Brand Management in Automobile Industry

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Brand Management in Automobile Industry

Literature Review

Mr. Bentley? He builds fast trucks.

Ettore Bugatti[1]

Peter Drucker, who is claimed to be “the greatest management thinker of the last century”[2], once declared: “The automotive industry is an industry of industries”[3]. The automobile industry exists for more than a century and tracing the changes and development that took place there could tell volumes about the human history. In some way automotive industry reflects it, but if one looks deeper into it one could notice that in some way the industry itself formed the history of the 20th century. Though the industry is market driven now, it was not always like that. The example of Henry Ford producing just one car model with no even color options in the beginning of the last century is the evidence of it. 20th century was the time when giant manufacturers such as Ford and Daimler have set the standards and the core values internally and promoted them externally by showing what success the quality and reliability focus could bring. Nowadays, the evolvement of engine co-operations, standardized parts and platform sharing has made all the cars comparatively analogical in terms of qualities so valuable in the past. Now customers demand something more to be integrated within the product they buy, not just the technical characteristics and quality. And that is the moment when brand management comes. Manufacturers have finally understood that they must promote the inherited values together with the brand character in order to differentiate their products in the market saturated with competing manufacturers. With focusing on the brand management, automotive companies now need to decide what brand management tactics should they 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...
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