Loyalty in the Exotic Car Market - Assignment Example

Introduction: The topic of brand loyalty is one that is raised fairly often within the realm of marketing and business development. However, for themost part, analysis of brand loyalty is almost entirely directed at consumer products of relatively low or mid range price structure. Although there is nothing wrong with this approach, it does not tell the full story with respect to the way in which consumer loyalty impacts on brand decision and the way in which consumers determine which product they will ultimately engage with on multiple iterations. Likewise, the topic of particular interest to this analyst has to do with the degree and extent to which brand loyalty is exhibited within the exotic car market. Although individuals might be quick to point out that brand loyalty affects decisions regarding Burger King or McDonald’s, Coca-Cola or Pepsi, or Toyota and Ford, it also impacts upon the way in which an individual views and ultimately integrates with an exotic car purchase; should they ever have the available resources to do so (Clinard & Berkey, 2013). Through such an examination it is the hope of this particular student that such a level of discussion can be useful with respect to apply the concepts of consumer and brand loyalty to the exotic car market; providing for the levels of success for firms that seek to promote brand loyalty as a means of increasing profitability and returning customer base. Literature Review: One of the first understandings concerning brand loyalty within the exotic car market has to do with research produced by Neil (2013). Within this particular piece of research, the authors indicate that several distinct psychological processes are entailed with the way the consumers make choices and identify with products. To a large part, this same psychological structure and framework is evident with respect to the way in which brand loyalty is predicated within other markets. The author indicates that brand loyalty within traditional consumer markets is predicated upon issues concerning trust, satisfaction, repeat purchase behavior, value, and other elements. However, within each particular market the way in which brand loyalty is exhibited is predicated upon a different set of metrics. In other words, the reader comes to understand that brand loyalty is ultimately products dependent. Essentially, the value and satisfaction that a given good or service represents to the consumer is based upon what that particular good or service is attempting to fulfill within the life of the consumer (Caplan, 2010). Likewise, within the market for exotic cars, the nearly entirely different psychological ranking of issues of importance is represented. Whereas this can vary from manufacturer to manufacturer, and consumer base to consumer base, there are key similarities that are exhibited across the board. One of these key similarities has to do with the fact that value, commitment, and process play a diminished level of importance as compared to issues revolving around customer satisfaction and perceived value. White (2008) discusses the fact of how perceived value and actual value differentiate from one another. In layman’s terms, perceived value is ultimately the type of economic value that an individual ascribes to a given good or service; regardless of how much it costs. However, by means of contrast in comparison, actual value is just as the name implies; indicative of the actual dollar per dollar value that consumer might hope to experience as a result of spending a given amount of money on a given product. As can relatively be seen, the exotic car market is not one that places a high level of emphasis upon representing the absolute rock-bottom price to the end consumer. Instead, luxuries inclusive of performance and comfort are oftentimes part and parcel of the way in which these products are marketed. Effectively, these firms understand that actual value to the consumer is not of a higher priority; at least not with regard to promoting a level of brand loyalty. Instead, perceived value that which can be derived from product differentiation and other means, is a far more important metric that these companies have historically attempted to address (Abbingdale, 2011). Another powerful element with regard to brand loyalty and perceived value is illustrated with respect to the article published by Curry & Silver (2002). In essence, the article affirms the understanding that brand loyalty within the exotic car market is oftentimes the direct result of the way in which individual understands that others will perceive them. This is a notable and important differentiation from the way in which they perceive satisfaction and value in and of themselves. Accordingly, exotic car manufacturers have attempted to craft an image of the way in which the drivers of their cars should be understood, defined, and respected. The author of the piece points to the fact that this can be seen in the way that firms such as Ferrari, Lamborghini, Bentley, Rolls-Royce, and others advertise and represent their products to specific demographics. Rather than limiting their approach to the market as such, these firms fully understand the impact that consumer perception has and seek to provide a niche by which they can effectively leveraged as many consumers as possible. It is also interesting to note within this particular dynamic that the majority of exotic car manufacturers do not place any level of emphasis on maximizing a global level of sales or otherwise promoting an increase in units sold from year to year. This particular dynamic is discussed at length within Bohr’ (2009) article. What the authors found was that this particular approach is not by accident. Instead, exotic car manufacturers are fully aware of the fact that consumer loyalty is not only predicated upon perceived value and the way in which other individuals identify with them, it is also predicated upon the way in which the availability of the product is indicated throughout the market. A review of exotic car owners reveals the fact that a large part of the decision purchase a particular car was based upon its exclusivity within the market. Whereas merely purchasing an expensive car is not beyond the reach of many of the superrich, the decision to purchase a specific car often comes down to the fact that few other individuals within the geographic region in which they live or plant operating the vehicle have a similar car to theirs. In much the same way that other luxury products speak to the exclusivity of those that own them, brand loyalty within the exotic car market seeks to speak to the exclusivity of ownership for those that are fortunate enough to afford them. Another relevant issue that relates to the way in which brand loyalty is exhibited within the exotic car market has to do with the way in which marketing inertia is exhibited. Fuhrmans (2010) illustrates that this provides a particularly difficult concepts and application for the exotic car market; at least compared to any other market. In other markets, difficulties in terms of product value, perceived satisfaction, trust, or any other relevant brand loyalty issue can be addressed by shifting marketing inertia in one direction or the other. Brands such as Coca-Cola, Chevrolet, and many others have utilized this particular as a means of staying one step ahead competition and maintaining a level of relevance within the market. Unfortunately however, this particular marketing inertia approach is one that provides a great deal of difficulty in terms of the exotic car market. Essentially, when the most prominent features within the exotic car market is the issue of overall stability. Whereas change of design and technology is generally welcomed by the public, core values and the approach to business and representation that these firms have established over many decades is something that ultimately cannot be undone; and if it is attempted, can be detrimental to the overall profitability and consumer loyalty that is exhibited within such a market (Yates, 2000). Accordingly, the authors illustrate that in order for exotic car manufacturer to shift away from a particular market stands for attribute, this shift can take an inordinately long period of time. Whereas it is of course possible for other less prominent firms that do not rely so strongly upon consumer loyalty to shift their marketing approach overnight, the overall marketing inertia that exotic car manufacturers have established the situation by which such a process is onerous to say the least. Recommendations and Suggestions of Implementation: From the information that has been provided bus far within the literature, it is clear and apparent that the market for exotic cars behaves in a unique manner; at least as compared market many other consumer goods and products. Furthermore, in terms of recommendations and suggestions of implementing successful marketing plan that firms within the exotic car market could leverage, the following section will detail some of these recommendations as a means of providing a cursory level of overview and synthesis of the available information that has been discussed. Firstly, firms within the exotic car market must understand that their marketing approach is somewhat imprisoned to slow and gradual changes. As a direct result of what has been discussed previously in terms of marketing inertia, the need and demand for exotic car manufacturers to maintain a stand and slowly evolved around this stance is of essential importance. Naturally, expanding upon this understanding, a marketing approach within an exotic car manufacturer would be consider a multi-year, potentially a multi-decade, approach to marketing (Yates, 2000). Likewise, by engaging with potential technological changes, potential changes in the economy, potential changes in the target demographic, the firm will be able to coalesce and more effective level of engagement with their target market. By means of contrast in comparison, a firm that does not take a multi-decade approach to marketing exotic car, or indeed of any luxury products, is in danger of facing a situation in which market forces, previously understanding, threatened to completely derail the marketing approach that the company has taken and create a situation in which it is ultimately insolvent and unable to appeal to the needs of the consumer base. Another realization and application/recommendation that can be made with respect to the exotic car market has to do with further leveraging the perceived value that such a product is able to provide the consumer. Whereas issues pertaining to trust, satisfaction, and other relevant indicators of brand loyalty are no doubt still relevant, the issue of promoting perceived value above other product manufacturers is as essential as establishing a resilient marketing approach that is inclusive of a multi-factor consideration. Further, in terms of this perceived value, it is absolutely integral for the exotic car manufacturer to market based on exclusivity; not based upon overall number of units sold (Higgens, 2011). Whereas it is oftentimes easy for exotic car manufacturer to fall into this rot, it must be resisted as attempting to sell as many units as possible at the lowest price possible slowly but surely whittles away at the distinct competitive advantage that exotic car manufacturers have as compared to the litany of luxury branded auto manufacturers operating within a parallel market space. Conclusion: From the unique market understanding represented above, it is clear and apparent that exotic car manufacturer’s face unique challenges that many other product manufacturers do not experience. In order to maintain a level of relevance within an ever-changing world, exotic car manufacturer’s will need to specifically focus upon the demographic that they attempt to market to, the overall production quotas close to static, and appealed to certain elements within brand loyalty that have not yet been leveraged. By performing these functions and attempting to engage consumers based upon the exclusivity and perceived value that their product offers, it is likely that these firms can continue to maintain a level of relevance within the market that might not otherwise have been realized. Regardless of this, a key pitfall that exists with respect to any exotic or luxury market has to do with the danger of an economic slowdown or partial collapse. At such a point in time in which luxury items and exotic goods are no longer able to be afforded by a large majority of the target demographic, the overall potential for these firms to continue to earn a profit is of course immediately reduced to nearly nothing. References Abbingdale, M (2011). The Shift towards Up-Market. Journal of Business Studies, 55(8), 3 Bohr, P. P. (2009). Bargain exotics. Business Development, 41(4), 48. Caplan, J. (2010). Be a Billionaire for a Week. Marketing and Business, 165(24), 13. Clinard, J., & Berkey, J. (2013). Confessions of an exotic-car enthusiast. Journal of Business Development, 44(12), 102. Curry, A., & Silver, M. (2002). Dude, wheres my Porsche?. Business Relations, 133(20), D8. Fuhrmans, V. (2010, November 12). Exotic Cars Go Green--at Prices of $100,000 and Up. Wall Street Journal - Eastern Edition. p. B1. Higgens, L. (2011). Exotic Cars and the Consumer Market. (2005). Journal of Business Studies, 56(10), 60-61. Neil, D. (2013, January 26). An Instant Gratification Premium Paid for Exotic Cars. Market Research. p. 10. White, J. B. (2008, May 13). Exotic Cars and the Future of Marketing. Journal of Contemporary Business. P. 19-28.  Yates, B. (2000). Cannonball deux draws some exotics. Cars, too. Car & Driver, 45(7), 26. Read More