elastic demand curve
Disposable income ↓, demand ↓
Reducing prices  brand image affected
Having value-added features and services
Magna’s injection used to compensate for high labour costs
Price

Forth party logistics (4PL)  efficiency
Value engineering
Domino effect  increased profits or reduced costs
Port demurrage charges are still high
Effective stock management
Making use of infrastructure from 2010 Soccer World Cup preparation
Place

Promotion
Change of brand mantra 5 times in 20 years
Confusion and no clear brand message
Weaken brand image
Little brand engagement and sense of community
“Opel Owners Club” to increase brand resonance
Promotions focus on long term brand building
Online media

End of Presentation
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