Luxury car brand positioning: Audi AG market segmentation and strategy

Audi: Segmentation and Marketing Plan

Audi is a luxury car manufacturer with international sales and recognition for its cars, but without the degree of market share as other luxury brands such as Mercedes and BMW, and without the sense of extreme performance and luxury offered by brands such as Porsche and Ferrari (Motor Trend 2010). By developing better market segmentation and an overall marketing strategy, Audi can better position itself to achieve greater growth and a larger market share in the luxury auto industry. This paper will attempt to provide a brief overview of various strategic components that should be considered and acted upon in Audi's marketing strategy.

Segmentation

Market segmentation is a key component of successful marketing plans in all industries, and perhaps especially in the highly competitive automotive industry. The higher cost of luxury cars adds even greater complications to marketing endeavors as it makes these items highly discretionary and therefore highly dependent on proper brand imaging and company profile. Developing proper constructs of market segments beyond the traditional older and upper class consumer of luxury automobiles is key to Audi's continued success. This first identified market segment is indeed important to Audi's growth and forms a part of the company's current marketing strategy and product design processes, but this older demographic is not enough to sustain long-term growth (Audi 2010; Car Connection 2010; Motor Trend 2010). Other market segments to target are identified below.

Young upper-class consumers and specifically young upper-class urban dweller can also be a profitable market segment for Audi and other luxury vehicles; performance capabilities and adjustments are a large part of the design and engineering aesthetics that go into many of Audi's cars and the sleek and modern body designs of some of Audi's cars would definitely hold appeal to younger drivers (Car Connection 2010). Hip-hop culture promotes a flashiness and image of conspicuous yet high quality consumption that Audi's marketing efforts can also tap into, opening up new market segments for the company's sales (Motor Trend 2010). These two market segments are primarily younger demographics, yet the luxury price tag of the Audi line requires that enough credit and/or cash be available for purchase, making these somewhat difficult market segments to capitalize on in a substantial manner that would prove profitable over the long-term (Audi 2010).

Market segments that would provide greater long-term profitability as well as a larger population of potential buyers are the middle-aged suburban professionals as well as younger urban business professionals. These are market segments that tend to have their own money yet are also strongly inclined towards projecting a certain self-image of stylishness and the affordability of luxury in their life styles, and Audi provides this image in both the appearance of its cars and in their performance standards -- the two of which combined create broad popularity for varying reasons among different consumers (Audi 2010; Car Connection 2010; Motor Trend 2010). Tackling a broad array of market segments is definitely in Audi's best interest.

The Four Ps

Another effective means of establishing a proper strategic marketing mix is through and analysis of the "four Ps" of marketing: Product, price, place, and promotion. By examining its current offerings in light of these four distinguished areas as well as examining industry trends through the lens of the four Ps Audi can better position itself and its marketing efforts to achieve higher rates of growth and greater overall profitability. Audi's current marketing strategies have begun to diversify the brand image to some degree, and the company's products have received numerous awards and other recognitions in addition to appealing to an ever-wider array of market segments, yet the company could still implement better practices in its marketing strategy by consciously implementing an awareness of the four Ps (Audi 2010; Car Connection 2010; Motor Trend 2010).

The products that Audi offers should be known as more than "luxury vehicles," as this label implies certain distinctions and demographics that lack broad appeal. "High performance" and other terms should be utilized to indicate the brand's quality without limiting the potential appeal of the product based on labels (Motor Trend 2010). Price is a delicate area for the company as it must ensure affordability for a broad enough spectrum of consumers while at the same time maintaining a sense of exclusivity and quality that come from higher price tags, especially in the automotive industry (Car Connection 2010). Careful manipulation of prices in response to competitors can also be effective in increasing sales.