Land Rover Marketing Mix

How marketing mix lead to the success of Land Rover

Jun Lu

Introduction

The traditional marketing mix has received wide approval in past 60 years. It is orientated towards physical products and is beginning to lose its position (Grönroos 1994). However, the ingredients of the marketing mix can be altered and they vary from the product to product (Hodder EduIcation, n.d). Booms and Bitner (1980) mentioned that the marketing mix for services should be extended to cover other aspects of marketing. Therefore, MaGrath (1986) added three new Ps (people, process and physical evidence) into the marketing mix. This essay firstly aims to analyse the impact of the traditional marketing mix on the success of Land Rover through information obtained from company websites. Secondly it analyses the shortages of traditional marketing mix and introduces this new concept of marketing mix (7Ps), and finally analyses the impact of the 7Ps merged with the relationship marketing on this company.

The traditional marketing mix

The concept of marketing mix was first introduced by Neil Borden in the 1950s and McCarthy in 1964 developed it into the four Ps, including product, price, place and promotion (Grönroos 1994). This marketing mix summarized by McCarthy is commonly referred to as the traditional four Ps (Grönroos 1994). The traditional marketing mix has had a substantial effect on informing the development of both marketing theory and practice (Möller 2006). Applying the marketing mix makes it easy to handle and organise marketing activities, including market analysis, marketing planning, advertising, sales, sales promotion, pricing, distribution and product packaging (Grönroos 1994). Meanwhile, marketing mix is also a conceptual framework that facilitates the exchange or transfer of goods or ideas so that it can help managers to satisfy consumers’ demands better than their competitors (Zineldin and Philipson 2007).

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Although the traditional 4Ps are not sufficient to satisfy the demands of the marketing concept (Gummesson 2000), they have become an indisputable paradigm in theoretical research and are still in effect and helpful in some industries (e.g. manufacturing) (Grönroos 1994, Zineldin and Philipson 2007, Brooks and Simkin 2012). So the marketing mix can still explore its utility in automotive sector firms. Next, this essay will explore the relationship between the traditional marketing mix and the success of Land Rover.

Firstly, products involve tangible products (e.g. cars) which are capable of satisfying customer needs or wants (Johan et al 2011). Considering that a broader product line would help to provide products to different customers with various characteristics and to meet their heterogeneous needs (Kekre and Srinivasan 1990), Land Rover involves such a product line with a group of brands that are closely related in terms of the capabilities and the functions they provide. These include Ranger Rover, Range Rover Sport, Range Rover Evoque discovery and so on. A broader product line is closely related to the company’s market share and profitability (Kekre and Srinivasan 1990). According to the data from TATA Company, Land Rover has achieved record-breaking global sales in 2013 and sold 425,006 vehicles in 2013 – up 19% on 2012 – setting new sales records in 38 international markets.

In terms of prices, companies often set different prices in various market segments, including different customers, products and locations. As a result, implementing segmented pricing strategies can involve various market segments and cover large number of customers (Kotler 2007). For example, Range Rover Evoque adopts distinctive pricing strategies based on the different types of engines with the mix of penetration and prestige pricing, they use penetration pricing for pure version of the car and prestige pricing strategy for the prestige and dynamic version of the car. Excluding the customers who are not sensitive to prices and care more about brand value, appearance, comforts and environmental friendliness than prices, a great number of customers have high price sensitiveness and prefer lower prices and high quality products. However, this mixed pricing strategy will confuse the consumers about the brand value to some extent (Mitchell and Papavassiliou 1999). Furthermore, Land Rover also has its own price distinctiveness all over the world. Using Range Rover Evoque as an example, in the UK, the minimum price of SD4 Diesel is £29205; the same types in United Stated and China are £25482 and £58383 respectively.

Thirdly, A more efficient distribution channel would bring less cost in delivery and help to enhance service quality and customer satisfaction (Jobber 2001). It could be found that a traditional exclusive distribution channel would lead to inconvenience for customers when they needed repairs or maintenance services, so channel integration with international networks was formulated. As stated in the company’s annual report, Land Rover has overall 174 markets, through a global network of 18 national sales companies, 83 importers, 61 export partners and 2241 franchise sales dealers. For further penetrating Chinese market, Land Rover co-branded with its partnership Chery Automobile China to set up the biggest parts distribution centre in China in order to facilitate delivery and rapidly response to the dealers and the end consumers’ parts ordering with this centre being capable of supporting 2,000 outbound lines per day. Nevertheless, co-branding will influence a brand’s positioning when customers blame the originated brand with their dissatisfaction towards] new products, and bring with it a number of risks to damage the originated brand equity (Washburn et al 2000).

Finally, Chu and Keh (2006) has stated: “without adequate capitals invested in promotion, it might be difficult for firms to build their own brand value”. All the entire effort Land Rover has exerted on promotion is to improve consumers’ loyalty towards its brand value and deliver its brand spirit-adventure. Land Rover organised a series of activities, such as off-road challenges, fun drives and rallies. A specially designed off-road simulation test track was constructed outside the showroom in Kollupitiya, to demonstrate the brand’s off-road supremacy. Besides these, Land Rover has one of the most active owners club – the LROC. With its membership, the LROC renders yeoman service towards promoting the link between Land Rover and the spirit of adventure. On the other hand, improving corporate social responsibility (CSR) is an approach to enhancing customers’ awareness of brand value, thus improving the sales of products. Melo and Galan (2010) concluded that when CSR is optimally conducted in the business context, it will maximally contribute to the improvement of brand value. Through Land Rover’s community and global CSR, the company not only improves the value of its brand, but also gets young people to have the opportunity to access advanced knowledge through education partnership, and gets the lives of millions of people improved.

The new marketing mix integrated with relationship marketing

However, tangible products are not the only factor in the evaluation of the success of a company. Intangible products or services are as important as tangible ones (Johan et al 2011). An increasing number of corporations throughout the world are beginning to add value to their core products by additional services. This is driven by customer needs or wants and is perceived as sharpening their competitive edges (Vandermerwe and Rada 1988). As a result, an authorized Land Rover service centre was set up to provide a customised route for services and maintenance and to ensure that they will meet Land Rover’s rigorous standards for quality and services. It is also guaranteed that your new car and its warranty are fully protected. Furthermore, customising the delivery of service on the product-customer interface is a key to improving customer satisfaction (Bettencourt and Gwinner 1996). There are some additional experiences, such as wining a chance to fly into space (2014), and an annual Land Rover adventure travel membership (2014) designed for different customers in order to satisfy customers.

However, traditional marketing mix focuses on tangible products and does not cover services. Obviously, with the introduction of services, the traditional four Ps are not sufficient to satisfy the demands of the current marketing concept (Gummesson 2000). Therefore, Booms and Bitner (1981) concluded that service needs a different marketing mix and introduced a new marketing mix for service, including the traditional 4Ps and participant (people), physical evidence and process. Nevertheless,

Grönroos (1994) stated that the marketing mix separates marketing from other activities, influencing the development of market orientation and customer orientation. Therefore, relationship marketing should be adopted to perform interactive marketing function.

Möller (1992) mentioned that the function of the marketing mix has extended to the strategic role, integrated with services marketing and interactions in industrial networks. Industries marketing and services marketing demand a relationship-oriented approach to marketing, which aims to establish relationships with both customers and other partners and to satisfy all the objectives of partners (Grönroos 1994). Therefore, People planning tends to be very important in the service sector where staff have a high level of interaction with customers. The interaction between front-line employees, especially the sales person, and customers is likely to critically influence market effectiveness (Palmer 2006). However, the marketing success of a company does not solely depend on “full-time marketers”, “part-time marketers”, including technicians and existing customers, often contribute more to influencing the purchase decisions of customers than sales persons (Grönroos 1994). As Yin and Tao (2011) has stated: “the implementation of strategic objectives, including marketing strategies and the enlargement of distribution channels, cannot be conducted without integrating and developing human capital”. Land Rover has an experienced and integrated team and an international network ready to help customers every step of the way from choosing the right vehicle, to delivery and beyond. Furthermore, to give customer premium service and maintenance, Land Rover made lot of effort to make sure that all the trained advisers and technicians at authorized Land Rover retailers have unrivalled experience, knowledge, and skills.

Furthermore, processes are involved in serving the customers, including the pre-sale phrase, sale phrase and after-sale phrase (Hill et al 2002). In terms of pre-sale services, except for offline service, Land Rover also provides online customised services. Consumers would be able to buy a preferred product online. They will have a chance to choose a car’s design theme and specification of engine. Once customers make a purchase decision, Land Rover will provide dealers’ permission and the nearest dealer will process the orders and complete the delivery service. Customers might choose the place where they are living and choose the specific dealership online, with dealers providing different kinds of services, including sales, parts, servicing and repairs. Furthermore, meetings with dealers will be held regularly to receive customer feedbacks after sale.

Finally, it can be found that customers tend to rely on physical cues to evaluate the quality of service before they make a purchasing decision (Rafiq and Ahmed 1995). Thus, Land Rover adopts technological innovations to create a premium physical appearance. These innovations include an interior decoration using luxury leather lined interior; with a choice of the available seats to manage weather extremes, new levels of ambient refinement and personalization and the installation of an automatically powered tailgate. On other hand, by offering tangible evidence of promised services may help to reduce the level of risk and facilitate customers’ purchase decisions.

Overall, with the application of the new 3Ps, it provides a broader perspective and makes the marketing strategies look comprehensive and more refined and detailed than the traditional marketing mix (Rafiq and Ahmed 1995).

Conclusion

The marketing mix still has its positive aspects in certain industries, especially in an automotive industry. However, considering that the traditional 4Ps only focus on products and the increase of marketing competition, the traditional 4Ps are not sufficient to help a company to maximise market strategy. In order to integrate customer services, processes, people and physical evidence need to be added into the new marketing mix. Then, through analysing the Land Rover, it can be seen that the new marketing mix (7Ps) is an indispensable factor in deciding its success. However, Traditional marketing mix ignore the internal markets like the employees in the organization and the relationship with suppliers, referrals and ‘influencer‘ markets. Companies need to evolve trends concerning customer relationship and long-term profitability of customer retention. This is through the coordination of external (customers) markets and the collaboration of internal (staff) markets in order to make the marketing mix running smoothly (Grönroos 1994, Christopher et al 1991).In the future, Land Rover should continue to think about how to integrate marketing mix with relationship marketing and how to build strong relationships with partners, suppliers and customers based on mutual cooperation-for example, constructing a valuable community.

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