How can the luxury car segment be protected while at the same time identifying new outlets accessible to the brand, without undermining its essence?

This is an extract from the book I've just published together with Philip Kotler, Denis Rothman and other gurus of marketing. Precisely, this is one of the many case studies in the book. Learn more here: https://eomm.bebrilliant.it/

Introduction

Lamborghini is one of the leading points of reference in the automotive industry within the exclusive super sport segment – that is to say the niche of super sports cars boasting 500 HP and featuring a mid-engine or front-engine design, with two seats and two doors, at prices exceeding € 150,000 (before VAT).

Created in 1963 with Ferruccio Lamborghini, the Sant’Agata Bolognese company has over time garnered one success after another, becoming a global leader.

In this case study, we will see how one of the leading figures in a specific market niche has joined skill and uniqueness to the needs of its reference target, thereby creating an innovative product that, according to pre-launch market research, has been winning beyond all expectations.

Problem

Lamborghini has always specialized in 10- and 12-cylinder luxury sports cars desired by motor sports enthusiasts and for use mainly on the track or at weekends. In the same market niche, the main players are Ferrari and Aston Martin. The problem arises when other car brands, including McLaren and Mercedes, begin crowding the segment, by producing sports cars and eroding the historic players’ shares. How can the segment be protected while at the same time identifying new outlets accessible to the brand, without undermining its essence?

Solution

Market research shows that the world’s number of ultra-high-net-worth individuals (1) is increasing. Lamborghini thus decided to perform market research on HNWIs, seeking to analyze how to raise their awareness of super sports cars. The analysis showed that they consider these types of cars too showy, and prefer to maintain a lower and more discreet profile. In particular, they have their eye on sports utility vehicles, the sales of which are continuing to grow.

So how can the attention of high-net-worth individuals be attracted while achieving their desires in the best possible way? Lamborghini combines its competence in super sports cars with the convenience and usability of the SUV. This has given rise to an innovative motor vehicle never before presented in the automotive world: the Super Sports Utility Vehicle, which joins super sport performance with the convenience of a car also suited for the family.

This unique selling proposition is well expressed by the claim “Since we made it possible,” which underscores the birth of a good that has revolutionized the segment.

The innovation was tested at the 2015 CAR CLINIC (2), after 3 years of studying and developing the concept. The clinic was highly articulated, aiming to test the worthiness of a launch that would cost the investor about € 1 billion.

It was performed on about 400 potential customers representative of the population, identified by an international agency. The interviews were held in Shanghai, Los Angeles, Munich, and Dubai. The target was presented with the new Lamborghini model, built at a scale of 1 to 1, placed in comparison with three other competitors.

The clinic brought results exceeding even the rosiest expectations: practically a landslide in favour of Urus. Lamborghini therefore manages to perfectly achieve the desires of the high-net-worth individual by leveraging its own speciality in super sports cars. In December 2017, a mega event was organized in Sant’Agata Bolognese to present the new Urus to the press and dealers.

The event was held in the new Urus factory built beside the historic headquarters. In two years, the Bolognese headquarters doubled its area, growing to 160,000 m2. This choice was made based on the recommendations drawn from the car clinic: potential buyers are sensitive to “Made in Italy” and expect the new Urus to be manufactured in Sant’Agata Bolognese.

The official presentation was followed by the international ADV launch campaign assigned to the Milanese agency Beyond the Line, which developed an omni-channel strategy summed up by the hashtag #SinceWeMadeItPossible, with an innovative and creative concept. The spot celebrates humankind’s capacity for innovation, as exemplified by this new SUV. The ADV shows a fast-paced succession of events once impossible, but that later, thanks to people’s commitment and research, managed to be achieved.

The campaign was followed by the launch with dealers, as they previewed the new Lamborghini model that was to become available in May 2018. The regional events were held in places of particular emotional impact, usually with a gala dinner and an in-person showing of the new automobile.

Conclusion

It was such a success that the waiting list is one and a half years long. Lamborghini could have decided to increase production, but it instead respected the law of luxury goods: produce less than demand and make the good increasingly desirable – desirable enough to allow the price to be further increased to upwards of € 220,000.

Features of the Urus

The Lamborghini Urus is the world’s first Super Sports Utility Vehicle, created to combine the soul of a super sports car with the functionality of an SUV. Powered by a 4-litre V8 twin-turbo engine with 650 CV HP and 850 Nm of torque, Urus can go from 0 to 100 km/h in just 3.6 seconds and reach a top speed of 305 km/h.?Design and performance, driving dynamics and excitement, all come together in a visionary approach completely shaped by pure Lamborghini DNA.

The series

PEARL CAPSULE - Available in 3 colours: Verde Mantis green, Arancio Borealis orange, and Giallo Inti yellow.

GRAPHIT CAPSULE - Nero Noctis black, Grigio Keres grey, Grigio Nimbus grey, and Bianco Monocerus white are the new matte colours of the Urus Graphite Capsule that further enhance the sporty and vigorous lines of its Super SUVs. Combined with certain details’ bright and lively tones in glossy finish, and the glossy black of the rear diffuser and the 23’’Taigete rims, they create exclusive combinations with clear and intense contrast.

Interesting facts

The Urus SUV set the ice speed record on Russia’s Lake Baikal during the Days of Speed – a record officially recorded by the FIA- recognized Russian Automobile Federation (RAF).?

At the wheel, the Russian driver Andrey Leontyev, tested the Lamborghini Sports Utility’s mettle by taking it to a top speed of 298 km/h and an average speed of 114 km/h from a standing start over a distance of 1,000 metres. This is of course thanks to Leontyev’s skill, but also to the “ANIMA” traction management system that allows the driver to choose from among six driving modes: Sabbia, Strada, Sport, Corsa, Terra, and Neve.

Notes

(1) The abbreviation HNWI, standing for “High-Net-Worth Individual” is commonly used in the world of finance to indicate individuals who possess a high net worth. Although there is no clear definition, the term usually comprises those persons whose total personal net worth, aside from their owned home, exceeds US$ 1 million, according to Cap Gemini-Merrill Lynch. The World Wealth Report has recently stated that there are more than 11 million HNWIs in the world and that Italy, with 168,000, is in tenth place in its number of “rich” individuals. HNWIs hold wealth of $ 1 million to $ 30 million, and are concentrated mainly in North America, Asia, and Europe. Source: IlSole24Ore

(2) The car clinic is a particular kind of market research in the automotive sector, in which users are physically shown the prototype for which an opinion is desired. The research is both quantitative and qualitative. In fact, the analysed sample is representative of the population and is interviewed in detail, seeking to comprehend its needs, aptitudes, and preferences. The interview identifies the prototype’s strong points and points for improvement. With the car present and set in comparison with other competitors, the interview takes place, normally lasting one hour. In it, the interviewer/moderator will examine all the strong and weak points that the participant can grasp, and the psychological mechanisms that might lead him or her to choose or not to choose the car in question. At the end of the interview, the car’s price is revealed, and the potential customer is asked whether or not he or she would purchase the vehicle.

This is an extract from the book I've just published together with Philip Kotler, Denis Rothman and other gurus of marketing. Precisely, this is one of the many case studies in the book. Learn more here: https://eomm.bebrilliant.it/

? 2021 Kotler Impact – First Italy edition, English language

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