China is gaining more and more global attention as the world’s number one economy with the highest return on investment and high growth potential. Luxury car manufacturers, in particular, have increased their focus on the local market (Research and Markets Adds Report, 2016). Along with adding to consumers’ consumption ability, their requirements for products are becoming more diversified and comprehensive. In the face of such a huge luxury car market, how to seize their own market share from the increasingly homogeneous luxury car brands is something that all the major Monarch companies need to study.
Infiniti, as a luxury manufacturer, has also gradually increased its attention to the Chinese market to grab market share. With a full range of sedans, SUVs, sports cars and other models, it has a very rich product line (Abhay, 2018). It is known for its superior customer service as well as avant-garde and stylish design and excellent performance, which helped it to increase its brand awareness and boost its sales in the Chinese market. However, there is still a big gap between Infiniti and the first camp such as Audi and Mercedes-Benz, which have firmly established their footing. Infiniti is still facing problems such as target group not yet clear, brand marketing still not formed system, and lack of product promotion.
Among the target consumer groups, Infinity has an advantage in model. Notably, its products have superior performance and highly individual design. The strong after-sales service system is another achievement; according to Abhay (2018), it is at a higher level than that of European cars. In addition, the brand is known to invest in the development of green energy and power, which also is a strong point, considering the current need for environmental protection.
On the contrary, Infiniti has only a 20-year history of development, is not as famous as European cars, and has entered the Chinese market later. Therefore, it remains challenging to surpass the old luxury cars (MCCABE, & DE, 2010). An obstacle on that way is that the design of the logo is similar to that of the Chinese brand Chery, which is likely to cause misunderstanding among first-timers.
Infiniti’s brand image positioning seems to be more suitable for the younger generation of consumers, whose number has been increasing (MCCABE, & DE, 2010). In addition, the traditional German luxury car brands alone cannot fully meet the various needs of domestic consumers, which undoubtedly creates a good opportunity for Infiniti. In the past two years, brand’s sales have been rising year by year under the role of successful marketing, which has also given the company the opportunity to increase its share.
The main threat to Infiniti comes from its competitors, as there are many brands of premium cars in China, both traditional and emerging brands such as Porsche, Volvo, and Lexus (MCCABE, & DE, 2010). The intensifying conflict between China and Japan also poses a potential threat to Infiniti’s development in the former. Its late entry into the Chinese market is another negative point due to the preconceptions of the Chinese people in general. The difficulty of developing new market segments is also a threat to Infiniti’s expansion of market share. The modern green trends are worth mentioning as well since they will lead to increased pressure on the development of the entire automotive industry, causing a situation that requires greater cost. The reasons for which this is likely to happen are explained below.
PM2.5, the deterioration of the natural environment, the greenhouse effect, and the increase in the number of water-related disasters are some of the causes of the growing number of passenger cars. The government will definitely put environmental protection on the agenda, and the environmental requirements for passenger cars will gradually increase, improving public transportation and encouraging public transportation is the trend. The automotive industry will continue to develop, and the trend is to save energy and reduce CO2 emissions. On the one hand, the pressure of environmental protection will influence the government’s decision to image car sales in the future. On the other hand, it will lead to increased pressure on research and development of the entire automotive industry, increased investment in research and development, increased energy saving and emission reduction, hybrid power and the application of new energy technologies, a situation that requires greater cost and cost of various car manufacturers.
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The target market is a sub-market where the company is prepared to meet its needs with corresponding products and services after market segmentation. Selecting the target market, specifying which type of users the enterprise should serve and which of their needs it should satisfy is an important strategy for the enterprise in its marketing activities. Market positioning is to create a strong and distinctive personality for the enterprise’s products according to the competitive situation of similar products in the target market.
For Infiniti, its target market in China has undoubtedly been clear from the very beginning, and that is the luxury car market, as its products meet the corresponding standards (MCCABE, & DE WAAL MALEFYT). However, as mentioned in the previous section, the competition is fierce, so Infiniti’s target market should also be each segment of the luxury car market (ibid.). In each segment of the target market, Infiniti should adopt a differentiated market strategy to design different style models in different segments according to the different preferences and characteristics of different types of consumers. And for the target consumers to carry out different marketing strategies to make the product more attractive to all types of consumers. Only in this way, it is possible to get a head start in the market competition.
Infiniti has always been known for emphasizing the handling and sporty performance of its products and the pure fun of driving. Such market positioning can undoubtedly attract more and more consumers who are eager to express their flamboyant personalities. And the consumption of luxury cars in China is changing in the direction of youthfulness, which will be more conducive to Infiniti’s development in China (MCCABE, & DE, 2010). In addition, Infiniti in China should continue to Chineseize, to develop more products for the Chinese market, and to propose marketing strategies for the Chinese market. In short, Infiniti’s position in the Chinese luxury market should be a younger, more fun-to-drive and more Chinese luxury car. This part of the wealthy group advocates dashing, elegant life style consumer group demand and spirited, like self-expression of the group demand, eager to stay young consumer group demand, advocate dynamic consumer group demand.
It is worth noting that the wealth segmentation of Chinese market in general is different from that in most Western countries due to the absence of middle class. Simply stated, people’s income can be whether high or low, limiting the target audience of Infinity to the former group (Shifting Social Trends in China, 2018). Regarding generational segmentation, Chinese consumers mostly belong to the generations of the 70s, the 80s, and the 90s. As said above, the percentage of wealthy people is gradually increasing in the last branch. In addition, members of this category are the most individualistic and focused on their own needs, which makes them especially likely to purchase luxury vehicles (ibid).
Recommendations for Future Improvement
Considering the above, Infiniti should continue to adapt to the Chinese environment, primarily, in cultural terms, so that the probability of prejudiced attitude from the locals is lower. In addition, the brand needs to break through the traditional sense of just emphasizing the core elements of technology and sporty style brand image, reshape Infiniti’s dignified, young, energetic and charming brand image, so that Infiniti is distinguished from its long-term rival Mercedes-Benz. Mercedes-Benz tries to create an aristocratic image, Infiniti shows the future personality (MCCABE, & DE WAAL MALEFYT).
Of course, Infiniti must also realize that although its own car brand has always been positioned as a mid-to-high-end car brand, in actual operation it is also based on high-income groups. Infiniti also needs to pay attention to the general family spending power through the financial way to improve, using low interest as well as using low down payment and other different auto finance methods as well as consumption strategies to greatly reduce the threshold of Infiniti cars, so that the middle or future have the strength to buy Infiniti cars greatly increase the group.
Price strategy mainly refers to the way that manufacturers and merchants use the difference in consumers’ ability to pay to price the same product differently, which is a differential pricing method (Varadarajan, 2009). To some extent, price strategy is price discrimination, but the policy allows for it. From an economic point of view, the price of a commodity is often inversely related to the demand for that commodity, the higher the price the lower the demand, and the lower the price will promote the market consumption desire or demand. Auto price composition is a complex content, but mainly contains the following aspects: production costs, transportation and storage costs, taxes and fees, as well as the profits of enterprises in various product chains. Domestic car terminal prices are higher than foreign prices for products of the same configuration because of excessive and high taxes and fees, which leads to high car prices and directly affects market consumption. In fact, the factors affecting the price of cars are not only the above-mentioned aspects, but also include many other factors, such as national income, car product design, car brand, car performance and parameters, handling and safety, and many others.
Because the market sensitivity of Infiniti products is relatively low, and because Infiniti aims to pursue success at a high price, Infiniti cars distinguish themselves from general public cars by their high prices. The reason for Infiniti’s high price strategy is that: Infiniti’s high price corresponds to the high quality of Infiniti cars, and Infiniti’s high price corresponds to success as well as high social status prestige (Abhay, 2018). The high quality and high price of Infiniti cars reflect the successful social image and high social status perception of people riding Infiniti cars, which is the conduction concept of Infiniti high price. At present, the products of each manufacturer in China’s luxury car market have their own positioning, but basically, they can be used as substitutes for each other (Research and Markets Adds Report, 2016).
Although a young consumer may prefer to buy an Infiniti car that is fun to drive, it is entirely possible for him or her to give up Infiniti to buy an Audi when he or she finds that the Audi car is more cost-effective. In the current luxury car consumers, a large part of them are not going to buy a certain brand, these sellers are very flexible and sensitive to price, and their buying habits are easy to change (Research and Markets Adds Report, 2016). Therefore, it can be said that the demand of the luxury car market is elastic.
The previous article has compared the sales prices of the 5 Series and A6L, with similar configurations; Infiniti’s prices are generally higher than Audi’s, and in other models, the situation is similar. Other car brands, both European and Asian, also mostly are cheaper in comparison with Infinity, as apparent from the below table (MCCABE& DE WAAL MALEFYT, 2010; “Up to 4,000 yuan,” 2021). It compares the lowest price for an Infiniti car with those of two large competitors.
On the other hand, the NDRC has launched anti-monopoly investigations against more than ten car companies since 2012, involving luxury car brands such as Mercedes-Benz, Infiniti and Land Rover. On the surface, the anti-monopoly investigation of luxury cars is due to the high ratio between the price of all accessories and the sales price of a car in the domestic aftermarket, but in the long run, it seems that the whole price of luxury cars, which is often several times higher than abroad, is the ultimate goal of anti-monopoly. In conclusion, based on the current competitive situation of the luxury car market and the general policy background, the trend is to reduce the selling price of luxury cars.
The higher pricing of Brilliance Infiniti Automobile Co., Ltd. undoubtedly makes some intermediate consumers turn to competitors’ alternatives. Under the conditions of perfectly competitive market structure in China’s luxury car market, no manufacturer can achieve absolute advantage in the market by virtue of its own strength. In order to avoid the losses caused by competition, especially price competition, most companies should adopt the market-as-you-go pricing method, specifying the price of products at the average market price level and using such pricing to obtain average profits. Instead, they should not set their selling prices significantly higher than their competitors, as Brilliance Infiniti Motors Ltd. currently does, which has affected Brilliance Infiniti’s sales to some extent. Therefore, under the premise of guaranteeing profit, Brilliance Infiniti should lower the price of its products by 30,000 to 50,000, so that it is basically the same as Audi, which can attract more consumers and increase sales by virtue of its better brand and quality.
Sridhar & Fang (2019) argue that brands, like people, have a variety of identities and characters, i.e., brand personality, which can be described by means of demographic items (age, gender, social class, ethnicity, etc.), life patterns (activities, interests, hobbies, actions, opinions, etc.), or human personality traits (extroversion, introversion, etc.). Varadarajan (2009) defines brand personality as a set of human traits that apply to and are closely associated with a brand. Katsikeas & Zeriti (2020) argue that brand personality, like human personality, is unique. The biggest difference between brand personality and human personality is that they come from different sources. Rutz & Watson (2019) also argue that brand personality may be critical to understanding brand choice.
Infiniti cars have a great driving experience and a great handling experience, the basis of which lies in Infiniti’s outstanding automotive product design (MCCABE, & DE WAAL MALEFYT, 2010). The entire process of Infiniti car products from creativity to consumption, car design is crucial. The product design of Infiniti cars perfectly illustrates the high quality and high technology of Infiniti cars as well as the artistic connotation of the products, such as the double kidney grille at the front of Infiniti cars. But beyond the unity, the specific series of products have different personalities, such as the Infiniti 3 Series Flexible Sport, 5 Series Business Experience and 7 Series Prestige. Infiniti combines the unified soul with specific personality characteristics, and the consistent logo image with specific product demands, completely interpreting the nobility, comfort and personality of the car.
Brand image affects consumer preferences. Whether the brand image of a luxury car is positive or negative positive will affect consumer preferences. For brands with too negative brand image, consumers will only turn away from them to brands with a positive brand image. Consumers’ perceptions of brand image often start with advertising, news media, promotions, etc.; at the present day, more and more of those are done online (Sridhar & Fang, E., 2019). Considering the generation segmentation (see above), it is possible to guess that the majority of potential buyers of Infinity cars have intensive online presence, as this more typical of the youngsters than older people. Therefore, it is relevant to advertise the cars in a digital form, and the promotion campaign has to focus on their individualistic character to attract young Chinese buyers. It may also be essential to highlight that the brand offers luxury vehicles that car influence the social status of their owners positively.
In one respect, Infiniti has good prospects at the Chinese market because it produces luxury cars that continue to gain popularity in the country, especially, with the young population. Along with this, Infiniti cars are too expensive even in comparison with European luxury brands like Audi, which may distract customers from it, and they will opt for more affordable variants. Another possible obstacle is the growing tension in the relationships between China and Japan, for the reason of which the Chinese population may boycott Japanese cars or simply treat them with prejudice. Considering this, it is relevant for the brand to focus on its advantages during promotion campaign, such as individualism, which is becoming more and more important for the young Chinese nowadays.
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