Consider the introduction of the Infiniti Brand by Nissan and discuss how this sub-brand relates to a particular target segment for Nissan. ‘Since its conception over 60 years ago by Frederick in 1934, the concept of segmentation has gained increasing importance, in both the consumer and business domains.’ (Goller et al., 2002) ‘Market segmentation is according to many text books one of the fundamental principles of marketing. (Kotler, 1997). Marketing theory suggests that businesses adopting a market segmentation approach can enhance their organisational performance (Kotler, 1997). Market segmentation is grounded in economic pricing theory, which suggests that profits can be maximised when pricing levels discriminate between segments (Frank et al., 1972). One reason for the widespread acceptance of the approach is the belief that organizations cannot normally serve all of the customers in a market.’ (Dibb et al., 2002) ‘The marketing literature identifies a range of benefits for businesses pursuing a segmentation approach. The underlying logic is that segmentation can enhance marketing effectiveness and improve an organisation’s ability to capitalise on marketing opportunities (Beane and Ennis, 1987; Weinstein, 1987). This is partly because segmentation builds on an excellent understanding of customers and competitors which can lead to few direct confrontations with competitors and the design of more suitable marketing programmes.’ (Dibb et al., 2002) Nissan itself predominantly produces small cars which are low cost and fuel efficient, the vehicles have a standard level of comfort, safety, style and performance. However, Silverstein and Fiske (2003) revealed that certain demand side factors have caused a move towards premium brands, or a trading up phenomenon. “They include the rise in incomes and home equity, the cash windfall delivered by mass retailers, the changing role of women and the family structure, the rise in divorce rates, the increasing worldliness and sophistication of the American consumer, and the increased focus on emotions and cultural permission to spend” (Silverstein and Fiske, 2003, p. 18). A new brand was to be created for this section of the market, specifically for the people in society who have a higher level of expendable income and demand a higher performance and more luxurious car. Infiniti (2014) explains that in 1985 Nissan made the decision to create a new luxury brand that would compete with the large existing luxury brands in the American market. Their vision was to provide a luxury purchase and ownership process as well as high performance and luxurious vehicles. “Brand managers face a series of dilemmas when choosing the name for a new product. Alongside the concerns about the name hitting it off with the consumer, there are worries about exclusivity, image and the effect on the firm’s other brands. All these issues make the choice of brand name a critical decision for any product manager.” (Bhat et al. 1998). Two years after its conception it was announced the new sub-brand was to be called Infiniti and a badge was created to symbolise the new brand’s desire to be always looking forward – to new horizons, to infinity. The division officially started selling vehicles in November 1989. With the first two models on sale in 1989 alongside the Infiniti Total Ownership Experience the sub-brand rapidly gained recognition as an industry leader in customer satisfaction. Almost a decade later in 1999 Infiniti launched the “Infiniti Owners Club”, an addition to the Total Ownership Experience. Being a member of this club gives numerous benefits, including invites to special events. This has helped create greater exclusivity and helped the brand to grow. By 2003 Infiniti was the number one luxury brand in terms of growth. (Infinity 2014) Andy Palmer, Nissan’s Executive vice-president, global planning and global marketing has stated “The premium and luxury car makers account...
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