Brand Management in Automobile Industry Essay Example

employ in order to succeed.

The two main options are brand extension strategy or promoting one holistic brand character common for all company models. Having analyzed 5 articles on automotive brand management topic, I have realized that though they give a lot of interesting theoretical material on the employment of the brand management, frequently the authors contradict one another and even themselves, especially on the dilemma mentioned above. The articles authors claim that companies should be brand-focused and that the degree of the brand stretching should be moderate.

It is very inexplicable, considering the admitted facts that Porche has succeeded with its reformatory Cayenne and that GM has succeeded with its Saturn sub-brand in 1990’s. Thus, there is a question standing out – to what extend the opinion of the expert coincide with the reality? The analysis of the issues discussed in the articles as well as the assessment of the quality of authors’ statements and predictions will be revealed in the following review. The first point I would like to discuss is the way the authors understand the conceptions of brand management and its increasing importance for the industry.

Vincent Grimaldi de Puget, a well-known brand strategist, in his article “Can Americans do it better? ”[4] sees brand management as the best tool for Detroit car manufacturers in getting out of the bankruptcy risk. His view that the last 50 years there was no major engineering breakthroughs in automotive manufacturing is shared by the author of “Brand Management in the Automobile Industry” article Pierre Deraed[5], who also believes that co-operation in models development and interchangeable parts of the vehicles only improve what already exists, and therefore little

room remains for product differentiation.

Both of the authors are promoting customer-oriented business strategies, stressing the importance of after-sales service. In fact, focus on customer orientation is one of a few issues importance of which is not put under any doubt in all of the articles. Most of the issues covered in the articles in some way do contradict the view points stated in others. For instance, though Pierre Deraed underlines that it is hard to differentiate the product with its features, Anne Asensio, the design director in GM, in her interview to Design Management Journal[6] stresses the importance of product design in creating brand character.

In her interview she states that nowadays companies consider the vehicle design to be the essence of the brand’s personality and stress their attention on it. Top Management of Automotive Companies understand that the design has a great influence on the perceived quality of the product, i. e. whether the customer will or will not love the car at a first glance. Anne, as all other authors, states that brand management should not be narrowed into a certain department and that every department of a company makes its own contribution to the development of the brand, starting from marketing and finishing with the delivery service.

Her opinion is absolutely the same with the opinion of Philip Kotler in his book “Marketing Insights”. Besides that, similarly to Ms. Asensio he considers that: “great brands present emotional benefits, not just rational benefits”[7]. Deiter Becker in his presentation “Trends and Challenges in Automotive Industry”[8] touches upon the brand management only indirectly. Nevertheless, his presentation in some way unites the point of views of the previous

articles, since he mentioned the importance of brand specific customer service and the design.

The last article – “Building Brand Loyalty by Improving Customer Experience” written by Clive Meakins and Sijith Abraham[9] is focusing on the importance of CRM in brand management. They base their thesis on the well known business proverb: “it costs more to win a customer than it does to keep a customer”[10]. The authors focus on the increasing importance of on e-commerce in selling the autos and the new CRM-based technique called VRM (Vehicle Relationship Management) that provides information on vehicles through their lifecycles.

Though the article includes a lot of innovatory ideas I consider the article to be the least reliable, since despite of its academic beginning, the purpose of it is to advertise the Oracle CRM and VRM systems. Thus, the information containing there is pretty much biased. The second issue I would like to mention is the current trends in automotive brand management that were covered in the reviewed articles and the forecast for the future. Those are co-branding with suppliers of equipment, the increasing importance of multi-brand dealers and the possibility of new car brands entering the market.

Nowadays, cooperation with suppliers of equipment and co-branding with them is quite common. The importance of suppliers is underlined in Pierre Deraed’s and Deiter Becker’s works. Cooperation such as cooperation of VW with Recaro, sport-seats supplier, or the cooperation of Audi with Bose Hi-Fi systems according to these authors will become more and more common in the future. Deiter Becker even states that suppliers are becoming the same level with OEMs(Original Equipment Manufacturers – Car Manufacturers) The second point has been touched

in the articles of Pierre Deraed and Clive Meakins with Sijith Abraham.

In the first article it was noted that today the stand-alone car service is developing very fast. However, it is not quite understandable why the author has not given any possible outcomes of the trend, saying only that “consequences for the brand will be far reaching”. We can only guess about the consequences having read the article of Clive Meakins and Sijith Abraham, which provide statistical data on customer loyalty statistics. According to their article, 58% of the consumers are loyal to the brand, while only about 12% are loyal to the dealership. That statistics puts on doubt the statement of Pierre Deraed.

If the majority of the consumers are loyal to the car brands, not to the dealership brand, how exactly will the development of independent dealership and car service affect the automotive industry? Answer to the question remains unclear. Strange as it may seem, but authors of three articles state there is a very high probability of emerging of new brands in automotive market. Vincent Grimaldi de Puget gives argument that due to the increasing level of outsourcing of different elements of the value chain almost any company could produce vehicles with their brand name on it.

The authors give examples of a possible “Virgin” car, “Apple” car or a “Gucci” Car. However, the articles were written at average 7-8 years ago, and nowadays there is no any emergence of such cars. Though, there is still probability that in future their predictions will come true. I would also like to stress the fact that there is a lack of information on the role of

the advertisement in the brand management. The authors wrote a lot about focusing on the consumer, brand-stretching, developing brand character but wrote little about the role of promotion in it.

Only Meakins and Abraham has briefly noted that customers are getting more used to individualized service rather than to mass marketing. Nevertheless, automotive companies still widely use advertisement in their brand promotion campaigns. More information on that aspect of brand management could have been extremely useful in understanding the principles of automotive brand management. Coming to the conclusion I would like to again put up the brand-stretching issue mentioned in the very beginning.

From the analysis above it could be understood that though the authors provide some very interesting facts on the brand management, some of their statements are confusing. For instance, Pierre Deraed has praises Audi for its step-by-step brand development. Nevertheless, Audi has a model that contradicts the image of Audi’s being a business class cars – Audi R8, a sports-car. The importance of proper management of manufacturers brand portfolio is very important, especially nowadays, and the articles help to understand it. Nevertheless, certain level of bias is still present in all of the articles.

Despite the authors’ opinion that narrow brand-management is very important, companies keep producing vehicles which do not totally fit into their brand image. The success of Aston Martin with its small city-car Cygnet, Porche with its crossover Cayenne and business class car Panamera or Ford with its popular sports car model GT is an evidence of the reverse point of view. Therefore, though the academic articles give some understanding of what the topic is about they are not able to give

the full picture of the situation in the market.

However, the brand management has indeed become the basis of the brand manufacturing business and proper brand management strategy chosen could serve as a guarantee for the company’s success. Bibliography The Articles analysed in the Review Becker, D (2010) Trends and Challenges in Automotive Industry [Internet] Available from: [Accessed 13 December 2011] Bouchenoire, J. L. (2003) Steering the Brand in the Auto Industry [Internet] Available from: [Accessed 13 December 2011] Deraed, P. (2003) Brand Management in the Automobile Industry: The Brand is the Asset of the Future [Internet] Available from: [Accessed 13 December 011] De Puget, V. G. (2005) Can Americans Do It Better? [Internet] Available from: [Accessed 13 December 2011] Meakins, C. & Abraham, S. (2003) Building Brand Loyalty by Improving Customer Experience [Internet] Available from: [Accessed 13 December 2011] Other Literature Sources Used Bloomberg Businessweek (2005) The Man Who Invented Managemenent: Why Peter Drucker’s Ideas Still Matter [Internet] Available from: [Accessed 15 December 2011] Forman, D. (2001) The “Industry of Industries” goes back to the future [Internet] Available from: [Accessed 15 December 2011] Kotler, P. 2003) Marketing Insights from A to Z: 80 Concepts that every manager needs to know, Hoboken, New Jearsey, USA, John Willey & Sons, Inc. Ridelust (2010) 50 Greatest Automotive Quotes of All Time [Internet] Available from: < http://www. ridelust. com/the-50-greatest-automotive-quotes-of-all-time/> [Accessed 15 December 2011] ----------------------- [1] Ridelust (2011) [2] Bloomberg Businessweek (2005) [3] Forman, D. (2001) [4] De Puget, V. G. (2005) [5] Deraed, P. (2003) [6] Bouchenoire, J. L. (2003) [7] Kotler, P. (2003) [8] Becker, D. (2010) [9] Meakins, C. & Abraham, S. (2003) [10] ibid.