This report is addressed to the Managing Director of Automobili Lamborghini for highlighting the key issues faced by the organization in various aspects of consumer behavior. Also, the report provides each detail ranging from the background of the organization to the various influences faced by the consumer for purchasing the cars by Lamborghini. It also specifies the strategies adopted for the purpose of marketing of its cars along with some recommendations for achieving better sales volume in future.
Background and History of Automobili Lamborghini
Automobili Lamborghini S.p.A. commonly referred to as Lamborghini is an Italian brand owned by Volkswagen Group through its subsidiary Audi. Lamborghini manufactures various luxury SUVs, supercars and sports cars. It was founded by Ferruccio Lamborghini in 1963 in order to produce grand touring car with the view to compete with the established brands such as Ferrari.
To create sports cars that are unmatched in terms of performance and thrilling designs with the touch of hassle for discriminating customer who wishes to be different from others.
To build GT cars without any imperfections- quite normal and conventional but perfect- not a technical bomb.
Automobili Lamborghini belongs to the automotive industry where innovations are required to be made at every step (Parkin, Wilk, Hirsh & Singh, 2017). Currently, the emission related regulations in the US and Europe have forced the industry to develop hybrid and electric vehicles (Technavio, 2017). The choices and preferences of the customers have changed over time and do not depend on the prices therefore, high involvement brands are also able to capture a part of market.
Lamborghini faces strong competition from Ferrari, Jaguar, Ashton Martin, Porsche Carrera GT and BMW. All of these are the high involvement brands which targets young and rich people including celebrities.
Automobili Lamborghini has reportedly sold a total of 3,457 cars globally out of the total 88.1 million cars sold worldwide in the year 2016 (Lamborghini, 2017). The sales are continuously increasing every year but since these cars are highly expensive and out of the reach of majority of the buyers, they occupy a very small share in the market.
Automobili Lamborghini does not advertise the cars on television since the people capable of affording such cars do not waste their time watching television. Its marketing strategy involves social media promotion, digital marketing, merchandizing, GT3 racing, Lamborghini museum and attractive launching events.
The SWOT analysis of Lamborghini highlights the following strengths, weaknesses, opportunities and threats-
Lamborghini has only one target audience i.e. the upper class. It only targets the rich people who wish to enjoy the ride of world’s finest cars.
Demographics constitute the three most important factors related to the target market i.e. age, income and gender (Porta Mandy, 2017). Lamborghini is mainly targeted towards the youngsters between the ages of 25 to 45 years.
The income of the group of consumers which is targeted by Lamborghini are extremely high as they belong to the upper class of the society. People earning $480K annually are capable of affording a Lamborghini therefore constitutes the target market for the brand (Stanganelli, 2017).
Males are the basic target of Lamborghini cars as men are more attractive towards the sports cars. Nowadays, the target of the organization is equally shifted towards women as now they have also started to prefer such cars (Elliott, 2016).
Lamborghini is generally owned by people who have an extraordinary lifestyle and have an enthusiasm for sports cars. These are the consumers belonging to the rich class whose highest priority is to possess high involvement cars to maintain their standard in the society.
The behavioral characteristics of the target market include the extrovert personality of the customers who love to socialize in their lives. They like to reflect their sporty and classy personality and image in the cars they own (University of Minnesota Libraries, 2017).
Lamborghini’s biggest single target market is America where it makes the majority of its sales followed by Japan, UK, Canada, Germany, China and the Middle East (Karr, 2017).
The decision making process of the target market of Lamborghini has been elaborated in the following points.
This involves the reason that triggers the customer to purchase a Lamborghini. The customer might be induced by the market trends or due to the reason of dissatisfaction caused from the current owned car.
Market Induced- Most of the customers are induced by the market since the launching of new Models of Lamborghini triggers them to follow the trends in the market. Also, some customers like the shape of the cars launched and therefore encouraged to purchase it. Some are indirectly induced by the marketers due to the improvement introduces in the engine of the car.
New stage in life- This is related to the Maslow’s hierarchy according to which when an individual has satisfied the needs at a certain stage, then the needs of the next stage induces that individual (McGuire, 2012). Therefore, when a person moves upward in the hierarchy, the internal stimuli is triggered and they want to achieve the best they can get, thereby proceeding towards the high involvement brands like Lamborghini.
The consumer considers various sources and factors (internal and external) while searching for information regarding the various models of popular brands.
Level of risk- Detailed information regarding the risks involved in the purchase of cars such as performance risk (in case the car does not meet the performance expectations), financial risk (net financial loss to the customer), and time risk (when the passage of time reduces the ability of the car to further satisfy the wants of customer) (Schiffman, 2010).
Level of product knowledge- The information is obtained regarding the various models and colors available from friends and family who seems to be a creditable resource for the buyer and influence the buying behavior. Also, information is gained from reviews provided on the various social networking websites along with the official website of the brands.
List of Evoked Sets and Why
At this stage, the comparison is made among the various available brands and models of cars such as Ferrari, Porsche and Mercedes, etc. which form the part of their evoked set as they come in the same price range. The rich class basically considers buying such brands for their prestige.
Compensatory decision rules helps a consumer evaluates the brands on the basis of their qualities and then decision is made in favor of the brand with highest weighted score. Similarly, non- compensatory decision rules restricts a consumer on focusing on positive evaluation related to the brand due to the existence of negative evaluation on some other attribute.
Evaluation criteria and why
The evaluation criteria of customer depend on the budget set for the purchase. Moreover, the perception of the consumer will be based on the car performance, price, design and value. The alternatives are evaluated on the basis of various psychological and functional benefits that are offered by the car dealer. Mostly the customers of Lamborghini does not consider price as an important factor instead they are concerned about newly launched models and attractive designs.
This step involves the decision making of the consumer which is either made on the perception framed by the trial made or as a result of brand loyalty after proper evaluation of the features of all the alternate cars. Other influencing factors involve the price, safety, fuel consumption, influence of sales promoter and functionality.
This step involves the post purchase evaluation regarding the feelings of the consumers whether they are happy or unhappy with the car purchased. This will determine whether the customer will continue using the car or will switch to other cars within the brand range.
The consumer dealing with cognitive dissonance-
Marketers dealing with cognitive dissonance-
Social Classes includes the group of people with similar level of prosperity, power, education and status (Management Study Guide, 2017). Lamborghini is a status symbol for rich people. Since Lamborghini targets only high income groups, people are influenced by their social circle to purchase Lamborghini cars in order to maintain their social status.
Communication and Reference Groups
Lamborghini belongs to that segment of customers who always look forward for an opportunity to display their products in order to maintain their prestige in the eyes of others. Therefore, Lamborghini is used by the high income groups to communicate their status and power to their peer and reference groups. (Reza & Valeecha, 2013)
Human sensations are affected to a great extent by the perceptions of an individual (Mott, 2017). Lamborghini has made a perception of a classy and sporty car in the minds of people. The customers are of the perception that Lamborghini is a brand owned by rich people and celebrities. Such perception is framed due to the influence of media and friends and therefore such perception encourages the consumers to switch to Lamborghini.
Motivation provides a consumer a reason for doing something. This factor mostly influences those who work hard to earn more money so that they can also consume high involvement products and cars like Lamborghini to represent themselves in the rich category. Motivation generally comes with a goal or objective perceived in mind which can be either extrinsic or intrinsic (Lumen, 2017).
People love to purchase those products which match their personality (Tutorials Point, 2017). People belonging to rich families try to highlight their class in the cars they possess. Therefore, they purchase Lamborghini cars to represent what they think they are as this is one of the best and expensive brands available in the market. In other words, a customer tries to link their sporty and classy image with that of Lamborghini.
Since Lamborghini sets its target at the youngsters between the age of 25 to 45, the data also represents that Lamborghini has the youngest buyers in comparison with other high involvement car brands (Automotive News, 2014). Moreover, young people are more attracted towards spending a lot of money on the high involvement cars in order to maintain their standard among friends and family.
Lamborghini provides high performance cars with innovative suspension system with around worldwide service center in 54 countries. The customers have strong brand loyalty towards Lamborghini and therefore prefer it even when its price is higher.
Ultimately, the value of the cars is dependent on its design and on the assessment of customer needs and perceptions and ranges from $1 million to $ 3.5 million.
The manufacturing of Lamborghini cars takes place in Italy and has international market with the help of worldwide franchises. The distribution of the cars is selective in various parts of the world.
Lamborghini facilitates a production line tour so that the production process of Lamborghini can be understood. Also, it provides the experience of the automobile field through Lamborghini Accademia. It also provides a mobile application with the high precise data tracking system.
In order to expand the business model, Lamborghini needs to increase the worldwide deliveries since it has limited manufacturing sites. Resources must also be improved for the purpose of importing the cars and parts. The prices and features offered by the competitors must also be taken into consideration from time to time. The threats and weaknesses can be avoided by inventing an alternative for petrol. Moreover, the costs can be reduced by dealing with the fixed suppliers and increase the profitability of the organization.
Therefore, the above recommendation must be taken into consideration in order to achieve improved sales and higher profits in the future. The various factors affecting Automobili Lamborghini must also be evaluated and analyzed with the view to overcome the weaknesses and converting them into the strength of the organization.
References
Automotive News. (2014). Dodge, Land Rover, Lamborghini draw youngest new-vehicle buyers, IHS report says. Retrieved November 21, 2017, from https://www.autonews.com/article/20140505/RETAIL03/140509907/dodge-land-rover-lamborghini-draw-youngest-new-vehicle-buyers-ihs
Eliott, H. (2016). Lamborghini Pivots to Target Women and Families. Retrieved November 21, 2017, from https://www.bloomberg.com/news/articles/2016-08-30/lamborghini-pivots-to-target-women-and-families
Karr, A. (2017). America is the brand’s biggest market. Retrieved November 21, 2017, from https://www.motor1.com/news/133209/lamborghini-2016-sales-report/
Lamborghini. (2017). AUTOMOBILI LAMBORGHINI ACHIEVES ANOTHER RECORD YEAR: 3,457 CARS DELIVERED TO CUSTOMERS IN 2016. Retrieved November 18, 2017, from https://www.lamborghini.com/en-en/news/automobili-lamborghini-achieves-another-record-year-3457-cars-delivered-customers-2016
Lumen. (2017). Influences of Personality on the Consumer Decision Process. Retrieved November 21, 2017, from https://courses.lumenlearning.com/boundless-marketing/chapter/influences-of-personality-on-the-consumer-decision-process/
Management Study Guide. (2017). Social Factors affecting Consumer Behaviour. Retrieved November 26, 2017, from https://www.managementstudyguide.com/social-factors-affecting-consumer-behaviour.htm
McGuire, K. J. (2012). Maslow’s hierarchy of needs. An introduction. GRIN Verlag.
Mott, E. (2017). Psychological Factors That Influence Consumer Buying Behavior. Retrieved November 26, 2017, from https://smallbusiness.chron.com/psychological-factors-influence-consumer-buying-behavior-80618.html
Parkin, R., Wilk, R. Hirsh, E. & Singh, A. (2017). 2017 Automotive Trends. Retrieved November 21, 2017, from https://www.strategyand.pwc.com/trend/2017-automotive-industry-trends
Porta Mandy. (2017). How to Define Your Target Market. Retrieved November 26, 2017, from https://www.inc.com/guides/2010/06/defining-your-target-market.html
Reza, S. A. & Valeecha, S. (2013). Influence of Social Reference Groups on Automobile Buying Decision – Research on Young Executives. World Review of Business Research. vol 3(4). Pp. 197-210.
Schiffman, L. G. (2010). Consumer Behavior. Pearson Education India.
Stanganelli, S. (2017). What Salary Do You Need to Own a Lamborghini?. Retrieved November 21, 2017, from https://www.clearviewwealthadvisors.com/personal-finances/salary-need-lamborghini/
Technavio. (2017). Automotive. Retrieved November 21, 2017, from https://www.technavio.com/industries/automotive
Tutorials Point. (2017). Personality & Self Concept. Retrieved November 26, 2017, from https://www.tutorialspoint.com/consumer_behavior/personality_and_self_concept.htm
University of Minnesota Libraries. (2017). How Markets Are Segmented. Retrieved November 21, 2017, from https://open.lib.umn.edu/principlesmarketing/chapter/5-2-how-markets-are-segmented/
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