Premium brand strategy in the automotive industry : what are the characteristics of a successful premium automotive strategy?

Abstract

Premium car brands are more successful in the last years than ever. These strong brands sell more and more units per year and reach record profits. The purpose of the thesis is to look behind the "right products" and the "right way" to build up and/or lead a successful premium brand, in particular to identify the key areas of an OEM's strategy, where a different approach is needed, if compared to a volume brand or a budget brand and also to identify differences between diverse premium strategies based on three case studies. The Thesis is divided into four chapters. Chapter 1 and 2 serve as a theoretical introduction. Chapter 1 is to give an overview of the topic - examining the definitions of the "premium" brands, including the identification of the boundaries to other brand segments. Chapter 1 also gives an overview about the benefits of the premium strategy and a rough overview of the key players of this market segment. In Chapter 2 the particular strategy fields are examined, where the different approach compared to a volume brand is of the highest importance. the strategy fields are limited in the thesis to some key issues: innovation (research and development), sales-brand building-marketing, finance, production, HR and general organization. The assumption of the Master's Thesis is that premium brands have different approaches in all the six defined business fields and these can be identified in specific values or other facts (with definition of specific KPIs). In Chapter 2, these specific KPIs are also defined and analyzed to give as a result a comparison of volume and premium strategy in general. After the identification of the key strategy fields, in the case studies of Chapter 3 the theory in the real world is examined; three undoubtedly premium brands with three completely different best practices - a traditional luxury brand, one of the first ones in the world, "downgrading" itself to a very successful premium brand (Mercedes-Benz), the opposite: one of Volkswagen's daughters- very deliberate way to upgrade itself from mass to premium (Audi), and BMW's approach to revitalize Britain's iconic (but before the takeover far from premium) brand MINI and to lay down the foundation for premium cars in the small car segment. Finally, Chapter 4 is to summarize the results of the best practices and to give a rough outlook into the future of the premium car market.