1.The Aston-Martin Brand
1.1. History
Aston Martin Lagonda Limited, more commonly known by the name Aston Martin, is a British automobile manufacturer that is currently owned by the American Ford Motor Company. The company is quite old—it was founded in the early days of the automotive industry, in 1913, and became famous for unusual and exotic cars through the use of the automobiles in a number of James Bond franchise films (Cooper, Schembri, and Miller 2010; Aston Martin 2016). Aston Martin has changed hands a number of times; the company has always remained a luxury automotive brand, however (Aston Martin 2016).
1.2. Current Status
Today, the company is worth £474.5 million GBP, making it one of the premier luxury automobile brands in the world (Aston Martin 2016). The Ford Motor Company, despite owning the brand, has been happy to allow Aston Martin to continue to operate largely independently in an attempt to maintain some distance from the brand—this allows the brain to retain its high-class, luxury image (Atwal and Williams 2010). Ford has allocated Aston Martin to the Premier Automotive Group, and the number of vehicles that have been produced in the Ford ownership era is higher than ever before (Aston Martin 2016). Historically, Aston Martin sells approximately 7,000 units per year, but in 2014, the company sold only 4,000 (Aston Martin 2016).
1.3. Usage of materials
Aston Martin, as a brand, has always been very focused on providing the best experience possible for owners. The materials used are all top of the line; no corners are cut when an Aston Martin car is produced, and the manufacturing process is designed to ensure that every detail is perfect (Aston Martin 2016). The cars have a leather interior and top of the line systems, but they are also designed to be the final answer in performance (Aston Martin 2016). Every car is individually created—the Aston Martin website describes each car as “luxuriously bespoke,” indicating that each car is designed to the standards provided by the customer (Aston Martin 2016; Hiscutt and Ishikawa 2009).
1.4. Current Facts and Statistics
Aston Martin currently only offers four or five models—this is an extraordinarily small number of models for a modern car company. Approximately 95% of the revenue for the company comes from the sale of luxury sports cars (Aston Martin). These cars have become collector’s editions around the world, and because of their fabulous construction, they can last an extremely long time (Cooper, Schembri, and Miller 2010; Aston Martin 2016). The company has approximately 1,300 employees, many of which are employed in the United Kingdom (Aston Martin 2016). The company is also heavily involved in performance products—particularly races like Formula One and Le Mans (Aston Martin 2016). It remains the smallest of the main luxury car brands, with the smallest number of workers; Hotten (2015) calls it a “loss-making company,” with a goal of failing to meet demand. There are no accurate figures available from Aston Martin, but Hotten (2015) suggests that the company operated at a loss of £24.9 GBP in 2012 and £51.2 GBP in 2011.
1.5. Signature products
Aston Martin became known for the “James Bond” car, which was a DB5—used by Sean Connery in Goldfinger (Cooper, Schembri, and Miller 2010; Aston Martin 2016; Lehu and Bressoud 2008). Today, the company even makes a “Bond edition” of the DB9; this car is a limited edition version of the DB9, and offers bespoke accessories that are designed based on the iconic film. According to Aston Martin, the car is “designed for the driver” (Aston Martin 2016). The company is known for its DB series; it currently makes only four models. These models are the Vantage, a sports car; the DB9, a sports tourer; the Rapide, a luxury tourer; and the Vanquish, which is also a tourer (Aston Martin 2016).
One of the things that tends to drive high-end consumers towards Aston Martin is the company’s reputation for excellence. The older cars are collector’s items because they are amazing pieces of machinery and tend to perform well into their old age as well as being status symbols for the owner (Cooper, Schembri, and Miller 2010; Aston Martin 2016; Lehu and Bressoud 2008). However, there have been problems with a shorter product life cycle in the newer cars—particularly the Virage (Hotten 2015). This has caused a problem for the company and a significant gap in the portfolio of Aston Martin, which the company has tried to fill with the introduction of a number of limited edition cars like the Bond Edition of the DB9 (Hotten 2015).
1.6. Product onion: Core, Actual and Augmented Product
2. Macro-Market analysis
2.1. The Aston Martin Market
The market for luxury vehicles is certainly not large in size—but it is significant in wealth; this is the market in which Aston Martin operates. These are luxury vehicles: they are not meant to be accessible to the vast majority of consumers (Lehu and Bressoud, 2008). Aston Martin competes in a very small, niche market of other vehicles companies that are dedicated to building expensive vehicles for a limited number of people. Many of these companies, like Mercedes-Benz and Porsche, create vehicles at a variety of price points, while Aston Martin prefers to craft only a few types of vehicles and limit their presence in the market. Because the top-tier luxury car market is so limited, each company must find a way to distinguish itself from the others within the market and build a loyal following. Like all goods, the price points on luxury vehicles can vary depending on the company and the tier of vehicle. The market has different demands for luxury: some want affordable luxury, others want practical luxury, and still others want bespoke and unique luxury.
2.2. PESTEL
Every company is, of course, subject to the currents of the marketplace. Aston Martin’s annual production has been down in recent years, and this is largely because there are fewer people who are able to afford these kinds of luxury cars in an economy that is struggling (Tynan, McKechnie, and Chhuon 2010). There are political, economic, social, technological, environmental, and legal factors that affect all companies, and niche companies like Aston Martin are no exception, despite the fact that these companies are completely targeted towards the rich.
Political and legal factors for a luxury automotive brand vary based on the market that the company is operating within. Because the company makes bespoke automobiles for extremely wealthy clients, they often have clients from around the world (Tynan, McKechnie, and Chhuon 2010; Aston Martin 2016). The luxury automotive brand is then limited by import and export laws, as well as tariffs and other international complications (Kapferer 2012). However, the impact of this factor is somewhat limited—most of the individuals wealthy enough to purchase an Aston Martin are wealthy enough to jump through any import hoops that their home government might establish.
Economic factors are particularly important for a luxury automotive brand, especially because the nature of the economy is to wax and wane. These are expensive luxury goods—not necessities—and there are many lower-tier luxury cars that might be substituted for one of these automobiles. The fluctuations of the market, then, can have a significant impact on revenue, as it does on the revenue of most luxury goods (Kapferer and Bastien 2009).
Technological factors have had a positive impact on luxury automotive brands. Growing technological knowledge has allowed the company to continue to refine and better their automobiles—today, they produce some of the most efficient automobiles available. There are social and environmental pressures on the luxury industry as well. Socially, every company strives to be well-liked by their target audiences; environmentally, there is more of a movement towards electric and low-fuel consumption automobiles, which has the potential to change the market as well.
2.3. Product Life Cycle and Competitors
The product life cycle of a luxury vehicle is quite long, but it varies based on a number of factors, particularly how well the company is able to maintain the product in the decline stage. Automobiles in the decline stage are sometimes revamped and rebuilt to better reflect the needs and the desires of the current market. The main competitors for Aston Martin are Mercedes-Benz, Bentley and Porsche, although most high-end luxury automobiles—like Ferrari—constitute a significant piece of the competition for the company (Hotten 2015). Aston Martin has chosen to approach their potential customers differently than many of their competitors, however, and have attempted to develop a brand and brand loyalty without relying on a large product portfolio or significant spending in advertisements.
2.4. BCG Matrix: Comparison of Market Growth and Share
2.5. Positives, Negatives, and Conclusions
Aston Martin has faced some questions about the potential longevity of their automobiles in recent years, and the demand for these automobiles seems to have dropped (Hotten 2015). However, despite the drop in demand, the company has retained a significant number of consumers who are loyal to the brand as a whole (Hotten 2015). The brand has become synonymous with both class and high society; as such, it has been able to survive some potentially devastating drops in production and demand through the maintenance of brand image (Truong et al. 2008).
As the economy continues to recover, it is likely that the market for these types of luxury cars will begin to thrive again. These cars are not, of course, purchased because an individual needs an automobile—they are purchased because an individual wants an automobile. These are cars that are chosen as collector’s items, not as cars that will necessarily be for daily use; this is important to understand the market within which this particular company exists and thrives (Truong et al. 2008). Interestingly, it seems that the very rich are insulated from complete economic ruin in a different way than the middle class and upper middle class are; as such, the very rich—those who have the means and drive to purchase these automobiles—rarely stop purchasing luxury, high-performance cars for very long.
3.Micro Market analysis
3.1.STP Analysis
Segmentation analysis involves understanding and analyzing why individuals would purchase an automobile like an Aston Martin. Many of these cars are valued at over £100,000 GBP; this is a massive sum for an automobile (Aston Martin 2016). As such, people usually purchase these automobiles because they function as status symbols or because they are planning to drive them on a track—not because they need one to commute to work on a daily basis (Cooper, Schembri, and Miller 2010; Aston Martin 2016; Lehu and Bressoud 2008; Kapferer and Bastien 2009; Tynan, McKechnie, and Chhuon 2010). The segment of the market that Aston Martin is attempting to corner is the market for the most elite of the luxury cars. The demographic target for Aston Martin is individuals between 21 and 60 who are highly educated and make more than £1,000,000 per year. The ideal individual is upper class or the highest echelon of upper middle class.
There have been some changes in the targeting process for Aston Martin in recent years. Lately, Aston Martin has been using a female in their advertisements to further target female customers. This is an attempt by the company to attract a new market segment. The company also segments the market by location—currently, most of their cars are sold in North America and Europe. Hotten (2015) suggests that the company has segmented an Asian market for future growth by pushing the current sports cars into these markets. The company has chosen to position itself to target female consumers more heavily, but also to target Asian consumers as well as its traditional high-end clientele in Britain and North America.
Once the market segment is understood, the targeting strategy must also be understood. Aston Martin has been highly successful at establishing themselves as a high-quality, high-class vehicle that is only for the super-wealthy without really investing much—the association with film protagonists like James Bond has been exceptionally effective at this (Cooper, Schembri, and Miller 2010; Aston Martin 2016; Lehu and Bressoud 2008; Kapferer and Bastien 2009; Tynan, McKechnie, and Chhuon 2010). The company positions itself by appealing to its target demographic: wealthy people interested in purchasing unique items. A perfect example of this is the creation of niche vehicles like the Vulcan, which is described as a “track-only” car that is being sold for £1.8 million GPB—this is a very niche vehicle, and only 24 of these were made (Hotten 2015). Aston Martin has created a community of owners of their cars through connecting owners of all different styles. Aston Martin has used many different events—get-togethers, races, sponsorships—to communicate and bond its customers to the brand. A combination of luxury, service, engine excellence, and the company’s heritage are what drives consumers to this particular brand.
3.2. TOWS Model
3.3. Positioning map
3.4. Recommendations
There is little reason or motive for the company to alter its current STP strategy. Despite slow sales in the past few years, the company remains profitable; there are not a lot of staff and there is not a lot of overhead for the company as a whole either, which means that continuing on the current path is something that might be extremely prudent for the company moving forward (Hotten 2015).
4. Competitive analysis: Short Term and Long Term
4.1. Unique Selling Point
The unique selling point for these cars is that they are the highest quality cars available on the market. While this is debatable in terms of actual performance and racing, the margin of quality at the highest tiers of luxury automotive science is quite slim, and most people—outside of the performance racing world—will not be able to tell the difference between different kinds of engines (Hotten 2015). In fact, what most people are paying for is the name brand: this is the selling point for this car that really drives sales. Each car is created for an individual and is almost completely bespoke; this is a significant driver for customers in terms of competitive advantage over other companies like Ferrari, Porsche, Bentley and Mercedes-Benz (Hiscutt and Ishikawa 2009).
4.2. The Market
Aston Martin does not have a corner on the market of luxury cars, but the company arguably does not want to corner the market on luxury cars. It wants to attract only the elite; the rarer these cars are the more Aston Martin is able to build mystique surrounding the brand name. There are other companies that sell luxury cars that have a much more significant control over the niche market for luxury cars, but none of these companies have been able to command the same type of desire and respect as Aston Martin (Hotten 2015). The company has even considered increasing the exclusivity level of the cars—the company has been discussing capping the number of cars at 7,000 units annually (Hotten 2015). Again, the market for these automobiles is quite small—but the price tag is significant. They are certainly a niche product, and one that not everyone will have the chance to enjoy. The price also helps the company target consumers: it is too high for anyone but the target consumer. The company has positioned itself with competitive advantage by creating a unique and relatively rare product. Very few Aston Martins are made each year, and each is unique; this adds to the positioning strategy that has been developed by the company by provoking a sense of scarcity or rarity (Cooper, Schembri, and Miller 2010; Aston Martin 2016; Lehu and Bressoud 2008; Kapferer and Bastien 2009; Tynan, McKechnie, and Chhuon 2010).
5. Conclusion and Recommendations
The development of culture has been fundamental to the success of the Aston Martin company as time has gone on. While the company has always been focused on creating luxury vehicles, it is only since the association with James Bond that the brand has become known as the best of the best. The ability that Aston Martin has demonstrated to take the association with James Bond and craft an entirely new brand image is impressive; this brand imaging is part of what makes the company so strong within their particular niche market. Hotten (2015) writes, “In its 102-year history Aston Martin has only sold 70,000 cars. It's a figure that surprises people, and is testament to the company punching above its weight” (Hotten 2015). In fact, this means that in all their years of operation, Aston Martin has never need to produce automobiles with any speed—there are very few people on the planet who can afford these kinds of vehicles, and when they purchase an Aston Martin, they want the car to be unique (Hotten 2015).
Moving forward, Aston Martin must continue to maintain this brand image for continued success. The scarcity of these automobiles adds to the brand image, and the scarcity is almost mandated by the company itself. Ford, as the owner of the subsidiary company Aston Martin, should take care not to associate itself too closely with the brand to ensure that it maintains its image of high performance and quality production. For future success, Aston Martin should continue to use its relatively small advertising budget for targeted advertising in magazines read specifically by their target demographic—BusinessWeek, Cosmopolitan, GQ, and so on. The company can also consider further product placement, but this should be carefully tailored to maintain its image in the media—poor product placement can be very detrimental to true luxury items. Continued integration between Aston Martin owners will also help maintain brand loyalty—Aston Martin can continue to host events and sponsor races as a way to maintain its image and its customer base.
References
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