Street Drag Race, Research Paper Example

The companies that sell cars in the automotive industry are extremely diverse and each company typically markets to a specific group of consumers. Therefore, competition is more common among companies who sell cars in similar price ranges. In the luxury automobile industry, the top competitors are BMW, Porsche, Jaguar, Maserati, Mercedes Benz, Pagani, Aston Martin, Bentley, Rolls Royce, Bugatti, and Maybach. However, Bugatti and Maybach are considered the best. Bugatti produces the Veyron GT, which is the world’s fastest car and is constructed of carbon fiber, aluminum, and titanium. Meanwhile, Maybach produces the Excelero, which is the world’s most expensive car that is known for providing its driver with a high level of comfort.

Bugatti was founded in 1903 and was eventually sold to the Volkswagen group in 1988. Despite this, the Bugatti subsidiary makes a large portion of the company’s income, which has been reported at $120 million. The Bugatti Veyron is the current model of the car being sold and has been shown to be able to reach about 267 miles per hour (Evans, 2014). Although the initial Veyron model was produced in 2005, it is constantly updated and the most recent car was produced in 2013 and is specially designed for racing. Sales of this car are aimed particularly to wealthy enthusiasts and only 47 cars were sold in 2013 due to its extravagant price of approximately $2,700,000.

Maybach is also known as Maybach-Manufaktur and was founded in 1909. The net income of this company, like Bugatti, has been reported to be $120 million. The Maybach Excelero is currently the most expensive car being sold by the company at $8,000,000, although cheaper models were sold in previous years. Only one Maybach Excelero was made, and the company gained profit by selling other models such as the Maybach 57 which was released in 2009, for $344,000. The Maybach Excelero is considered the most expensive vehicle in the world and the most luxurious car available.

A major marketing issues within the high-end luxury car industry is a car company’s ability to identify and reach consumers that both want and would be able to afford the product. In the case of both Maybach and Bugatti, the production and marketing team focused more on making the best product they could and then selling it on this basis. As a consequence, very few models of their top line cars were produced and a very small portion of the market was targeted as a consequence. For a time, both of these companies were successful, but Bugatti found a need to enhance its standing by merging with Volkswagen and Bugatti became defunct altogether in 2013. As a consequence, it is necessary to analyze their marketing plans in light of the automobiles they produced to determine which plans were effective and which detracted from their ability to do business.

Since Maybach needed to become close with potential consumers in order to be able to sell cars, this company used a unique marketing strategy that involves attending the same events that its target market does. In this manner, company representatives were able to talk to their target market about the car one-on-one in a non-business context. Therefore, the marketing team simply needed to identify the events that wealthy individuals typically attend and show up with the hope of speaking with a few of them. This “direct contact” plan is what allowed Maybach to sell many of its cars, and especially the Maybach Excelero, which was built based on a request from Fulda Tires.

Once Maybach convinces a consumer that a Maybach car would be ideal for them, they provide them with excellent service throughout the ordering process in order to ensure that the customer goes through with the deal. The personal liaison manager is responsible for making the purchasing experience easy and great, which may convince consumers to return for their next car. In this way, Maybach intends to win customers by providing them with both an excellent car and excellent service.

Bugatti has taken an alternative approach to marketing and rather than targeting a small group of people, makes itself available across the world. Despite the many locations that the company attempts to sell its car, however, its target market is similar; the group that the car is marketed to must be wealthy due to the car’s high price tag. The Bugatti marketing team searches for wealthy car enthusiasts around the world and attempts to sell the car to them directly. This has been successful to some degree, but the company also relies on its reputation for having one of the best luxury cars to encourage their customers to come to them. To increase its name in the news, Bugatti enters its cars in races to demonstrate to customers its quality firsthand (World Car Fans, n.d.).

Interestingly, neither Bugatti nor Maybach utilize marketing techniques that are employed buy middle-range price car companies, such as Honda and Toyota. These two companies advertise on television and in newspapers and Bugatti and Maybach would have benefited by getting word out about their cars in this simple way. Therefore, it is important for car companies within this industry to look at the data trend of other car sales and to create an effective balance between price and availability in order to reach the most profitable market. While high priced cars generate large profits quickly, there is a limited number of people who are willing to purchase them. Therefore, it may be ideal to produce a greater number of cars in the $300,000 to $1,000,000 range compared to several in the $2,500,000 to $8,000,000 range. The luxury car will still have many amenities that are considered to be greater than that of lower priced cars, but slightly more people will be able to afford them (Fuhrmans, 2011). In addition, it is essential for these companies to do more than just rely on reputation alone. While reaching out directly to the target market is a generally good approach, it is never possible to reach everyone in this manner. Therefore, it would be ideal to resort to some conventional advertising methods that have been successful for selling less expensive cars as well.

A major problem with selling Maybach and Bugatti cars is that many individuals have not actually seen one in person due to their rarity. Therefore, these companies would benefit by implementing a consumer-oriented promotion in which potential customers are offered the opportunity to stop by a dealership and try the cars. Due to the price of these vehicles and risk involved in allowing this type of promotion, these car companies have not allowed this type of event in the past. However, it would benefit them by allowing the consumer to experience the car firsthand. Even if a potential customer does not buy the car, he or she will remember its luxury and is more likely to promote the company via word-of-mouth. A second consumer-oriented promotion that should be offered to sell this type of vehicle is to offer a discount on the original price near holidays in which cars are more likely to be bought. If a consumer sees that there is a discount on the car and believes that it will only be offered for a small period of time, he or she will be more likely to purchase the car on the spot.

The two pricing objectives that Maybach and Bugatti consider when determining the prices of their cars are the overall financial, marketing, and strategic objectives of the company in addition to the objectives of the product or brand. The ultimate goal of these two companies is to demonstrate that their cars are so luxurious that they could only be obtainable by a small amount of people. Therefore, car production is focused on enhancing the quality of the car to the greatest extent and an appropriate price that is associated with its development is attached to it. These companies hope to differentiate themselves on this basis. While high-level luxury companies like this certainly do differentiate themselves, they often make their cars too unattainable. BMW is another luxury car that is considered distinguished for the same reasons as Maybach and Bugatti, and their middle-range cars cost approximately $137,000. This demonstrates that is also essential for companies to consider consumer price elasticity and price points in addition to the resources they have available. Ultimately, BMW could be considered more successful due to Maybach and Bugatti due to its high quality and lower price.

The most effective advertising medium for luxury automobiles is television. Television advertisements typically reach individuals of all social classes, but could also be modified to reach people living in only certain geographic areas. Television advertisements are generally successful for other luxury automobile companies who sell cars in a more affordable range. For example, BMW utilizes television advertisements and has a $6.99 billion yearly profit, which is significantly greater than that of Maybach and Bugatti combined. A second example of a luxury car company that uses television advertisements to market itself is Mercedes-Benz, who has an $8.87 billion profit (BMW Group, 2012).

Ultimately, Maybach and Bugatti need to lower their car prices in order to be successful and reach a larger target market. Although the two companies survived primarily based on their reputation among wealthy individuals, this is no longer sufficient and the companies need to resort to further reaching marketing techniques in order to survive. High-end luxury vehicles should consider television advertisement and look to BMW and Mercedes-Benz as models of profitable luxury automobile companies.

References

BMW Group. (2012). Annual Report. Retrieved from http://annual-report2012.bmwgroup.com/bmwgroup/annual/2012/gb/English/pdf/report2012.pdf

Evans J. (2014). News: Bugatti dismisses Hennessey’s speed record claim (video). The Sunday Times. Retrieved from http://www.driving.co.uk/news/news-bugatti-dismisses-hennesseys-speed-record-claim-video/

Fuhrmans V. (2011). A Handful of Maybachs Isn’t Enough. The Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB10001424053111903885604576486064192002334?mg=reno64- wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1000142405311190388560 4576486064192002334.html

World Car Fans. (n.d.). Street Drag Race: Bugatti Veyron Vs Nissan GT-R R35 Retrieved from http://www.worldcarfans.com/110052526446/street-drag-race-bugatti-veyron-vs-nissan-gt-r-r35-video