Marketing Report: Brand Extension of Rolls Royce Luxury Watches

This report provides a comprehensive marketing analysis of Rolls Royce's brand extension strategy, specifically focusing on the introduction of luxury watches. It begins with an introduction to marketing principles and the concept of brand extension, highlighting Rolls Royce's existing brand values. The report then delves into the application of key marketing models, including Kapferer's Brand Identity Prism, Ansoff Matrix, and the STP model (Segmentation, Targeting, Positioning), to understand the target market and develop effective marketing strategies. A PESTLE analysis is conducted to assess the external environment, and Tauber's Brand Extension Options are explored. The report also includes a competitive analysis of the luxury watch market. Ultimately, the report concludes that brand extension is a viable strategy for Rolls Royce, supported by various marketing models and thorough market research, and emphasizes the importance of marketing for business success.

PRINCIPLES OF
MARKETING REPORT

INTRODUCTION
 Marketing is the activity concerned with creation of awareness among people regarding
the products and services offered by entity at market place.
 The aim of this report is to facilitate brand extension of Rolls Royce by introducing
luxury watches within the market.
 Rolls Royce is a luxury automotive producer that is engaged in segments such as civil
aerospace, marine, energy, defence aerospace and automobile.
 The brand has its headquarter situated within England, United Kingdom. As per the
reports of 2018, this firm generated overall revenue of £15,729 million.

Existing brand and Brand Values
 Brand can be referred to as the name, designing, symbol, term or any other
distinct feature that creates a unique image of seller in the eyes of purchaser.
 This is what distinguishes a company and its offerings from other rivals
present at market place.
 In addition to this, brand extension can be referred to as a marketing strategy
which is adopted by a business entity in a bid to use its brand name for
marketing of a new product category in which the organisation was not
earlier dealing.

Kapferer’s Brand Identity Prism
 This is identified as a concept which was developed by Kapferer as
per which, a brand is recognised in accordance with its unique characteristics.
 This is acknowledged to be a hexagonal prism which consists of 6
characteristics defining a brand.
 The management of Rolls Royce is making use of this model to portray a
likely image of company after execution of brand extension by launching
luxury watches.
 The illustration of this model in context of the new watches being introduced
by the brand is presented as follows:-

Ansoff Matrix
Ansoff Matrix is useful in preparing strategy marketing plan by avail various opportunities present in the
market for growth and expansion of business. Therefore, this model help in evaluation of various
opportunities to increase sales and market share of the company. It includes Market Penetration, Product
Development Strategy, Market Development Strategy and diversification strategy and all these are explained
below:
 Market Penetration: It is growth strategy of the company that involves selling of existing products to
existing markets and its objective is to expand its existing market share. It involve less investment or
expenditure as the company has almost information regarding customer needs and competitor strategies.
 Market Development: This strategy is used by the business when it is planning to promote its existing
product in new market. It can be done in many ways such as by changing price policy, using new
channels for distribution of products or exporting product to new country.

Cont..
 Product development: This is strategies of the company is used to introduce new
product in existing market and it is suitable in case the business want to get
competitive advantages by differentiating products. For this strategy the company
should effectively identify needs of customers and develop product to expand its
business.
 Diversification: It the strategies of the company to launch new product in new market
and it involves high risk as company has less knowledge of new market so it should
effectively analysis its market before expansion.
 Company can use product development technique as it is launching new product
Luxury watch with the existing market share. This strategy is beneficial to the
company as it help in identify the needs of customers and satisfying them in effective
manner.

Description of Target Market
It is important for a firm to effectively target the audience as per the nature as well as type of
their organisational offerings. In this relation, Rolls Royce is gaining entry into luxury watch
segment. The management of Rolls Royce is making use of STP model to select the target
market and effectively position its new offerings among them. This model is explained in
context of context of luxury watches as follows:-
 Segmentation: The market can be segmented on 4 bases, namely, geographic,
demographic, psychographic and behavioural. A brand segments the market as per the
nature and characteristics of product. The market for luxury watches is segmented on the
basis of demographics.

Cont..
 Targeting: The aspect according to which the luxury watches would be targetted is
income status. In this relation, the top management of this firm has decided to target the
elite section of society as the watches would be priced by making use of premium
pricing strategy. Thus, it can be said that such watches would not be easily affordable for
middle and low sections of society.
 Positioning: The watches being launched by Rolls Royce at market place
would be positioned within the target audience by leveraging social media marketing.
This would enable the brand to gain the attention of people towards its watches having
lavish and hi tech features

Analysis of New Market, Including Trends - PESTLE analysis
PESTLE Analysis
 This is a macro environmental analysis model that is taken into use by firms
with a view to gain knowledge of the influence that external factors place upon
the operations of an entity. In this relation, the management of Rolls Royce has
conducted this analysis with a view to identify the effects of external
environment upon the launch of luxury watches of this brand at market.
 Summary: It can be summarised that political and economic conditions of
England are strong enough to support the increment in market share of Rolls
Royce after the launch of luxury watches.

Explanation of New Product through Tauber’s Brand Extension
Options
Tauber’s Growth Matrix illustrates that there are 4 primary choices that are available to a company in terms of its
brand strategy. The 4 choices are acknowledged to be new brand, multi brands, brand extension and line extension.
 New brand: This strategy is concerned with launch of a new brand within the market place to
significantly gain the attention of people.
 Multi brands: This is concerned with the usage of multi-brands, that is, more than 1 brand within a
product category. This is a strategy that offers a methodology of segmentation in a specific category, even
though it is essential to do management of such flanking brands and their relation with parent brand.
 Brand extension: This strategy involves the usage of an already established brand name with a
view to gain entry into a new product category. This is done with a view to facilitate growth and expansion of
the brand in terms of scale and size.

Comparative analysis of brand extension with competition
identified in new market sector
 Rolls Royce is establishing a strong image within global luxury market by introducing luxury
watches having hi tech and unique features that can appeal to customers in an effectual manner.
 There are a large number of brands that have been leading the luxury market by providing
products and services of high quality.
 In this relation, the top brands pertaining to luxury market are recognised as being LVMH - Louis
Vuitton Moët Hennessy, The Estée Lauder, Compagnie Financière Richemont SA, Luxottica
Group SpA, Kering SA etc.
 Thus, it is significant for Rolls Royce to ensure that the organisational offerings are capable of
gaining the attention of a large number of individuals pertaining to the luxury market.

CONCLUSION
 Marketing is a crucial aspect for every corporation.
 Further, it is analysed that brand extension is considered as an effective way of inflating existing
level of brand value and brand image at market place.
 In addition to this, it has been analysed that there are various models which provide assistance to
a brand in facilitating brand extension in an effective and efficient manner.
 Apart from this, it is recognised that secondary and competitor research are 2 effective methods
to collect information for executing brand extension strategy.
 Additionally, it is identified that market is generally segmented as per income status for luxury
products, thereby targeting elite class section of society.