Each company in the luxury automotive industry has its own "niche within the niche". Being an oligopoly, characterised by a very limited, and very demanding customer base, this market requires each one of the few key players to distinguish itself creating something outstanding.
Some manage to do it better than others, and I have discussed previously the difficulties to enter this market due to its very nature.
In all this, Rolls-Royce, producing cars under the BMW Group since 2003, is definitely one of the most unique examples for many reasons. So much so, that it could almost be said it does not really compete with other firms. In those characteristics that make this brand unique in fact, there is pretty much no one coming close, and its strategy and pricing are a reflection of that.
An essential factor in this is how the company approaches the market, which is expressed perfectly by its CEO, Torsten Müller-Ötvös, words during an interview with CNBC:
"We are not lowering prices just for the sake of volume. That's not Rolls-Royce. We're in the high-end exclusivity business. We are luxury goods. Probably not cars really, our clients see us as luxury goods, and it is to be maintained like that.[...]Rolls-Royce is not at all in any trading business. We are not in the car business at all."
With these premises, it is interesting to look more in-depth into what defines Rolls-Royce's marketing mix.
For previous articles about luxury automotive company's marketing mix 8Ps check the links:
The framework applied, as before, comes from the original 1981's work from Booms and Bitner's 7Ps which analyses every business as a service-based one. This fits every modern automotive company, as already discussed, and even more Rolls-Royce when considering it as a luxury goods company, not an automobile manufacturer. For this reason too, a big part of what Rolls-Royce sells is actually intangible. A lifestyle, and the brand's value that customers want to belong to.
The 8th P concept hypothesised by Goldsmith (1999) and revolving around Personalisation and segmentation claims that modern business has to be the opposite of one-size-fits-all. And Rolls-Royce's business model perfectly incarnates it. While every company in this space now applies a high degree of customisation, these extremely high standards become increasingly harder to maintain as numbers grow. Rolls-Royce keeping strict control over its growth sits on top with only Pagani (which however produces much fewer cars, just between forty and fifty a year) coming close in terms of personalisation.
Whether you see them as luxury cars or luxury goods as claimed by its CEO, Rolls-Royce vehicles are in a league of their own for what they want to achieve. The brand name is synonymous with top-end luxury for a reason, and the quality has to be the best in every small detail. The best materials are picked for every component, and not a single piece that is going to be touched or used in their interiors is made out of plastic.
This attention to quality is applied to achieve also the main driving characteristic of any Rolls-Royce, its refinement and capability to isolate from the outside world. While not lacking in power and performance by any means, differently from other luxury automakers, Rolls-Royce is not concerned with numbers. Especially knowing that for most of their models, owners will not even drive the car but most of the time will be chauffeured around. A serene experience is the most important feature of the Rolls-Royce drive.
Features and options follow the previous concept. They are countless and offered to accommodate every client's preference to mostly unprecedented levels. So naturally, a big component of the product, purchasing, and ownership experience offered by Rolls-Royce consist of its personalisation range, which is discussed later on.
The design language is very recognisable as well. It is essential and clean. So much so that at Rolls-Royce it is said that every model's design can be captured with just three lines. At the same time though, each design is very imposing and conveys Rolls-Royce's stability and luxury character.
The product line consists of five main products. Starting from the Phantom, is a 4-door saloon, full luxury flagship, and thus the most expensive, and the largest. It is the quintessential car for the owner that leaves the driving to the chauffeur.
It follows the Ghost, which is still a full-fledged 4-door luxury car but slightly smaller than Phantom, and conceived to engage the driver more. The latest model to be renewed, launched in 2020 according to the concept of Post Opulence, and it is extremely being the best selling model of the company's history so far. In its statement, Rolls-Royce claimed that more clients than expected actually liked to drive their own Ghost, and for this reason, they paid attention to provide an engaging driving experience as well.
Talking about sales figures, the third model is the Rolls-Royce Cullinan, the latest introduction in terms of vehicle types. The Cullinan, in fact, followed the SUV popularity trend bringing the Rolls-Royce luxury into this vehicle in high demand in the current market. As for other automakers in similar segments, since its launch, in the last two years, the Cullinan alone accounted for around 50% of the total sales of the entire company.
Dawn and Wraith are too fairly recent addition to the line-up. 2-door, 2+2 coupé and convertible versions of Rolls-Royce's ultimate grand tourer. These as well are meant to be driven by their owners, offering a sportier and more engaging drive while still preserving every luxury feature.
The last three models mentioned Cullinan, Wraith, and Dawn are offered also in their Black Badge versions. The Black Badge upgrade usually includes a slight increase in power, and some aesthetic changes such as the use of carbon fibre for some interior components, and the exterior chrome details (including the Spirit of Ecstasy) painted in black.
Finally, the two 4-door Phantom and Ghost instead have both an extended wheel-base version that is popular in certain countries such as China.
*Source: Rolls-Royce Media
The pinnacle of craftsmanship for the British company is Coachbuild. Access to this service is granted only to, according to Rolls-Royce, ‘individuals of extraordinary achievement, culture, and vision'. Here these highly selected clients working closely with the Rolls-Royce team can create their very own car. Unique, or extremely limited pieces that directly become part of the brand's history due to their rarity. Two have been the examples of this within the last decade: The Sweptail and the Boat Tail.
Every new Rolls-Royce comes with a 4-year warranty that covers unlimited mileage, as well as servicing, repairs, and maintenance.
As for the accessories, Rolls-Royce offers a wide range of specially designed objects to complement the cars. From luggage sets to pic-nic sets, lifestyle items, every piece's quality is of course up to standard with the rest of the company's production.
As quoted from CEO Torsten Müller-Ötvös, pricing strategy is essential to Rolls-Royce. None of their products will ever be offered below the current price range. And it is again a unique price positioning, as it is significantly higher than that of any other luxury company.
The ‘entry-level' model in the line-up is the Ghost which starts at £233,235, follows the Wraith at £258,000, and the SUV Cullinan at £264,000. The most expensives of the line-up are the convertible Dawn, MSRP £282,000, and last of course the Phantom for £363,300.
This is another example of Rolls-Royce being on a different level from any competition. Bentley and Mercedes' luxury division Maybach most expensive models which are usually compared to Rolls-Royce are sold for starting prices of £157,900 and £162,390 respectively.
Naturally, the prices mentioned are all before options, which can easily amount to an additional £100,000.
This will most likely not happen to Coachbuild models mentioned above that initially sell for several million (Boat Tail was indicated at a price of around £20 million with only 3 units to be built) and thanks to their rarity should at least hold their value.
Rolls-Royce sells through a network of 138 authorized dealers spread in 50 different countries. Like its sales numbers, the dealer network too is slightly smaller than that of other companies in similar segments, which sell their cars through networks of 150-160+ dealers.
As seen previously, in the case of Rolls-Royce too each dealer is located strategically in areas with a higher density of high-net-worth individuals or in ‘cluster areas' where other luxury automotive dealerships are located. The image below shows a dealers' area of London in Mayfair.
As expected, the majority of Rolls-Royce's communication is focused on the luxury aspect of its products, the search for perfection, and for great achievements, which is what makes it unique. This is expressed clearly already in the company's vision statements:
Inspiring Greatness. For over 100 years, Rolls-Royce Motor Cars has pushed the boundaries of luxury, creating new realities both within and beyond automotive design.
Our strive for perfection guides us.
Rolls-Royce is an everlasting expression of the exceptional, where everything we do reflects our persistence and commitment towards the remarkable.
The strategy is naturally consistent throughout all its online channels. Entire sections of the website hardly mention or show cars. Focus is again on the ownership experience, and in getting the clients involved in that unique lifestyle.
This is done, as it is common in today's industry segment, through exclusive events meant to enrich the brand's value and increase loyalty. Some of these are organised to surprise owners, which become effectively part of the brand's family, with exciting and unique journeys in selected locations. Then there are cars presentations, history revivals, and even art-related events.
Art is in fact another important component of Rolls-Royce's communication strategy. A theme that is found in numerous activities. One example is Muse, a program with which Rolls-Royce supports artists working with moving imagery and using different technological means. Another is the ‘Evelina Art for Allergy X Dine on the Line' event, a philanthropic initiative to support medical research organised with the collaboration of Rolls-Royce and artist Marc Quinn.
*Source: Rolls-Royce Media and Jake Curtis
The social media pages alternate car-related content to art and inspirational collaborations with important personalities or people of great success in different paths of life. These too contribute to creating a consistent image for the brand.
Participants are one of the most important tiles of this complex mosaic. In an industry that, especially after the pandemic, is looking more and more at how to make things easier and faster through digitalisation and automatic processes, Rolls-Royce and the rest of the luxury segment go in the opposite direction.
The contact with clients is extremely important as it is an integral part of the brand experience. It starts in the dealer with the initial specification of the vehicle and then varies depending on the involvement of the clients on further steps. When collaborating with the Bespoke division, buyers enter in direct contact with artisans at Rolls-Royce. A staff of highly-trained professionals taking care of every detail.
The final touch added in early 2020 is Whispers, the app for Rolls-Royce owners that features social functionalities for the community, a store, and exclusive experiential offerings by the company itself.
Everything in Rolls-Royce's physical (and digital) environment reflects the brand's search for luxury, art, and perfection.
From the showrooms and dealers to the ateliers, to locations and settings where events are located everything exudes luxury and opulence. Clients are welcomed and can spend time in dedicated lounge areas or ateliers equipped with proper working spaces to work closely with Rolls-Royce staff to specify their car's customisation.
The process is changing. Technology enriches the experience for clients in many ways, the first of which is the increasing power and accuracy of car configurators. The pillars of these steps, which are partially described in previous sessions, remain the same. Policies and best practices are maintained to create the best ownership experience.
Length and involvement depend on the customisation level required by each client. Some might just choose ‘basic' features, while more demanding ones could specify unique paint colours or bespoke embroideries, up to those rare lucky who access the Coachbuild program. On average, however, the whole process takes around six months, during which each car component is carefully handcrafted.
As it is obvious by now, this is a big part of what Rolls-Royce is all about nowadays. Customisation options range from the general choices like the bodywork paint to the smallest detail, such as the steering wheel spokes, down even to the accessories like the umbrellas hidden in the door panels.
Rolls-Royce's very own division Bespoke takes care of every detail of the car specification at such a level that is rarely seen anywhere else. There are countless examples of the level of craftsmanship reached.
For instance, sales managers can use dedicated lamps to show how different lights depending on the locations, season, or moment of the day, would hit the car paint colour. When specifying the veneer for the interiors, clients can even select the piece of wood to use. There is then the famous starlight headliner, for which Rolls-Royce artisans using over 1,000 fibre optics create a bespoke pattern mimicking specific constellations chosen by the client.
*Examples of ‘Phantom Galleries', interiors, Starlight Headliner, bespoke details, Boat Tail, Source: Rolls-Royce Media
Even the art theme is found again in the personalisation process. The fascia running almost the entire width of the Phantom dashboard is called ‘The Gallery'. For this piece enclosed in glass, clients can commission bespoke art pieces to include and showcase in their cars.
The ultimate level of this service is, of course, the Coachbuild program mentioned before which gave life to unique projects like Sweptail and Boat Tail where even the exterior design is unique and comes from clients' inspiration.
As wealth increases in many countries, the luxury segment of the automotive industry is likely to see increasingly high levels of customisation developing due to increased competition and demanding clientele. Rolls-Royce is well-positioned to deliver a service as no other company does in this space. Even the Coachbuild projects could become more ‘frequent' fundamentally changing the industry as we know it.
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