Free Essay

Jaguar

In: Business and Management

Submitted By NehaGujrani
Words 3188
Pages 13
Word count: 2593 DATE: 9 NOVEMBER, 2015
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annual operational marketing plan for jaguar Word count: 2593 DATE: 9 NOVEMBER, 2015
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annual operational marketing plan for jaguar

Table of Contents

1. Introduction 2 2. Marketing Objectives and Strategies 3 3. Marketing Mix A. Product 4 B. Price 7 C. Place 9 D. Promotion 11 4. Conclusion 13 5. References 14

1. Introduction

Jaguar Land Rover Limited is a British car manufacturer whose main trade is described as “the design, development, manufacture and marketing of high performance luxury saloons and specialist sport cars” (Fame, 2015). Owned by Tata Motors since 2008, Jaguar is one of the leading luxury car brands in the UK, known for its rich British heritage.

The UK Luxury Car market recorded a market growth of 7.3% in the Executive, Luxury and Sports Car segment in 2014, with Jaguar seeing growing sales in the UK market in recent years (Mintel, 2015). The thriving car market in the UK provides opportunities Jaguar can capitalize on. The purpose of this report is the formulation of an operational marketing plan for Jaguar to increase sales by 5% over a period of one year.

2. Marketing Objectives and Strategies

Jaguar believes in putting the “Customer first”, creating “great products” and developing “Environmental Innovation” (Jaguar, 2015).

Jaguar’s customer base is predominantly male, between their late 30s and early 50s, successful, affluent and family-oriented (Bendzovska, Blomqvist and Rubenstien, 2008). In the recent years a new market has emerged in the automobile industry – the low-price luxury car market, with buyers (typically younger generations) seeking premium brands at affordable prices. With launching the Jaguar XE, Jaguar hopes to capture this new market and target the millennials and the female population. Jaguar’s main competitors in the given market are German manufacturers such as Audi (A4), BMW (3 Series), Mercedes (C-class) and Japanese Lexus (IS) (Dutt, 2015).

The Marketing Objectives for Jaguar are:
1. To enter the entry level premium car market with the new Jaguar XE and reach out to affluent millennial customers
2. To uphold the brands cultural heritage and vision whilst promoting environmental sustainability
3. To increase sales by 5% over a period of one year from December 1, 2015 to November 30, 2015 A brand associated with British culture, Jaguar’s core competitive advantage is its British heritage. Hence to achieve its set objectives, Jaguar must focus its marketing strategy in the United Kingdom on its prestigious British brand image, positioning the brand above its competition in terms of status and attracting customers who value culture.

3. Marketing Mix Plan

To successfully achieve Jaguar’s organizational objectives, the below recommendations must be incorporated in the marketing mix.

A. Product

Positioned in the ultra premium segment (Mintel, 2015), Jaguar currently offers 5 luxury vehicle models, the XE, XF, XJ, F-TYPE and the F-PACE, in its Product Line in the UK, which use the family brand name Jaguar (Umbrella Branding).

Jaguar’s biggest selling and most awarded car, the Jaguar XF recorded its best year of sales in 2014 (Jaguar, 2015) and is in the Growth stage of its product life cycle with newer improved models of the car recently launched in 2015, while one of the brand’s oldest flagship cars, the Jaguar XJ and Jaguar’s sports car, the Jaguar F-TYPE are in their Maturity stage. New entrants, the Jaguar F-PACE (Jaguar’s new Luxury SUV) and Jaguar XE (Jaguar’s Entry Level Luxury saloon) are in their Introduction stage. However, while the PLC model is helpful in determining the marketing strategy the brand should undertake at that time, its aptness is questionable considering the stages are not time bound or exact, i.e., the Jaguar XF can be in the Growth or Maturity phase depending on perspective.

Fig. 1: Product Life Cycle (Source: Rohlik, 2015)
With first deliveries since May 2015, the Jaguar XE is in the Introduction phase of its PLC having crossed the Product Development phase. Jaguar invested a large sum to develop and promote the new Jaguar XE and thus the profits in the Pre-development and Introductory stages are negative (typical of a product in its introductory stage). However, there have been sales in the Pre-introductory stage through bookings of the car, and during the Introductory stage, and hopefully the Jaguar XE will breakeven and start making profits soon.

Recommendations on Product

The UK Luxury Car market has High market growth, a 7.3% growth in the Executive, Luxury and Sports Car segment in 2014 (Mintel, 2015). Jaguar holds a 0.7% Market share in the UK Car market. Its competition Audi holds 6.4%, BMW 6% and Mercedes 5%. Hence Jaguar has low relative market share and high market growth - it’s a Problem Child when plotted on the Boston Consulting Group Matrix. However, the brand is seeing increased sales in the recent years and has potential. Hence, Jaguar must invest more to take advantage of the booming UK Car Market. Jaguar must focus its marketing efforts on pushing the Jaguar XE, since the new entrant captures a new market that has great sales potential and can specifically drive higher sales owing to its cost advantage.

What the Jaguar XE needs to stand out amongst competitors is uncontested Product differentiation. The Jaguar XE satisfies the same core need of transportation, with tangible benefits of advanced engine technology, great performance, strong exteriors & customizable luxurious interiors, as its competitors. Even at the Augmented Product level, its In-Car Technology system, Driving Assistance and other advanced features such as the unique electric powered assisted steering to boost responsiveness, State of the Art Aluminium intensive architecture for refined handling and After sales services are easily at par with or imitable by competitors give or take few features, and new or improved product development is not feasible given the limited timeline and the fact that the car was launched barely months ago. Hence, product differentiation must be made at the Potential Product level. The Jaguar brand is associated with British Heritage, prestige, luxury, style, the promise of Quality, dependability, reliability. It has a premium feel to it. Every Jaguar is made to order with the specifications of its owner. To achieve the set marketing objectives, efforts must be focused on creating value through brand appeal, not product specifications.

Fig. 2: Product Anatomy

B. Price

Given the growth of the Entry level luxury car market and an increased consumer demand for cars in this category, Jaguar sensed the need to launch a car like the Jaguar XE. Since the car is in the introduction stage of its Product Life Cycle, the organization’s pricing objective is to enter or penetrate the market (a new market for the brand) and gain market share.

The Jaguar XE is priced at £26,990 (on road price) for its entry model in an oligopolistic market where it faces competition from the BMW 3 Series, Audi A4, and Mercedes C Class. The prices of comparable models (exact figures unavailable) of competitor brands are higher than Jaguar. Thus Jaguar is using a Market penetration pricing strategy of low pricing with heavy promotional expenditure to encourage customers and gain market share for the new Jaguar XE.

Recommendations on Price

Price is often treated as an indicator of quality. Customers often perceive products with a higher price to be of better quality than similar products charging a lower price. This becomes even more significant when dealing with luxury products where price is often used to convey a differential advantage. The higher the price, the more status the product will confer on its owner and more prestigious the brand image.

With launching the Jaguar X Type in 2001 and the Jaguar XE in 2014, Jaguar has entered the low-price entry level luxury segment, hoping to capture its traditional customers at a younger age (possibly female buyers as well) and engender life-long loyalty to its brand, and to increase revenues through an aggressive growth strategy (Ganaway, Sammy and Smith, 2003). There has been much debate on the low pricing strategy adversely affecting the brand image. Jaguar has always been perceived as a high-status brand targeted at the classes. While an addition to its product line to target a new market segment altogether is a lucrative opportunity, pricing a Jaguar car at a lower level than competitors (BMW, Mercedes and Audi) significantly damages Jaguar’s brand image and diminishes its perceived value. Jaguar’s competition (primarily German owned) does not have the rich British heritage and history Jaguar boasts of and neither do they exude that premium feel. Jaguar is an aspirational brand, and caters to a market that is not particularly price sensitive. A customer willing to spend £26,000 will be likely to spend £30,000 for a brand he perceives as having a better reputation, even if it lacks few product specifications its competitors have. The luxury market operates primarily on brand image. Pricing Jaguar lower is significantly detrimental to the exclusive, up-market image Jaguar currently holds. Hence Jaguar must position the Jaguar XE at a higher level than its competitors by charging a price comparable or slightly higher than them to maintain the premium brand image and consequently drive sales to achieve the organizational objective.

However, these recommendations are made on best available data and would likely differ with exact company data such as its costs and market and competitor data.

C. Place

Jaguar currently uses an Indirect, One-level Distribution Channel to bring its cars to consumers in the United Kingdom. Jaguar uses the Short Channel Distribution structure, wherein Jaguar’s National Sales Company (Producer) distributes Jaguar cars to franchised dealers (Retailer) who then sell to final customers. Jaguar cars are sold through 90 such authorized dealers in the UK (Jaguar, 2012).

Fig. 3: Jaguar’s Distribution Channel Structure

Jaguar follows a Selective Distribution Intensity Strategy. Jaguar selects limited dealers who are then entrusted with the task of sales and after-sales servicing of their cars. Each dealer enters into a contractual relationship with Jaguar, by which, each single outlet must sell Jaguar’s products only, hence maintaining the exclusive image of the brand. Jaguar’s channel members hence form a vertical marketing system.

Jaguar employs a hands-on approach to manage its Channels. It maintains close contact with its Authorized dealers, monitoring their performance along with providing necessary support and assistance to deliver maximum value to the customer. The company itself has entered into arrangements with partners such as FGA Capital (for the UK and European market) to provide financial support to its customers (Jaguar, 2012). Hence Jaguar maintains a high level of control over channel operations.

Recommendations on Place

Jaguar’s distribution strategy takes into account the market scenario, nature of the product, producer capabilities, competitor activities, environmental background and consumer mindset. The brand caters to an up-market, exclusive audience and distribution must be selective. Jaguar’s typical customers often buy in person and expect a premium feel and a personal experience, hence Jaguar handpicks its limited number of high quality auto dealers who uphold and maintain Jaguar’s classy and sophisticated brand image and can provide high quality services. A consumer would not want to buy a Jaguar online. Jaguar is not a car with mass appeal. It is about the overall experience. Hence, it is imperative to have well groomed sales personnel, plush showrooms and carefully curated experiences for customers.

Jaguar’s vertical marketing system limits conflict between intermediaries as each dealer reports directly to Jaguar and all conflicts are solved by Jaguar giving the brand control on operations. Moreover, Jaguar’s manufacturing is capital intensive and Jaguar has established an efficient system to match its production with market demand through its authorized dealers by keeping a watch on dealer stock and inventory to forecast demand.

While Jaguar’s competitors, BMW, Lexus, Mercedes, Audi, also follow a similar distribution strategy, though with larger number of dealers, Jaguar limits itself to a few dealers to keep its exclusive and ‘limited to few’ image. To upkeep the premium brand image of Jaguar, it must seem difficult to procure, yet approachable so it does not lose out on customers. Hence, the current distribution strategy works well for Jaguar.

However, Jaguar must focus on creating unforgettable buying experiences and constantly strive to maintain better relations with its dealers to maintain demand for their cars. They must motivate them and provide valuable incentives since the dealers are the face of the brand and represent the brand to the consumer.

D. Promotion

Jaguar currently employs a range of promotional tools – Mass and Direct communication – to promote the new Jaguar XE and has allocated a sizable promotional budget for the new car. Jaguar unveiled the XE through a unique £4 million worth PR stunt, involving a helicopter flown across London transporting the new saloon, in 2014.

Jaguar uses mass communication methods such as advertising, PR and Sponsorships, and employs tools like Product Placements and Cross promotion marketing. The new James Bond film, Spectra featured the Jaguar C-X75 (Product Placement) making associations between the car and the English/British heritage of the brand. The brand sponsors the Wimbledon, and is associated with Sky Cycling, where Jaguar provides vehicles for the cycling team events. Jaguar is also a proud sponsor of the Invictus games. The brand supports road safety through its initiative Jaguar First, a Driving school for the Under 17 aimed at teaching people to drive correctly and safely from a young age.

Jaguar also uses direct communication methods. It is very active on social media and responds rapidly to customer queries and questions, using the platform to effectively engage with potential and existing customers and generate considerable social media traffic. Jaguar had the 3rd highest brand engagement levels on Facebook in 2012 (Shearman, 2015). The use of online marketing helps promote the brand to their audience through diverse mediums. Jaguar also employs personal selling to to maintain exclusivity. Consumers submit personal data to gain access to Jaguars brochure, which Jaguar then uses to market to them.

Recommendations on Promotion

Typical of a product in its introductory stage, Jaguar XE’s promotional objectives are to inform potential customers of the car, to constantly remind them of the new option they now have when they want to purchase a car in that category, whilst reassuring them that they have bought or will buy a prestigious car.

Jaguar is associated with designing cars for the Queen and high officials and celebrities in the UK and is linked with British culture and Heritage. Owning luxury cars is a form of self expression. A customer buying a luxury car seeks the status that comes with buying the car. He buys the brand, not the car. Hence Jaguar’s premium and exclusive image must be promoted, positioning the brand as a status symbol. Consumer must view the brand as the only solution to their desire, and not the best option amongst competition.

A mix of mass communication tools such as advertising on carefully selected Television channels, billboards and magazines, PR activities and sponsorships must be employed forming favorable associations between the brand and its target audience, emphasizing that every Jaguar is custom made for its owner. The owner’s initials could be inscribed on the engine, showing its tailored exclusively for them.

Since the Jaguar XE is primarily targeted at the young millennial customers, Jaguar must reach out to its customers in their way, i.e., digitally. While Jaguar does have a good social media presence, it must develop functionality of its mobile app and websites introducing features such as virtual test drives and interesting graphics, integrating the whole communication into one seamless experience.

Given the recent Volkswagen case, Jaguar must promote the cause of Environmental sustainability. The Jaguar XE is the first car in the world to use RC 5754, a high strength alloy made up of recycled material, and the Jaguar XE has the lightest body in its class, reducing fuel consumption and CO2 emissions. Jaguar must promote its stance on sustainability and sponsor Environmental initiatives.

4. Conclusion

The Jaguar XE has tremendous growth potential in the UK market. With emphasis on its British Heritage and prestigious brand image, and the right pricing and promotion strategy to support it, the British home brand will be able to achieve its organizational and marketing objectives within the given time frame.

5. References

Bendzovska, D., Blomqvist, M., and Rubenstien, S., 2008. Assessment of Online marketing communications of an automotive company: A case study of Jaguar Cars, Sweden. Master Thesis, University of Kristianstad. [Accessed 18 October, 2015].

Blythe, J., 2009. Key Concepts in Marketing [ebook]. London. Available via: SAGE 2009. [Accessed 27 October 2015].

BMW, 2015. Index [Online]. Available at: http://www.bmw.co.uk/en/index.html [Accessed 5 November 2015].

Buss, D., 2012. Tata Finally Gets Serious About Jaguar [online]. Available via: Brandchannel. Available at: http://brandchannel.com/2012/03/01/tata-finally-gets-serious-about-jaguar/ [Accessed 25 October 2015].

Dutt, P. (2015). Jaguar XE vs its rivals: BMW 3 Series, Mercedes C-Class, Audi A4 and Lexus IS [online]. Available at: https://www.carwow.co.uk/blog/Jaguar-XE-vs-rivals-a4-c-class-3-series-lexus-is [Accessed 18 October, 2015].

Fame, 2015. Jaguar Land Rover Limited (Standard Report) [online]. Available via: Fame [Accessed 1 November 2015].

Ganaway, M., Sammy, C., and Smith, C., 2003. A Strategic Analysis of the Jaguar X-Type [online]. Available at: http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/2003/Jaguar.pdf. [Accessed 27 October 2015].

Jaguar, 2012. Annual Report 2012-2013 [Online]. Available at: http://www.jaguarlandrover.com/media/14149/jaguar_land_rover_automotive_plc_annual_report_2012-2013.pdf [Accessed 24 October 2015].

Jaguar, 2015. Annual Report 2014-2015 [Online]. Available at: http://www.jaguarlandrover.com/media/75843/jaguar-land-rover-annual-report-2014-15-web_final.pdf [Accessed 24 October 2015].

Jaguar, 2015. Jaguar UK | Luxury Sports & Executive Saloon Cars [Online]. Available at: http://www.jaguar.co.uk/index.html [Accessed 17 October 2015].

Jobber, D. and Fahy, J., 2015. Foundations of Marketing. 5th ed. London: McGraw-Hill.

Marketing Event, 2013. Jaguar [online]. Available at: http://search.proquest.com/docview/1416788536?OpenUrlRefId=info%3Axri%2Fsid%3Aprimo&accountid=14693 [Accessed 18 October, 2015].

Matr., P, 2013. Cross-Border Cultural Challenges in Mergers and Acquisitions: The Tata Jaguar Case [online]. Available at: http://tesi.eprints.luiss.it/10539/1/ciceri-piergiorgio-tesi-2013.pdf [Accessed 25th October, 2015]
Mercedes Benz, 2015. Content [Online]. Available at: Www2.mercedes-benz.co.uk [Accessed 25 October 2015]

Mintel, 2015. The UK Car Review: An Insight into Brand Preferences and Market Trends - UK - February 2015 [online]. Available via: Mintel [Accessed 7 November 2015].

Rohlik, P., 2015. Product Life Cycle Stages and Strategies [online]. Available at: https://prohlik.wordpress.com/product-life-cycle-stages-and-strategies/ [Accessed 27 Oct. 2015] [image].

Shearman, S., 2015. PG Tips is ‘most engaged with’ UK brand on Facebook [online]. Available at: http://www.marketingmagazine.co.uk/article/1121956/pg-tips-most-engaged-with-uk-brand-facebook#5X07ORwluMjClcft.99 [Accessed 3 November 2015]

Štrach, P., and Everett, A. M., 2006. Brand corrosion: Mass-marketing’s threat to luxury automobile brands after merger and acquisition. Journal of Product & Brand Management, 15(2), 106–120.

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