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Land Rover's Strategy to Conquer the US Market
- 1. A Case Study on Land Rover North America, Inc. (HBR Case: 596036) Group No. 07|Breety|Harshul|Karthik|Preetika|Rohit|Saurabh
- 2. Introduction- The Land Rover Story Land Rover Introduced in 1948 as a 4WD in UK. Land Rover defender introduced in US in 1992 Range Rover Introduced in 1970 in UK. Operations in US commenced in 1986. Discovery Launched in 1989 in UK. Discovery introduced in US in 1994. • Land rover emerged as a cult brand in the UK and owners shared a consumer lifestyle around the brand • Brand Essence: Individualism, authenticity, freedom, adventure, guts, and supremacy
- 3. Entering US Market 1985 worldwide Market Review: The U.S SUV segment was considered ‘HOT’ “You can’t be a major Player if you don’t compete in the world’s largest auto market” Range Rover of North America INC- 1986 Challenges: 1.New Market 2.Positioning How to create a space for Land Rover offerings in a competitive market very different from the U. K Market? Target: LRNA #1 Land Rover Market Worldwide
- 4. Development of Product Category “Who in their right mind would spend over $50,000 for that…for a Jeep? That’s nuts! I would rather buy a Mercedes for that money!” “U.S. buyers were not as sophisticated or knowledgeable. Their reception of the vehicle had to be shaped” Pitching Discovery as a definitive family 4x4 Pitching Range Rover as a rugged 4x4+luxury BOLD Different Defying Tradition
- 5. Development of Product Category
- 6. Brand Recall / Evoked Set AWARENESS SET EVOKED SET CONSIDERATION SET SELECTION SET
- 7. Personalities LAND ROVER: Detached (Defy the norms; Follow your own path)
- 8. Perception Quality Safety Perform ance Offroad capabili ty Aestheti cs Comfort Econom ics Status All SUV Makes 6.7 6.8 6.5 6.7 6.8 6.7 5.8 5.9 LR Discovery 7.4 7.6 6.4 7.4 6.5 6.9 4.9 6.9 4 4.5 5 5.5 6 6.5 7 7.5 8 Attributerating LR Discovery Vs All SUV Makes Model Overall Opinion Buying Consideration Excellent (%) Good (%) Definitely (%) Probably (%) Range Rover 32 38 8 16 LR Discovery 18 38 15 12 Range Rover Hunter LRNA misinterpreted the consumer responses and the model bombed in the market! The Range Rover 4.0 SE First vehicle designed from scratch for the US consumer! Completely re-designed after 25 years with more than 98% parts being changed! ` More Affordable Range Rover
- 9. Quality Safety Performan ce Offroad capability Aesthetics Comfort Economics Status LR Range Rover 7.3 7.4 6.5 7.3 6.4 6.8 4.7 7 LR Discovery 7.4 7.6 6.4 7.4 6.5 6.9 4.9 6.9 4 4.5 5 5.5 6 6.5 7 7.5 8 Attributerating LAND ROVER Quality Safety Perform ance Offroad capabili ty Aesthet ics Comfor t Econom ics Status Grand Cherokee 7.2 7.4 7.2 7.2 7.5 7.5 5.6 7.4 Cherokee 7.1 7.3 6.9 7.1 7.2 7.3 6 6.4 Wrangler 6.4 6.5 6 6.8 6.8 5.7 5.8 4.6 4 4.5 5 5.5 6 6.5 7 7.5 8 AxisTitle JEEP Range Rover sales decreased significantly after Discovery’s launch LRNA: Losses can be attributed to competition not cannibalization. Research says only 5% of Discovery sales as Range Rover replacement. Perception
- 10. Perception - MOST IMPORTANT REASON FOR SELECTION DEFENDER Fun To Ride Manufacturer's Reputation
- 11. Perception - MOST IMPORTANT REASON FOR SELECTION DISCOVERY Safety Features Technological Innovations
- 12. Perception - MOST IMPORTANT REASON FOR SELECTION RANGE ROVER 4WD Availability Previous Experience 93% first time buyers would definitely recommend the brand to others 84% of the buyers claimed they would by a Range Rover again
- 13. Motivation – Customer Engagement Car buying was described by the customers as – frustrating, painful, insulting, & belittling. “We would rather go to the dentist than buy a new car!” Land Rover Centre Model: Offers a whole 4WD experience rather than purchasing only a car from a retailer New and Used Vehicles Branched Merchandis e Off-Road Equipment Adventure Travels Car Accessories
- 14. Analysis Summary • Addressed the gap between the 4X4 SUVs and performance luxury brand, hence difficulty in positioning – created awareness of a new product category. • The ads were designed to connect the LR brand image with US customers. • Understood customer’s perception of its vehicles and created ads that stimulated customer’s interests. • To improve customer engagement, LRNA was contemplating if it should open Land Rover centre.
- 15. Attitude Building Quality Safety Performance Off road capability Aesthetics Comfort Economics Status Attitude index Total all makes 6.7 6.8 6.5 6.7 6.8 6.7 5.8 5.9 6.5 Chevy Blazer Full size 6.7 7.1 6.7 7.2 6.8 7.1 5.5 5.9 6.7 Chevy Blazer S-10 6.7 6.9 6.7 6.8 7 7 5.9 5.9 6.6 Ford Bronco 6.6 6.9 6.4 6.9 6.5 6.7 5.6 5.4 6.4 Ford Explorer 7.4 7.4 7.1 7.1 7.5 7.6 6.1 6.8 7.1 GMC Jimmy 6.5 6.8 6.5 6.7 6.8 6.7 5.8 5.7 6.5 GMC Yukon 6.4 6.7 6.2 6.8 6.5 6.6 5.3 5.9 6.3 Honda Passport 7.1 6.7 6.6 6.3 7.1 6.8 5.9 6.3 6.6 Isuzu Rodeo 6.4 6.5 6.1 6 6.7 6.3 5.9 5.2 6.2 Isuzu Trooper 6.3 6.4 6.1 6.1 6.2 6.5 5.8 5.3 6.1 Jeep Wrangler 6.4 6.5 6 6.8 6.8 5.7 5.8 4.6 6.1 Jeep Cherokee 7.1 7.3 6.9 7.1 7.2 7.3 6 6.4 6.9 Jeep Grand Cherokee 7.2 7.4 7.2 7.2 7.5 7.5 5.6 7.4 7.1 Land Rover Discovery 7.4 7.6 6.4 7.4 6.5 6.9 4.9 6.9 6.8 Land Rover Range Rover 7.3 7.4 6.5 7.3 6.4 6.8 4.7 7 6.7 Nissan Pathfinder 7.1 7 6.6 6.7 7.1 6.9 6.1 5.9 6.7 Olds Bravada 6.5 6.6 6.6 6.5 6.7 7 5.4 6.7 6.5 Toyota 4Runner 7.4 7.3 6.6 7 7.2 6.8 5.9 6.1 6.8 Toyota Land cruiser 7.1 7 6.3 6.9 6.4 6.7 5.2 6.1 6.5
Editor's Notes
- How Does the Consumer in US Market decide? Typically when a car manufacturer is entering a new market, the marketing team will prepare a business case. The first step is assessing the industry potential which this slide covers. 1985 Worldwide market review…… So, the market looked good. The next question that faced the LRNA (then called RRNA) team is <TITLE> Which further translates to asking “How will the customers in the new market use our offered vehicle as compared to our existing markets; What are our competitor’s unique offerings and how our product can differentiate and make a place for itself” We study how the five aspects of consumer behaviours i.e. <POINTS> are hinting towards the answer to these questions and what the case facts substantiate.
- Our earlier slides suggested that the market was available for selling SUVs. However, the attitude of consumers towards the Range Rover was…<Two points> An easy channel that builds consumer attitude towards a particular product is Advice on aspects like price, quality and performance. By introducing <point 1> they tried to tap in directly to this aspect of consumption. Also did not restrict audience by focusing more on vehicles and <point 2> A differentiated product approach of <point 3> set them apart from the usual competition that was existing in the US market.