At the beginning of the nineties, the global car industry was in decline and the German car manufacturers were scared to death. They were warned that the Japanese competition had great advantages in terms of quality and productivity, as shown in the business book bestseller The Machine that Changed the World. And with the help of low prices, Lexus in particular made a successful entry onto the American car market. Top management consultants warned that only a handful of huge global car groups would survive in the long run. Instead of following the praised concepts of lean production, Mercedes-Benz, BMW, Porsche and Audi developed their own innovative Premium Power brand strategy and thereby initiated a true revolution in the automotive industry. Premium is not "Cheap Luxury", and it is also not "Upscale Mass-Market" - but it is an independent, new sector of the global car industry, and is all about premium innovations and premium marketing. Premium Power is really a strategic revolution of the automotive industry, as it reverses the companies' focus from production and technology to the customers' needs.
This means a premium brand - or better premium company - has to innovate in those product properties which are important to its clients, in order to create premium products that can be sold at a price premium. As a consequence, the concept of Lead Production cannot be fully applied by Premium manufacturers, because it would endanger their differentiating powers through innovation. This book outlines the properties of Premium Power and describes the breathtaking story of its invention, which saved some of the most respected automotive brands in the world. What exactly is the secret of success of these German premium carmakers, which is reflected in a superior growth in revenue and profits? Which challenges do those premium brands have to face in the future? What lessons can be learnt from these successful brands in other industries? The automotive analysts Philipp G. Rosengarten and Christoph B. Sturmer describe the fascinating success story of the German Premium car brands, especially over the past 10 years.
With the help of the new premium brand DIS-Matrix (Design-Innovation-Sector-Matrix), they describe the characteristics of each individual German premium brand and analyze the individual success factors. After providing an outlook of the future challenges premium brands will have to face in order to defend their market position, the authors apply their insights to other industries that could learn from the high performers in the automotive industry - how to build and manage a premium brand.
PHILIPP G. ROSENGARTEN is a Senior Automotive Analyst at the Global Insight Automotive Group (formerly Standard & Poor's DRI), the market leader in the area of automotive analysis and forecasting. He is also responsible for the global luxury car segment. Before joining the Global Insight Automotive Group he completed his masters degree at the London School of Economics (LSE) on car components suppliers, involving research for MIT's IMVP project, after finishing his diploma in business administration. CHRISTOPH B. STURMER is a Senior Automotive Analyst at the Global Insight Automotive Group and is also responsible for analyzing and forecasting the German automobile market. Previously he worked at DaimlerChrysler in the marketing strategy department of the Mercedes-Benz passenger cars division, where he was responsible for product portfolio management and strategic planning. Christoph B. Sturmer holds a diploma in economics from the University of Heidelberg.
1 What is a Premium Make? 2 BMW - From the Motorbike to the Automobile 3 Mercedes-Benz - The Inventor of the Automobile 4 Porsche - The Sports Car Manufacturer 5 Audi - Vorsprung durch Technik 6 Cooperation, Competition and Awareness of Premium Makes 7 The Premium Brand Design-Innovation-Sector Matrix (DIS Matrix) 8 The Success Factors of the Premium Makes 9 The Challenges for the Premium Makes 10 Findings for other Companies and Industries Appendix: Premium Makes - Theory