Strategic Brand Positioning in a recession for Opel
Transcript of Strategic Brand Positioning in a recession for Opel
• Impacts of economic recession
• Auto Industry one of the hardest hit
• In order to remain competitive brands must adapt
• Analyse and make recommendations for Opel’s marketing activities
• Develop a marketing mix to foster growth in the current economic crisis
• Wholly owned subsidiary of GM from 1929
• GMSA is GM’s largest market in Africa
• 5 manufacturing facilities in Africa
• 5,000 employees
• Produce Opel and Chevrolet, Isuzu and the HUMMER H3
• Market Chevrolet, Opel, Isuzu and the premium brands HUMMER SAAB and Cadillac
• Filed for bankruptcy in 2008 in the US
• GMSA however is not affected
• No longer produce the Hummer SUV
• GM Europe sold its Opel/Vauxhall arm to Magna and Sberbank
• Magna plans to inject €500 - 700 million into Opel and cut 10,000 jobs in Europe
• South African politics remained stable throughout recession
• Infighting within ANC formed COPE
• Prudent banking legislation shielded South Africa
• Despite Apartheid, South Africa has a modern infra-structure
• Not without problems
– Unreliable Trains
– Expensive Ports
– 2008 Electricity Crisis
• Transnet and Eskom development
• 2010 Injecting capital in development
• During recession South Africa fared relatively well compared to US
• Still had adverse effects
– GDP retracted 1.4% in 2008 (Fourth Quarter)
– GDP retracted 6.4% in 2009 (First Quarter)
• Remains financial hub of Sun-Saharan Africa
• Global recession more exacerbated
• USA hardest hit
– 6.9 Million Jobs lost during recession
– 216,000 jobs lost in August 2009
• Exports have fallen
• Foreign Investment Decreased
• Less Demand for SA minerals
• Global and Local industries hit
• Consumers do not want to enter into credit
• Vehicle Sales in SA decreasing
• Certain un-established Brands have left the industry
• Perfect Competition
• Identified Segments included
– Budget Consumers
– Passenger Vehicles
– Luxury Vehicles
– Commercial Vehicles
BUDGET CONSUMERS
PRESTIGIOUS
COMMERCIAL
PASSENGER
0
1
2
3
4
5
6
7
8
9
10
012345678910
SEG
MEN
T A
TTR
AC
TIV
ENES
S
OPEL COMPETITIVE POSITION
Founded in 1862 by Adam Opel
Acquired by GM in 1929
Built the first “people’s
automobile” in 1931
Largest car maker in Europe in 1972
First automaker to recycle in 1990
Re-entered the commercial market
in 1997
New image campaign in 2002
First sustainability report in 2002
Corsa and Astra in 2007
Passenger Commercial
Agila Ampera Astra Van
Astra Astra Wagon CNG
Astra GTC Astra Twin-Top Combo
CNG Comno Corsa Van
Corsa GT Corsa Utility
Insignia Sports Tourer
Meriva Monavo
OPC Tigra Twin-Top Vivaro
Vivaro Zafira
• Positioned as “the German pedigree at the right price”
• Determined to bring the German technology to the broadest, most diverse range of customers
• Prices at mid-range levels• Dealership network• Aggressive TV advertising
– Legal dispute with VW in 2003
• Online advertising with MSN Autos• Changes in brand image
– 1990: Joy to Technology– 1994: We Understood– 2002: Fresh Thinking-Better Cars & Discover Opel– 2009: "Wirleben Autos“ (We Live Cars)
• Brand name: Opel
• Brand logo– A silver flash inside a ring as a subtle reminder of the
speed and power of the German-made cars
– The ring also represents the letter “O,” the first letter of the brand name
– Clear communicator of openness, freedom and connectivity
• Functional benefits
• Corporate social responsibility
• German Heritage
• High Brand Awareness
• International Market
• Favorable brand logo
• Competitive Pricing
• Customer awareness of Brand
• Environmental track record
• Too many changes in brand positioning
• No clear brand message to consumers
• Target market is still limited in demographics
• Limited product portfolio
• High variable costs
• Lack of brand engagement among consumers
• Stable political atmosphere
• Revamping of infrastructure
• There are still many untapped consumer
segments
• Slow economic recovery
• Exports affected
• Intense competition from low-cost car makers
• Banks not willing to loan capital
• Limited Portfolio
– Low-cost and luxury segments
– Competition from GWM and Tata
• Utilise German brand identity
– Economies of scale
– Additional market share
• Target market over segmented
• Elastic demand curve
– Disposable income ↓, demand ↓
• Reducing prices brand image affected
• Having value-added features and services
• Magna’s injection used to compensate for high labour costs
• Forth party logistics (4PL) efficiency
• Value engineering
– Domino effect increased profits or reduced costs
• Port demurrage charges are still high
– Effective stock management
• Making use of infrastructure from 2010 Soccer World Cup preparation
• Change of brand mantra 5 times in 20 years– Confusion and no clear brand message– Weaken brand image
• Little brand engagement and sense of community– “Opel Owners Club” to increase brand
resonance
• Promotions focus on long term brand building
• Online media