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Product Characteristics

Product Characteristics

The products under review are motor vehicles from the German carmaker Audi. The cars fall into the luxury segment of the market alongside with Mercedes, and BMW. Major production activities take place at Bavaria, Germany with nine facilities across the globe. Having emerged relatively late, Audi has surprised many observers by capturing the market that is traditionally difficult to enter. The paper uses the Audi automaker to examine the theories of segmentation, targeting, and positioning.

Various activities at Audi reflect the application of a number of approaches aimed at attaining market dominance. After increasing the ownership of Audi by Volkswagen, the F103 series was re-launched making Audi become a quality manufacturer. During the process, the company gained a niche for itself in the automobile industry. In other words, Audi cars come with aesthetically pleasing designs accompanied by mechanical reliability. Producing cars to serve the top customer category requires specific approach given that distinctiveness is integral to succeeding. The company’s markets are largely situated in Europe and North America, and in countries with emerging economies, such as India (from 2004). The above-mentioned regions have a high percentage of rich individuals who have the capacity to purchase class and expensive items.

In order to enhance customer reach, the cars are sold across many dealerships worldwide. Focusing on the Indian market shows that the Audi car sales continue increasing. Owing to the shifting economic growth trends, the Audi group has shifted focus to the Asia market. With the increasing levels of affluence in the areas, the luxury segment has been experiencing steady growth. Thus, Audi has responded in a positive way to take advantage of the development. It is also noted that the company has a wide presence across the Asian continent. To buy the Audi product, it is only necessary to visit a dealership and reach an agreement with the centre.

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Segmentation at Audi

The Audi car segmentation reflects that it solely focuses on the high end market. Similar to BMW, Ferrari, and Mercedes, Audi is known to focus on the premium designs. Being top, as well as sophisticated, Audi are for very rich buyers. To achieve its segmentation goals, the company’s main differentiating factor is in its logo, which has four interconnected circles. The cars are produced in hatchback and sedan versions, both of which are in the luxury segment. Feinman also noted that the carmaker serves the premium, super premium, and ultra-premium classes of customers. In particular, the A and Q series are among the most popular cars from the automaker. Besides the above-mentioned segments, the company equally serves other market niches, such as sports by producing the Audi sport, Audi Quattro and Audi ultra. Competition in the luxury car segment is high given that participants, such as Mercedes and BMW, pose a great challenge. Consequently, operating in such conditions is observed fiercely competitive. Besides, gaining access to the mature markets is one of the most difficult tasks for marketers.

From the above review, there exist four segments: premium, super premium and ultra-premium, in addition to sports. The first three are relatively similar with the focus being placed on elegance. The latter segment is focused on sporting activities with the targeted individuals being lovers of sports. Without a doubt, the premium segment is the priority area for the Audi. However, companies, such as BMW, have diversified into low cost cars to extend its market, an aspect that is ignored by the Audi Company. Similarly, BMW and Mercedes are more aggressive in marketing compared to Audi. It is also noted that in a bid to serve different market needs the company has developed, or is in the process of erecting new production facilities. For example, the company is building a plant in the city of Curitiba in Brazil. Audi is also currently constructs a new car plant in the city of San José Chiapa in Mexico. Other areas of production include: Indonesia, Bratislava (Slovakia), Changchun (China), and Martorell (Spain). It is also noted, based on the above information, that the aspect of geographical segmentation is employed by the company. As the term suggests, such segmentation takes into account physical variations between markets. Locating plants in different regions would be useful in tailoring cars to match region-specific customer expectations.

Positioning at Audi

Positioning centres on the process of establishing a place/niche for itself. The Audi Company has entered the car industry and positioned itself as a top quality car fit for the highest class. The development occurred despite the fact that the luxury car market has one of the most noticeable barriers to entry. Besides the high costs attributable to manufacturing, automakers must convince customers that the products are better than the popular brands. Thus, exclusivity is a major factor in the segment. In effect, devising a new marketing mindset is required. Moreover, for luxury cars, popularity is earned based on the individuals who drive them. Thus, entering such markets is not only challenging but is equally complicated. After watching BMW and Mercedes dominate the market, Volkswagen chose to enter the contest via its Audi brand. Using contempt and sarcasm, Audi managed to redefine the segment. In particular, Volkswagen portrayed the existing luxury automobile owners as pretentious and old-fashioned. In order to overcome the ‘misery’, the company depicted Audi as the car to rescue the customers as it was for vibrant achievers who were keen to escape from the burden of old luxury that was commonly associated with grandfathers. In such was, Audi had posed a challenge to the old luxury carmakers. Thus, the company managed to gain entry, and establish itself as the new luxury car. After ridiculing the old brands, Audi R8 was highly searched. Thus, it is noted that by entering the segment, Audi challenged the existing positions by refusing to play by the rules. As a result, the Audi brand became widely accepted as a top luxury car. Having ridiculed Mercedes and BMW, Audi cars became popular among the young and rich who aspire to move from tradition. Thus, the company succeeded in using attributes, such as advertising to position itself as a luxury brand for ‘vibrant’ individuals.

Positioning can also be seen based on the locations that the company has chosen for manufacturing plants. Apart from locating its operations in all parts of the developed world, the company has also established enterprises in Curitiba in Brazil, San José Chiapa in Mexico, Jakarta in Indonesia, Bratislava in Slovakia, Changchun in China, and Martorell in Spain. Positioning is also achieved through the placement of advertisements. From the previous example, Audi relied on movies to target its customers. Through pricing and the sales locations, the company has equally managed to position itself in the luxury car business. Through premium pricing, Audi ranks itself in the leadership position of the luxury segment. In particular, Audi appears to be better priced compared to other premium cars, such as Mercedes. With competitors such as BMW producing cheaper cars, the Audi gains by not operating on the back side of the spectrum.

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Marketing Strategies and Segmentation Profiles

One of the most famous advertisements of the Audi car appeared on Godfather movies, the Superbowl. As observed above, the advertisement portrayed old luxury brands as outdated. The allegation allowed entity to implore customers interested in overcoming the old standards. They are the young and vibrant people who liberate themselves from the trend by selecting the Audi car. Claiming that the past brands allowed for sedentary luxury had a significant negative influence on the competitors, and a major score for Audi as many potential customers were psychologically challenged. Owing to the focus on the rich segment, which seeks exclusivity and novelty, the allegation that the other brands were sedentary and old-fashioned proved to be effective. The super rich do not want to be portrayed in a negative way, especially dealing with lifestyle or class possessions. Thus, the approach by the Audi aligned with its focus on the premium segment.

Conclusion

The Audi car company entered the car market with relative ease. The effectiveness of the strategy lies in its unorthodox approach to become beyond expectations. Through various methods, such as market segmentation, targeting and positioning, the Audi Company has managed to position itself in the share of luxury cars. Despite the high level of competition and fears connected with market saturation, the company continues holding a significant share of the market.