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Rimowa-Marketing case study - Essay Example

The following essay will deal with the well-established Cologne-based luggage and outcast manufacturer RAMONA who has achieved world fame with its rectangular aluminum travel trunk featuring an iconic design – that is a grooved surface. The tradition-rich company can proud itself of over 100 years of experience having resisted drastic market fluctuations and recessions, extreme politico-economic crisis, reforms and other externalities such us societal change, globalization and change at an unprecedented pace since the inception of the Internet in the sass.

Hence the continued existence of the family business attests to the effectiveness of their eateries and a certain market resilience. The business has realized a meteoric career from a local business to global player which is now dispersed in more than 50 countries all over the globe. Their resounding success can be attributed to an incident in 1937 when the entire production site was destroyed due to Force measure. Such an event often means that a company is doomed to decay as it incurs exorbitant reconstruction costs.

In this case a creative destruction”l of the current business was imposed by an exogenous shock,that is the explosion of a bomb at their company site. But then the son of Rowan’s founder Richard Memorize made a business(virtue) out of necessity back then. Is also the brand” Richard Memorize Wrenching”. Actually Mr.. Memorize discovered that aluminum was the only material that had not been subject to destruction, so he decided to continue luggage production at the base of aluminum instead of leather.

This was an unprecedented novelty which corresponded to yet unfulfilled demands with regard to practicability, comfort and stability. Hence the new kind of suitcase can be considered a “blue ocean”2 invention although this phenomenon has not been fined before 2005 (W. Chain Kim and Renee Unbroken). But it perfectly fits the definition. However for this reason RAMONA has achieved to rank among the world leaders in the business. The purpose of this essay is to analyses and fathom ROWANS marketing strategies, to evaluate them and to provide further suggestions. ERM coined by J. Schumacher ( an Austrian economist) in his magnum opus entitled “Capitalism, Socialism and Democracy” (1942) to denote a “process of industrial mutation, which implicates an incessant substitution process of industries and products. He metaphoric concept of a blue ocean describes an newly opened market a corner untainted by competition as opposed to a “red ocean” where rivals fight for market share. In a blue ocean demand is created by a unique invention which has no competitors and which is not easy to replicate. 2.

Mission statement Their mission statement can be summarized either as Expert craftsmanship, high quality materials, precision manufacturing and unwavering vision” (Ian, 2010) or as it says in their current official online catalogue craftsmanship meets high- tech. That s they attach importance to continued loyalty to their roots which lies in manual precision work and which is timeless and irreplaceable. Owing to the fact that they dispose of many years of experience the production process has become very proceed with their pioneer status.

So they maintain continued strive for excellence always revising and enhancing existing products while developing new ones with again unprecedented features. So the second blue ocean tapped into was the launch in 2000 of a serious lightweight suitcase made of polycarbonate. The latter invention was made by the current CEO Dieter Memorize. Then in 2001 a patented ball bearing- mounted [email protected] system was successfully brought to market. This system allows to easily transport heavy-load luggage.

According to the differences of time-to- market periods it can be deducted that the company has also achieved to adjust to the acceleration in product cycles to keep abreast of the market. (Long period from innovation in 1937 until 2000, and a very short period from 2000 to 2001). The paradigm shift since the advent of the Internet is remarkable. It becomes obvious that their deported business policy (traditional craftsmanship and innovation) says off. On top of that the famous notion of “made in Germany’ plays a primordial role in their business tactics on the operational level. . Strategic posture RAMONA has a self-conception of a precursor in order that they can benefit from the first-mover advantage. That is they aspire to be considered a substantial part of the growth locomotive Germany. Apart from that they want to convey an image of their company as think tank and talent incubator. One of their subordinate goals is to always offer something very particular like the grooved pattern of the suitcases. It should be instantly recognized as their achievement that is not comparable to other products due to its unique and salient characteristics.

The before mentioned strategic mission places emphasis on the pioneer image they are anxious to conserve. It can be considered as a way to circumvent in away competition trying to keep up the blue ocean market space. Furthermore RAMONA aspires to reconcile the image of a global player and of a locally anchored business. So they are active in a myriad of countries all over the world. Again this action can be qualified as a method o pre-empty competitors that could introduce products 3 reminiscent of the RAMONA suitcases. So they can strengthen their leadership position everywhere on the globe.

Moreover it can be regarded as some kind of hedging strategy or contingency plan. If sales difficulties occur in one place, they may be compensated with a surge in demand in other countries. In order to further safeguard against future potential competitors RAMONA sets high barriers to entry by means of their patents for the distinguishing grooves and the mounted [email protected] system. At the same time RAMONA accentuates their down-to-earth attitude and despite their global engagement their business they kept a moderate size with about 1000 employees.

But then their double-digit sales figures and return rates of в? 145 million in 2011 testify to their success. (Allurement, 2013). Thus their efficiency rate and profit margin must is even more considerable. Following the purpose to even boost their ratio, RAMONA meanwhile outsource labor intensive parts of the value chain to a Czech plant and a Canada to expand their capacities. Consistency in their quality-oriented image – “Ontario is also a premium brand, with ride in manufacturing excellence and a well-educated and skilled workforce, a strong innovative culture, reduced business and employer health(… ” (Ontario business report , 2012). Moreover due to the Canadians market proximity to the USA, RAMONA has chosen a strategically propitious location which enables them to conquer also the US market more easily. For the same purpose they selected Cambridge (Canada) as an ideal location for “Just-in- time” shipments located near major transportation routes. A further aspect of their strategy is the high level of in-house manufacturing, only the IP fasteners are from Japan (Sidle, 2010) .

Because of their long experience with their approved technique RAMONA also benefits from a learning curve. The solidity of their liquidity and solvency situation as well as their excellent reputation qualifies them to go public in order to raise additional funds. But as a matter of fact RAMONA made a deliberate choice of the legal form “Gumbo” (corresponding to Ltd. ) to convey the image of the famous German “Antihistamine”. What is more RAMONA only focuses on its core business not to delude its image. It’s one of their major concerns to keep p the family business for consecutive generations.

According to the current CEO it’s paramount to their philosophy to pursue a family-run business handing down the in-house developed manufacturing techniques, the legacy of family success they are proud of. It is out of question to go public, or to entrust responsibility to foreign organs, that is executives that are not family members involved. Actually the CEO fears thereby losing control and points out that external managers may only be profit-oriented. So RAMONA banks upon organic growth, in percentage terms 99 % (Memorize, 2009).

But then if there is need for complementary skills RAMONA hires outside personnel after meticulous selection procedures. Recently they have employed Hans Current who is responsible for special constructions. What is more it is also part of ROWANS’ risk strategy that they would not shift their production overseas to countries where 4 patent protection is lax. Actually RAMONA is eager to take risk, if they dispose of the control. Hence substantial investments in Research and Development are part of their organic growth and (technological) innovation strategy.

The afore-mentioned teeth can also be qualified as a “technology push” strategy. 4. Short-term objectives RAMONA is about to conquer the North and American continent. Therefore they have launched a high-profile advertising scheme. A “flight tour” not a “road tour”. As a far- sighted business they have recognized huge potential in the emerging markets, especially in the Asian and South American continent as the propensity to consume and demand is very high there, more over the market is far from being saturated. 4. Long-term objectives defects” in production keeping the complaint level as low as possible. Furthermore RAMONA is anxious to become a generic trademark, respectively a proprietary eponymous. Thus they envision that their trademark becomes an epitome of quality, style and comfort for discerning customers. Moreover they adopt a demeanor of continuous improvement in order to be able to set benchmarks for the business. The RAMONA brand belongs to the category of premium brand which Justifies a high price. It can be also considered a flagship brand, a brand for which as business is best known. . 2. 1 essence ” RAMONA-Die Coffer MIT den Airline” , “Germany since 1898” and “Every case tells a Tory’ are the slogans which express the core concept of the company. Image Extraordinary quality and unique design are the components that should be associated with he products. RAMONA – the classic among the suitcases with timeless and simplistic elegance. 4. 2. 3 personality the brand’s identity is forged by the attributes mundane, cosmopolitan, chic conveying the user an image of a quality and style-conscious connoisseur of world- class products that belongs to upper social strata.

The brand also alludes to the notion of prestige. In the case of RAMONA it is in particular the grooved design which identifies instantly heir products together with the attributes such as impeccable quality. The brand’s name only is not as well known as the design. As long as there are no replicas launched onto market, there is no need to emphasize the name of the brand. But in to enhance name recognition. 4. 2. 5 the simplicity and straight-forwardness of RAMONA is expressed by a non-serif typeface without flourish. . Environmental analysis In order to determine a sustainable marketing strategy it is absolutely necessary to conduct a marketing audit. The latter terms is defined as “a comprehensive, hysteretic independent, and periodic examination of a company’s marketing environment, objectives, strategies, and activities. ” (Contain & Estate, 2008). It comprises market data and miscellany from research, merchandising data from sales departments, product data from production, financial data from accounting departments etc.

When considering the interconnectedness of the global market sphere subject to perpetual metamorphosis due to information technologies a revising of the marketing definition of American marketing Association becomes a vital necessity. Their concept has been adapted by Contain & Estate the following ay’ marketing is an organizational 6 function and a set of processes for creating, communicating, and delivering and maintaining value streams to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders, and society in the context of a global environment. (Contain & Estate, 2008, S. 4-5). In the following the macro- and micro factors shall be analyzed. 5. 1 Over the past century the travel sector has undergone considerable transformations. Sociopolitical, scientific as well as technical developments, and economic necessities dead to a promotion of worldwide mobility. This trend has been accelerated since the inception of the internet from the ass’s onwards. However the industry plummeted in 2001 due to the World Trade Centre terrorist attack.

Afterwards it witnessed a period of revival and again was subject to decline in 2008/9 when the financial crisis hit adversely affecting this business sector. People were forced to cut down on expenditures for travel and tourism. However since 2010 the growth prospects are optimistic again given also the fact that demand is increasing at high rates in the merging markets. In a nutshell it can be deducted that the travel market is especially vulnerable to externalities. As a matter of fact the luggage market is positively correlated with the travel industry and bound to equally volatile market conditions.

Currently the luggage market is projected to grow about 4,5 % until 2014. Gained momentum as well. Above that a revival of “frugality’ and green living has gained popularity which encourages the abandonment of overcompensation and incites people to get rid of unnecessary items while opposing travel because of environmental damage (Investigations, 2011), On the other hand there are groups of buyers that consider luggage articles as a fashion accessory. Moreover it has become a vital element of conspicuous consumption in the emerging markets.

According to the reshaping of the customer landscape, also with respect to geographical regions the conceptualization of diametrically opposing strategies in the target markets becomes an important prerequisite to survive over the long term (the economist, 2012). According to a study of 2011 of the opinion and market research organization ЂћSinus Institute” general tendencies in Germany are need for “resounding” that is a desire to consume less, respectively more quality-oriented.

Deceleration and sustainability are the key determinants. The cognitive overload of the multi-option society has a paralyzing effect. Furthermore the trend towards social dichotomizing and “digital divide” is becoming more pronounced. The affluent social stratum has is anxious to be privileged and to distinguish from the rest of the population. The latter is defined as the “established milieu” and accounts for about 10 % of the German population (Sinus Milieus , 2011). In particular it constitutes the first target 7 group of RAMONA.

On international level there has been developed a “values and lifestyle system”‘ (VAL’S) which defines common customer typologies such as “innovators”, “achievers” “experiences” etc. RAMONA could make use of this classification system when entering a new market, because the composition of the customer landscape differs in the international context. 5. 2 The luggage market is particularly fragmented and subject to fierce competition. The market is flooded with numerous branded and unbranded products. However it is dominated by Sensation followed by RAMONA, PIP, Ace and a few more.

According to recent tendencies competitor are increasingly concentrate on targeted advertising and promotion activities as well as on research, development, and designing of new products. (Global luggage market report, 2012). Whereas Sensation suffered substantially from the economic downturn, RAMONA did not face high losses as they are cater primarily to an affluent clientele from the luxury sector that is reportedly resistant to economic fluctuations, respectively counter-cyclical al as these people are eager to differentiate themselves from the other customers.