How the purpose of special and limited edition strategies varies according to the different stages of a

In this section of the analysis, researchers will continue to explore the multipurpose nature of limited and special edition and they will test the truthfulness of the second proposition.

Second proposition: special and limited edition products can be used as product life cycle strategies.

Specifically, this section will focus on exploring the second proposition within the context of the PLC stages.

Researchers will analyse how special and limited edition strategies can address different purposes according to the considered phase of a product life cycle. They will explain how special and limited edition products can be employed at different phases of a product life cycle in different ways and with different aims in mind.

As explained in the literature review, each phase of a product life cycle requires different and specific strategies and tactics due to the distinct nature and characteristics of these stages.

During the first stages of the PLC, special and limited editions are more likely to offer new, specific features in order to attract customers and offer them a higher degree of differentiation. On the contrary, the last phases of the PLC are usually characterizing by different business needs, namely the need for cost reduction and thus, the degree of experimentation and newness of the features decrease (Eumenidi & Zamboni, personal communication, 2019).

Stage I: Introduction

During the first phase, the company focuses on achieving market acceptance. As previously discussed, the automotive industry is showing a general short introduction phase and companies concentrate their efforts on creating model awareness and a product advantage. Special and limited editions can be created for this purpose.

Particularly, they can help the companies to generate faster adoption and greater marketing coverage, as they are marketed in order to achieve higher resonance (Eumenidi & Zamboni, personal communication, 2019).

For example, Alfa Romeo launched the 4C model with a limited launch edition available only in 500 units in order to create model awareness and over 1000 people have shown up with the intention to purchase the car (Figure 5.6) (AlVolante, 2019). As outlined in the previous sections, special and limited edition products, indeed, can be seen as important marketing strategies in order to affect consumer behaviour by, for example, creating feelings of scarcity and time pressure. Moreover, as discussed before, special and limited editions can help customers to focus on those characteristics and features of the product which could be otherwise overlooked. Thus, using a special or a limited edition in this early stage of the product life cycle can be of great value to communicate those attributes that the company want to emphasize.

Figure 5.6 - Alfa Romeo 4C Launch Edition, retrieved from www.fiatpress.com

Moreover, in the scenario in which a company wants to speed up the initial plant set up and moving fast to market, special and limited edition models can help in creating a limitation on the level of customization of the product’s features. An extensive personalization can bring to the company complexity and difficulties during this early stage of the PLC. For example, a company may decide to move fast to market and create a limited launch edition with only one colour available, in order to deliver a standardized yet exclusive product without losing the interest and attraction of customers.

Stage II: Growth

As explained earlier in the literature review, during the second stage of the product life cycle, sale volumes increase thanks to the cascade effects generated by satisfied customers. In this period of the PLC, companies shift the focus on creating higher brand awareness in the market, enhancing the efficiency and providing differentiation.

In this context, special and limited editions may be implemented with the purpose of increasing the marketing efforts and outcomes in order to achieve a higher brand recognition within the market segment. For example, Alfa Romeo launched the MiTo R.I.A.R. limited edition model in only 46 units in 2009, when the MiTo model was going through its growth phase (Motor1, 2019a). This limited edition had the intention to promote the MiTo model in its expansion phase in order to create strong feelings for it and for the brand in general.

Figure 5.7 - Alfa Romeo MiTo R.I.A.R. limited edition, retrieved from it.motor1.com

Moreover, special and limited editions can be implemented as a differentiation strategy by offering different and special features not available in the basic models. Indeed, as already explained, customers are more likely to focus their attention on the features of a particular car model when this is labelled or marketed as a special or limited edition. For example, the Alfa Romeo MiTo R.I.A.R. drives the customer’s attention to its iconic and traditional alley wheels and its overall sportiness.

Stage III: Maturity

The maturity stage is marked by the levelling of the sales volume. As presented in the literature review, the main strategies to be used in this phase are cost leadership, differentiation and focus strategy. As stated by Bush and Sinclair (1992), creating hybrid strategies is beneficial for the business.

For instance, special and limited editions can be implemented in order to create hybrid strategies, combining cost reduction and differentiation efforts. By limiting the degree of customization, special edition car models can address needs for cost reduction, while by offering a specific bundle of features they can enhance the delivered and perceived product’s differentiation.

Furthermore, implementing in a special edition features decreasing in competitiveness or overlooked by customers, a company can reduce both the manufacturing efforts and the investment necessary for gaining customers’ interest. Indeed, as explained in the theory, customers generally perceived an enhanced modernity for features and optional when they are re-marketed within a special edition, even if these attributes were decreasing in demand and previously neglected.

For instance, the Alfa Romeo MiTo Urban has been created with a different styling thanks to the implementation of existing features and characteristics already available in the existing production but not yet exploited in the MiTo model. This has allowed Alfa Romeo to address cost reduction issues while executing a differentiation strategy and gaining customers’ interest (Eumenidi & Zamboni, personal communication, 2019).

Furthermore, special and limited editions can be conceived as focus strategies, aiming at a different and specific type of customers, such as car enthusiasts and brand passionate customers (Eumenidi & Zamboni, personal communication, 2019).

For example, Alfa Romeo MiTo SBK special edition and Alfa Romeo SBK limited edition represent two different models created and marketed with the end of reaching the SBK passionate (Motor1, 2019b).

Stage IV: Decline

The decline stage has been presented in the previous chapters as the period in which the product is reaching the end of its life and the sales are declining. The focus of the company moves on price promotion.

In this specific stage, for example, a special edition can help the company to deliver a great customer advantage by providing a specific bundle of features at a more competitive price. Thus, also in this case a special edition can be seen as a hybrid strategy, combining cost reduction with differentiation needs.