There are FIVE (5) questions in this question paper. Questions are based on the case study below. Answer all questions.
Posted: Sun Jul 03, 2022 5:23 pm
There are FIVE (5) questions in this question paper. Questionsare based on the case study below. Answer all questions. (30MARKS)
Morgan Motor Company: can the British retro sports car brandstill be successful after 100 years?
The once proud British car industry has all but vanished.However, there is one famous producer left in the UK: the MorganMotor Company. It is the oldest privately held car company in theworld and today the company is still 100 per cent family owned. Thecompany was founded in 1909 by H.F.S. Morgan and was run by himuntil 1959. Peter Morgan, the son of H.F.S., ran the company untila few years before his death in 2003. The company is currently runby Charles Morgan, Peter's son. Morgan is based in Malvern Link, inWorcestershire, and employs 163 people. All the cars are assembledby hand and the waiting list is one to two years, although it hasbeen as high as 10 years in the past. Business is strong, despitethe economic slowdown. In 1997 Morgan made 480 cars; 14 yearslater, in 2011, the figure was 700. Morgan Says that one day it maymake as many as 900—1,000 cars a year, but only if that can be donethe Morgan way and what a totally unique and utterly inimitable wayto make sports cars that is! In 2011 the estimated revenue wasaround £25 million. The operating profits were £320,000 in 2011,compared with E665,000 in 2009. The company employs 160 people, ofwhom 130 are production floor employees.
Morgan history
The first Morgan design was, of course, the famousThree-wheeler. H.F.S. Morgan designed a fun car, the Morganrunabout, for people with little money but with a sense ofadventure. The car was a great success and in the 1920s the Morganfactory in Malvern was making 2,500—3,0Q0 cars a year, with asmaller number being built under licensee in France under theDarmont Morgan brand. Nevertheless, each year production alwayssold out in advance, as customers were desperate for small cars atthis time. Morgan Three-wheeler sales declined and by 1935 therewere only 300 new orders. The reason for this was the arrival ofmass-produced popular cars from Ford, Morris and Austin at asimilar price but offering more features for the money. H.F.S.Morgan had to come up with a new design. He did this in 1936 andannounced the Morgan Four, a light sports car with four wheels anda four- cylinder Coventry Climax engine. From the start, the MorganFour made its name in competition and finished well at Le Mans in1938 and 1939. In 1962 Morgan won the two-liter class at Le Mans. Aproduction Morgan beat the specially modified Porsche and Lotusracing cars and then drove home: the car averaged 98 mph for the24-hour race. Following the race, the Morgan plus Four Super sportswas launched as a factory model so that customers could buy a LeMans class winner. Morgan's cars became regular winners inproduction sports car races across the US. At this time the MorganMotor Company was one of the first companies to benefit fromcelebrity endorsement — Ralph Lauren, Brigitte Bardot and DavidBailey all drove Morgans in the 1960s. In 1989 a visit was made bybusinessman Sir John Harvey Jones and makers of the BBC programTroubleshooter. Sir John criticized the company's strategy ofhaving a long waiting list and making every- thing by hand in sucha labor-intensive way. Morgan is probably the only car company thatstill makes cars the way they were made in the early 1900s —building them on a wooden frame and crafting them mainly by hand.Sir John did not really understand Morgan's market. Coachbuilding(by wood) and a waiting list are strengths, not weaknesses, of thebusiness. Coach- building the cockpit area produces a light, strongcabin that is durable and the waiting list maintains second-handprices. There was much humor over the ‘Sir John Hardly Knows'T-shirts that subsequently appeared at Morgan Sports Car Clubmeetings. There were some very beneficial commercial effects of SirJohn's visit. Morgan experienced a big increase in orders and thelong waiting list encouraged a price increase, which led to thecompany making significant profits that could be reinvested. InApril 2009, princess Anne officially opened the brand-new MorganVisitor Centre, a modern museum bedecked with memorabilia, photos,films, and the inevitable gift shop, housing a remarkable range ofmerchandise for ‘Moggie’ enthusiasts, young and old.
The Morgan philosophy and product range
The company's whole business model is based on longevity andbrand reinforcement. This is not a get rich quick business. Amongthe many other distinctions Morgan enjoys is that of being one ofjust a few family dynasties left in the car industry. Thetraditional family influence has engendered a long-time dedicationto craft, as well as a determination not to grow the company toolarge for fear of increasing costs and jeopardizing quality. Thesense of family ties isn't lost on customers, either. Eager buyersoften visit their unborn vehicles in the company's factory as thecars are being built. It is a kind of Build.a.Bear transferred tothe car industry. All Morgan cars have a customer's name on thembefore they begin pro- duction. Customers can choose from myriadvariants of body, engine size, paint color, dashboard, and leathertrim. However, component supply and storage have been complicatedby the Morgan customization model, but this have been simplifiedwhere possible to make it easier for the business to deliverproduct. Morgan's speedy roadsters are entirely hand-crafted, whichis perhaps fitting for the oldest privately held sports carmanufacturer in the world. As a result, each car takes 130 hours tobuild, and the waiting list is at least 12 months. By comparison,the average US- made-Nissan takes just over 28 hours to build andcan be had pretty much when you want it. Unlike commonplacevehicles, Morgans feature ash wood frames, hand molded body panelsand hand-stitched leather. Such craftsmanship doesn't come cheap.For the US market, a basic two seat roadster starts at nearlyuS$50,000 and the top-of-the-line Aero 8 two seat road rocketstarts at around uS$140,000 — before adding custom cosmetic,luxury, or performance upgrades. Aero 8 (launched in 2000) was thefirst completely new Morgan for 30 years and customers wanting tobuy one must wait nine months. The two- door Morgan roadsters maylook old-fashioned, but they perform as well as the best of today'stechno- logically advanced sports cars. The Aero 8 is Europe'sfirst AIV (aluminum intensive vehicle) and is 20 per cent lighterthan comparable vehicles. It is equipped with a BMW- sourced4.4-litre V8 engine that gets the car from 0 to 60 in just 4.5seconds. As part of the centenary celebrations (100 years in 2009),Morgan announced a truly special model. The brand-new Aero SuperSports was launched at the Geneva Motor Show in 2009 and the firstcustomer models were finished at the factory in January 2010. Thetwo Aero models, intended for a production run of 100 units, werelaunched from rendered drawings, with up-front deposits of £25,000per car required 12 months before build. They quickly sold 100 onplan. Designed and engineered in-house, the Morgan Aero SuperSports is a lightweight aluminum sports car with a luxuriousspecification. The interior features a comfortable combination ofpolished hardwoods, hand-stitched leather and electronic technologyto create a driving environment that is efficient and ergonomic.Despite all this opulence, the overall weight of the car is stillrelatively low, so the car is responsive to driver inputs andeconomical to run. Morgan can achieve this because of their uniqueuse of aircraft style super formed aluminum outer panels and theskills of their craftsmen in hand finishing the assembly of eachcar. The technology debuted in the 100 AeroMax coupes built by thefactory in 2008 and 2009. Such was the demand for the Aero SuperSports model that Morgan took the decision to produce the new modelin greater numbers.
Customer target groups
Morgan is not a company that deliberately targets the recessionproof super-rich, but the cars' name and cache have made the marqueresilient. Morgan's business model has been robust. First, the carshave great residual value — an AeroMax that sells for E110,000 newcan go on sale in Germany for €160,000 within a year. Today, 98 percent of all the Morgans ever made are still in existence. Ofgrowing importance is the number of women who are wealthy in theirown right who are potential customers. In north America where thenumber of Morgan distributors has doubled in recent years, womenrepresent nearly 40 per cent of the top wealth holders, with grossassets of more than uS$625,000, and in the UK there are now as manywoman millionaires as men in the age group 18—44. However, Morganbuyers are not necessarily terribly wealthy, especially not ownersof the 1.6 base model, costing around E30,000 in the UK. The BMW-engined Aero 8 costs nearly eight times this amount. Over the yearsa lot of celebrities have joined the Morgan spirit: Mick Jagger hasjoined Catherine Deneuve and Jean-paul Belmondo. Even Miss piggyhas been among the elite alumni of Morgan owners. Morgan cars haveappeared in a host of films and TV programs, including Moonraker,Monty Python's Flying Circus, My Girl and The Trip. Several bookshave been published about Morgan cars.
The Morgan community
A Morgan community is in place for the firm's huge network ofenthusiasts: • Cars can be ordered online or through the globaldealer network (26 in the UK, 28 in Europe, eight in the US and sixin the rest of the world). • The Morgan Sports Car Club: thisowners' club, which represents owners in many countries, pro- videsa sense of identity and community for many of the buyers. It hasstrong links and influences with the factory, and the Morgancommunity is often consulted on product and brand development. Theclub is a powerful, though informal, symbol and promoter of theMorgan core brand proposition. There is an active agenda ofmeetings and social gatherings. For example, during the 100thanniversary celebrations in 2009, many Morgan owners met with theMorgan family at the factory in Malvern Link. • The Worcester basedMorgan Works racing team. The racing events also create a strongrelational bond between owners and the factory. All theseactivities represent classic examples of customer relationshipmarketing.
International marketing
Morgan builds about 700 cars per year, around 30 per cent ofwhich are sold in the UK. Besides the UK and the US, Morgan carsare sold through- out most of western Europe, as well as inAustralia, Japan, New Zealand and South Africa. For part of the1950s and 1960s, the US provided the company with its largestmarket worldwide, taking up to 85 per cent of all production. Thisended with the first wave of US safety and emission regulations in1971. For many years (1974 to 1992), all Morgans imported into theUS were converted to run on propane, to meet the requirements ofthe US emissions regulations. However, this conversion, along withbringing the cars into compliance with US vehicle safetylegislation, was carried out by the dealership and not by thefactory, making the cars grey market vehicles. Comeback in the USIn 2003, Morgan sold 100 cars in the US, and it has alreadypre-sold the same number of the Aero 8 which replaces its plus 8model. Sales were then expected to rise to 200—250 per year. TheAero 8 was the first Morgan model sold in the US since the 1950sand 1960s. Source: https.'//www.academia.edu/4153 7 f31/GlobalMarketing 8th Edition_Pearson Edu cation
Based on the case study above, answer the followingquestions:
Question 3 Describe TWO (2) reasons thatMorgan's international communication strategy is different frommainstream mass-produced car. (6 Marks)
Question 4 Localizing market strategy is theprocess of adapting content, products, and services to specificlocal markets. Identify TWO (2) advantages of localization forMorgan Company's global market. (6 Marks)
Question 5 If Morgan wants to expand itsproducts, briefly explain ONE (1) advantage and ONE (1)disadvantage of using “Market Expansion Strategies' matrix. (6Marks)
Morgan Motor Company: can the British retro sports car brandstill be successful after 100 years?
The once proud British car industry has all but vanished.However, there is one famous producer left in the UK: the MorganMotor Company. It is the oldest privately held car company in theworld and today the company is still 100 per cent family owned. Thecompany was founded in 1909 by H.F.S. Morgan and was run by himuntil 1959. Peter Morgan, the son of H.F.S., ran the company untila few years before his death in 2003. The company is currently runby Charles Morgan, Peter's son. Morgan is based in Malvern Link, inWorcestershire, and employs 163 people. All the cars are assembledby hand and the waiting list is one to two years, although it hasbeen as high as 10 years in the past. Business is strong, despitethe economic slowdown. In 1997 Morgan made 480 cars; 14 yearslater, in 2011, the figure was 700. Morgan Says that one day it maymake as many as 900—1,000 cars a year, but only if that can be donethe Morgan way and what a totally unique and utterly inimitable wayto make sports cars that is! In 2011 the estimated revenue wasaround £25 million. The operating profits were £320,000 in 2011,compared with E665,000 in 2009. The company employs 160 people, ofwhom 130 are production floor employees.
Morgan history
The first Morgan design was, of course, the famousThree-wheeler. H.F.S. Morgan designed a fun car, the Morganrunabout, for people with little money but with a sense ofadventure. The car was a great success and in the 1920s the Morganfactory in Malvern was making 2,500—3,0Q0 cars a year, with asmaller number being built under licensee in France under theDarmont Morgan brand. Nevertheless, each year production alwayssold out in advance, as customers were desperate for small cars atthis time. Morgan Three-wheeler sales declined and by 1935 therewere only 300 new orders. The reason for this was the arrival ofmass-produced popular cars from Ford, Morris and Austin at asimilar price but offering more features for the money. H.F.S.Morgan had to come up with a new design. He did this in 1936 andannounced the Morgan Four, a light sports car with four wheels anda four- cylinder Coventry Climax engine. From the start, the MorganFour made its name in competition and finished well at Le Mans in1938 and 1939. In 1962 Morgan won the two-liter class at Le Mans. Aproduction Morgan beat the specially modified Porsche and Lotusracing cars and then drove home: the car averaged 98 mph for the24-hour race. Following the race, the Morgan plus Four Super sportswas launched as a factory model so that customers could buy a LeMans class winner. Morgan's cars became regular winners inproduction sports car races across the US. At this time the MorganMotor Company was one of the first companies to benefit fromcelebrity endorsement — Ralph Lauren, Brigitte Bardot and DavidBailey all drove Morgans in the 1960s. In 1989 a visit was made bybusinessman Sir John Harvey Jones and makers of the BBC programTroubleshooter. Sir John criticized the company's strategy ofhaving a long waiting list and making every- thing by hand in sucha labor-intensive way. Morgan is probably the only car company thatstill makes cars the way they were made in the early 1900s —building them on a wooden frame and crafting them mainly by hand.Sir John did not really understand Morgan's market. Coachbuilding(by wood) and a waiting list are strengths, not weaknesses, of thebusiness. Coach- building the cockpit area produces a light, strongcabin that is durable and the waiting list maintains second-handprices. There was much humor over the ‘Sir John Hardly Knows'T-shirts that subsequently appeared at Morgan Sports Car Clubmeetings. There were some very beneficial commercial effects of SirJohn's visit. Morgan experienced a big increase in orders and thelong waiting list encouraged a price increase, which led to thecompany making significant profits that could be reinvested. InApril 2009, princess Anne officially opened the brand-new MorganVisitor Centre, a modern museum bedecked with memorabilia, photos,films, and the inevitable gift shop, housing a remarkable range ofmerchandise for ‘Moggie’ enthusiasts, young and old.
The Morgan philosophy and product range
The company's whole business model is based on longevity andbrand reinforcement. This is not a get rich quick business. Amongthe many other distinctions Morgan enjoys is that of being one ofjust a few family dynasties left in the car industry. Thetraditional family influence has engendered a long-time dedicationto craft, as well as a determination not to grow the company toolarge for fear of increasing costs and jeopardizing quality. Thesense of family ties isn't lost on customers, either. Eager buyersoften visit their unborn vehicles in the company's factory as thecars are being built. It is a kind of Build.a.Bear transferred tothe car industry. All Morgan cars have a customer's name on thembefore they begin pro- duction. Customers can choose from myriadvariants of body, engine size, paint color, dashboard, and leathertrim. However, component supply and storage have been complicatedby the Morgan customization model, but this have been simplifiedwhere possible to make it easier for the business to deliverproduct. Morgan's speedy roadsters are entirely hand-crafted, whichis perhaps fitting for the oldest privately held sports carmanufacturer in the world. As a result, each car takes 130 hours tobuild, and the waiting list is at least 12 months. By comparison,the average US- made-Nissan takes just over 28 hours to build andcan be had pretty much when you want it. Unlike commonplacevehicles, Morgans feature ash wood frames, hand molded body panelsand hand-stitched leather. Such craftsmanship doesn't come cheap.For the US market, a basic two seat roadster starts at nearlyuS$50,000 and the top-of-the-line Aero 8 two seat road rocketstarts at around uS$140,000 — before adding custom cosmetic,luxury, or performance upgrades. Aero 8 (launched in 2000) was thefirst completely new Morgan for 30 years and customers wanting tobuy one must wait nine months. The two- door Morgan roadsters maylook old-fashioned, but they perform as well as the best of today'stechno- logically advanced sports cars. The Aero 8 is Europe'sfirst AIV (aluminum intensive vehicle) and is 20 per cent lighterthan comparable vehicles. It is equipped with a BMW- sourced4.4-litre V8 engine that gets the car from 0 to 60 in just 4.5seconds. As part of the centenary celebrations (100 years in 2009),Morgan announced a truly special model. The brand-new Aero SuperSports was launched at the Geneva Motor Show in 2009 and the firstcustomer models were finished at the factory in January 2010. Thetwo Aero models, intended for a production run of 100 units, werelaunched from rendered drawings, with up-front deposits of £25,000per car required 12 months before build. They quickly sold 100 onplan. Designed and engineered in-house, the Morgan Aero SuperSports is a lightweight aluminum sports car with a luxuriousspecification. The interior features a comfortable combination ofpolished hardwoods, hand-stitched leather and electronic technologyto create a driving environment that is efficient and ergonomic.Despite all this opulence, the overall weight of the car is stillrelatively low, so the car is responsive to driver inputs andeconomical to run. Morgan can achieve this because of their uniqueuse of aircraft style super formed aluminum outer panels and theskills of their craftsmen in hand finishing the assembly of eachcar. The technology debuted in the 100 AeroMax coupes built by thefactory in 2008 and 2009. Such was the demand for the Aero SuperSports model that Morgan took the decision to produce the new modelin greater numbers.
Customer target groups
Morgan is not a company that deliberately targets the recessionproof super-rich, but the cars' name and cache have made the marqueresilient. Morgan's business model has been robust. First, the carshave great residual value — an AeroMax that sells for E110,000 newcan go on sale in Germany for €160,000 within a year. Today, 98 percent of all the Morgans ever made are still in existence. Ofgrowing importance is the number of women who are wealthy in theirown right who are potential customers. In north America where thenumber of Morgan distributors has doubled in recent years, womenrepresent nearly 40 per cent of the top wealth holders, with grossassets of more than uS$625,000, and in the UK there are now as manywoman millionaires as men in the age group 18—44. However, Morganbuyers are not necessarily terribly wealthy, especially not ownersof the 1.6 base model, costing around E30,000 in the UK. The BMW-engined Aero 8 costs nearly eight times this amount. Over the yearsa lot of celebrities have joined the Morgan spirit: Mick Jagger hasjoined Catherine Deneuve and Jean-paul Belmondo. Even Miss piggyhas been among the elite alumni of Morgan owners. Morgan cars haveappeared in a host of films and TV programs, including Moonraker,Monty Python's Flying Circus, My Girl and The Trip. Several bookshave been published about Morgan cars.
The Morgan community
A Morgan community is in place for the firm's huge network ofenthusiasts: • Cars can be ordered online or through the globaldealer network (26 in the UK, 28 in Europe, eight in the US and sixin the rest of the world). • The Morgan Sports Car Club: thisowners' club, which represents owners in many countries, pro- videsa sense of identity and community for many of the buyers. It hasstrong links and influences with the factory, and the Morgancommunity is often consulted on product and brand development. Theclub is a powerful, though informal, symbol and promoter of theMorgan core brand proposition. There is an active agenda ofmeetings and social gatherings. For example, during the 100thanniversary celebrations in 2009, many Morgan owners met with theMorgan family at the factory in Malvern Link. • The Worcester basedMorgan Works racing team. The racing events also create a strongrelational bond between owners and the factory. All theseactivities represent classic examples of customer relationshipmarketing.
International marketing
Morgan builds about 700 cars per year, around 30 per cent ofwhich are sold in the UK. Besides the UK and the US, Morgan carsare sold through- out most of western Europe, as well as inAustralia, Japan, New Zealand and South Africa. For part of the1950s and 1960s, the US provided the company with its largestmarket worldwide, taking up to 85 per cent of all production. Thisended with the first wave of US safety and emission regulations in1971. For many years (1974 to 1992), all Morgans imported into theUS were converted to run on propane, to meet the requirements ofthe US emissions regulations. However, this conversion, along withbringing the cars into compliance with US vehicle safetylegislation, was carried out by the dealership and not by thefactory, making the cars grey market vehicles. Comeback in the USIn 2003, Morgan sold 100 cars in the US, and it has alreadypre-sold the same number of the Aero 8 which replaces its plus 8model. Sales were then expected to rise to 200—250 per year. TheAero 8 was the first Morgan model sold in the US since the 1950sand 1960s. Source: https.'//www.academia.edu/4153 7 f31/GlobalMarketing 8th Edition_Pearson Edu cation
Based on the case study above, answer the followingquestions:
Question 3 Describe TWO (2) reasons thatMorgan's international communication strategy is different frommainstream mass-produced car. (6 Marks)
Question 4 Localizing market strategy is theprocess of adapting content, products, and services to specificlocal markets. Identify TWO (2) advantages of localization forMorgan Company's global market. (6 Marks)
Question 5 If Morgan wants to expand itsproducts, briefly explain ONE (1) advantage and ONE (1)disadvantage of using “Market Expansion Strategies' matrix. (6Marks)