Bentley company caseDocument Transcript

1. Company Case Bentley Motors: Differentiation and Positioning in International Market The
mission of Bentley Motors, the definitive British luxury car company, to produce best cars in their
class, has remained unchanged since it was expressed eloquently by its founder Walter Owen
Bentley in London in 1919. Located in Crewe, England, since 1946 and owned since 1998 by
Volkswagen AG, Bentley Motors is an international company developing and crafting one of the
worlds most desirable luxury cars. There are many unmistakable characteristics that define a
Bentley distinctive design, handcrafted luxury, supreme comfort, ultimate performance, and a
refined and exhilarating driving experience. Yet it is the companys brand imaging through
differentiation and positioning that makes the quintessentially British brand unique today. To
many, owning a Bentley is not about getting from A to B but about getting there with flair infused
with advanced technology and classic hand craftsmanship at the pinnacle of British luxury
motoring. Based around the concept of Britishness in image and design. Bentley has
succeeded in differentiating its position in the global luxury car market through a market- drive
strategy based on responsive cross-market segmentation. Cross-Market Segmentation The
traditional markets of Bentley Motors are the United States, the United Kingdom, and Europe,
which were identified by the company using two of the traditional market segmentation variables:
the level of a nations economic development and per capital gross domestic product (GDP).
Bentley had enjoyed high sales in these economically developed markets, especially in the boom
of the 1980s. In the 1990s, it struggled to reach similar level of sales, which led to a major
investment in the facility, new- product development, and brand re-positioning in 1999. The brand
reached the height of its heyday in the 1920s and 1930s, and the Bentley Boys winning the 24hour race in Le Mans in 2003 seemed to emulate victories of the past. Its new Amage T luxury
sports sedan won critical acclaim by the motoring press worldwide soon after, and the
Continental GT, launched in 2004, was seen as one of the most successful launches of any car
in Bentleys history.

2. However, sales in its traditional markets slumped in 2008 due to the global financial crisis
triggered by the collapse of Lehman Brothers in September 2008. Some orders for its cars were
cancelled immediately, and sales dropped by 24 percent that year compared to 2007. When the
company was forced to stage a seven-week production shutdown in the spring of 2009 due to
the slump, it started to search for new markets to increase sales. It realized that the use of the
more traditional market segmentation variables such as age, gender, education and level of
economic development does not seem to reflect the real aspect of market behavior, especially
the burgeoning purchasing power of the well-to-do in the big emerging markets such as Brazil,
Russia, India and China. The result of the search was the identification of a thriving consumer
segment that transcends the national boundaries of these nations. Despite being located in
nations featuring low per capita income, this segment of consumers has the greatest global
consumption growth and represents rapidly growing buying power for luxury goods ranging from
ultra- luxury cars to designer handbags. Targeting Operating in markets of both developed and
emerging economies presents challenges for Bentley. It was clear from day one that it targeted
high-income groups who want to buy into the symbolism and history of the Bentley brand, seen
though the prospect customers would inherently know that they could purchase a vehicle with
similar performance and specification for less than half the price. Bentley is aware that the needs
and preferences of its target groups in the emerging economies may differ from those of its
prospects in developed economies, who are typically older or retired males, highly educated and
high earners. In comparison, Bentleys target consumers in emerging markets are often the
young, less educated entrepreneurs who share a number of important commonalties. They have
a strong appetite for Western-branded luxury goods, from which they expect superior quality as a
fundamental attribute associated with these goodsquality may mean design, materials,
technology, performance and craftsmanship, but also attributes such as the tradition and the

heritage of country of origin, uniqueness traits and perceived superiority and exclusivity.
Recognizing the differences and the opportunity to be had from differentiating its targeting efforts,
Bentley launched its value proposition based on Britishness in its newly found markets while
refreshing its original value proposition of luxury, performance and exclusivity in its traditional
markets. Differentiation and Positioning The Bentley brand concept is based on the premise that
a consumer who regards luxury car brand characteristics as important or desirable, and is in the
market for such a luxury product, should be attracted to the brand. Bentley is aware that for its
brand to be unique, it must have imagery and symbolic meaning to its consumer. In other words,
it must stand for a lifestyle or an attitude and communicate this to its cross-market consumer
something something.
3. Although owned by the German Volkswagen AG group, which employs a perception of
creditability and originality, Bentley brands itself as a quintessentially distinctive luxury brand
originating in Crewe, England, with a fusion of heritage and cutting-edge technology. It defines its
cars by the important attributes of tradition and hand craftsmanship, relative to those of speed
and performance used by its competitors. It focuses on the emotional benefits of its cars and has
stayed true to this proposition through an integrated, high-touch differentiation and positioning
program tailored to the carefully defined well-to-do groups in each of its markets. Bentley offers
an exclusive collection of limited no-motoring products produced under license from its equally
exclusive partners. Entinger and Bentley offers luxury leather travel products in vibrant colors
from the Bentley color palette, hand-stitched in England from Bentleys own hides. Through
Estede, Bentley offers a limited edition, high-end range of sunglasses and ophthalmic frames
featuring the famous winged B emblem and presented in a Bentley leather presentation box.
Through Zai, a Swiss maker of luxury ski equipment known for its craft end exclusivity, Bentley
offers innovative ski products handmade in Switzerland with support from Bentley Styling studio
in England. Bentley has also teamed up with luxury hospitality brands to enforce its value
proposition through Bentley Places that embody the values and the spirit of Bentley around the
world. The Bentley Room at Londons Mosimanns is an inimitably British blend of style and
tradition with a dash of Bentley decor and detailing. The dining room was designed by Caulder
Moore, who also designed the Bentley Living Room at the companys headquarters in Crewe.
The Bentley Suite at the exclusive St. Regis Hotel in New Yorkbuilt by John Jacob Astor IV in
190vprovides guests with the luxury, craftsmanship, and style associated with the Bentley
brand. In its traditional markets of the United States, the United Kingdom, and Europe, Bentley,
through its dealerships, regularly invites customers to take part in national golf tournaments that
culminate in cross-national event held in differing worldwide locations; the winner is crowned with
the Bentley Continental Cup. These events bring together golfers from different continents with
common interest in golf and Bentley and help to refresh and reinforce its image of luxury and
exclusivity. In its newly found markets in the emerging economies, Bentley increases publicity to
raise awareness of its brand through motor shows, exhibitions, openings of grand showrooms,
and signing of exclusive dealerships to highlight the craftsmanship, quality and luxury of a
Bentley car and the authenticity of the Bentley name. All these events take place in the most
economically developed and fashionable metropolitan areas, such as Sao Paulo in Brazil,
Shanghai, Shenzhen and Beijing in China, and Mumbai in India. Bentley stays true to its English
heritage and makes sure that the unique Britishness is steeped in its targeted marketing
programmes. In the biggest Bentley brand exhibition ever held outside Crewe, the World of
Bentley exhibition held in Shanghai in 2009 featured a myriad of exhibits devoted to telling the
Bentley story of craftsmanship, style, luxury and heritage originated in England. Bentley has long
stood as the worlds premier maker of handcrafted cars, and it did not disappoint in Shanghai.
The Bentley Design Studio gave the crowd a rare chance to glance into its celebrated tradition of
designing the
4. grand tour automobile; a Bentley stylist at work, sketching its future inspired by its past.
Bentley woodwork and trim experts demonstrated Bentleys unrivaled craftsmanship in an
interactive and fun- filled display of how the company brought the English way of life into dynamic
designs of luxurious motor cars. In the words of Geoff Dowding, Bentleys Regional Manager for
East Asia, The Chinese just love the Britishness. Bentleys high-touch positioning through
tailored marketing programmes in its new markets played a key role in the companys recovery
since the sale slumps in 2008. China has now replaced the United States as Bentleys largest
market. In 2011 the company delivered 1,664 cars to Chinese customers; during the first quarter

of 2012, sales in the region grew by 84 percent compared with the same period in 2011. The
prominent presence of its dealerships, 35 by September 2012, is set to further expand in the next
12 months as the latest high-performance coupe and convertible Continental models are
introduced to Chinese customers. In Russia, Bentleys sales increased by 45 percent in 2011.
Making it the best-selling luxury car brand in the country, The Road Ahead In summary, Bentley
target high-income segments, and builds its brand by serving a luxury segment of the car market.
It produces superior-quality products distributed through exclusive dealerships and is never shy
about charging a typically high price. It is strongly positioned as a quintessentially British brand
steeped with tradition and heritage, and it communicates this proposition through consistent and
believable associations with high-end brands in the luxury consumer goods and hospitality
sectors. In doing so, it draws its existing and prospective customers to style, luxury prestige,
heritage and exclusivity. Through these well-tuned competitive advantages, it had sold well in its
traditional markets until the economic downturn in 2008, when buyers became more cautious in
their spending. It has since recovered the following expansion into high-consumption-growth
segments in the emerging economies by carrying out effective cross-market segmentation,
targeting and positioning. The pent-up demand for luxury cars in the emerging economies is
remaining strong, with Bentley and other European sports car brands all reporting string sales
and orders. However, there are already signs of a slowdown in some of Bentleys new markets,
such as China, which reported the slowest economic growth in the past decade. Furthermore,
increasing sales aggressively in these new markets may imply less distinctiveness and
exclusivity for the Bentley brand. However, as long as Bentley remains true to its pinnacle
positioning of building the best car in its class with heritage, tradition, and cutting-edge
technology, it can look forward to ample opportunities in the years to come, especially in the
existing emerging economies as well as those in the making, such as Vietnam, Cambodia,
Kazakhstan, and the Philippines, where the nouveau rich have just started to appreciate the
quintessentially British tradition and heritage that is embroidered in Bentley.
5. Words Im sick of: Bentley, quintessential, heritage, tradition, luxury, emerging economies,
craftsmanship, exclusivity, proposition, car. Questions for Discussion 1. What is International
market segmentation? What challenges does it pose to Bentley? 2. Using the full spectrum of
segmentation variables, describe how Bentley segments and targets he international luxury car
market. 3. Has Bentley differentiated and positioned its brand effectively? Explain. 4. Given the
economic downturn in developed economies and the slowdown in emerging economies such as
China, will Bentley continue to grow? Why or why not? 5. What recommendations would you
make to help ensure Bentleys future growth?