MINI Marketing Competitiveness - Essay Example

?ANALYSIS OF CURRENT MARKETING STRATEGY OF MINI: The organizations have been coming up with different marketing strategies in order to market and promote themselves to the customers (Anderson, 1982). It is important for the organizations to come up with proper differentiation and positioning strategy in order to create the competitive advantage and remain competitive in the industry (Baines, Fill, and Page, 2010). Analysis of the MINI Brand reveals that it has been launched in the market as n individual brand by BMW. Although, BMW leverages its brand equity to MINI, but it (BMW) has allowed MINI cars to retain and develop their own identity and associations. This strategy has a twofold application; firstly it helps the parent company to mitigate the risk that would arise for its own brand equity, when the newly launched product fails to achieve the response or attention of the public expected from it. This failure can have a profound negative impact on the brand equity of the parent or corporate brand. The second positive application of this strategy deals with the addition of a new brand in the brand portfolio of the parent company. This step gives a fresh outlook to the corporate brand portfolio and enables it to nurture a “Star”. This strategy, also gives some breathing space to the aging brands of the corporation, thereby extending the lifecycle of the entire brand portfolio. Let’s analyze the marketing strategy of MINI on pertinent dimensions: 4P’s Framework: The marketing mix or 4P’s, as they are called, reflects the important strategies of the organization regarding the product, price, promotion, and place (Fill, 2009). Product The product under consideration is the MINI car, which launched its new model in 2001. In addition to this model the company has the following brands of cars: New MINI, MINI One, MINI Cooper, Cooper S, Cooper D, MINI Convertible, MINI Clubman and MINI Countryman. Price The pricing method used by the company to appraise its cars is “value-based pricing”. This method of pricing is consistent with the strong brand equity of the car. Since the car is a symbol of a specific kind of lifestyle, therefore it carries immense value for the followers of this kind of lifestyle. These followers are willing to give extra when it comes to expressing their peculiar lifestyle. This makes MINI exclusive and inaccessible to every car buyer. Promotion Industry followers have always found MINI’s marketing campaigns to be very innovative, lively and peculiar. These attributes make these campaigns very successful. When MINI launched its new 2001 model, it employed adventure campaigns to enhance brand awareness. This campaign had at its core the concept of buzz marketing. By the use of this concept the company amplified its core association of: Excitement, Uniqueness and Fun. Through this campaign the company very successfully raised the level of awareness of its brand, and created a word of mouth effect among its customer community. This campaign employed both traditional and contemporary marketing tools and tactics, for instance media houses were brought into this campaign, print and online advertising was done along with promotional material being planted in hot spots(important public centers). Through “Bondage Fetish leather”, the company extended its adventurous and likely nature. In this entire promotional campaign the company engaged its target audience and fan community. The company employed methods which led to their (audience and community) participation. In this endeavor the company also made use of digital community forums like social networking sites e.g. Face Book, Twitter, YouTube. One unique method used in this endeavor was MINI Space, which brought together the MINI community. This community used to engage in online conversations in the form of threads, to communicate their opinions about the car. Direct marketing tools like emails and instant messages were also used. A unique king of email was sent to customers, containing a game in it. This mail was very enthusiastically received by the customers; the opening rate of this mail was 35.3% whereas its click rate was approximately 54.7%. These are considerably good figures when it comes to online marketing. Place The cars are sold to customers through a closely knitted network of distributors. These distributors are highly sensitive to the car’s core associations. They understand very clearly what the car stands for and what it represents. This understanding is reflected in the sales pitch of the distributor’s salesperson and in the ambience of the distributors’ outlet. Extended Marketing Mix The concept of extended marketing mix is more common in the services industry, however several other firms and organizations are also coming up with strategies related to people, processes, and physical evidence (Lovelock and Wirtz, 2011). People Other than the dedicated sales team of the distributors, who are very conscious about the brad imagery of the car, the company’s own employees are also a source of spreading the word of mouth effect. Together they make a formidable pair. Distributors of the company are widely spread and have their own customer database, which allow them to handle customers more proficiently. In addition to this the company maintains its own customer database which it uses to contact its customers. Process As mentioned above the company has a dynamic and high sensitive customer database, to help them deal with their customers on an individual level. Not only does the company have this kind of database but also the distributors have this database. The company also has a vibrant public relations team; this team helps the dealers in undertaking a promotional campaign. They assist them by connecting them with sources which help the dealers to run their promotional campaign. This public relations team is also responsible for keeping the car on the nationwide channels. Physical Evidence Other than the three production factories, the company maintains an independent dealership network. The ambience of each dealer’s showroom conforms to the company’s set parameters. The company also has a company maintained website which enables customers to seek car related information and purchase merchandises like tee-shirts. Segmentation The company does not believe in segmenting its market by using any kind of segmentation bases. They firmly believe that their car attributes cuts across different customer segments and different customer age groups. The car is aspired and appeals to all kinds of individuals. However, having seen the company’s opinion with regards to its segmentation scheme, it is quiet very much apparent and worth considering that the company in reality uses psychographic and behavioral segmentation bases to segment its customers. In these bases the company focuses on social class, personality traits, benefit sought, and attitude towards product as variables, while defining these segmentation bases. The reason behind this opinion is that the price of the car does not permit people belonging to lower strata to buy this car. The exclusivity which comes with this car also makes it an unlikely option for all consumers. The brand associations of the car are very clear as to who can be the owner of this highly valued piece of work. Target Market By looking at the price and judging from the marketing campaigns it is quiet apparent that the company caters to the socio economic groups forming the ABC’1’s class. Differentiation The MINI car brings with it a unique and peculiar identity. This unique quality sets apart a car driver from the herd of other car drivers. The car is complete illustration of the personal characteristics of the driver. This compatibility is difficult to replicate by other cars in this category. Positioning of MINI The MINI lies in the premium car segment of the industry, and is a highly desirable car for individuals who want to express their individuality. The car extends well beyond the functionality criteria of selecting a car, and goes on to reflecting the lifestyle and urban culture of the driver driving the car. Product Levels Core Product Benefits: efficient utilization of space, efficient fuel consumption, sound road grip and other driving feature. Expected Product Benefit: a peculiar imagery to go along with the car and an opportunity to express one’s inner self. Augment Product Benefits: the company provides additional services like financial assistance to the buyer, insurance services, and motor repair cost insurance. Positioning Maps: Integrated Marketing Communication: It is important for the organizations to come up with integrated marketing communication plan and strategy (Mulhem, 2009). By integrating all marketing mediums and tools, the organization make sure that same message is being conveyed by all mediums (Gosnay and Richardson, 2008). In this way the marketing activities leave more effective and long lasting influence on the customers and target market (Kotler, Armstrong, Wong, and Saunders, 2008). All the tools employed by the company and the stakeholders involved in the marketing of the MINI car, send out a single message, that has excitement, fun, novelty and peculiarity at its center. If looking at the customer touch points where this message gets communicated, the same mea consistent message is communicated by the dealers’ sales representative, the company public relations team and the communication tools used by the company, whether they are the chat forums hosted by the company or the advertising medium used in the general population. Messages delivered through direct mails and posted mails all contain the same customer-centered message, appealing to their individual traits. The message seeks individual feedback and participation. It tries to enhance the customer word of mouth effect and encourage new customers to join this community. Strategy Levels Corporate Level: BMW which is the parent company of MINI, maintains this company as an individual entity. It has allowed the company to develop its own brand identity and equity. SBU Level: the MINI brand is synonymous with uniqueness, freshness and expressiveness. This creates it brand equity. The company by creating its own brand equity is also enhancing the brand equity of the parent brand. The drivers of MINI are very effectively communicated through this marketing strategy. They are encouraged to take initiative and feel a part of an exclusive coterie. The success of this marketing strategy can be gauged through the fact that customers, fans, dealers and the company all are on the same page with regards to the attributes of this car and the key associations which come along with the ownership of this brand of car. DIGITAL MARKETING APPRAOCH OF MINI: The ongoing changes and advancements in technologies have resulted in the creation of a whole new medium for marketing known as the digital and social media marketing (Ryan and Jones, 2009). The e-marketing tools applied by MINI are direct mailing, hosting online forums, and social media advertising. These tools further have many intriguing features in them; for instance in the mails sent to the customers a game is present which pertains to driving a MINI car, other than this the online forums allow the MINI community members to engage in a thread. This thread can be of any topic pertaining to MINI, in this chat forum they can suggest any design improvement in the car or they can share their experiences with the car. Last but not the least the social media website like Face book and Twitter, along with MINISPACE offer consumers’ opportunity to get close to the company; they can receive live feeds with regards to the changes or future landmarks which MINI is sitting it to accomplish. The importance of these online channels can be gauged from the fact that the mediums used in them are most likely to engage the attention of the audience, whom MINI considers to be its customers. These internet savvy customers can online be reached through online channels of communication because they are less likely to view television or read a newspaper. These customers a fun loving, carefree, enthusiastic, and well educated. They have the power of money to back their carefree fun loving attitude. One important tool of online marketing used by MINI is MINISPACE. Since it is very important in generating community participation and feedback via competitions, creative projects, events and parties, therefore it is important to look at its purpose more closely. On looking at this forum from a critical angle, it becomes apparent that all the components in it are geared towards creating a buzz about MINI’s cars and thereby generating the word of mouth effect which MINI cars thrive on. So the importance of e-marketing for MINI lies in the fact that it helps to generate word of mouth for them and nurtures opinion leaders, who try to change or influence market opinion about MINI with their superior and well established knowledge. VALUE CREATION BY MINI: It is important for the organizations to create value for the customers through the brands and products (Day, 1990). The customers prefer to go for the product or brand which provides them high value and benefits (Kotler and Armstrong, 2010). Different brand management and development techniques are used by the organizations in order to come up with effective and efficient brand strategies and brand image (Kotler, 2009). Mini Brand Related Attributes Fuel Efficiency Iconic Figure Product Innovation Small well performing vehicle Strong Brand and customer compatibility Legacy of the Britain Phenomenal Brand Experience Customer-oriented products Amongst the premium league of Car manufacturers A subsidiary of BMW Mini Brand Portfolio New MINI MINI One MINI Cooper Cooper S Cooper D MINI Convertible MINI Clubman MINI Countryman MINI Coupe(in the launch phase) Communication, Pricing, Distribution, Media and Philanthropy: The company follows an integrated marketing program. The core aspects of this program are FUN, EXCITEMENT and PECULIARITY. These dimensions of the marketing program are communicated at all levels of the company. Whether it be the public relations team, whether the production department, whether the marketing department and whether the distributors or salespersons, they all communicate this same message when encountering a customer's touch point. Since the aspect of peculiarity gives rise to exclusivity, which is the main driver behind the use of value based pricing by the company. Since the company has successfully developed strong brand equity, therefore it is in a good position to harness the benefits which comes with having a strong brand. The company has a strong network of independent distributors, who work in close collaboration with MINI. They follow strict parameters, set forth by the company. These parameters defines the ambience that the distribution center will have, how the sales person is going to interact and what message will he convey to the customer from the company. These distributors maintain their own customer database which allows them to keep track of potential customers. The company’s public relation department works closely with national broadcasting channel, newspaper agencies and magazine agencies. As a result of this close association the public relation department tries to keep buzzing about the MINI brand. They also use these associations to help dealers plan their local promotional campaigns. The public relations team, pairs the dealer with the most effective channel owner so that a relevant and far reaching message is produced. The company gives charity to just one organization (kids Out); the imagery and core associations of both these organizations are in sync making both compatible for one another. Brand Exploratory Customer Knowledge: MINI car has successfully managed to translate its emphasis on variables like quality, product innovation and product design. It has done this through the use of latest technology (MINI invest heavily on the development of IT infrastructure to achieve process perfection) which has allowed it to come up with the most value added products (Cars). Most commonly associates consumer brand associations are: national origin, top notch part, superior designing and high quality car features. All this has made the car Iconic of customers. They find the car as a depiction of a valued class, which is a very unique niche of likeminded individuals. These individuals may belong to different cultures but have certain unifying traits. These traits cut across age groups and generations. These were the traits which made it possible for the company to rollout a million units of New MINI in 2007. Sources of Brand Equity The name of MINI itself means pride, fun, excitement and peculiarity. And it is these associations, which keeps the company motivated to keep achieving perfection in its cars. The latest source of brand equity that summarizes the essence of the brand is its new brand, “New MINI”, which is soon to be complemented by another model “MINI Coupe”. It completely captures the best practices and the highest standards of quality that the company tries to achieve in its governance and products. Equity that is attributed to the functional aspect of the brand is due to its superior design, features, efficient fuel consumption and utilization of space. The other sources of its equity would definitely include its marketing campaigns and online marketing efforts (adds, chat forms, direct mails), though limited, but highly effective in promoting its core identity. Strong distribution is another source of brand equity as this ensures that the brand and its products are always available to the consumers whenever they want it. Brand Achievements The advertising agency of MINI named Lida was given in 2009 a gold award, for their effective use of the word of mouth effect to created brand loyalty, by the Institute of Direct Marketing. Green-Car-Guide.com bestowed the company with an award for being the Greenest Manufacturer. In addition to this award the company has received several other awards for its concern for the environment and for the actions the company have taken in this regards. Point of Parity Many small car manufacturers fall in the premium car segment. E.g. Alfa Romeo Mito and the Audi A1 Hatchback. All small car manufacturers are showing concern for environment. Functionality features of all small cars are more or less the same. All small cars are focusing on reducing fuel consumption. Point of Difference There is a strong compatibility between the brand and its customers. The company has a diverse market segment which conforms to the values and aspirations of the brand. The brand name MINI is backed by another strong brand of car manufacturer BMW. Strong customer base, which actively take part in the development and improvement of the car. These customer groups form an active community of members. Effective marketing mix is being employed by the company. Strong dealer network comprising of 146 dealers. Strong opportunity to enhance its brand equity through the London Olympics. Strong compatibility between the brand and the brand portfolio components of BMW. Salespersons are very comfortable with the company’s message, which enables them to effectively communicate this message to customers. Brand Elements The most attractive brand elements are: EXCITEMENT, ORIGINALITY and FUN. These elements are communicated in all the company’s marketing campaigns. Brand Associations The brand of MINI is very strongly associated with the brand of BMW; however BMW has maintained the original sprit of mini. But the two brands are a reflection of class, exclusivity, elegance and idiosyncrasy. Cool and Bubbly image. The brand of car receives high Celebrity Endorsement e.g Beatles, LuLu, Steve McQueen and Brigitte Bardot are amongst the few who endorse the brand MINI. The film “Italian Job” played a vital role in raising brand Identity and brad awareness of MIINI, by featuring it in the movie. The company has a grand opportunity to farther its brand awareness by featuring alongside BMW in the 2012 London Olympics. Brand Positioning The brand of cars falling under MINI falls in the premium car segment of the industry. Although there is stiff competition in the small car industry, having competitors like Alfa Romeo Mito and the Audi A1 Hatchback, but still than MINI is able to maintain its premium position in the small car industry. It is a car characterized by many in the industry as a small well performing vehicle, having strong compatibility with its driver’s individuality. Internal Branding Not only does the brand message match with the frequency of its target segment but also it matches the understanding level of its distributors and salesperson. Both these stakeholders understand very clearly what the brand stands for in terms of its key brand associations. The production department is well aware of its innovative characteristic which becomes very apparent to them when they see a huge amount of capital outlay from the management aimed at enhancing the company’s production capabilities. Customer-Based Brand Equity Model: It is not easy to evaluate the overall value or equity of the brand. For this purpose most of the organizations take help of the customer based brand equity model (Kotler and Keller, 2009). This model of Customer based brand equity is used by the organization in order to evaluate the overall brand management strategy and decide about the value and equity of the brand in terms of its customer base (Smith and Zook, 2011). BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY: Since the advent of globalization, geographic boundaries have been eradicated completely, leading to a situation in which a company is selling directly or indirectly to customers from different geographic region (Strauss and Frost, 2011). Companies have these days have no idea where their next customer will be from. Increases in the access of internet in households have made dissemination of information very easy and quick. Information is travelling from one part of the world to another very quickly and without any filtration (Zenker and Martin, 2011). This above mentioned scenario has made it imperative for companies in every industry to work in an ethical and morally acceptable way. Since customers these days are not just buying a product they are actually buying a brand. And a brand comes with some tacit promises, which include the promise to keep ethics above profits and a promise to give high quality products. These promises are the main reason behind brand’s equity. Whenever a company behind a brand violates a tacit promise, it compromises and losses its brand equity. Information age makes it impossible for a company to take rectifying measures quickly, because information regarding its ethical compromise spread in the world through high speed data transmitting lines. And as mentioned above, there is no way a company can know for sure where its next customer is present. After the spread of such derogatory news about the company, it is potentially possible that the company has delineated its prospective customer, without the company knowing the damage. So in this way a brand has lost its equity on multiple fronts (Haberberg and Rieple, 2008). List of References Anderson, P. (1982). Marketing, Strategic Planning and the Theory of the Firm. The Journal of Marketing, 46 (2), 15- 26. Baines, Fill and Page (2010) Marketing (2nd Ed.) Oxford: Oxford University Press Day, G.S. (1990). 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