Jaguar Cars Limited, Marketing Plan Example

Jaguar Cars Limited, founded as the Swallow Sidecar Company in 1922(Edmonds), has a rich history of automotive achievements and luxury traditions. The company is credited with developing arguably the most famous sports car of all time, the Jaguar E-type in the early 1960s(The Telegraph, 2010) which has now become a collector’s item. The company’s current product line consists of XF series, XK series, and XJ series (Jaguar Cars Limited). The company’s closest competitors are Daimler Company’s Mercedes-Benz division, BMW, and Audi who each produce product lines that compete directly with Jaguar’s offerings. XF series competes with Mercedes’ E-Series, BMW’s 5 Series, and Audi’s A4 and A6. Similarly, XK competes with Mercedes’ SL Series, BMW’s 6 Series, and Audi’s R8. XJ, Jaguar’s most premium offering competes with Mercedes’ S Class, BMW’s 7 Series, and Audi’s A8. Surprisingly, Jaguar’s product offerings do not include any SUV model even though all three of the company’s closest competitors offer SUVs in various sizes and at different price points. Thus, Jaguar may have a strategic opportunity to add an SUV line, probably a variation of its XJ Series and then extend its SUV offerings through cheaper and smaller models.

Jaguar was once a proud luxury brand with strong customer loyalty but the company’s fortune reversed in the 1980s after which it was sold to Ford Motors in 1989. Ford resold Jaguar along with Land Rover to Tata Motors after about nineteen years in 2008, never once making a profit from the Jaguar’s brand. Tata finally turned around the Jaguar Land Rover subsidiary in 2010, earning approximately 1 billion British pounds or about $1.58 billion profit at current exchange rates. The Jaguar Land Rover’s first profit in years was made possible by particularly strong sales in North America, Russia, and China (The Telegraph, 2010).

Thus, China and North America constitute an important market for the Jaguar brand and as such, it will be a strategic mistake to ignore the demands of the customer for too long. According to Wall Street Journal’s August 2011 car sales data, SUVs (all segments) as a group had enjoyed a 24.2 percent increase in sales since the beginning of the year when compared to last year’s data. Midsize SUVs enjoyed the greatest percentage gain in sales of any segment at a staggering 50.7 percent. The next biggest segment gain was registered by small-size cars at 15.5 percent(Wall Street Journal, 2011). China offers quite a similar picture where future growth is expected to come from SUVs. According to China Association of Automobile Manufacturers, SUV sales rose by 30 percent since January through May 2011 as compared to 6 percent for total passenger car sales. According to Lexington, Massachusetts based industry consultant IHS Automotive, SUV sales in China will increase by 33 percent through 2012, which is almost twice the expected rate in the US and four times that of Western Europe. German automaker Porsche sells more Cayennes SUVs in China than any other country(Ying, 2011). This is not surprising given the fact that China is the world’s second largest luxury market, ahead of the United States. China is expected to surpass Japan as the world’s largest luxury next year (Xiaoshu, 2010).

As compared to U.S. which has a mature automobiles’ market, China’s automobile market is still in an infancy stage in terms of growth potential. Jaguar is fortunate to enjoy strong demand in two of three biggest luxury markets in the world, thus, it needs to pay better attention to the customer demands. The data shows that SUVs have been enjoying strong demand in both the United States and China and all three of Jaguar’s closest competitors offer at least two different SUV models each. Yet Jaguar doesn’t have a single SUV model among its product offerings which is surprising given the fact that even Porsche which is known more for its sports heritage, offers an SUV option to its customers.

Jaguar’s XJ model went through a major overhauland has been praised for its modern look while retaining Jaguar’s reputation for luxury. Both Jaguar and Land Rover are owned by Indian conglomerate Tata Group. I will create an SUV which will take its inspiration from XJ line and will compete with BMW’s X5 and Mercedes GL series. Jaguar’s SUV will differentiate itself from the competition through a better combination of luxury and SUV capabilities than the competitors. Among current line of SUVs, Range Rover SUVs have a reputation for the best off road capabilities now that Hummer brand is dead. But even if Hummer was still alive, Hummer didn’t have an aura of luxury that Range Rover’s products have. Jaguar’s SUV will benefit from its sister brand’s experience in off road capabilities while retaining Jaguar’s trademark luxury features. Once Jaguar’s first SUV has gained acceptance among the high income consumer segments, the company will leverage its reputation in introducing smaller and more affordable SUV lines. This is the path that has been taken by almost all of Jaguar’s competitors who first introduced an upscale SUV and then extended their offerings through more affordable options. This strategy makes sense because any new product category is a risky venture and thus, an organization would want to leave the best possible impression on the customers. Once it has developed a certain image in customers’ minds, it can leverage that perception to successfully introduce line extensions.

Jaguar is up against competitors who have a long track record of success, thus, Jaguar can’t afford to ignore the consumer trends in the global automobile markets. Automobile companies have an incentive to fulfill their customers’ demands because good experience leads to repeat purchases. By not offering an SUV, Jaguar is losing all potential customers’ to the competitors who are in the market for a luxury SUV and may purchase other products in the future as well. Moreover, being a first move has huge advantages in growing economies like China and Jaguar has a huge opportunity to grab a major share of the luxury SUV market in China where SUV segment is expected to grow at a faster pace than the overall automobile industry.

References

Edmonds. (n.d.). Jaguar Overview. Retrieved September 16, 2011, from http://www.edmunds.com/jaguar/

Jaguar Cars Limited. (n.d.). Jaguar – All Models. Retrieved September 16, 2011, from http://www.jaguar.com/us/en/xk/

The Telegraph. (2010, February 11). Jaguar Land Rover: a history. Retrieved September 16, 2011, from http://www.telegraph.co.uk/finance/newsbysector/transport/8163797/Jaguar-Land-Rover-a-history.html

Wall Street Journal. (2011, September 1). Market Data Center. Retrieved September 16, 2011, from http://online.wsj.com/mdc/public/page/2_3022-autosales.html

Xiaoshu, L. (2010, June 5). China to be biggest luxury market in 9 months. Retrieved September 16, 2011, from http://business.globaltimes.cn/china-economy/2011-06/663731.html

Ying, T. (2011, June 24). China’s SUV sales to set global pace soon. Retrieved September 16, 2011, from China Daily: http://www.chinadaily.com.cn/business/2011-06/24/content_12769916.htm