Fall 2012 MARK 360 Final Retailer Profile See full original version at www.storify.com/jhostetler

1. Jacob Hostetler
MARK 360-20W
Stacy Neier
Final Retailer Profile
Land Rover
December 4, 2012
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2. DB 1. An Introduction to Land Rover
Land Rover is one of the most iconic automotive companies, with a tremendous history
and instantly recognizable branding. Ever since the original Land Rover debuted in 1948,
customers have sought their products for their off-roading prestige. These days, the company is
represented by several models, most notably the Range Rover. The Range Rover is the pinnacle
of luxury off-roading and is world renown for its agility and status. Leading the company into
the future is the 2013 Range Rover.
In contrast to many retailers that use the "classic model" when it comes to distribution,
automotive companies such as Land Rover get rid of the middlemen. Auto manufacturers
generally use forward integration, overtaking some of the retailing responsibilities themselves.
New car dealerships are almost always franchises, so the vehicles travel through companies'
retailers to the final consumer. In the diagram below, Land Rover and its competitors are
represented by the second row of Consumer Goods. The third and fourth rows are
more representative of industries such as grocery and clothing.
Land Rover is strictly a first-tier retailer, catering to consumers with higher incomes. Its
entry-level model - the LR2 - starts at over $35,000, while the Range Rover goes from $80,000
to nearly $200,000. This is a rather narrow target market. In a case study by AdMob for the
automaker, Land Rover identified its target audience as an "active male, high net worth
demographic between the ages of 35-54." This is represented in many of their commercials, such
as the video below featuring the Range Rover Evoque Convertible concept.
While the company is best known for its Range Rover SUV, Land Rover has been
diversifying its portfolio. The automaker makes a lone variety of car - sport utility vehicle - but is
increasing its assortment. Recently, in collaboration with Victoria Beckham, Land Rover
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3. designed and released the Range Rover Evoque, a significant departure from the company's
history. A coupé version is available, and the above convertible concept has been so well
received by the company's customer base it's likely to be produced. Development of new models
is helping Land Rover to maintain and increase its competitive advantage over Mercedes-Benz,
Porsche, and BMW. The following article details how this diversification has helped the
company's sales immensely.
There is no electronic channel available that allows consumers to purchase Land Rovers.
In fact, no automaker features this option, though almost all allow potential customers to "Build
& Price" their various models. However, this can be used to entice customers to buy. In the
Retail Communities text the author writes, “What goes on inside the store is often the
culmination of a host of other external forms of marketing, communication and societal
influences, which come together at the point of sale.” In addition, the fact that the dealers are
franchises of the manufacturer means that both ends of the distribution channel benefit from one
another. Retailers "have direct access and control over the final transaction with the ultimate
consumer," whereas "manufacturers...often have the advantage of product knowledge and,
sometimes, larger marketing budgets."
DB 2. Once Upon A Time In a Land (Rover) Far Away
A Brief History
Born of the aluminum left over from World War II aircraft, the first Land Rover vehicle emerged
from the skunkworks of the Rover Car Company in 1948. Modestly entitled "Series I," it was
"ingeniously designed and engineered for extreme capability and strength." However, Land
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4. Rover did not become its own entity until the late 1970s. These days the company carries on with
partner Jaguar under the ownership of Tata Motors.
Recent Events
The automotive industry as a whole has been tumultuous over the past decade, the landscape
marred by most notably the worldwide economic downturn. Land Rover's history has been
heavily affected by the resulting industry changes. In 2000, BMW Group sold the off-roading
automaker to one of the most iconic companies in the world: The Ford Motor Company.
However, in 2007 Ford put its high-end subsidiaries Jaguar and Land Rover up for sale. The
company was losing money, investing much less than its German rivals in the brands, and in
2008 it sold Jaguar and Land Rover to Tata Motors, an Indian automotive group.On the
sale/acquisition of Land Rover and Jaguar, Alan Mulally, president and CEO of the Ford Motor
Company, said, "Jaguar and Land Rover are terrific brands. We are confident that they are
leaving our fold with the products, plans and team to continue to thrive under Tata's stewardship.
Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement
our plan to create a strong Ford Motor Company that delivers profitable growth for all."
Mission Statements
While Land Rovers and other large, powerful SUVs have been seen by many as wasteful,
inefficient, and harmful to the environment, the automaker has made strides in conservation
efforts and keeps environmental sustainability at the forefront of decisions. This philosophy is
evident in the company's video environmental mission statement, which speaks volumes about
how dedicated the automaker is to providing the vehicles its customers know and love while
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5. creating some of the "greenest" SUVs.Parent company Tata Motors' mission statement is "To be
world-class automotive innovators, and to help Tata Motors to develop world-class vehicles
through the advancement of its technical knowledge and its product engineering processes." This
mission statement is carried through to the Land Rover brand, with more innovation,
diversification, and competitive products that better meet the needs of consumers.
What Changes Might We See In the Retail Format and Target Market?
Land Rover already has an ideal consumer (active male, high net worth demographic between
the ages of 35-54) but might be able to use some of the data in Retailing Communities to its
advantage. While targeting "singles [who] are less likely to live in a rural area" would be a great
start, a key selling point to "families [who] make slightly more trips and spend more money per
trip" would be the efficiency, luxury, and driving experience of the Land Rover lineup. These
customers spend a great deal of time in their cars, and might appreciate what the automaker has
to offer.Sales figures for Land Rover are increasing rapidly and significantly, though the new car
market has been shrinking. There are no plans to change the retail setting, described by the
automaker as: "The Land Rover Retailer setting is unique in the realm of retail automotive
experiences, with an ambiance reflecting warmth, adventure and world exploration. Our relaxed,
respectful sales process is one where a friendly and knowledgeable sales representative attends to
you the entire length of your visit." Because of the uptake in sales, mainly attributable to the
popular Evoque and the Asian market, Land Rover only plans on further expanding its retail
locations.
Will the Automaker Remain Relevant?
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6. Land Rover has made it out of a dark period in time during Ford's ownership and is on the cusp
of the "hyper-SUV" trend. After the big SUV/crossover boom in the early 2000s, a new trend of
expensive, high-performance SUVs is starting to emerge. In 2002, Porsche defied all when it
launched an SUV called the Cayenne, which has since become widely popular. With
new/upcoming SUV offerings from Maserati, Lamborghini, and Bentley, consumers are willing
to pay much more for "trendy" sport utility vehicles. Though many Land Rovers start at a much
lower price point, the new flagship supercharged Range Rover will easily compete at the low end
of the market and with similar vehicles from BMW. Not to mention the upcoming
Autobiography Range Rover, which starts at a mere $230,000+.The automaker is also beginning
to diversify its portfolio, most notably with the Range Rover Evoque. One generally doesn't
associate a Spice Girl with an off-roader, but the vehicle was in fact designed in team with
Victoria Beckham. This diversification is slated to continue in order for the automaker to remain
and become even more relevant.
DB 3. Why Get a Car When You Can Own a Land Rover?
Target Market
From Jeremy Clarkson of BBC's Top Gear to daddy's little 20-something, Land Rovers are
bought and driven by a very diverse group of consumers. There are consumers who purchase the
highly capable Range Rover with the intention of actually driving off roads, and then there are
those who think [and can afford to think] Cadillac Escalades and BMW X5s are cliché.
However, the automaker has a fairly narrow idea of its target consumer. A recent case study by
AdMob describes their client's target customer as "an active male, high net worth demographic
between the ages of 34-54." The brand is successfully targeting these individuals according to a
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7. 2008 article from Cars.com: "As the flagship of the Land Rover brand, and with its high price
tags, the Range Rover's demographics are impressive. The typical buyer is a professional or
executive male, college graduate, with an annual household income of about $375,000."
Trade Areas
According to Chapter 8 of Retailing Management,many retailers use geographic information
systems such as Claritas to define trade areas. In Claritas's PRIZM segmentation, "Movers and
Shakers" are described as well educated, without kids, wealthy, and business-oriented. This
segment is also said to drive a Land Rover Range Rover. Another (potentially untapped) group is
the "Winner's Circle" who are similar but have children.The retailer should locate itself so the
primary trading area is in regions inhabited by these young, wealthy, adventurous demographics.
The size of the primary trade area is quite large; Land Rover retailers are few and far between
relative to those of large department stores and even higher volume automakers such as Ford. As
the map from SimplyMap in the Storify post shows, new cars purchased in places such as
Chicago, Arizona, the northeastern seaboard, and southern California are much more expensive.
These are areas Land Rover could consider primary trading areas, whereas the middle of the
country would be a tertiary area if at an area all. Secondary trade areas would consist of regions
where it's a far drive to purchase a Land Rover vehicle, but not unreasonable.
Future and Emerging Markets
While the target market is overall not slated to change, Land Rover is beginning to target new
consumers with new, unique products to cater to a different audience. The best example by far is
the Range Rover Evoque, which is much smaller, lighter, less powerful, and inexpensive in
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8. relation to the traditional Range Rover while retaining its sibling's off-road prowess. Design
Director Gerry McGovern talks about the Range Rover Evoque's ideal consumer as younger,
image aware, well connected, interested in social media, and wanting an emotional connection
with vehicles. Chapter 7 of Retail Communities talks about how Twitter, Facebook, and other
social media sites are playing a role in purchases. This group of "yuppies" who are engaged with
social media is certainly an emerging market Land Rover is capitalizing on.In the future, Land
Rover will also be releasing and updating cheaper vehicles to appeal to a broader range of
consumers. In an Inside Line article, Global Brand Director John Edwards talks about how the
company will be going after more of the leisure segment, creating vehicles that are "functional,
durable and affordable." This will help better cater towards the emerging segment of Generation
X buyers who are looking for larger luxury vehicles capable of family trips and moving large
amounts of equipment or luggage. The chart below reveals that over 40% of Land Rover
customers were ages 28-45.
DB 4. Land Rovers and Range Rovers and Evoques, Oh My!
Merchandise Assortment
The merchandise assortment of automakers relative to other retailers is quite unique. Land Rover
is a part of a much larger organization, but the retailer technically only carries one brand – Land
Rover – though the argument can be made that the Range Rover is itself a subbrand. At the
retailer's locations, it's unlikely to find a new vehicle bearing a different name unless the location
supports other automakers. Often Land Rover retailers are found with BMW
and/or corporate partner Jaguar dealerships.
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9. Stages in the Product Lifecycle
When it comes to the product lifecycle, one might think such an old, well-established company
would be in at least the third stage, maturity. For several models in the mix this may very well be
the case, but because of strongly increasing sales and new models in the portfolio, Land Rover is
experiencing tremendous growth. For the past several decades, the retailer was stable, simply
selling exactly what its customers expected with little change after the initial creation of the
company. Land Rover had a specific brand identity, and eventually Range Rover developed its
own as well. At this point the retailer's merchandise was comfortable in the maturity stage.
However, with the development of new models such as the Range Rover Evoque and the
massive new Chinese market, Land Rover is without doubt back in the growth stage. According
to an article from the DailyMail, "In 2003, JLR sold just 431 cars in China. In the last financial
year it sold an astonishing 51,000 there, up 76 per cent on the year before, and by the end of this
year China is likely to overtake the United States as the firm’s biggest market." Sales records
aren't just being broken in China either.
You're Special, and So Is Your Car
Specialty goods are products that have certain features, qualities, or identities that consumers are
willing to seek out, pay more for, and often sacrifice convenience for. As a specialized, luxury
automaker Land Rover is most definitely a purveyor of specialty goods. Even the cheapest
model, the LR2, starts at a fairly high price for its size and features. As noted in last week's
Storify post, the primary and secondary trade areas of the retailer are very large. Dealerships can
be scarce in certain areas, meaning consumers may need to travel a long distance to purchase a
Land Rover. Luxury brands' special goods can have high consumer loyalty, so special "loyalty
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10. programs" mentioned in Chapter 8 of Retail Communities would not apply. These consumers are
going out of their way to get exactly what they want, a Land Rover.
Potential Gaps
As a company with a very narrow merchandise assortment, there are many very large if not
massive gaps in the Land Rover portfolio. Small and mid-size luxury SUVs able to cope with
rough terrain are all Land Rover makes. No minivans, sedans, coupés, convertibles, trucks, very
large SUVs, sports cars, etc. are available from Land Rover. These are all potential gaps, but
from the automaker's point of view these gaps are necessary. As a specialty goods retailer, Land
Rover needs to retain its exclusivity and its precious brand identity. By creating a sedan or other
non-SUV, the identity of Land Rover is cheapened, so these gaps need to exist. In the past,
though, there have been gaps that have been filled; and in the future, the automaker may attempt
to manufacture a truck, taking care of a once-closed gap.
DB 5. Location, Location, Location
In What Areas Are the Retailers Located?
Land Rover dealerships are typically located in larger metropolitan areas. In the map below, it is
noted that there are concentrations of retail locations in Los Angeles, San Francisco, Atlanta,
Chicago, New York City, and Boston. To drill down further, though, the automaker's locations
are frequently paired with sister company Jaguar's or former sister company BMW's as was
mentioned in a previous post. One often finds several dealerships owned by the same individual
in an "auto mall" of sorts, so Land Rover retailers can be found in an area with a plethora of
competitors. For example, the Troy Motor Mall in Troy, Michigan features automakers such as
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11. Bentley, Lamborghini, Cadillac, Hyundai, Jeep, and Mazda in a very small area; all dealerships
share the same owner.
But Why?
The reason behind the large number of Land Rover retail locations in major cities and lack
thereof in many states is the target market: the populations in these metro areas are large, so
many dealerships are needed to cater to the demands of many consumers; and many of these
cities and suburbs contain Land Rover's target market. Generally young to middle-aged, wealthy,
educated male professionals live in cities and suburbs. When combined with SimplyMap data on
new car purchase prices from a previous Storify post, it is evident the dealer locations coincide
with high purchase prices and vice versa. Land Rover and other automotive dealerships are
franchised due to laws prohibiting automakers selling cars directly to consumers, so the retailer
has no direct say on where a dealer is located and/or the conditions of the lease agreement. For
the majority of consumers who would be interested in a Land Rover vehicle, there is an
accessible dealership, though it may be nearly 100 miles away in areas marked in light blue
below.
Integration of Multi-Channel Retailing
Consumers make new automotive purchases almost exclusively through brick-and-mortar
dealerships franchised from the automaker. However, with the rise of mobile technology and e-
commerce, there is room for Land Rover to innovate how it sells its luxury SUVs. The Wired
article in the Storifypost describes how fellow automaker Tesla uses "boutique" stores in high-
end malls to educate customers. All purchases are done through an online system available at the
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12. stores or at home. While this could potentially help Land Rover reach customers in the tertiary
trade area, it might not be cost effective, and Tesla is currently in a lot of hot water for its retail
locations and online system.
DB 6. Land Rover’s Pricing
As a premium automotive retailer, Land Rover's vehicles are almost always at the high
end of the price range. Even the entry-level LR2 starts at over $35,000; add a few popular
options and it's $40,000. In order to remain a high-end automaker and keep the value of the Land
Rover and Range Rover brands, Land Rover must bring to market only products that are high
quality with an MSRP to match. Other manufacturers have been going down-market, cheapening
the brand in the process; this is something Land Rover has successfully avoided. Due to laws
preventing automakers from selling vehicles directly to consumers, the exact prices consumers
pay for vehicles can vary greatly, especially with luxury automobiles. The MSRP, or
manufacturer's suggested retail price is what Land Rover recommends its dealerships sell the
vehicles for, but many consumers are able to negotiate a lower price still within the dealer's
profit margin.
Pricing Policy
The specific pricing is set by each dealership, so almost all discounts and other specials are done
through each according to the supply/demand in the area, current inventory, and overhead costs.
Often deals are given on outgoing model years and older designs. Currently the 2013 model year
vehicles are arriving, so some dealerships are discounting 2012 models in order to move the
inventory. Current offers and specials are often shown on dealers' websites, in local newspapers,
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13. or on local television. While almost all specials are done through dealerships, Land Rover does
offer similar specials that are available at all participating dealerships. Some consumers also take
advantage of Costco's Auto Program, which gives members a discounted price based on average
sale price and what the dealer pays the manufacturer. The program is designed to satisfy the
consumer need to negotiate and bargain with dealerships. As the website notes, the MSRP of a
2012 Land Rover Range Rover Supercharged with a few options is $98,970. By purchasing
through a Costco partner dealership, a consumer would save nearly $9,000. In a recent
Euromonitor article entitled I Don’t Need to Have It All – Thrift and the Under 35s Worldwide,
the author notes that many consumers in foreign countries are going without a car. Stateside, this
isn’t as much a case, but it’s noted that in a Consumer Reports survey “75% of hagglers were
successful in getting a lower price.” “37% of those under 35 said they always or often asked for
discounts,’” which could be a problem for the luxury retailer. However, the retailer could simply
direct cost-conscious consumers to the Costco program, showing how much money can be
saved.
Loyalty Programs
While the retailer does not have a loyalty program, Land Rover and LR dealerships do offer
loyalty incentives from time to time. For example, Land Rover Canada is offering $5,000 off a
new Range Rover for current Land Rover owners and lessees. In an article from Luxury Daily,
industry expert Al Ries states, "Many automobile customers are very loyal to their current
vehicles. When a Range Rover customer needs a new car, he or she tends to trade in an old
Range Rover for a new one.” This shows that whether or not the specials themselves are
effective, consumers are very loyal to the company and the automobiles.
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14. DB 7. Land Rover’s Communication Mix
Paid Communication
Consumers are continuously bombarded with specials and deals on automobiles through a
variety of media. There are advertisements for countless local dealerships in the daily
newspapers, on the radio, and on television. Some dealerships even use direct mail and email. An
automobile purchase is a highly involved process, so many retail locations try to move their
expensive inventory as quickly as possible. By making their name, location, and current
purchase/lease offers known, dealerships can attract more potential customers who may have not
known of or forgotten the business's existence. Land Rover is no exception to this concept. Open
any Sunday newspaper and you're likely to find an advertisement for Land Rovers.
In a National Retail Foundation article entitled “Goosebumps, Giggles, and Gadgets,” the author
remarks how retailers use Super Bowl commercials to create a connection with the brand and the
viewer. Land Rover definitely has a big opportunity to increase their TV presence and create a
viral video such as VW’s “Star Wars Kid” commercial. However, promotions aren't the sole
method of Land Rover's paid communication mix. In addition to the company's simple, well
organized website, the retail locations are highly similar in appearance inside and out. The
outside always consists of two main colors: beige or brown and the traditional "Land Rover
Green." Some even have stone fasciae or look like a large log cabin, making the essence of the
brand evident. Another main feature of the retail locations is a Land Rover vehicle propped up
on rocks or logs or something else to show off the automobile's off-road skills. According to the
retailer's website, most dealerships feature a Rock Course Test Drive where associates drive
consumers through a "Demonstration Course, which vividly demonstrates the strength and
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15. capabilities that have made Land Rover vehicles legendary on all seven continents." Of course
there are also demo models dealers are required to have on hand if customers request a test
drive.The identity of the adventure-driven automaker carries forth inside the dealerships. With
wood details, fireplaces, and kayaks propped up against the wall, the company's brand identity is
obvious. The rustic chic interiors help foster what the automaker calls The Land Rover
Way: "The Land Rover Retailer setting is unique in the realm of retail automotive experiences,
with an ambiance reflecting warmth, adventure and world exploration. Our relaxed, respectful
sales process is one where a friendly and knowledgeable sales representative attends to you the
entire length of your visit." The store atmosphere instills inside many customers a sense of
adventure while the salespeople satisfy their clients' needs using a no-pressure approach.Personal
selling is a major concept in the automotive industry, especially with luxury vehicles. The main
benefit of personal selling in this industry is its flexibility. By paying attention to individual
consumer needs, sales associates are able to direct consumers to the exact model, suggest
optional extras, and answer any questions customers might have. Land Rover customers are also
able to go online to "Build and Price" the Land Rover of their choosing. Afterwards, they can
print off the information, bring it to a dealership of their choosing, and have someone guide them
through a hands-on vehicle experience. Another way Land Rover spends money to market its
automobiles is through launch events and attendance at auto shows around the world. These
events may be mostly for the glitterati, but they certainly make a splash in the automotive
industry. Subject matter experts, celebrities, and the media were all recently invited to one of the
many recent events celebrating the all-new 2013 Land Rover Range Rover. Perhaps the most
recent example of indirect paid communication is Jaguar Land Rover’s presence in the film
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16. Skyfall. Range Rovers, Range Rover Sports, and even a Range Rover Evoque were all featured,
not to mention the European-spec Defender in the opening scene.
Unpaid Communication
Land Rover and many of its competitors benefit greatly from such publicity. There are a plethora
of companies such as Motor Trend magazine,Automobilemagazine, and the British television
show 'Top Gear' that review new cars, alert readers of recalls, provide commentary on the
automobile industry as a whole, and compare offerings from various manufacturers. A great
number of consumers turn to these sources of information when purchasing a new vehicle.
According to MRI+ Automobilemagazine has a circulation of 571, 321 consumers who are likely
to be influenced by the articles and industry commentary. Good publicity from these
organizations helps retailers such as Land Rover increase their visibility and their sales. For
example, Motor Trend annually gives away the highly coveted "Car/SUV/Truck of the Year"
award. The recipient of the 2013 SUV award was the Mercedes-Benz GL. It is likely that
Mercedes will have a direct benefit, and it's possible Land Rover sales will be negatively
affected. Word of Mouth may not be as influential in the automotive industry as it is elsewhere,
but consumers do share great and terrible experiences with others. A July 2012 Mintel report –
Car Retailing UK – shows that 33% of consumers used the opinions of friends and family in
researching a car. This is mainly because of the highly involved nature of automobile purchases.
It's not as simple as returning the vehicle. Satisfied Land Rover customers may recommend their
friends purchase a Land Rover or purchase from a specific dealership. This goes both ways,
though; if a consumer has a bad experience, he may not return, not even for regular maintenance.
This can be a major disadvantage to any retailer.
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17. Cooperative Advertising
Land Rover and its dealerships do take advantage of cooperative advertising. Dealerships have
a liaison that coordinates with the main company - Land Rover North America - on advertising,
new product launches, and press fleets. This beneficial relationship not only allows dealers to use
more advertisements without a large ad budget but also makes it possible for Land Rover to
prevent advertising that harms the brand image. After decades of building brand equity, it is
imperative the automobile manufacturer keep the retail experiences and ad campaigns the same
across the board. Dealer-specific ads inform consumers about regional deals and direct them to
their local Land Rover dealership; many of these are aired on basic network channels and on
local radio stations. In contrast, advertisements developed and paid for by Land Rover aren't
region-specific and feature nation-wide promotions.Another concept worth noting here is the
halo effect. While the retailer and the dealerships partner on some advertising costs, Land Rover
pays for the national ad campaigns. These are normally on cable and satellite networks, but they
still inform consumers. In this fashion, dealerships can directly benefit from these advertisements
without having spent money. The halo effect carries through to the dealer experience as well.
Consumers have an idea of a Land Rover dealership experience, and this is applied to all the
dealerships. This can be negative, though. For example, if a customer has a bad experience at an
under-performing dealership, he may project this experience onto other retail locations and the
company as a whole.
DB 8. Land Rover Layout
Dealership Layout & Design
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18. As is the case with many automakers today, Land Rover dealerships tend to look and feel very
similar not only on the exterior, but also the interior. Inside Land Rover dealerships, the
atmosphere is very relaxed with a sense of adventure emanating from the use of natural wood
and stone. Due to size restrictions, many locations use a free-form layout; 4-6 popular models
and trim levels are placed here and there as freestanding displays inside so potential customers
can experience a Land Rover in comfort. Located around the perimeter of the showroom are
desks and offices of managers and sales agents. Most retailers also feature a small lounge with
literature, chairs, a television, and a fireplace, and all have an "Adventure Center," where
customers can learn more about the adventuring aspects of their vehicles. Embedded in the
Storify post is a video of a Land Rover dealership someone designed using Google SketchUP.
Many of the traditional Land Rover design elements are seen in the mock-up.Outside in the
parking lots, however, the automobiles are arranged in a grid layout, parked in neat rows
(normally) according to model and trim level. This makes it easy for a consumer to look at two
of the exact same vehicle in a different color or try out a feature they aren't sure they want. Both
of these layouts are effective in promoting customer flow. Consumers are able to look at Land
Rover literature in addition to looking at and climbing into a few select models. They are able to
go in any order they wish and explore the vehicles to their desire in a very nice environment. On
the retailer's website Land Rover states: "Our relaxed, respectful sales process is one where a
friendly and knowledgeable sales representative attends to you the entire length of your
visit... Genuinely pleased to assist, these Land Rover enthusiasts employ an educated, no-
pressure approach to describing vehicle features and capabilities."
Dealership Atmospherics
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19. According to the retail radar, there’s a 98% chance of adventure in Land Rover dealerships with
a slight possibility of sales. The most notable and arguably most important fixtures in the Land
Rover retailers are the vehicles inside. If it's cold, raining, or hot outside, consumers can escape
to the showroom to play around with the cars or have a sales associate take them through the
features and capabilities. Other fixtures such as seating and literature bookshelves are also
important; in the retailer's locations these are tasteful and blend into the overall décor. In the
image below, one can see all the decorative fixtures that enhance the feeling of adventure.
Though many Land Rover consumers don't take their vehicles off road, it's important to maintain
the company's brand identity. Compared to competitors' retail locations, Land Rover certainly
stands alone in this aspect.The lighting in each location is primarily used to highlight each
vehicle. Looking at the Storify photos, one notices a profound use of track lighting; this is done
so that cars in the showroom can be arranged in a variety of different ways. Because windows
are such a prominent feature in each dealership, there is little need for additional lighting in the
showroom during the day. However, one will note the use of traditional fluorescent lights in the
office area in the above photo. The large amounts of natural light help consumers to feel as if
they are in a more natural setting, unlike in a grocery store where they are bombarded with
fluorescent lights. The colors also help to create a natural, calm mood inside the dealerships.
Warm, neutral colors are almost exclusively used, in addition to the standard Land Rover green.
Many of the tones and natural stone/wood effects help soothe consumers by creating a relaxing
atmosphere.Music may or may not be used in Land Rover dealerships, depending on the
dealership owner/manager's request. Dealerships can often be empty and rather quiet, so playing
music in the background would certainly make a positive impact. Almost all Land Rover (and
other) retail locations have a television in the lounge area, allowing consumers to sit and enjoy a
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20. kid's program, the local news channel, or a Land Rover video. Music might be too much in that
case. The scent of a Land Rover dealership, however, is very important. Many consumers
love the "new car smell," and as an automaker that uses natural woods, wool, alcantara, and
some of the finest cow hides in the world, Land Rover's lineup certainly has a scent. This scent
makes a dealership visit pleasurable, but according to some new information, the scent itself may
be very dangerous. However, Land Rover and its competitors typically use higher-end materials,
so the smells are more often fresh leather than flame retardant chemicals. These smells coupled
with the overall décor cater to Land Rover's target demographic of middle aged, wealthy,
adventurous males.
DB 9. Land Rover Customer Service
Maintenance
Land Rover's many retail locations offer much more than new and preowned vehicles. While
selling automobiles is a major purpose of dealerships, providing service for the customers is
highly important. Land Rover dealerships are able to perform the routine maintenance on Land
Rovers and Range Rovers, and some have the capability to repair major bodywork. When it
comes to automobiles, customers are very concerned about service. Howard Orloff Land Rover
states the following about its service: "We are proud to provide the Land Rover service Chicago
counts on. Our factory-trained and ASE-certified technicians undergo regular training sessions to
learn the latest techniques in automotive repair and to master the latest innovative diagnostic
equipment. With the expert assistance of our auto parts specialists, our service team is able to
diagnose and repair your Land Rover or Range Rover swiftly and efficiently. Our promise to you
is this: we’ll always strive to fix it quickly and correctly, and fix it right the first time." In the
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21. Journal of Retailing article “Technical complexity and consumer knowledge as moderators of
service quality evaluation in the automobile service industry” it was found that “perceived
fairness of the facility and its personnel was more important than empathy, responsiveness,
reliability, and convenience. For Land Rover, this means more focus should be put on
maintaining fair practices and getting the maintenance done properly than on convenience.
Adventure Services
As a lifestyle brand, Land Rover doesn't stop at producing cars and servicing them. The company
is very involved in events and actively engages with its consumers. Land Rover offers
"Experiences" consisting of driving schools and annual exotic treks. One such school is located
on the Biltmore Estate in North Carolina. On the 8,000 acre property there are vehicle trails used
by the Land Rover Driving Experience to test every facet of the manufacturer's
automobiles.These special events are not exclusive to the international retailer, however. Many
dealerships have their own local activities for their respective clients. While many consumers
would never dream of actually taking their off-roading SUVs off the roads, there is a large
demographic who occasionally feel differently. Howard Orloff Land Rover in Chicago, IL is one
dealership that brings these unique experiences closer to its consumers. Multiple times per year,
this retail location hosts off-road events that consumers and Land Rover enthusiasts can attend.
In addition to simply driving on a special course, participants can attend family-oriented
activities that align with the automaker's adventuring image such as the fishing contest. As the
video in the Storify shows, many consumers outside the target demographic (families, young
women, etc.) are involved in the events.
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22. Complaints
All Land Rover dealerships are held to a certain standard by the company. That being said most
of the customer service is done through the individual dealerships because consumers purchase
vehicles from the dealers not the automaker. Hardly ever will a dealership accept a return on a
vehicle, especially one at such a high price point. To prevent complaints and Buyer's Remorse,
Land Rover sales associates use a very personalized approach, finding exactly what a consumer
wants/needs and satisfying them. More often there are complaints about the dealer's service
department. If a customer has complaints, the service department can try to remedy the issue by
not charging for the service, redoing what had been done, or what is applicable in the situation.
However, many consumers remain unsatisfied and choose to switch dealerships, take the vehicle
elsewhere for service, or even sell the vehicle as the customer in the review shown in the Storify
did. Consumers are also able to contact Land Rover's Customer Relationship Center if necessary;
the automaker will intervene if it is evident there is a service gap that isn't in line with the
company's policies.
Employee Empowerment
Dealership sales associates are the direct negotiators with consumers, so they are able to reduce
the selling price of a vehicle and negotiate other terms of the sale within reason. Most
dealerships have a certain limit above the break-even point where an associate cannot sell the
automobile without managerial permission, however. By empowering the sales team, consumers
get an independent, customized sales experience; the managerial oversight makes certain that the
dealership is able to profit on each vehicle sold. When it comes to service, things are different. If
a customer has a complaint, the service manager normally deals with the situation and is
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23. generally the only individual with the power to discount a service. However, the services are not
negotiable.
Mystery Shopping
In contrast to most other retailers, mystery shopping in the automotive industry is not very
prevalent. The price point of Land Rover vehicles is much higher than that of products at Chanel
and Saks Fifth Avenue let alone at Wal-Mart and Macy's, but with that comes a highly involved
purchase process; consumers put much time and effort into the purchase, so automakers and
dealers need to make sure the process is exceptional. Therefore, automakers and outside
organizations such as Pied Piper do engage in the use of mystery shoppers to evaluate the sales
process, dealer quality, and service department. The group Pied Piper annually publishes an
automotive industry satisfaction index. It's worth noting that in the past year Land Rover has
fallen by one point to below average customer service.Market research is very important to
mystery shopping; Land Rover needs to appeal to a certain unique demographic. A mystery
shopper who is 38, male, wealthy, travels a lot, and active outdoors will feel much differently
towards a Land Rover dealership and the sales process than a shopper who is 22, female, high-
strung, hipster, and eco-conscious. Turning the situation around, however, Land Rover could use
mystery shoppers who align with another demographic that is purchasing their vehicles to
evaluate why these customers enjoy the vehicles and how the sales process can be customized to
better service them.
What Consumers Are Actually Saying!
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24. Janie is an older woman who doesn't travel or spend time outdoors. She is very wealthy
and purchases luxury SUVs because of their practicality. Very recently she sold her Land
Rover Range Rover because it spent over 2 months out of the year at the dealership for
service. Janie was very satisfied with the sales process, but highly unsatisfied with the
service cost and quality. "Overall it was just an unreliable car, and they couldn't fix it"
she said.
Jake is a "yuppy" (young professional) who is wealthy, adventurous, travels frequently,
and is highly brand-conscious. On his purchase he commented, "Range Rovers aren't
reliable, but it's not that important to me." So far he has been very satisfied with the
automobile; Jake saved money by purchasing a used vehicle and hasn't had any major
service issues yet. His dealership gave customers a free first service as part of a
promotion.
Stephen is a successful doctor with several children and a wife who heads a law firm. The
family frequently travels and occasionally spends time outdoors. He is a car collector
with several notable vintage pieces, and the cars they drive are all high-end. He and his
wife recently traded in her BMW for a Range Rover Evoque Coupé. "The salesman was
great - very helpful. Much better than last time I was there looking to purchase a car."
Stephen continued to go into great detail about how his local Land Rover dealership has
done well under new ownership since BMW sold Land Rover.
With these consumers, it appears there is more of an issue with reliability than dealership
service. Land Rover hasn't been known for making reliable automobiles, but recent
models have improved. However, they also show than there is room to improve when it
comes to retail locations.
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25. DB 10. Land Rover v. Mercedes-Benz
Land Rover's Brand Image
Land Rover's primary advantage is that it is a definitive lifestyle brand. The very essence of a
Land Rover vehicle channels adventure, capability, luxury, and status, especially the flagship
Range Rover, which many consider a subbrand in of itself. In an interview Paul Melhuish,
Marketing Manager of Land Rover South Africa, states, "The Land Rover brand epitomizes
'authenticity and supremacy,' the heritage earned gives the brand these characteristics/qualities as
being proven and 'the real thing.' The other important brand personality is that of individualism.
One of the strongest aspects that the brand symbolizes is that of adventure – consumers perceive
the brand as a symbol of adventure and exploration. This together with the traits of individualism
and authenticity present the Land Rover brand image as one of the strongest and most
established in the world."When it comes to other automobile manufacturers, there is no other that
can compete with such a unique and strong identity. Many competitors have a strong heritage as
well, but have since diversified their lines so much to serve more than just a niche group of
consumers. Take, for example, BMW's motorsport heritage - perhaps one of the most recognized
in the world. One can still purchase a race-tuned BMW M3, but there are 70+ other models,
many of which do not carry forth the motorsport prowess the automaker was once known for.
While Land Rover is currently expanding its lineup, looking to double annual sales by 2020, the
coming models will hold true to the Land Rover identity.
Land Rover's Off-Road Prowess
The main component of the automaker's brand image is off-road capability. This key aspect is
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26. carried forth through all current models from the entry-level, sub-$40k LR2 to the Range Rover
Autobiography Ultimate Edition. And even though the Range Rover Evoque was designed in
part by Spice Girl Victoria Beckham, it can hold its own off-road. While many Land Rover
consumers wouldn't dream of taking their precious luxury SUV off the highway and out of the
metropolitan, it is important to other customers that Land Rover is certainly a class leader when
it comes to driving on very rough terrain.In fact, no other automaker can attest to making
exclusively vehicles that are not only some of the most luxurious available but also share the off-
road capabilities that Land Rovers have. However, in the world of rough terrain, go-anywhere
4x4s, two competitors stand out: the Mercedes-Benz G-Class and the Toyota Land Cruiser. Both
are currently still on sale, are currently used throughout the world as serious off-road vehicles,
and have a high price tag that brings refinement to the world of off-roading. The key difference
between Toyota and Mercedes-Benz and Land Rover is that only Land Rover's off-road pedigree
is applied to all models in the lineup.
Mercedes-Benz's Advantages
Mercedes is one of Land Rover’s close rivals. They offer many luxury automobiles, including
two SUVs that consumers generally use to trek off the highways, the GL-Class and the G-Class,
the latter of which is much more specialty and capable. Interestingly enough, many consumers
who aren’t looking for capability but for status also purchase the G-Class.The difference in
capability between the Land Rover Range Rover and Mercedes-Benz G-Glass is negligible. Both
are incredibly suitable over rough terrain, and each has a luxurious interior, though many
consumers prefer the Range Rover. The G-Class is a much lower-volume seller than any of Land
Rover's products. The GL-Class is a direct competitor with the Range Rover, though it's larger. It
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27. doesn't share the capability off the road, but many consumers look to this SUV when searching
for a Range Rover alternative. It’s also worth noting the GL was Motor Trend’s SUV Of the
Year, a highly commendable feat; it’s likely Land Rover consumers will purchase a Mercedes-
Benz GL because of this. Where Mercedes comes into its own, though, is with diversity. A
consumer who wants something other than an SUV is tragically disappointed by Land Rover, but
not Mercedes. The German automaker has small cars, large cars, convertibles, SUVs, and
everything in between; it even has coupés with 4 doors! Land Rover sells exclusively SUVs. In
November 2012, data from BIGInsight’s Auto Insight Center shows that over 50% of vehicles
purchased in the last 6 months by consumers in the survey selected a car, not an SUV, minivan,
or other alternative.However, Mercedes is looking to go into the off-roading market even further
with the new Ener-G-Force concept [possibly] aimed at Land Rover's European Defender and
DC110 concept. If the MB model comes to the market and is very successful, it could mean
problems for LR.
How to Maintain the Advantage, You Ask?
This shouldn't be hard for Land Rover. Land Rover is a lifestyle brand whereas Mercedes-Benz
is not (or is at least less of one). The British, once-German, once-American, now-Indian
automaker is known for its luxury, off-road capable sport utility vehicles and nothing else. Land
Rover has been expanding its lineup very recently and is planning to continue to do so; however,
this will be done without harming the brand image. By diversifying in this fashion, the retailer
will be able to reach more consumers without alienating the die-hard Land Rover fans.
Mercedes-Benz has simply chased profits and really hasn't looked to maintain much more than a
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28. brand image of "luxury." Land Rover, in contrast, is going after profits but without its German
competitor's wild abandon.
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