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 the 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 Bentley's future growth?
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 world's 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 company's 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 breathtaking power as well as timehallowed tradition 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-driven 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 international market segmentation variables: the level of a nation's economic development and per capita 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 24-hour race in Le Mans in 2003 seemed to emulate victories of the past. Its new Arnage 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 Bentley's history.
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.