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Case Study Land Rover North

America Inc.

1. Background of the case


This case describes how Land Rover North America, Inc. (LRNA) has
redesigned their dealerships and selling process with the objective of
building and enhancing equity for its brand. Land Rover is a niche player in a
very crowded and rapidly maturing product category. Competition is fierce
and is dominated by large global competitors with extensive dealer networks
who differentiate their products largely by size, features, and price. The
company has relatively few dealerships and cannot afford the volume of
advertising or promotion that its primary competitors can. The company
must choose to depend upon positioning its product as a specialty brand,
characterized by brand insistence on the part of its buyers. Charles Hughes,
President and CEO of Land Rover North America, Inc. (LRNA) is debating
three positioning options for the new $30,000 Land Rover Discovery. The
positioning decision will help LRNA settle on advertising messages and other
communications strategies. The current situation is that demand for SUVs is
changing from symbols of wealth and prestige to experiences. This is seen
from the fact that there is an increasing SUV purchasing trend and also with
the increase in consumer wealth in US.

2. Problems
Determination of an appropriate positioning strategy
Land Rover North America Inc needs to determine a positioning
strategy for its newly launched Discovery v/s its other products Land
Rover Defender and Range Rover. Currently the company did not
clearly differentiate the positioning of the three SUVs.
The Company did not address who the target segment were for the
three SUVs and what are the USPs or benefits of each product.
The other problem faced by the company is how to position the brand
Land Rover?

Lack of Brand Awareness & Deciding on right marketing mix


The Customer Survey on Brand Recall [Exhibit No: 10] shows clearly
that Land Rover brand commands very low brand recall, compared to
its competitors. Adding to the confusion is renaming of the corporate
brand from Range Rover to Land Rover and then retaining the product
as Range Rover. For e.g. the advertisements for Range Rover read
Land Rover Range Rover. This resulted in lower market share [Exhibit
No: 9] of LRNA in Americas SUV market.
Also with regard to sales, it can be seen from the Mini SUV Segment
sales and full size SUV segment sales that Land Rover and Range Rover
have not seen the same increase in sales when compared to Jeep,
GEO, Suburban etc. This is a major problem hindering them in attaining
their target of 40,000 by 1998.
One of Land Rovers main problem now is to determine the right
marketing mix in order to properly distribute and allocate its marketing
funds in an attempt to meets its goals.
In line with meeting its target LRNA has set a target for itself to
increase its sales from 9000 to 40,000 by 1998. Correspondingly it has
allowed its marketing budget to be increased to $20-30 million from its
existing budget of $9 million. The marketing options that it has to use
this budget include:
a. Advertising - $6 to $19 million

b.
c.
d.
e.

Sponsorship and PR programs - $775,000


Experience marketing initiatives - $4.61 million
Promotions - $100,000
Total Cost - $25 million

Determination of the proposed


experience marketing initiatives

retailing

strategy

and

As part of the new strategy, LRNA wants to redesign its dealer


networks, by converting its franchise into exclusive Land Rover
Centers. The problem they are currently facing is to decide, which
distribution strategy from among the following to choose - current
retail strategy, or opening of exclusive retailers, or developing of Land
Rover Centers.

3. Objectives of the Company

The main objectives of the company at present include:

To make North America Land Rovers #1 market

To devise a proper and relevant positioning strategy

Allocation of the appropriate amount of funds to its different brands

Develop a retailing strategy to attract more customers.

To profitably introduce and sustain Discovery in the US market

Plan on whether new marketing initiatives should be bought in or not..

4. Alternate Solutions
The options that TiVo could consider for its strategies and mix could be as below

Positioning Strategy

Strategy 1:
Land Rover is aware that there are two distinct markets whose purchasing
decisions are impacted by various drivers but also know that factors such
as quality, safety, reliability, comfort, off-road capabilities and aesthetics
overlap. When compared with other SUV alternatives, the following
differences should be highlighted to develop a distinctive niche for the
Discovery and Land Rover brand in the target audiences mind. The
Discovery and Land Rover brand should be positioned as luxury car
alternatives with rich histories and superb off-road capabilities designed
for the crme-de-la-crme of consumers: affluent, intelligent, practical,
unique, full of character, and seeking to empower themselves through
adventure and exploration during their driving experiences. The Discovery
and Land Rover brand should, in effect, convey the following message:
you are what you drive.

Strategy 2:
Land Rovers performance advantage is not reflected in their consumer
perceptions. This is seen to have a direct impact on the value judgments
of the consumers (which is seen one of the major reasons for purchase by
consumers). Based on this, value and performance are the criterias which
require the maximum improvement and by doing this, Land Rover should
associate itself and its umbrella brand with performance in all SUV
segments.

Marketing Mix

The main problems in the marketing area as seen were low brand
awareness, low brand consideration and not fulfilling sales potential. In
this case, it is seen that the target customer is a married male who is
college educated, 35-50 years old, has an income of atleast $100,000,
and is a professional or a manager.

To overcome their marketing problems, Land Rover should look to improve


their brand awareness through advertising. Land Rover used print
advertisements with the price of the vehicle clearly stated, yet no one
could seriously argue that this increased price sensitivity. In fact the
purpose of price advertising in this case was to allow potential customers
to self-select for willingness to pay the significant price premium for this
car, as well as to build the luxury appeal of the car by showing everyone
how much it cost. In the words of the VP at the agency in charge of the
account: The price drew the right audience. It was self selecting
It also saved the buyer the step of having to tell his friends
how much he paid for this radically new vehicle. They should focus
on the target customer profile mainly through print and television and at
the same time incorporate the positioning strategy.
Also Land Rover should retain their most important sponsorships but at
the same time reduce their Experience Marketing programs. This is
based on the fact that these programs were seen to be expensive as not
many customers took advantage of the facilities.

Retail Strategy

Land Rover can come up with certified Land Rover dealers. This would
help to reduce the costs that is currently having to spend on its dealer
network while at the same time will allow them to attract customers at
different locations.
They can also open centers as premiere locations for purchasing Land
Rover models. To ensure that they get maximum benefit, they can open
the centers in selected markets.

5. Solution
Criteria for selection:

The primary criterion for selection of the solution is that it should be


the most effective in addressing all of the problems stated.

Other criteria include:


- Cost effectiveness
- Ease of implementation
- Long term advantage

Solution:
The Corporate Brand has to be

In the short term, the most effective solution according to us would be as


follows:
-

In terms of positioning, Land Rover needs to position its brands as


luxury car alternatives with rich histories and superb off-road
capabilities designed for the crme-de-la-crme of consumers. This
would help to attract customers given the fact that customers are
now looking at SUVs more from an experience point of view rather
than as a symbol of wealth.

From the marketing perspective, Land Rover should look to spend


more on their advertising budget so that they can increase their
brand awareness among the consumers. This will help them to
attract more customers. This can be done through print and
television advertisements.

In terms of retailing strategy, Land Rover can take advantage of


their exclusive dealer network and also can look at opening certified
centers.

In the long term, the best option we believe would be for Land Rover to
focus on performance of their brands to increase the perception of value.
They should look at associating Land Rover with performance as their
positioning strategy. This will also in the marketing front as the positioning
message
will help to reinforce their brand and hence attract more

customers. Also in addition, they can look at opening select centers in target
customer profile areas as their retailing strategy.