Since Land Rover North America began its operations in 1987, the SUV industry in the United States has developed into an extremely competitive market.
Charles Hughes, President and CEO of Land Rover North America, Inc. (LRNA) is debating three positioning options for the new $30,000 Land Rover Discovery.
These positioning decision will help determine advertising messages and the overall communication strategy for the Discovery launch.
The current situation is that demand for SUVs is changing from symbols of wealth and prestige to experiences. This is seen from the fact that there is an increasing SUV purchasing trend and also with the increase in consumer wealth in US.
One of Land Rover’s main problems is how to determine the right marketing mix in order to properly distribute and allocate its marketing funds in an attempt to meet its goals.
In line with meeting its target LRNA has set a target for itself to increase its sales from 9000 to 40,000 by 1998. Correspondingly it has allowed its marketing budget to be increased to $20-30 million from its existing budget of $9 million.
The marketing options that it has to use this budget include:
a. Advertising - $6 to $19 million
b. Sponsorship and PR programs - $775,000
c. Experience marketing initiatives - $4.61 million
d. Promotions - $100,000
e. Total Cost - $25 million
• Marketing Mix
The main problems in the marketing area as seen were low brand awareness, low brand consideration and not fulfilling sales potential. In this case, it is seen that the target customer is a married male who is college educated, 35-50 years old, has an income of at least $100,000, and is a professional or a manager.
To overcome their marketing problems, Land Rover should look to improve their brand awareness through advertising. Land Rover used print advertisements with the price of the vehicle clearly stated, yet no one could seriously argue that this increased price sensitivity. In fact the purpose of...