Rolls-Royce Marketing Planning - Report Example

Individual Marketing Plan-Business Report for Rolls-Royce on Eco-Friendly Cars ID Number & Date Total Number of Words: 2,041 Table of Contents 1. Introduction ................................................................................................. 3 2. Target Market for Ghost Car Model ............................................................ 3 2.1 Socio-Demographic Segmentation ............................................... 3 2.2 Lifestyle or Psychographic Segmentation .................................... 4 2.3 Geographic Segmentation ........................................................... 4 3. PEST Analysis .......................................................................................... 4 3.1 Political Factors ........................................................................... 5 3.2 Economic Factors ........................................................................ 5 3.3 Social Factors .............................................................................. 6 3.4 Technological Factors ................................................................. 6 4. Marketing Mix (4 P’s) ................................................................................ 6 a. Product ........................................................................................ 6 b. Price ............................................................................................ 7 c. Place ........................................................................................... 7 d. Promotion .................................................................................... 7 5. Marketing Plan .......................................................................................... 8 6. Discussion and Analysis ........................................................................... 8 References .......................................................................................................... 10 - 14 Appendix I – Market Segment for Rolls-Royce’s Latest Ghost Car Model ......... 15 Appendix II – Unemployment Rate in UK ............................................................ 16 Appendix III – List of UK Minimum Wage ............................................................ 17 Appendix IV – List of Rolls-Royce’s Potential Competitors Within and Outside the UK Market .................................................................. 18 Appendix V – List of Rolls-Royce Regional Offices Worldwide ........................... 19 1. Introduction Established in 1904, Rolls-Royce Motor Cars has been focused on innovating and manufacturing extraordinary cars (Rolls-Royce, 2013a). Three of the most famous car models that Rolls-Royce is selling include: (1) Phantom Family a.k.a. the big boy rolls; (2) Ghost Family a.k.a. baby rolls; and (3) Wraith (Doron, 2013, 1:20; Rolls-Royce, 2013b, c, d). Rolls-Royce is dedicated in preserving our environment. Therefore, this company started producing eco-friendly cars for these three models (Rolls-Royce, 2013e; Massey, 2011). During the first quarter of 2013, Rolls-Royce is going to launch its latest Ghost car model. With regards to the marketing and selling of the latest Ghost car model, this report will provide a marketing plan for Rolls-Royce Ghost. In this report, the market segmentation for the Ghost car model will first be conducted. Using the PEST Framework, external factors that could somehow affect Rolls-Royce’s potential sales and revenue will be identified and tackled in details. To complete the marketing plan, this report will purposely define the marketing mix (4P’s). 2. Target Market for Ghost Car Model To identify Rolls-Royce’s target market for the Ghost car model, it is necessary to first divide the public consumers into subgroups (Rogers, 2005, p. 15). Eventually, the next step is to identify and examine specific market segement based on the personal and individual characteristics of Rolls-Royce’s target consumer (i.e. socio-demographic, lifestyle or psychographic, and geographic factors) (Kotler, 2000, p. 8, 263). 2.1 Socio-Demographic Segmentation Socio-demographic segmentation focuses on analyzing Rolls-Royce’s target customers’ age, occupational status, yearly income, educational background, family background (i.e. family size, family life cycle), social class and status, nationality, race, and religion (Rogers, 2005, p. 19; Kotler, 2000, pp. 263 – 266). Using socio-demographic variables like occupational status, yearly income, and social class and status, the marketing manager of Rolls-Royce can identify group of people who are capable of purchasing the company’s latest car model. The selling price of the latest Ghost model is GBP 170,000 (Cauchi, 2013) or £200,000 (English, 2010). Considering the selling price of this particular car model, the target market for this product belongs to the upper and middle class people who are earning more than GBP 180,000 each year. Furthermore, this product is not sensitive to socio-demographic variables like age, gender, family background, educational attainment, religion, race, generation, and nationality. (See Appendix I – Market Segment for Rolls-Royce’s Latest Ghost Car Model on page 15) 2.2 Lifestyle or Psychographic Segmentation Lifestyle or psychographic segmentation examines Rolls-Royce’s target consumers’ lifestyle, personality and personal values (Kotler, 2000, pp. 266 – 267). Aside from having a positive buying behavior and attitude on luxury cars, Rolls-Royce’s target consumers is not limited to sociable people who lives an active and sophisticated lifestyle but also those who are trend setters and car fanatic individuals who prefer to drive their own small luxury car (Ernst, 2012). (See Appendix I – Market Segment for Rolls-Royce’s Latest Ghost Car Model on page 15) 2.3 Geographic Segmentation Geographic segmentation focuses on dividing Rolls-Royce’s target consumers based on geographic profile (i.e. nation, states, regions, cities or communities) (Kotler, 2000, p. 263). Since the market price of Rolls-Royce’s latest Ghost model is much higher as compared to other luxury brand such as BMW 7-series 760Li (English, 2010), its target consumers are more likely to live in upscale subdivision or areas where most of the wealthy people lives. As part of its business expansion plan, Rolls-Royce is targeting 40 other countries (Rolls-Royce, 2013g). 3. PEST Analysis External factors can signficantly affect the potential sales performance of Rolls-Royce’s latest Ghost car model. To ensure that this company will be prepared in managing the presence of these external forces, this report will purposely examine the macro-environment within the UK automobile industry using the PEST framework. 3.1 Political Factors Political factors that can affect Rolls-Royce’s sales and profit include: (1) taxes imposed on luxury vehicles; (2) environmental regulations; (3) trade restrictions such as tariffs; (4) local and international trade relations; (5) government protection; and (6) government regulations on market competition (Applegate and Johnsen, 2007, p. 29). Recently, the UK Parliament designed several legislations and policies to help create public awareness on climate change, pollution, and waste management (The National Archives, 2012; Parliament, 2004). Furthermore, EU’s environmental policies which require all car manufacturers to produce only vehicles that are eco-friendly (European Commission, 2012). This could also help increase the market potential and growth of Rolls-Royce within UK market and the rest of the EU nation. Imposing higher tax rates on luxury vehicles will make luxury cars more expensive. Therefore, this particular government intervention could de-motivate the public consumers from purchasing Rolls-Royce’s latest Ghost car model (Menon and Raj, 2012; Kuwano, Zhang and Fugiwara, 2005). On the contrary, implementing tax incentives on hybrid cars could help save the public consumers a lot of money (Fuel Economy, 2013a). As a result, more people will be motivated in purchasing a Rolls-Royce’s Ghost. 3.2 Economic Factors The public consumers’ decision to purchase Rolls-Royce’s Ghost car model is highly dependent on their disposable income. Recently, the employment in UK rose by 154,000 to 29.7 million between the months of October to December 2012 (BBC News, 2013a). However, inflation rate at 2.7% is still too high as compared to the minimum wage of £6.19 for individuals more than 21 years old (BBC News, 2013c; gov.uk, 2013; Inman, 2013). (See Appendix II – Unemployment Rate in UK on page 16; Appendix III – List of UK Minimum Wage on page 17) There is a free market competition within the UK and EU automobile industry. Since the presence of alternative products within the UK automobile industry is high, the marketing manager of Rolls-Royce should focus on strengthening Rolls-Royce’s brand equity and value and continuously increase the quality and features offered in each Rolls-Royce eco-friendly cars (Peterson and Michalek, 2012; Kew and Stredwick, 2010, p. 8). (See Appendix IV – List of Rolls-Royce’s Potential Competitors Within and Outside the UK Market on page18) 3.3 Social Factors The presence of Competition Commission intervention tightens market competition within the automobile industry. Furthermore, people could easily check the public opinion on a particular car model particularly with regards to its selling price, quality, and added features online. As a result, the public consumers have more opportunity to purchase highly competitive cars at a much lower price (Sharma and Patterson, 1999). Therefore, car manufacturers such as in the case of Rolls-Royce should continuously innovate and further improve the quality of their vehicles (Ball, Simo es-Coelho and Macha, 2004). 3.4 Technological Factors It is common for automobile manufacturers to invest on research and development (R&D). To compete in the market, Rolls-Royce need to focus on product innovations (i.e. hybrid engine, etc.). Through the use of modern technology, Rolls-Royce can create more competitive advantage. One of the latest technologies used in the manufacturing of new cars is the hybrid technology (i.e. plug-in hybrid-electric-petroleum vehicles, continuously outboard recharged electric vehicle, hybrid fuel, fluid power hybrid, etc.) (Rucker, 2011; Schiller, 2010, pp. 123 – 128; Vyas, Santini and Johnson, 2009). With regards to the need to communicate a wide-range of products to the public consumers, the internet as a marketing communication tool is the most effective and cost-efficient. For example, creating a business-to-business (B2B) environment will make automobile manufacturing companies easily advertise their newly launched products at a relatively much lower cost (Slbadvi and Hosseini, 2011). 4. Marketing Mix (4 P’s) 4.1 Product The new Rolls-Royce’s Ghost is made of 6.6 liter V 12 twin-turbocharged petrol engine with eight-speed automatic transmission and rear-wheel drive (Doron, 2013, 0:56; English, 2010). This particular car model has a power of 563 bhp @ 5,250 rpm and offers a limited speed of 155 mph (Doron, 2013, 1:03; Ernst, 2012; English, 2010). Furthermore, the Rolls-Royce’s Ghost has an acceleration power of up to 60 mph in 4.7 seconds (Ernst, 2012; English, 2010). The latest Rolls-Royce’s Ghost is also known for its extended wheel-base. Other special features include handmade interior design made out of wood and leather, having an umbrella in each of the four doors, extremely big room at the back sit, having an automatic button to close the rear passenger doors, having a remote control at the back sit to allow the back seat passengers control everything that the driver can control (Doron, 2013). This car model also have a big screen, a table for laptops or ipads, 16 speaker audio system, big automatic compartment, soft suspension, foldable side-view mirrors, high roof, plus the seats at the back are adjustable with massage option (Doron, 2013; English, 2010). 4.2 Price The market price of Rolls-Royce’s Ghost is around GBP 170,000 (Cauchi, 2013), £200,000 (English, 2010) or between US$246,500 to US$290,000 (The Car Connection, 2013). This particular car model is considered more expensive than a BMW 7-series 760Li (which sells at the price of £96,590) or a Bentley Continental Flying Spur Speed (which sells at the price of £137,300) (English, 2010). 4.3 Place Rolls-Royce plan to keep its production line in UK (Cauchi, 2013). Since Rolls-Royce managed to target 40 other countries worldwide including some of the millionaires in Chile, Thailand, and Vietnam (Reiter, 2012; Rolls-Royce, 2013g), the place of selling would vary depending on the company’s target market. For example, in UK market, Rolls-Royce can launce the Ghost at the Geneva Motor Show (Rolls-Royce, 2013f). (See Appendix V – List of Rolls-Royce Regional Offices Worldwide on page 19) 4.4 Promotion To promote the lastest Rolls-Royce’s Ghost model, the company is using online news publications and reviews (Doron, 2013; English, 2010). Rolls-Royce can also promote its latest car model using a wide-range of advertising tools such as television advertisements and advertisement on news paper and car magazines. Using these marketing communication tools, the company can easily communicate its launching date to the public. 5. Marketing Plan The target market for Rolls-Royce’s Ghost are those wealthy individuals who prefer a small car and drive their own car (Ernst, 2012). To capture the interests of Rolls Royce’s target consumers, the company should invite a large group of elite individuals to come and visit an exclusive Auto Show. By doing so, the sales personnel at Rolls-Royce can have the opportunity to introduce the lastest Rolls-Royce’s Ghost model and explain to them the advantages of owning one of these personalized car model. It will also give the Rolls-Royce’s sales personnel the opportunity to discuss with their prospective clients the differences between this particular car model and those that are being offered by other luxury brands. To capture the interests of Rolls-Royce’s target consumers, this company should make use of their existing customer database to formally invite each one of them to visit the company’s Auto Show. This can be done by sending each of its potential customers a post-mail invitation. Since the target market of Rolls-Royce are the elite and wealthy individuals, providing its potential customers with a cocktail party event prepared by some award-winning chefs could help them feel more valued and highly appreciated. Even though the employment in UK rose by 154,000 to 29.7 million between the months of October to December 2012 (BBC News, 2013a), employees’ wages are still below high inflation (Inman, 2013). Therefore, coming up with a more friendly payment scheme could help Rolls-Royce increase their expected sales and profits. 6. Discussion and Analysis To be able to create an effective marketing plan, it is important to conduct a market segmentation study as this particular marketing strategy will enable the company learn more about the personal characteristics of its target market. Basically, knowing the social status and lifestyle of Rolls-Royce’s target market gives signal on how the company should respond to the needs of their prospective clients. Examining the macro-environment of the UK automobile industry is equally important. In the process of conducting PEST analysis, the top management of Rolls-Royce could idenfity political, economic, social, and technological factors that could affect the selling of Rolls-Royce’s Ghost. Using the information gathered in the PEST analysis, Rolls-Royce will be able to come up with strategies that are useful in the delopment of a more effective marketing plan. Lastly, the marketing mix is a useful tool that will help Rolls-Royce decide on how they should offer the Ghost model in the market. This model is equally effective in terms of testing the effectiveness of Rolls-Royce previous marketing strategies. References Applegate, E. and Johnsen, A. (2007). Cases in Advertising And Marketing Management: Real Situations for Tomorrow . Plymouth: Rowman & Littlefield Publishers Inc. Ball, D., Simo es-Coelho, P. and Macha, A. (2004). The role of communication and trust in explaining customer loyalty: an extension to the ECSI model. European Journal of Marketing, 38(9/10), pp. 1272-1293. BBC News. (2013a, February 20). UK unemployment total falls to 2.5m. [Online] Available at: http://www.bbc.co.uk/news/business-21517854 [Accessed 8 March 2013]. BBC News. (2013b, February 20). Economy tracker: Unemployment. [Online] Available at: http://www.bbc.co.uk/news/10604117 [Accessed 8 March 2013]. BBC News. (2013c, February 12). UK inflation rate unchanged at 2.7% in January. [Online] Available at: http://www.bbc.co.uk/news/business-21425939 [Accessed 13 March 2013]. Cauchi, M. (2013, January 10). The Wall Street Journal. Rolls-Royce To Launch New Model In 2013, Mulls Hybrid Engines. [Online] Available at: http://online.wsj.com/article/BT-CO-20130110-704450.html [Accessed 8 March 2013]. Doron, R. (2013, January 19). You Tube. 2012 Rolls Royce Ghost Review. [Online] Available at: http://www.youtube.com/watch?v=D23Exdg2Rp4 [Accessed 8 March 2013]. English, A. (2010, January 29). The Telegraph. Rolls-Royce Ghost review. New Rolls-Royces come along once every blue moon. This baby Rolls costs almost £200,000 and is claimed to be the essence of the marque. [Online] Available at: http://www.telegraph.co.uk/motoring/car-manufacturers/rolls-royce/7092773/Rolls-Royce-Ghost-review.html [Accessed 8 March 2013]. Ernst, K. (2012, November 21). Motor Authority. 2013 Rolls-Royce Ghost – Review. [Online] Available at: http://www.motorauthority.com/overview/rolls-royce_ghost_2013 [Accessed 8 March 2013]. European Commission. (2012, July 30). Reducing CO2 emissions from passenger cars. [Online] Available at: http://ec.europa.eu/clima/policies/transport/vehicles/cars/index_en.htm [Accessed 8 March 2013]. Fuel Economy. (2013a). Federal Tax Credits for Hybridgs. Federal tax credit up to $3,400! [Online] Available at: http://www.fueleconomy.gov/feg/tax_hybrid.shtml [Accessed 8 March 2013]. Fuel Economy. (2013b). Compare Hybrids Side-by-Side. [Online] Available at: http://www.fueleconomy.gov/feg/hybrids.jsp [Accessed 8 March 2013]. gov.uk. (2013). National Minimum Wage rates. [Online] Available at: https://www.gov.uk/national-minimum-wage-rates [Accessed 13 March 2013]. Inman, P. (2013, January 23). The Guardian. UK unemployment rate falls to 7.7% but wages stagnate below inflation. [Online] Available at: http://www.guardian.co.uk/business/2013/jan/23/unemployment-rate-fell [Accessed 8 March 2013]. Kew, J. and Stredwick, J. (2010). Human Resource Management in a Business Context, 1st Edition. UK: CIPD. Kotler, P. (2000). Marketing Management - International Edition - The Millennium Edition. New Jersey: Prentice Hall International Inc. Kuwano, M., Zhang, J. and Fugiwara, A. (2005). Analysis of ownership behavior of low-emission passenger cars in local Japanese cities. Proceedings of the Eastern Asia Society for Transportation Studies, 5, pp. 1379-1393. Massey, R. (2011, January 11). Mail Online. The electric Rolls Royce: Luxury firm plans eco-friendly vehicle as sales see 171% rise. [Online] Available at: http://www.dailymail.co.uk/motoring/article-1345841/The-electric-Rolls-Royce-Luxury-firm-plans-eco-friendly-vehicle-sales-171-cent-rise.html [Accessed 8 March 2013]. Menon, B. and Raj, J. (2012). Model Development and Validation for Studying Consumer Preferences of Car Owners. International Journal of Marketing and Technology, 2(5), pp. 148-173. Parliament. (2004). Environmental Policy and Innovation. Postnote. No. 212. London: Parliament Office of Science and Technology. Peterson, S. and Michalek, J. (2012). Cost-effectiveness of plug-in hybrid electric vehicle battery capacity and charging infrastructure investment for reducing US gasoline consumption. Energy Policy. [Online] Available at: http://dx.doi.org/10.1016/j.enpol.2012.09.059. [Accessed 8 March 2013]. Reiter, C. (2012, November 27). Bloomberg Businessweek. Rolls-Royce Cars Plans Expansion as Wealth Spreads. [Online] Available at: http://www.businessweek.com/news/2012-11-26/rolls-royce-cars-pushes-expansion-as-wealth-growth-flouts-crisis [Accessed 13 March 2013]. Rogers, E. (2005). Learners Resource: Certificate IV in Business (Marketing) Profile the Market. Melbourne: Australian Training Products. Rolls-Royce. (2013a). History: The Beginning. [Online] Available at: http://www.rolls-roycemotorcars.com/history/ [Accessed 8 March 2013]. Rolls-Royce. (2013b). Wraith. [Online] Available at: http://www.rolls-roycemotorcars.com/wraith/ [Accessed 8 March 2013]. Rolls-Royce. (2013c). Phantom Family. [Online] Available at: http://www.rolls-roycemotorcars.com/phantom-family/ [Accessed 8 March 2013]. Rolls-Royce. (2013d). Ghost Family. [Online] Available at: http://www.rolls-roycemotorcars.com/ghost-family/ [Accessed 8 March 2013]. Rolls-Royce. (2013e). Environmental. [Online] Available at: http://www.rolls-roycemotorcars.com/the-company/environmental/#Pollutionprevention [Accessed 8 March 2013]. Rolls-Royce. (2013f). News. [Online] Available at: http://www.rolls-roycemotorcars.com/library/news/ [Accessed 8 March 2013]. Rolls-Royce. (2013g). Regional Offices. [Online] Available at: http://www.rolls-royce.com/contact/regional_offices/ [Accessed 13 March 2013]. Rucker, J. (2011, June 9). Fast Company. How Hybrid Engines Work. [Online] Available at: http://www.fastcompany.com/1758741/how-hybrid-engines-work [Accessed 8 March 2013]. Schiller, J. (2010). Global Change & Energy Policy. US: Createspace. Sharma, N. and Patterson, P. (1999). The impact of communication effectiveness and service quality on relationship commitment in consumer, professional services. Journal of Services Marketing, 13(2), pp. 151-170. Slbadvi, A. and Hosseini, M. (2011). Mapping B2B value exchange in marketing relationships: a systematic approach. Journal of Business & Industrial Marketing, 26(7), pp. 503-513. The Car Connection. (2013). 2013 Rolls-Royce Ghost – Review. [Online] Available at: http://www.thecarconnection.com/overview/rolls-royce_ghost_2013 [Accessed 8 March 2013]. The National Archieves. (2012). Climate change and pollution. [Online] Available at: http://www.nationalarchives.gov.uk/webarchive/climate-change-pollution.htm [Accessed 8 March 2013]. Vyas, A., Santini, D. and Johnson, L. (2009, January 11-15). Plug-In Hybrid Electric Vehicles’ Potential for Petroleum Use Reduction: Issues Involved in Developing Reliable Estimates. Paper No. 09-3009.Submitted for Inclusion in the Compact Disk and Presentation at the 88th Annual Meeting-Transportation Research. [Online] Available at: http://cta.ornl.gov/TRBenergy/trb_documents/09-3009%20PHEV%20Oil%20Reduction%20Vyas%20and%20Santini%20ANL.pdf [Accessed 8 March 2013]. Appendix I – Market Segment for Rolls-Royce’s Latest Ghost Car Model Demographic: Age Family Size Family Life Cycle Gender Annual Income Occupation Educational Attainment Religion Race Generation Nationality Social Class 16 years old and up 1 – 2; 3 – 4; 5+ Young & single; young & married; with or without children; old & single; old & married Male, female GBP 180,000 and up Professional and technical managers, public officials, business people, celebrities / artists. Grade school or less; some high school; high school graduate; some college; college graduates. Catholic, Anglican; Uniting Church; Presbyterian; Reformed; Others. (Rivera, 2008) White; Black; Asian; Hispanic; Chinese; Others Baby boomers; Generation X and Y. Australian; North American; South American; British; French; German; Italian; Japanese; etc. Upper class and middle class. Psychographic: Lifestyle Personality Values Party goers; active and sophisticated lifestyle. Car fanatic individuals; trend setters. Positive attitude and buying behaviour on luxury cars. Appendix II – Unemployment Rate in UK Source: BBC News, 2013b Appendix III – List of UK Minimum Wage Source: gov.uk, 2013 Appendix IV – List of Rolls-Royce’s Potential Competitors Within and Outside the UK Market Hybrid Cars Manufacturers Specialists in Sports Cars Manufacturers of Non-Hybrid Cars 1. BMW 2. Buick 3. Cadillac 4. Chevrolet 5. Chrysler 6. Dodge 7. Ford 8. GMC 9. Honda 10. Hyundai 11. Infiniti 12. Kia 13. Lexus 14. Lincoln 15. Mazda 16. Mercedes-Benz 17. Mercury 18. Nissan 19. Porsche 20. Saturn 21. Toyota 22. Volkswagen 1. Quantum Sportscar Ltd. 2. Radical Sportscar 3. Sebring 4. TVR 5. Ultima Sports 1. AC 2. Aquada 3. Ariel 4. Ascari 5. Aston 6. Martin 7. Bentley 8. Berkeley 9. Bristol 10. Brooke 11. Caparo 12. Caterham 13. Connaught Motor Company 14. Daimler 15. Eterniti Motors 16. Farboud 17. Ginetta 18. Grinnall 19. Invicta 20. Jaguar 21. JZR 22. Land Rover 23. Lea-Francis 24. Lister 25. Locost 26. Lotus 27. McLaren 28. Mini 29. MK Indy 30. Morgan 31. Noble 32. Nova 33. Prodrive 34. Triking 35. Vauxhall 36. Westfield Source: Fuel Economy, 2013b; Chapman, 1995, pp. 44 – 45 Appendix V – List of Rolls-Royce Regional Offices Worldwide Source: Rolls-Royce, 2013g Read More