Teesside University

Business Management

Fundamentals of marketing
Nissan case study

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Case Study on Nissan
The purpose of this essay is to explore and question why Nissan Motor Company creates products that are branded for a specific target audience. It will also be based upon how these techniques benefit the company and discuss what Nissan gain from it.
1. Consider the introduction of the infiniti brand by Nissan and discuss how the sub-brand relates to a particular target segment for Nissan?
Nissan was originally founded in 1993 and was formerly known as Tobata Casting co, Ltd, the company name then later transformed in Nissan Motor. According to Nissan Global “the founder Yoshisuke Aikawa a brilliant leader of the Nissan combine had grand plans to mass-produce 10,000 - 15,000 units per year, and was about to putting his plan into practice”(www.nissan-global.com, Accessed: 12 January 2014 ).
Since 1933 Nissan has transformed and expanded massively and is now very popular and successful brand. Its products are now purchased worldwide selling mostly in larger countries such as Japan and America. As reported by Johnathon Jones “Nissan produces more than 300,000 cars a year, and has plans to increase that volume in the long term to 500,000” (Johnathon Jones, 2002). “Nissan has a clear vision for the future, and - with our Alliance partner, Renault - we are working with passion to achieve it. Our mission is to enrich people's lives, building trust with our employees, customers, dealers, partners, shareholders and the world at large”. (www.nissan-global.com, Accessed: 12 January 2014).
Nissan has become one of the world’s more leading automakers, with annual production of 2.4 million units, which represented 4.9 percent of the global market. Domestically, the company sells 774,000 vehicles on annual basis, placing it second behind Toyota Motor Corporation. (Fundamentals of marketing case study).
In 1989 Nissan Motor Company came to a decision that they would establish a new division within their company which would be known as the inifini brand. Introduced firstly in the USA, the Infiniti brand was designed as a luxury brand and its main purpose was to “compete with other car brand in the U.S and Europe” (http://www.autoevolution.com/infiniti/history/, Accessed: 13 January 2014). The Infiniti brand has grew massively over the years however it’s still not a popular or as recognised as Nissan had hoped.
Due to the car market becoming increasingly competitive Nissan came up with the Infiniti brand to compete with brands that are well-known worldwide such as Audi, BMW and Mercedes. “Infiniti managed to create a global network in a fairly little amount of time” (www.autoevolution.com, Accessed: 13 January 2014). Nissan chose to keep the Infiniti division detached to the original Nissan brand so that it would have a bigger impact within the vehicle industry. Nissan did this hoping the Infiniti brand would generate a more effective appeal to a distinct market segment. “Infiniti, the company’s premium brand, is aiming for a ten percent share of the global luxury brand market” (Fundamentals of marketing case study.
The Original Nissan brand was created to cover all target areas however they have took a different approach with the sub-brand “The Infiniti division”. One of Infiniti’s main purposes was to attract a specific target audience being only up-scale adults. This was done hoping that Infiniti division and the vehicles they produce would be seen as more of a luxury brand. “Infiniti’s pioneering spirit boldly breaks from convention to create something more distinctive, more alive”. (www.infiniti.com, Accessed: 19 January 2014)
For a very long time now the Nissan brand has been known for producing vehicles that are more family beneficial.” Nissan normally produces low-cost and fuel efficient small cars with a standard comfort, safety, style and performance”. (Fundamentals of marketing case study). The launch of the Infiniti brand has helped Nissan step away from that particular market segment and help evolve a more luxuries and high standard reputation. Nissans sister brand Infiniti have built an empire of vehicles which are more expensive and desirable. Nissan says “we believe a luxury vehicle should connect you to the road not insulate you from it. It should put you in charge, not take charge. It should make your heart beat faster not lull you to sleep. (www.infiniti.com, last accessed 19 January 2014).
The core product of the Infiniti Division or the core benefits as some people may say are mostly connected to transportation. The main purpose of the Infiniti brand is to transport a person from place to another; however it differs from other vehicles company’s as with Infiniti you travel in luxury, in style. According to Masterson and Pickton “A products main reason for existence is called its core benefit. It is the simplest possible answer to an expressed need” (Masterson. R & Pickton .D, 2010, p206). Nissan have done this emphasising on the fact that everybody transporting from one place or another needs some type of vehicle to do so. By creating a luxury brand, customers are persuaded more to purchase with Nissan due to the Infiniti brand being branded as upper class type of transportation
The logo of the Infiniti brand was designed carefully making sure it could represent the division’s purpose in every possible way. “In July, 1987, the Infiniti name was born. The fresh spelling with four “I”s and badge with its two central lines leading off into an infinite point on the horizon symbolizes this new luxury performance brand’s desire to be always looking forward – to new horizons, to infinity” (www.nissannews.com, Accessed 13 January 2014)
Due to low awareness of the Infiniti brand, Nissan had to think quick on how they could turn the division is to a brand which would be acknowledged and sold worldwide. Sproule, who leads Nissan’s global marketing and communications division, selected Formula 1 sponsorship as a marketing vehicle for Nissan’s luxury car brand Infiniti. According to Sproule “As long as there has been the car industry there has been racing”. Nissan chose to sponsor F1’s Red Bull team, which includes the German driver Sebastian Vettel and the Australian Mark Webber. Results were seen straight away, says Nissan executive vice-president Andy Palmer. Unaided awareness of Infiniti in Europe was only 2.5 per cent before Infiniti signed the Red Bull deal in 2010, but in its first full season in F1 last year this increased substantially. He also claims the Infiniti branding on Red Bull’s cars got more airtime than did the branding of F1 manufacturers Ferrari and Mercedes-Benz. (http://www.marketingweek.co.uk, Accessed: 19 January 2014)
According to Lexile a writer for the sun “Infiniti is the sporty luxury brand for Nissan buyers wanting to move upmarket” (Lexile, 2007), however it is clear to see that not everyone agrees with this which is shown through low sales in both Europe and other small countries. Even though Nissan have continuously tried to promote their sister brand Infiniti, they are still not receiving the response they had set out to gain. Sproul, who lead’s Nissan’s global, marketing, says “we have a business problem to address, which is awareness of the Infiniti brand. Basic awareness is still low. We are competing against luxury brands that have been around for 100 or more years. We wanted people to finally say: I’ve heard of Infiniti.” (http://www.marketingweek.co.uk, Accessed: 19 January 2014)
Overall it is clear to see that the sub-brand Infiniti is mainly focused on targeting a specific market segment being better-off and up-scale adults. This is because the Infiniti brand was created solely to produce more luxury cars which would expand and build Nissans reputation. As a result of this, Nissan has placed the vision Infiniti in a very difficult position as there a lot of other luxury brands such as Mercedes, Audi and BMW which they will have to compete with. This is very challenging as these brands have been around for years making them more well-known and popular to consumers. By keeping the sister brands Nissan and Infiniti separate from each other Nissan have been able to create a more Upper scale division within the company allowing them to widen the range of vehicles they produce. Nonetheless it’s evident that because of Nissan’s previous background and reputation the Infiniti brand is finding it harder to battle with other brands. This is due to the Infiniti brand still being linked with Nissan, which is seen to create more middle class vehicles.
1. Discuss the way the Nissan leaf is being positioned in the marketing communications activity of Nissan? Illustrate your answers by considering a range of promotional mix variables?
On August 2nd 2009 Nissan motor company unveiled the world’s first affordable, electric vehicle, The Nissan LEAF. In 2010 the environment-friendly 100% electric car manufactured by Nissan was firstly introduced into Japan, The United States and then later on into the year, parts of Europe and some other markets. Due to the massive Global concerns surrounding global warming and climate change, there has been increasing demand for the auto industry to produce solutions to limit or reduce greenhouse gas emissions. Nissan feeling the pressure due to the legal measures, with stringent environmental target for vehicle emission standards came up with a solution The Nissan LEAF (Fundamentals of marketing case study).
Designed specifically for a lithium-ion battery-powered chassis, the Nissan LEAF is a five-door hatchback that comfortably seats five adults. With the new compact lithium-ion batteries fitted under the floor it ensures a comfortable space. (Fundamentals of marketing case study). Nissan designed the LEAF this way making it more appealing to customers. There are a wide range of exterior and interiors deigns and colours to choose from which is displayed on there website. Even though the Nissan leaf has not been around for that long it has won numerous international accolades, including the prestigious 2011 European Car of the Year, 2011 World Car of the Year and 2011-12 Car of the Year Japan awards. (http://www.nissan-global.com, Accessed: 22 Jan 2014)
As well as most other International; companies Nissan choose to use the 4p’s within the Nissan LEAF Launch to help market their vehicles. The 4p’s are linked in with the marketing mix and consist of Product, Price, place and promotion. All 4 of these are all used to help advertise and sell products to a customer or particular market segment. Masterson & Pickton say “All commercial enterprises have products to sell and these products are both the result of, and the reason for, marketing activities. Products are developed to meet customer needs and so those needs must be researched and understood”. (Masterson .R & Pickton .D, 2010, p202).
Starting off with product, the main purpose or core benefit, known to some, of the product the Nissan LEAF is it being a 100% electric environmental friendly vehicle, used for some type transportation being either business commuting or leisure. The benefit of the “zero emission car in contrast to traditional vehicles is that it does not have an engine therefore it does not emit C02 or exhaust gas. (Fundamentals of marketing case study). This means that the Nissan leaf is causing no harm to the earth. The Nissan LEAF is a great way of saving money compared to other vehicles produced by other motor companies, As a result of it being an all-electric car it requires no fuel, just electrical charge, therefore helping customers save money that would have been spent petrol or diesel. This again another Core benefit for the Nissan LEAF.
Promotion another term for marketing communications is an essential part of the total product offering. No matter how good your product is, if people don’t know how good it is, then they will not buy it (Masterson .R & Pickton .D, 2010, p270). The motor company Nissan uses Promotion to show off their new 100% all electric environmental friendly vehicles, the Nissan LEAF, hoping to attract customers which will buy the product. One of the ways Nissan chose to promote the LEAF vehicle was through The Big turn on Campaign which involved giving away free cab rides in the battery-electric vehicle to pedestrians in the city. "The Big Turn On campaign that launched in April that was geared towards getting one million people to experience electric-vehicle driving in just 100 days. Through this and other events, that goal was reached June 20, 18 days ahead of schedule” (http://green.autoblog.com/2012/06/25/free-nissan-leaf-cab-rides-in-london-promote-electric-vehicles/, Accessed: 22 Jan 2014)
The five door hatchback viechle was first manufactured in
Even though the Nissan LEAF is a cheaper type of transport in the long run its still more expensive to buy than other vehicles that are ran on petrol and diesel due to the pricing of the battery pack
Even though Nissan were the first motoring company in the world to create and introduce a 100% environmental friendly battery-electric car, many other companies have followed in Nissans footsteps and have started to bring out similar vehicles which have similar core benefits causing a lot of competition for the Nissan LEAF. All these companies including Nissan are all targeting a specific marketing segment which is customers who want to save money and help protect the earth from gas emissions such as greenhouse gasses causing worldwide issues such as global warming. Other popular brands such as Renault and Toyota are also going green and have produced 100% all electric vehicles. This is a big disadvantage for Nissan as due to a wide range of well-known and trustworthy competitors they may not be receiving as many customer sales as they first did when the LEAF was first released. Due to the Nissan LEAF still being in the begging stage of its life cycle this is a very challenging position to be put into in such an early phase of its growth.