The Audi Q7: Market Positioning The Audi Q7 is a luxury SUV that has recently entered the lucrative SUV market. It is entering a UK new car marketthat is the second largest in Europe and valued at 30 billion. Ford, General Motors, and the VW group dominate the market. Together these three hold a near 50% market share with Ford being the dominant player with 18.8%. The SUV market has been experiencing a slow down lately as high fuel prices have discouraged new buyers. Only 39% of industry executives in Europe expect to see any growth in SUV sales this year, compared with 50% a tear ago (KPMG annual auto industry survey 2007).
The Audi Q7 is a full size luxury SUV manufactured by the German Audi Corp. The Q7 is designed to sell in the premium SUV market against competitors from BMW, Lexus, and Mercedes. Industry analysts expect the Audi Q7 to face intense competition from existing products such as "Cadillac’s SRX, Acura’s MDX, Mercedes’ R Class and a host of others" (Post Gazette 2006). Prices begin at about $50,000 US. The car is available powered by a 350 horsepower 4.2 litre V-8 engine. Fuel consumption is expectedly high rated at 14 mpg city and 19 mpg highway. Less expensive and more fuel conscious versions are in the pipeline.
The Audi Q7 is designed primarily for a male audience that is affluent and insulated from rising fuel costs. Its current market demographics are comprised of 78% male and includes company owners and entrepreneurs. The remaining 22% are a mix of fleet drivers, females, and rental companies. The target audience is in the social-economic class of A, B, and C1 and have more purchasing power as luxury cars represent their social status. They tend to be higher educated and use their vehicle as a personal expression of their success rather than a commodity for utility purposes.
Though the Audi Q7 has a broad reach of luxury appointments, it is presented as a product that is intimidating to the female market and has not been marketed successfully to that segment. Primarily sold in Europe, "The company is seeking to make major inroads into the U.S. market with its diesels" (Jobs 2007). The power of the Audi Q7, while significant, is not in excess of the requirements due to the excessive weight of the vehicle. It is viewed as a large SUV almost in the class of the Hummer in size, weight, and overall impression.
In the current market position, Audi enjoys a reputation for German quality and is considered a premium vehicle. It has many formidable competitors in this area and may not be able to sustain any competitive advantage (see appendix A). It’s unique characteristics of quality and luxury are easily reproduced by the competition. There are also the brands of BMW and Mercedes, which also benefit from a reputation of high quality. However, in the high-end luxury female quadrant, there is little competition (see appendix A). Audi’s reputation and consumer product loyalty would give it a competitive edge in this area. This segment is not highly competitive and the advantage could be maintained for a considerable time.
Repositioning the Audi Q7 will demand that the vehicle be made attractive to the female market. This female segment will be in the A, B, and C1 social-economic class. They are well educated and have a large disposable income. Many are young and probably single representing the age group of 25-55 years old. Repositioning the Audi Q7 to appeal to this segment will require accenting the luxury through appropriate product and advertisement placement. Industry reviews have been positive and have indicated that the appointments and luxury are focused toward the female audience (What a woman wants). It may not be a difficult product to reposition as World Car reports an, "… increasing number of American women who are attracted to this particular class of vehicle. They use it to take the kids to school or to make the short trip to the shopping centre" (Test driving the Audi Q7 2005). Repositioning may be as simple as ad content and proper placement.
Jobs, A 16 February 2007. ‘Audi introduces its first SUV’, Seattle Post-Intelligencer, Seattle WA, viewed 22 March 2007
KPMG annual auto industry survey shows fears as SUV growth grinds to a halt, Auto Industry 4 January 2007, viewed 22 March 2007, Post Gazette 21 June 2006, Audi: Q7 crossover will face intense competition, Pittsburgh PA., viewed 22 March 2007, <. http://www.post-gazette.com/pg/06172/699765-97.stm>. Test driving the Audi Q7 2005, World Car Fans, viewed 22 March 2007,
What a woman wants behind the wheel 2007 Audi Q7 4.2, The Auto Channel 2006, viewed 22 March 2007, Appendix A