Battling for Position in the Fast Lane

In the late 1980s, Europe dominated the world luxury car market. Germany reigned with Mercedes, BMW and Audi followed by Sweden's Saab and Volvo. Rover's re-entry into the crowded luxury car market contained a clue to the future. Realizing that it did not have the scale to design and buiid a range of cars by itself, Rover made a deal with Honda. For Rover it was to be the 800, a replacement for its SD1; for Honda, the Legend. Both firms intended to sell them in the North American market. Rover got there first in 1986. The car was good value and fitted well with the United Kingdom's reputation for traditional luxury products. The Rover 800 sold in the United States as the Stirling, with no Rover badge, to avoid association with the SDI's unsuccessful career in the United States. Although voted International Car of the Year when it was launched in 1977, the SD1 had quickly acquired a reputation for poor quality and unreliability. In 1987 initial sales of the Stirling were good, reaching 14,000. Then, by 1988, they had dropped to less than 9,000. Again unreliability killed Rover in the United States market. Quality problems plagued the Stirling, it was not ready for any market, let alone the American market.

Honda's aims for the Legend were higher than Rover's. The Honda Aeeord was already America's top-selling car. It had an excetlent reputation for economy, reliability and comfort, and was no. 1 in the US compact car market. Honda, however, had its sights on the US luxury market dominated by the Europeans. The market was growing fast, and margins were high. To attack the luxury end Honda had to straddle the US car market. The Accord was smaller and less expensive than regular American cars. In contrast, the European luxury cars now targeted were exclusive and priced above regular cars. Honda realized that to succeed it had to position the Accord and Legend differently, and that is what it did. The Legend was already bigger and more expensive than the Accord, but that was not enough. Honda decided

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not to extend the Honda brand mime, but to launch the Legend as an Acura, a new luxury brand. It also established a new Acura distribution chain and set up a special hot-line service for Aeura suppliers and users. However, unlike Mercedes and BMW, Honda intended to sell its ears fully equipped to luxury standards -cruise control, air conditioning, the iot. With the cars being made in Japan, it would have taken too long to have them 'made to measure' and shipped.

Honda had decided to take on Europe's leading car manufacturers in the world's largest car market - and with a new product, in a segment ir did not know, using a new brand name and new dealerships, and pricing higher than it had ever done before. Honda's declared aim was to give the discerning Acura driver 'total customer satisfaction'.

Honda's Legend did much better than Hover's Stirling in the United States market. In its first year 70,770 Acuras were sold, 80 per cent more than Mercedes, which had been the class leader up to that point. The Acura also had one of the best reliability records in the United Stares market and one of the highest residual values. However, Acura supremacy in the United States did not last long: Toyota soon followed with its luxury Lexus range.

America's economic recession and their loss of market share to the Japanese hit European luxury ear makers. Some responded with violent repositioning to help attract new customers. Mercedes tried to adjust its staid, reliable, quality reputation and so address customers' views that T can't afford one at the moment' and 'I'm not old enough yet'. One Mercedes ad asked: 'Has our reputation for the highest quality also given us a reputation for the highest price?' and then explained how inexpensive it was. Mercedes wanted to be sporty too. One ad headlined 'What do 27 of the 34 Grand Prix drivers drive on their day off?' Mercedes' concern about perceived expense continues. It advertises its S-class using quotes from Autocar & Motor, which says it is the best car in the world: 'Sit in an S-class, regardless of engine size, and you know you've arrived.' Hut the ad continues: '"A genuine bargain": as What Car? so neatly puts it.' The ad's headlines bet rayMercedes' positioning dilemma: Llt wouldn't be the best car in the world if nobody could afford it.'

Volvo is also repositioning its products. In 1990 its position was clear when it ran an ad with five pictures of toddlers with the headline: 'Are they as safe around town as they are around the house?' It goes on: 'If you'd like your children to be as safe as houses on the road ...'. Shortly after, Volvo's TV ads were showing a horse galloping through a dark wood. The ear had become so exciting to drive that it was almost alive - a position close to BMW's 'The Ultimate Driving Machine'.

Saab's repositioning is no less dramatic. In the late 1980s Saab's Carlsson series ads had the car juxtaposed with the Saab Viggen jut fighters: 'For Saab Viggen, getting behind the controls is proof of incredible mental and physical stamina, years of intensive training and an ally or two at the Royal Swedish Air Force.' Their strapline was 'Saab: The Aircraft Manufacturer'. The aggressive masculinity of the product and the strapline have now gone. The Saab is a thoughtfully designed car. Designers appear in the ads and one of them is a woman, 'Aim Nilsson, chief interior designer of the Saab 900'.

The 1990 European launch positioned Lexus as one of the great marques. Names like RollsRoyce, Mercedes, BMW and Jaguar littered the copy. They ignored Japanese oars such as the

Acura Legend and Nissan Infiniti. The car impressed the press, so later ads incorporated their favourable comments: 'Imagine a big saloon that is faster than a BMW 735i, quieter than a Jaguar Sovereign and as meticulously engineered as a Mercedes. The Lexus LS400 is all of these and more.' The launches of other Japanese models have used positioning strategies similar to that used by Toyota for Lexus. Nissan's new coupe used a quotation from Autocar & Motor as a headline: 'Brilliant new 200SX, Ferrari iooks, Porsche pace'. Underneath the Nissan logo they also promote: 'Nissan UK Ltd, Worthing, Sussex'. Mazda's MX- 5 Miata is also in the mood of more exotic antiques and must have Rover sobbing. It was designed in the United Kingdom, hut when it was being road tested in California, the drivers were plagued by people demanding to know where they could get one. The ear's launch used 1960s imagery and profuse references to Austin Healey, MG and Triumph. Like Nissan's nostalgia cars, the MX- 5 is a 'back to basics' car whose performance is not outstanding but, as Wliat Car? says, it has 'Sixties looks with Nineties fun and finesses . . . Over to you MG'.

sources; Timothy Jacobs, The Wbrtds IVorsf Cars (London Bison, 1991); Nick Georgano, Costs of the Seventies and Eighties (Gothenburg: Crescent, 1990); Peter Nunn, 'Class barriers faff, Financial Times (18 September 1994), p. XI; Neil Weinberg, 'Domestic luxury car sales accelerate:', Financial Tirnes (25 June 1994), p. VI; Miohiyo Nakamoto, 'A taste of their own medicine'. Financial 'limes (.10 June 1994), p. 11.

should develop a unique selling proposition (I'SP) for each brand and stick to it. Each brand should pick an attribute and tout itself as 'no. 1' on that attribute. Buyers tend to remember 'no. 1' better, especially in an overcommunicated society. Thus Crest toothpaste consistently promotes its anti-cavity protection, and Mercedes promotes its great automotive engineering. What are some of the !no. 1' positions to promote? The most significant ones are 'best quality', 'best service', 'lowest price', 'best value' and 'most advanced technology'. A company that hammers away at one of these positions and consistently achieves it will probably bceonie best known and remembered for it.

The difficulty of keeping functional superiority has made firms focus on having a unique emotional selling proposition (ESP) instead of a USP. The product may be similar to competitors', but it has unique associations for consumers. Leading names like Rolls-Royce, Ferrari and Rolex have done this, Other cars outperform Ferrari on the road and track, but 'the red car with the unique selling proposition (L'SP) The unique product benefit that a firm aggressively promotes in a consistent manner to its target market. The benefit usually reflects functional superiority: best quality, best services, lowest price, most advanced technology.

emotional selling proposition (ESP) A non-functional attribute that has unique associations for consumers.

imdeipositioni ng A positioning error referring to failure to position a company, its product or brand.

overpositioning A positioning error referring to too narrow a picture of the company, its product or a brand being communicated to target customers.

I Can'[ Believe ft's Not Butter uses dual positioning: it is 'light' but it tastes [ike 'butter'.

prancing horse' is the world's no. 1 sports car. Many Formula One racing drivers still dream of racing a Ferrari, even when the team is not winning.

Other marketers think that companies should position themselves on more than one differentiating factor. This may be necessary if two or more firms arc claiming to be best on the same attribute. S tee lease, an office furniture systems company, differentiates itself from competitors on two benefits: best on-time delivery and best installation support. Volvo positions its automobiles as 'safest' and 'most durable'. Fortunately, these two benefits are compatible - a very safe car would also be very durable.

Today, in a time when the mass market is fragmenting into many small segments, companies are trying to broaden their positioning strategies to appeal to more segments. For example, Beecham promotes its Aquafresh toothpaste as offering three benefits: 'anti-cavity protection', 'better breath' and 'whiter teeth'. Clearly, many people want all three benefits, and the challenge is to convince them that the brand delivers all three, Bcecham's solution was to create toothpaste that squeezed out of the tube in three colours, thus visually confirming the three benefits. In doing this, Beeeham attracted three segments instead of one.

However, as companies increase the number of claims for their brands, they risk disbelief and a loss of clear positioning. Usually, a company needs to avoid three serious positioning errors. The first is underpo si tinning - that is, failing to position the company at all. Some companies discover that buyers have only a vague idea of the brand, or that they do not really know anything special about it. This has occurred with dark spirits - whisky and brandy - where young drinkers have drifted away from them. United Distillers and Hiram Walker aim to reverse this trend with their Bells and Teacher's brands by targeting 25- to 35-year-old men. There is much focus on extending the use of both brands as a mixer. This is an anathema to many whisky drinkers, but United Distillers has successfully promoted it as a mixer in both Spain and Greece.21 The second positioning error is overpositinning - that is, giving buyers too narrow a picture of the company.

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