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Company Case
Bentley Motors: Differentiation and
Positioning in International Market
The mission of Bentley Motors, the de...
However, sales in its traditional markets slumped in 2008 due to the global financial crisis triggered by
the collapse of ...
Although owned by the German Volkswagen AG group, which employs a perception of creditability and
originality, Bentley bra...
“grand tour” automobile; a Bentley stylist at work, sketching its future inspired by its past. Bentley
woodwork and trim e...
Words I’m sick of: Bentley, quintessential, heritage, tradition, luxury, emerging economies,
craftsmanship, exclusivity, p...
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Bentley company case


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From Principles of Marketing book

Bentley company case

  1. 1. Company Case Bentley Motors: Differentiation and Positioning in International Market The mission of Bentley Motors, the definitive British luxury car company, to produce best cars in their class, has remained unchanged since it was expressed eloquently by its founder Walter Owen Bentley in London in 1919. Located in Crewe, England, since 1946 and owned since 1998 by Volkswagen AG, Bentley Motors is an international company developing and crafting one of the world’s most desirable luxury cars. There are many unmistakable characteristics that define a Bentley – distinctive design, handcrafted luxury, supreme comfort, ultimate performance, and a refined and exhilarating driving experience. Yet it is the company’s brand imaging through differentiation and positioning that makes the quintessentially British brand unique today. To many, owning a Bentley is not about getting from A to B but about getting there with flair infused with advanced technology and classic hand craftsmanship at the pinnacle of British luxury motoring. Based around the concept of “Britishness” in image and design. Bentley has succeeded in differentiating its position in the global luxury car market through a market- drive strategy based on responsive cross-market segmentation. Cross-Market Segmentation The traditional markets of Bentley Motors are the United States, the United Kingdom, and Europe, which were identified by the company using two of the traditional market segmentation variables: the level of a nation’s economic development and per capital gross domestic product (GDP). Bentley had enjoyed high sales in these economically developed markets, especially in the boom of the 1980s. In the 1990s, it struggled to reach similar level of sales, which led to a major investment in the facility, new- product development, and brand re-positioning in 1999. The brand reached the height of its heyday in the 1920s and 1930s, and the Bentley Boys winning the 24-hour race in Le Mans in 2003 seemed to emulate victories of the past. Its new Amage T luxury sports sedan won critical acclaim by the motoring press worldwide soon after, and the Continental GT, launched in 2004, was seen as one of the most successful launches of any car in Bentley’s history.
  2. 2. However, sales in its traditional markets slumped in 2008 due to the global financial crisis triggered by the collapse of Lehman Brothers in September 2008. Some orders for its cars were cancelled immediately, and sales dropped by 24 percent that year compared to 2007. When the company was forced to stage a seven-week production shutdown in the spring of 2009 due to the slump, it started to search for new markets to increase sales. It realized that the use of the more traditional market segmentation variables such as age, gender, education and level of economic development does not seem to reflect the real aspect of market behavior, especially the burgeoning purchasing power of the well-to-do in the big emerging markets such as Brazil, Russia, India and China. The result of the search was the identification of a thriving consumer segment that transcends the national boundaries of these nations. Despite being located in nations featuring low per capita income, this segment of consumers has the greatest global consumption growth and represents rapidly growing buying power for luxury goods ranging from ultra- luxury cars to designer handbags. Targeting Operating in markets of both developed and emerging economies presents challenges for Bentley. It was clear from day one that it targeted high-income groups who want to buy into the symbolism and history of the Bentley brand, seen though the prospect customers would inherently know that they could purchase a vehicle with similar performance and specification for less than half the price. Bentley is aware that the needs and preferences of its target groups in the emerging economies may differ from those of its prospects in developed economies, who are typically older or retired males, highly educated and high earners. In comparison, Bentley’s target consumers in emerging markets are often the young, less educated entrepreneurs who share a number of important commonalties. They have a strong appetite for Western-branded luxury goods, from which they expect superior quality as a fundamental attribute associated with these goods—quality may mean design, materials, technology, performance and craftsmanship, but also attributes such as the tradition and the heritage of country of origin, uniqueness traits and perceived superiority and exclusivity. Recognizing the differences and the opportunity to be had from differentiating its targeting efforts, Bentley launched its value proposition based on “Britishness” in its newly found markets while refreshing its original value proposition of luxury, performance and exclusivity in its traditional markets. Differentiation and Positioning The Bentley brand concept is based on the premise that a consumer who regards luxury car brand characteristics as important or desirable, and is in the market for such a luxury product, should be attracted to the brand. Bentley is aware that for its brand to be unique, it must have imagery and symbolic meaning to its consumer. In other words, it must stand for a lifestyle or an attitude and communicate this to its cross-market consumer something something.
  3. 3. Although owned by the German Volkswagen AG group, which employs a perception of creditability and originality, Bentley brands itself as a quintessentially distinctive luxury brand originating in Crewe, England, with a fusion of heritage and cutting-edge technology. It defines its cars by the important attributes of tradition and hand craftsmanship, relative to those of speed and performance used by its competitors. It focuses on the emotional benefits of its cars and has stayed true to this proposition through an integrated, high-touch differentiation and positioning program tailored to the carefully defined well-to-do groups in each of its markets. Bentley offers an exclusive collection of limited no-motoring products produced under license from its equally exclusive partners. Entinger and Bentley offers luxury leather travel products in vibrant colors from the Bentley color palette, hand-stitched in England from Bentley’s own hides. Through Estede, Bentley offers a limited edition, high-end range of sunglasses and ophthalmic frames featuring the famous winged B emblem and presented in a Bentley leather presentation box. Through Zai, a Swiss maker of luxury ski equipment known for its craft end exclusivity, Bentley offers innovative ski products handmade in Switzerland with support from Bentley Styling studio in England. Bentley has also teamed up with luxury hospitality brands to enforce its value proposition through Bentley Places that embody the values and the spirit of Bentley around the world. The Bentley Room at London’s Mosimann’s is an inimitably British blend of style and tradition with a dash of Bentley decor and detailing. The dining room was designed by Caulder Moore, who also designed the Bentley Living Room at the company’s headquarters in Crewe. The Bentley Suite at the exclusive St. Regis Hotel in New York—built by John Jacob Astor IV in 190v—provides guests with the luxury, craftsmanship, and style associated with the Bentley brand. In its traditional markets of the United States, the United Kingdom, and Europe, Bentley, through its dealerships, regularly invites customers to take part in national golf tournaments that culminate in cross-national event held in differing worldwide locations; the winner is crowned with the Bentley “Continental Cup”. These events bring together golfers from different continents with common interest in golf and Bentley and help to refresh and reinforce its image of luxury and exclusivity. In its newly found markets in the emerging economies, Bentley increases publicity to raise awareness of its brand through motor shows, exhibitions, openings of grand showrooms, and signing of exclusive dealerships to highlight the craftsmanship, quality and luxury of a Bentley car and the authenticity of the Bentley name. All these events take place in the most economically developed and fashionable metropolitan areas, such as Sao Paulo in Brazil, Shanghai, Shenzhen and Beijing in China, and Mumbai in India. Bentley stays true to its English heritage and makes sure that the unique “Britishness” is steeped in its targeted marketing programmes. In the biggest Bentley brand exhibition ever held outside Crewe, the World of Bentley exhibition held in Shanghai in 2009 featured a myriad of exhibits devoted to telling the Bentley story of craftsmanship, style, luxury and heritage originated in England. Bentley has long stood as the world’s premier maker of handcrafted cars, and it did not disappoint in Shanghai. The Bentley Design Studio gave the crowd a rare chance to glance into its celebrated tradition of designing the
  4. 4. “grand tour” automobile; a Bentley stylist at work, sketching its future inspired by its past. Bentley woodwork and trim experts demonstrated Bentley’s unrivaled craftsmanship in an interactive and fun- filled display of how the company brought the English way of life into dynamic designs of luxurious motor cars. In the words of Geoff Dowding, Bentley’s Regional Manager for East Asia, “The Chinese just love the Britishness”. Bentley’s high-touch positioning through tailored marketing programmes in its new markets played a key role in the company’s recovery since the sale slumps in 2008. China has now replaced the United States as Bentley’s largest market. In 2011 the company delivered 1,664 cars to Chinese customers; during the first quarter of 2012, sales in the region grew by 84 percent compared with the same period in 2011. The prominent presence of its dealerships, 35 by September 2012, is set to further expand in the next 12 months as the latest high-performance coupe and convertible Continental models are introduced to Chinese customers. In Russia, Bentley’s sales increased by 45 percent in 2011. Making it the best-selling luxury car brand in the country, The Road Ahead In summary, Bentley target high-income segments, and builds its brand by serving a luxury segment of the car market. It produces superior-quality products distributed through exclusive dealerships and is never shy about charging a typically high price. It is strongly positioned as a quintessentially British brand steeped with tradition and heritage, and it communicates this proposition through consistent and believable associations with high-end brands in the luxury consumer goods and hospitality sectors. In doing so, it draws its existing and prospective customers to style, luxury prestige, heritage and exclusivity. Through these well-tuned competitive advantages, it had sold well in its traditional markets until the economic downturn in 2008, when buyers became more cautious in their spending. It has since recovered the following expansion into high-consumption-growth segments in the emerging economies by carrying out effective cross-market segmentation, targeting and positioning. The pent-up demand for luxury cars in the emerging economies is remaining strong, with Bentley and other European sports car brands all reporting string sales and orders. However, there are already signs of a slowdown in some of Bentley’s new markets, such as China, which reported the slowest economic growth in the past decade. Furthermore, increasing sales aggressively in these new markets may imply less distinctiveness and exclusivity for the Bentley brand. However, as long as Bentley remains true to its pinnacle positioning of building the best car in its class with heritage, tradition, and cutting-edge technology, it can look forward to ample opportunities in the years to come, especially in the existing emerging economies as well as those in the making, such as Vietnam, Cambodia, Kazakhstan, and the Philippines, where the nouveau rich have just started to appreciate the quintessentially British tradition and heritage that is embroidered in Bentley.
  5. 5. Words I’m sick of: Bentley, quintessential, heritage, tradition, luxury, emerging economies, craftsmanship, exclusivity, proposition, car. Questions for Discussion 1. What is International market segmentation? What challenges does it pose to Bentley? 2. Using the full spectrum of segmentation variables, describe how Bentley segments and targets he international luxury car market. 3. Has Bentley differentiated and positioned its brand effectively? Explain. 4. Given the economic downturn in developed economies and the slowdown in emerging economies such as China, will Bentley continue to grow? Why or why not? 5. What recommendations would you make to help ensure Bentley’s future growth?