Abstract Marketing of luxury automobiles in developing countries presents unique challenges to the manufacturers and the marketers. Thus they have to focus keenly on the development process of their marketing strategies. The use of different frameworks such as four Ps of marketing mix helps towards conducting the current market situational analysis. This proposal uses these factors to analyses the market situation for Bentley and Rolls-Royce brands in China as well as compare the marketing strategies for these brands and other car brand in China. The report first introduces the topic under study and proceeds to review literature on the three models of analysis that will be used. These are PEST, SWOT and the four Ps of marketing mix. Then the methodology is presented and the expected results as well. Keywords: Luxury Brands, Bentley, Rolls Royce, Marketing Strategies, China Introduction The effectiveness of a marketing strategy for any brand determines its success or failure in the particular market. This underlines the importance of a comprehensive and highly specific marketing strategy. These aspects are even more important in the case of luxury goods markets such as high-end automobiles. Marketing and branding strategies for luxury brands are highly specific and very much targeted at a specific section of the customer base. This section of the customers are after a little bit more than convenience as they seek for image, social status and satisfaction in all their purchases. In developing countries, the luxury market presents more challenges to marketers as the needs of the customers shift and they are inclined towards value for money. The marketing strategies for luxury brands in developing countries need to consider the emerging section of the population who are growing with the economy and entering the upper class of the population. This proposal seeks to study the marketing and branding strategies between Bentley and Rolls Royce in China. The study will use PEST, SWOT and the four Ps of the marketing mix to evaluate, analyze and compare the strategies between these two luxury automobile brands. Background of the Study Marketing strategies for Bentley and Rolls Royce brands is oriented towards luxury marketing, which targets the high-end customer with specific needs. In order to achieve this the marketing strategies have to create a heritage of the brand, which is based on its history. The history of both Bentley and Rolls Royce is that of luxury with a luxurious heritage. These two brands were produced for customers with specific needs. These are two British brands were initially manufactured by two different manufacturers until the Great Depression of 1929-1931 when Bentley was acquired by Rolls-Royce after undergoing financial difficulties caused by the economic situation. Bentley, which was founded in 1919 by W.O. Bentley, produced cars for sports enthusiasts, which had very innovative racing technology. Rolls Royce, which was founded in 1904 by Sir Charles Rolls and his brother Henry Royce, produced cars targeted at the luxury customers (Roll-Royce and Bentley Company, 2012). Since the acquisition of the Bentley by Rolls Royce, the two brands have built a heritage based on a mythology that has proved successful over the years. The marketing strategies used by these two brands today heavily rely on this history to position the brands in new markets as well as to promote their sales. This is especially so in the Chinese automobile market (Huo, et al., 2012). The automobile market in China has been under constant growth but of particular interest is the premium cars market. China is currently among the top brands for luxury cars. This has been informed by the emergence of a new population in the upper class. The growth in Chinas economy has been the main reason behind this. However, the demand for high end cars such as Bentley and Rolls-Royce in China is characterized by customers who have different desires. Efficiency is a great deal to the Chinese but they interestingly favour vehicles with powerful engines. It is also important to note that the price of these vehicles is a significant consideration for them as they purchase these two brands. Basically marketing strategies outline the activities that will be involved in achieving the marketing objectives that were predetermined earlier. Marketing Strategies for luxury vehicles in China are more inclined towards attracting the new customers (Zhang, et al., 2014). Historically, China has been considered a conservative society with a strong cultural orientation. Previously, the market has not been purchasing exotic commodities and products such as Bentley and Rolls-Royce vehicles. This was attributed to the weak economy but currently with China emerging to be one of the strongest economies globally, this has changed at the marketing strategies for these two brands had to change as well. This study will also look at the changes that have occurred in the marketing strategies for these two automobile brands in the Chinese market. The four Ps of marketing mix have been used to analyze marketing situations. Market analysis is important so as to understand the individual elements of a particular market and how different factors come into play determining the market statistics of a particular product. The market and effect of marketing strategies of Bentley and Rolls Royce can be well understood through a situation analysis by these three methods. In the past, these methods have been used to analyze the general luxury goods market in China and they revealed that Chinese were new to luxury products and thus there was need for change of tactics in marketing activities unlike in other established economies. Statement of the Problem There has been a lot of literature detailing the essentials of marketing strategies and their roles in the entire filed marketing. These studies have mainly focused on convenience goods. Many other have also focused on marketing of goods and products on a business-to-business level. Only a few studied have delved into the luxury goods segment and even fewer have focused on luxury vehicles market and the strategies used. In addition to this, few studies have focussed on the essentials of marketing strategies for luxury goods in developing countries. It is clear from the few earlier studies that the market dynamics for developing economies and established economies do not compare in most aspects. Therefore, it follows that the planning of marketing activities in these two types of economies are also different. The automobile market being different from the convenience goods market also has different dynamics since the customers will usually gather information on products that they intend to purchase. This fact shapes the nature of marketing strategies in the automobile industry. It also follows that for the luxury vehicles market the market dynamics are again different. Very few studies have focussed on this area and therefore this study seeks to analyse, evaluate and understand the market dynamics and strategies of Bentley and Rolls Royce in the Chinese market. Comparison of different marketing strategies provides understanding of a wider aspect of marketing. Few studies have made comparisons of two luxury motor vehicle brands in the same market for the purpose of understanding the market planning process for any organization. This study partially fills these gaps and also opens up an area where farther studies on the same can be conducted. Objectives of the Study General Objective of the Study The general objective for this study is to do a comparison of branding and marketing strategies between Bentley and Rolls Royce in developing countries, and specifically China, through a critical analysis and evaluation Specific Objectives of the Study The specific objectives of this proposal will be: a) To determine the advantages and disadvantages of the marketing strategies for Bentley and Rolls Royce in China b) To examine the influence of product, price, place and promotion in order to improve marketing strategies for these two brand. c) To compare Bentley and Rolls-Royce brands with other luxury car brands which are more successful in China and draw on their achievements d) To compare the marketing strategies of Bentley and Rolls Royce in other developing countries, draw lessons from them countries, draw lessons from them 1.4 Research Questions The research questions that will guide this proposal are: a) What are the advantages and disadvantages of the marketing strategies for Bentley and Rolls-Royce brands in the Chinese market? b) What is the influence of product, price, place and promotion in efforts to improve marketing strategies for these two brands? c) What are the comparisons of Bentley and Rolls Royce with other luxury car brands, which are successful in China and what are their achievements? d) What is the comparison between the marketing strategies of Bentley and Rolls Royce in other developing countries and what are the lessons drawn from them? Justification of the Study Marketing strategies are components of the marketing plan. The planning process entails defining the organizations mission, vision and corporate objectives. In order to carry out proper planning of marketing activities, a current situation analysis is important as it assist the marketer to establish the set-off pint as well as the control points. A study that analyses and evaluates the marketing strategies of Bentley and Rolls Royce in developing countries serves to make the market easier to understand for any interested party. This study will bring out clearly the nature of marketing strategies for Bentley and Rolls-Royce luxury vehicle brands in the Chinese market. In this regard, it will offer an overview of how market planning for these vehicle brands ids conducted as well the promotional methods that their marketers employ that. While conducting a situational analysis, it is very important to consider the analysis method used. A wrong analysis method could lead to wrong market planning and formulation of wrong marketing strategies. The use of PEST analysis a wider range of factors that affect marketing in of Bentley and Rolls Royce in the developing countries markets. It will analyse both internal and external factors that include political, economic, social and technological factors. The use of SWOT analyses provides a more elaborate analysis of the strong pints, weak points of the marketing strategies as well as opportunities that can be exploited so as to improve the marketing and eventual sales figures for these two brands. The use of the four Ps of the marketing mix will also show the effectiveness with which the marketing strategies are able to provide the products of these two brands at the right time in the right place (Kotler & Keller, 2009). There exist some key and essential factors to be considered in formulating of marketing plans for luxury goods. Thus is because many luxury goods consumers will seek for pedigree, social status, image and exclusivity while shopping for luxury goods. Thus the marketing plans for should be able to cover such factors. This analysis will evaluate to see if the marketing strategies for Bentley and Rolls Royce put these factors into consideration so as to ensure that their marketing activities are effective especially in developing countries. It is worth noting that these factors are informed by other factors such as the demographic composition of the population, cultural background and the economic status of the country. Developing countries have markets that are highly elastic to these factors. Scope and Limitations of the Study Scope This study covers the marketing strategies that are used for Bentley and Rolls Royce in developing countries markets. The market under focus is the Chines market where consumption of luxury goods has been on the increase over the past few years. A comparison of the strategies used of Bentley and Rolls-Royce brands will be evaluated through the use of market analysis frameworks, which provide the underlying factors for success or failure of these marketing strategies in China. While considering that these two brands have a foreign origin, it will also be important to cover the global marketing strategies, which originates form the countries of production. While conducting the analysis, other aspects such as the distribution channels, pricing strategies, product planning and marketing organizational structures will be covered. The study will also over the other aspects of marketing strategies such as control actions by management, promotional activities and marketing resources allocations. 1.5.2 Limitations of the Study The limitations for this study will be: a) Little research is presented concerning brand management, which is critical and essential part of marketing management and a major consideration in developing marketing strategies. b) The study does not focus on pricing strategies, which are intertwined with marketing strategies in terms of operations and execution of marketing plans. c) The study also does not focus on consumer behavior and how that is managed though the marketing strategies for Bentley and Rolls Royce brands. d) Finally, the study falls short of discussing the role of public relations and customer service, which is an essential component in management of luxury brands such as Bentley and Rolls-Royce, especially in the economies of developing countries such as China. Literature Review This section of the proposal will study and critically analyze and evaluate the relevant literature on marketing of Bentley and Rolls-Royce brands in developing countries with a specific focus on China. The analysis will use frameworks that will form the guidelines for reviewing this literature while still meeting the objective of this proposal research. Research Methodology Marketing Mix ?? 4Ps In marketing management, there are very many factors, which should be considered. All these factors can be grouped into four categories, which are referred to as the marketing mix. The marketing mix consists of four P which are product, price, place and promotion. Neil Borden presented the theory on the marketing mix in 1953 and it consisted of more than four elements. Later, E. Jerome McCarthy narrowed down the elements into four that were later referred to as the four Ps of marketing. These elements interplay to form the market situations that exist in every market. The product refers to the item or service being offered for sale. Promotion refers to the communication part of the marketing mix and it involves the channels used to communicate to customers about the products in the market. Price refers to the monetary value attached to the product and it is a consideration offered for the product. Place refers to the venues or location where the purchase transaction will take place. Keller and Kotler present that these four elements provide the basis for any market (Kotler & Keller, 2009). In summary the marketing mix is all about promoting the right product, at the right price and in the right location. The theory is criticised by Popovic who presents that the four Ps of marketing are more oriented towards the product than they are oriented towards the customer (Popovic, 2006). According to Lauterborn, marketing management is about focussing and meeting customers needs, which he referred to as customer- oriented marketing (Lauterborn, 1990). 2.3.1 Product Pearson defines product as an item or a service that is used to meet the demand and needs of customers (Pearson, 2013). A product is tangible while a service is intangible and these two refers to what is actually offered for purchase. When products are being designed and developed, they are usually targeted at a specific customer. The luxury cars brands of Bentley and Rolls-Royce are designed for the high end customer who feel that these vehicles will fulfill their desires to have a desired image and social status. Once the product is sold to the customer, the business makes a profit. Once the product has been designed and released into the market, it undergoes a product life cycle. It is important for the producer to fully understand the product life cycle so that they can know how to deal with the marketing challenges that are encountered in every stage. Conducting keen studies on the product can also assist the producer to determine to use the shortcomings of the current product to forecast the needs of the future product and therefore improve the product. In order to improve their products, Bentley and Rolls Royce can decide on, first, to concentrate on the product features and functionalities. This would involve evaluating their products strength and features that they can use as a basis for improvement. These could be the engine technology, safety features or luxurious features in the two brands of cars. The second step would be to establish or create new features that make the product unique. This can be used in the market as its unique selling point. The third would be to be keen on the service provided on the customer. In the case of Bentley and Rolls-Royce luxury brands, god customer service would have two most important benefits among others. The first benefit is that the organization would gain the valuable customer feedback and secondly, the organization would give their customers a memorable experience that would go hand in hand with the luxury purchase of any of these two motor vehicle brands. The product in the marketing mix is the most important factor because in absence of it, there would be no meaningful business that would take place. Therefore product forms the foundation of the marketing mix and thus it should be given much of the attention by the marketer. Product can also be used a basis for segmenting and targeting, in the marketing strategies of any organization. Bentley and Rolls Royce brands can decide to segment their customers according to the type of product or the brand that they prefer. Once segmented in this manner, the organization can then develop specific marketing strategies for each category and this would be very effective since the marketing activities conducted would be specifically targeted at specific groups of the population. Price Price refers to the consideration that is offered by the customer or proposed by the seller in exchange of the product. It can also be defined as the amount of money that the buyer would be willing and have the ability to pay for the product. Pricing affects the amounts of units that will be sold by a company. This means that price will determine the sales volumes and consequently the sales revenue. It therefore follows that price will also have an impact on the profitability of the organization. The marketing strategies for Bentley and Rolls Royce would be affected by its prices since the marketers would have to determine how competent the prices in the Chinese market are. Price also has a direct bearing on the number of vehicles demanded and supplied to the market. Pricing can also be used to position a product in the market through creating a perception that it is the best in the market and therefore it is sold at a premium. This is common in luxury commodities since they are sold at prices that have a premium (Pearson, 2013). The price element of the marketing mix underlines the importance of pricing strategies in marketing. Pricing strategies can take the form of price discriminations; cost-plus pricing, market-based pricing or completion based pricing. Price discrimination is when the same product id offered to different people and at different prices. Price discrimination in luxury goods and brands such as Bentley and Rolls Royce can be used to charge the customers the much that they are willing to pay for the product. This is called first-degree price discrimination. The organization can also use a cost-plus method where the prices are determined based on the cost of production. Market-based pricing involves determining the prices of a product based on the prevailing market prices for the same product while competition based pricing is where the price for a product is determined based on the competitors prices for similar products. While determining the prices, Bentley and Rolls Royce can consider the following few steps as its guidelines. The first step is to determine the unique selling points of the two brands. This would also assist in determining the cost of producing the product. The second step is to determine how to take advantage of the consumer behavior in the market. The consumer behavior could present opportunities that the organization could exploit to increase the prices without affecting the demand. For instance, Bentley and Rolls Royce could realize that customers for their cars are not affected in anyway by the set prices. They can then take advantage of this to charge the customers the highest possible prices so that they can recover their investments faster. The third step would be to set prices according to the market findings. Place Place refers to the location where the customer purchases the products offered. It could also be used to refer to the channels used to convey the product to the customer. Multinationals such as Bentley and Rolls Royce usually work with smaller organizations to establish outlet points for their brands. They can also have their own distribution outlets as this gives them the opportunity to interact with the customer directly. Organizations should realize that it is very important to have well located distribution centers, as this could be strength of the organization. Strategically located distribution centers are easily accessible to customers as well as ease of supply by the organization. This results in increased sales levels as well as reduces costs of transportation of the products. An organizations location or the location of its outlets has a direct impact on its efficiency as well as its cost obligations. In some instances, place refers also to the channel of distribution. Currently, most transactions are conducted on the online platform. The channels could include more than one intermediary, direct contact with the manufacturer or include a middleman. In order to have a good placing strategy that will support a good marketing strategy, the organization can aim at building customer loyalty and satisfaction through offering the best services that will give the customer a memorable experience. It is important to note that a customers post purchase reaction can satisfaction, dissatisfaction, cognitive dissonance or delight. Marketers and organization should strive to achieve satisfaction and delight. The second consideration is to determine how to build and support a strong and wide sales network that adequately serves the geographical region of the market. Promotion Promotion is the communication part of the four Ps of the marketing mix. Promotion uses communication channels to create product awareness, boost organizational and product image and to increase knowledge about the product. The channels used by promotion are advertising, direct marketing and public relations. Advertising involves the use of media channels such as print, cast and social media to communicate to both existing and potential customers about the organizations product. The ultimate objective of promotion is to urge the customers to purchase the products on offer (Pearson, 2013). Promotion can also be used to position a product and to increase customer loyalty to a brand. In the case of Bentley and Rolls Royce, promotional activities should focus on promoting luxury as a unique selling point as well as to associate the cars with pedigree, high quality and a high social status. This communication would be targeted at both the existing and potential customers in the Chinese market. The style of promotion and the content of the promotional message should be targeted at high-end customers. In the case of Bentley and Rolls-Royce using promotion to earn customer loyalty, the organization would have to keep on promoting the product even after it has acquired the targeted customer loyalty so as to maintain the relevance of the brand among the customers in the market. There are a few key points that can be considered while laying out the strategy for promotional activities. The first involves identifying the target market for the product. The second is to identify the aim of the promotional activity. The third is to consider the promotional activities and strategies by the competitors. Limitations of 4Ps The marketing mix analysis provides more in-depth information than both the SWOT and PEST models. However, the marketing mix still has its limitations. The first limitation is that it oversimplifies the elements of the marketing mix. The information about each element does not provide incisive and critical evaluations. The second is that the marketing mix model concentrates more on the product instead of both the customer and the product. It analyzes product features, price of the product, the location of the product, and the promotional activities done on the product. It does not focus on consumer behavior or preferences. The third limitation is that the model does not focus on the market factor, which has a significant factor on marketing strategies for both Bentley and Rolls-Royce brands. Date analyses Literature Survey The literature review indicates that there exist significant comparisons of the marketing strategies of Bentley and Rolls Royce in China. The study will use a theoretical framework to critically analyze and evaluate the marketing strategies for the two luxury car brands. The comparative aspect will be used to bring out the advantages and disadvantages of these marketing strategies. The information gathered from the literature review and data collection will be used to provide a clear analysis of the influence of product, price, place and promotion on the marketing strategies of Bentley and Rolls Royce in China. Information on the sales levels and revenue in the Chinese market will be obtained from the companys website and published financial records. The turn-over periods will be calculated s as to determine the average selling time for vehicle units in China This will be compared with the sales figures for other motor vehicle brands so as to determine how effective the forces of price, place, product and promotion are in the market. Comparison of Bentley and Rolls-Royce brands with other successful brands will be conducted through an??32 analysis of the sales figures. The financial figures for other car brands in the Chinese market will be collected from the specific websites. The sales revenue will be used to compute the market share for each of these brands and this will form the basis for determining how successful these companies are in the Chinese market. These achievements will then be used to determine the success of their marketing plans. Once this is done, a comparison of these achievements will be done to those of Bentley and Rolls Royce and then use this to determine the different levels of brand presence. A keen evaluation of marketing strategies will then be conducted. This evaluation will include identifying the promotional activities for Bentley and Rolls Royce and other car brands in China. Their marketing plans will also be compared and the differences tabulated. Data Collection and Analysis Data for this analysis will be collected form the respective websites of the companies. Sales revenue information will be obtained from the financial statements of the companies. The analysis will use comparative aspects to determine the differences and the effects of the various elements on the marketing strategies. Results Once the data has been collected and analyzed, there is expected to be some relationships, which will be drawn from the analysis. The analysis is expected to bring out the relationship between the marketing strategies and the element of the different models used. It is expected that the external situations will have a greater impact on marketing strategies and the marketing strategies are also expected to have a significant effect on the external factors outlined in the Conclusion Marketing strategies should be developed with specific customer focus. The effectiveness of marketing strategies is greatly determined by the methods used to develop them. These methods are informed by situational analyses that are carried out. Therefore there exists a direct relationship between the effectiveness of marketing strategies and their development procedures. The importance of development methods and procedures is that they take into consideration the targeted marketed. This is so particularly in developing countries. The markets in developing countries are subject to a myriad of factors, which determine market directions. The market for luxury products is especially complex in such circumstances where marketing strategies have to consider additional factors. The market for luxury goods in China is growing and studying the marketing strategies that are used for luxury good in this market would reveal the various aspects that come into play in market planning for luxury goods. Bentley and Rolls Royce brands have significant market share in China and the factors for this are inherently in the quality of the cars. The marketing strategies for these brands in China are built on this strength that these brands have a rich heritage in production of luxury cars. Bibliography Brean, D., 2013. Taxation in modern China. New York: Routledge.??Christensen, C. & Raynor, M., 2013. The Innovators solution: Creating and Sustaining Succesful Growth. Havard: Havard Business Review Press.??Henry, A., 2008. Understanding Strategic Management. Oxford: Oxford University Press.??Huo, H., Zhang, Q., He, K. & Yao, Z., 2012. 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Financial Development and Economic Growth: Recent Evidence from China. Journal of Comparative Economics, 40(3), pp. 393-412. Zhang, L., Fenga, Z., Teng, W. & Shi, M., 2014. Challenges of the New Energy Vehicle Industry in China. The Journal of Sustainable Mobility, 1(1), pp. 53-64. Zhu, X., 2012. Understanding Chinas Growth: Past, Present and Future (Digest Summary). Journal of Economic Perspectives, 26(4), pp. 103-124.
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