MKT 202

Section- 25

Group Assignment
Prepared by-

Saif Saem Islam # 1420659030

Date Of submission- March 25, 2015

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 Table of Content
Topic Name Page
(Porsche) No.


Bentley Page
No.


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.

Guarding the Old

While Bringing in the New

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INTRODUCTION:
Porsche AG is a German automobile manufacturer specializing in high-performance sports cars,
supercars, hyper cars, and lately SUVs and sedans. Porsche AG is headquartered in Stuttgart, and
is owned by Volkswagen AG, which is itself majority-owned by Porsche Automobile Holding
SE. The current Porsche models include the 911, Boxster, Cayman, Panamera, Cayenne, Macan,
and the 918

Porsche's company logo was based on the coat of arms of the Free People's State of Württemberg
of former Weimar Germany, which had Stuttgart as its capital (the same arms were used by
Württemberg-Hohenzollern from 1945-1952, while Stuttgart during these years was the capital
of adjacent Württemberg-Baden). The arms of Stuttgart was placed in the middle as an in
escutcheon, since the cars were made in Stuttgart. The heraldic symbols were combined with the
texts "Porsche" and "Stuttgart", which shows that it is not a coat of arms since heraldic
achievements never spell out the name of the armiger nor the armiger’s home town in the shield.

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Porsche is a brand of uniqueness and elegance. Its customers are highly brand loyal and maintain
an image of exclusivity. It has always been a niche brand that makes cars for a small and
distinctive segment of automobile buyers. Last year, Porsche sold only 29,023 cars in the five
models it sells in the United States.
Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a
great deal of time thinking about customers. They want to know who their customers are, what
they think, and how they feel. They want to know why they buy a Porsche rather than a Jaguar,
or a Ferrari, or a big Mercedes coupe. These are challenging questions—even Porsche owners
themselves don’t know exactly what motivates their buying. But given Porsche’s low volume
and the increasingly fragmented auto market, it is imperative that management understand its
customers and what gets their motors running. Now-a-days, this company is in better shape than
ever to maintain its brand image with the Porsche faithful, and with others as well.
Understanding Porsche buyers is still a difficult task. But one former chief executive of Porsche
summed it up this way: “If you really want to understand our customers, you have to
understand the phrase, ‘If I were going to be a car, I’d be a Porsche”.

 Analyze the buyer decision process of a traditional Porsche customer.

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 Ans.

The buyer decision process of a traditional Porsche customer consists of 5 steps & those are
given below:-

Informatio Evaluatio Purchase Post

Need
n search n of decision purchase
recognitio
alternative behavior
n

Figure of Buyer Decision Process

1. Need recognition:

Customers need can be triggered by internal & external stimuli.

 Internal stimuli: Internal stimuli refers to the stimuli produced by body components
like as thirst, hunger etc. So, obviously in terms of buying a Porsche car customer’s
internal stimuli doesn’t exist.
 External stimuli: It influences consumer to buy on impulse rather than need such as
buying a luxurious car, air conditioner etc. The buyer decision process of a traditional
Porsche customer starts with the consumer’s recognition of a need for the product. In
this case it is the need for a unique, expensive, distinctive designed car.

2. Information search:

After deciding the need for a car the consumer will potentially indulge in further research
towards the options available. Consumers can obtain information from four several sources:

 Commercial sources: This can include searching on the Porsche website, looking
through ads of their products, or even going to the dealerships to gather more
information.
 Public sources: This can include mass media, consumer rating organizations etc.
 Experimental sources: Customers can make a test drive in this case.

3. Alternative evaluation:

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The stage of buyer decision process in which the consumer uses information to evaluate
alternative brands in the choice set. Like after researching about the Porsche cars the consumer
is interested in and then look at the competitors of Porsche such as the Toyota Supra, Nissan
GT-R, BMW 6 series, Etc.

4. Purchase decision:
The next step is for the Porsche consumer is to make the decision to buy their car. After the
consumer has evaluated all the options and would be having the intention to buy the product,
there could be now only two things which might just change the decision of the consumer of
buying the product that is what the other peers of the consumer think of the product and any
unforeseen circumstances. Unforeseen circumstances for example in this case could be financial
losses, which led to not buying of the product.
5. Post purchase decision:
According to the information provided, the company has had different post purchase behaviors
regarding different models of Porsche. The initial models showed great popularity. The
purchase of a product involves certain consumer’s expectations and a perceived product
performance. The greater the difference between the two, i.e., the greater the conflict, the
greater the dissatisfaction or cognitive dissonance. Said phenomenon was very pronounced with
the more affordable models of Porsche, like the 911, 914, 924 and 944. Traditional buyers
believed that affordability should not replace exclusivity as Porsche’s mantra. In conclusion, the
traditional buyer has greater levels of satisfaction when they find that the company strived to
keep exclusivity intact, and not be just another car manufacturing company. This is proven to be
true with the examples of the Porsche sports car lines, where essentiality was not taken as a
factor.
 Contrast the traditional Porsche customer decision process to the decision process
for a Cayenne or Panamera customer.

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Ans.
The traditional Porsche customers skip most of the decision process and jump right to the
purchase decision. The traditional Porsche customers put more concentration on the appearance
and focus more attention on the new model. They develop a personal relationship with their cars,
one that has more to do with the way the car sounds, vibrates, and feels, rather than looking at
the functional facilities. They buy Porsche because they enjoy driving and of course the car
mirrors their self-image of exclusivity and elegance.
On the other hand, the customers for the Panamera or the Cayenne look for essentiality over
exclusivity. The traditional customer favors the one-of-a-kind car, whereas as the non-traditional
buyers look for something that will suit them in terms of more than just the feel of the car or the
way it bends around the corners. These were people who had to bear the burden of pulling more
than one or two people, and also people in the emerging economies who bought expensive
vehicles, hired chauffeurs, and may sometimes need to make a quick getaway (emerging Chinese
economy)

Porsche
Cayenne Turbo
Cayenne and Panamera customer’s decision process differs from the decision process of
traditional Porsche customer because Cayenne and Panamera customers are more versed in their
decision making as they go through almost all of the stages of the decision process. They
recognize their need of having a larger vehicle that can seat more than two people. They are also
interested and search for more information of the Cayenne and Panamera before their purchase
decision. These customers are different, as they have moved into different stages of life, and
need a larger vehicle to accommodate their needs but still have the drive of a Porsche.

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 Porsche
Panamera Turbo

The post-purchase behavior of any traditional Porsche buyer, upon driving the Cayenne or the
Panamera is simple: the car drives like a Porsche, but Porsches are not meant for utility.
However the behavior of the non-traditional buyer is expected to be better; he or she finds both
the thrill of driving, and can share it with family as well, owing to the spacious nature of the
Cayenne and the Panamera.

 Which concepts from the chapter explain why Porsche sold so many lower-priced
models in the 1970s and 1980s?

Ans.

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Even though Porsche was doing great before the 1970s, in time the company began to realize the
nature of their customers, who was on the constant lookout for exclusivity, might run out on
them. Porsche had never really expected to get through mass car production, and they had very
few customers worldwide. The company began to realize that, in order to stay in the market, it
had to go out and widen the consumer market. The underlying concept here is that the
Consumer Decision Making Process, in this case, was greatly dependent on the consumer’s
psychological and the personally opinionated factors. Since these were very likely to change,
given the nature of the consumers, the company decided to think out of their box, and take a leap
for survival.

Porsche 911E (1970)

Porsche 911 SC 3.0 (1980)

The concepts are consumer buyer behavior with the four key sets of characteristics which are
Cultural, Social, Personal and Psychological. The values that come with the name of Porsche
are higher than the values of the vehicle itself. It is a luxury brand that gives a sense of
accomplishment and status to customers. They knew the average consumer would want these
vehicles if made affordable. Hence, a lot of people wanted to have the satisfaction of owning a
Porsche.

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 Cultural Social Personal Psychological

 Culture  Groups and  Age and life  Motivation

social cycle stage
 Subculture networks  Occupation  Perception
 Family  Economic
 Social class situation  Learning
 Roles and  Personality
status and self-  Beliefs and
concept attitudes

Figure of Factors Influencing Consumer Behavior

Since Porsches were not really classified as cars which were affordable to any and every one, the
company had to move out of its mantra for a while. It needed to stay afloat no matter what, and
this it would be able to do if it widened the consumer market, and aimed to get buyers adopted to
the fact that Porsches could be made affordable for the general lot. In order to do that, Porsche
differentiated its products to make consumers undergo the Adoption Process, where they would
get accustomed to the affordability of Porsches and hence help in increasing the sales of the
company. In the adoption process, the new Porsche customers had to go through five steps
which are- Awareness, Interest, Evaluation, Trail and Adoption where they started from
knowing about a new model of Porsche and ended up adopting that new car. That’s how their
experiment turned out to be a great success for the company in 1970s and 1980s.

Awareness Interest Evaluatio Trail Adoption

n

Figure of Adoption Process

 Explain how both positive and negative attitudes toward a brand like Porsche develop. How might
Porsche change customer attitudes toward the brand?

Ans.

“Social Factors” plays a very important role in creating positive and negative attitude in people
towards a brand like Porsche

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Positive Attitudes:
A brand like Porsche can easily set standards. Over the years the company has managed to create
a brand which thousands of people aspire to chase and become a part of. Other than that, Porsche
also works avidly in innovation, and brings out new cars that are nothing short of revolutionary
and moreover, its engines are extremely reliable. Examples include the Porsche Cayenne, which
was stated to be the Porsche of SUVs, something that feels nothing like a regular SUV, and
drives magnificently like a traditional Porsche. Positive attitudes for a brand like this are easy to
develop. Porsche never compromises on quality, allowing them to strive for the best in the best
of cars of their kind and according to their motto, “There is no substitute” when it comes to
Porsche. This can prove to create a very positive image about the brand. Their customer service
is also outstanding. Traditional Porsche customers want to show their financially secured status
and be excluded from the crowd through owning a Porsche. Thus, the company seeks out and
separates the ones who are unique, who look for the thrill in driving, and can see their image
reflected on the car.

Negative Attitudes:
When Porsche expanded its targeting strategy, then premium class and loyal customers started to
feel less reputed and degraded because they saw common people purchasing the same brand and
this was the time when negative impression of Porsche was created. Another negative attitude
that may develop is the fact that the company does not engage in mass production. The fact that
the company charged excessively high in price may also be proved as a bad factor. Just like it
brings out the exceptional people within society, (people who can afford Porsches) it also brings
out those who cannot afford Porsche cars and that is how Porsche is dividing people in to
different groups in terms of money. Thus, negative attitudes develop toward Porsche.

However, Porsche cleared this air of negativity by launching Porsche Cayenne which was stated
to be the Porsche of SUVs and later on they lunched the Panamera which are something that
feels nothing like a regular SUV and also drives magnificently like a traditional Porsche. Porsche
also changed its loyal customers negative attitude towards it by retaining and launching
exclusive and expensive cars, which cleared that Porsche cars were only for wealthiest segments
and that was for regaining the trust of their loyal customers.
 What role does the Porsche brand plays in the self-concept of its buyers?

Ans.

The extent of the faithfulness of consumers to a particular brand, expressed through their repeat
purchases irrespective of the marketing pressure generated by the competing brands.

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Porsche is capable of altering consumer attitude through its performance in regards to consumer
expectations of high performance. Porsche’s brand develops one’s sensing of the self-concept,
and the self-image by producing very unique and luxurious vehicles and focusing on the
appearance of the vehicles more than the performance so that it would reinforce the feeling of
success by reflecting the customers’ high self-esteem, their roles, and their status.

If we classify the whole Porsche car customers into two groups which are upper class (has high
social status and income) and lower class (has lower social status and income), Porsche
addresses the upper class since it produces exclusive cars. If the price were is affordable to all
people, it would destroy the high level social status of the brand (negative attitude of upper
class).

Rather than doing this, Porsche appeals to a very narrow segment of financially successful
people as the price is very high due to good quality. So, Porsche creates a brand of exclusivity
and uniqueness without the argumentation from others. Then, put their buyer in their own class
of exclusivity and extraordinary. That’s why it is quoted “Most Porsche buyers are not moved
by information but by feelings, a Porsche is like a piece of clothing – something the owner
‘wears’.” That’s how Porsche defines the role of its buyer and sets him or her apart from the
ordinary because of being exclusive and extraordinary just like the cars they prefer to go around
in.

References:
 http://en.wikipedia.org/wiki/Porsche#Production_and_sales
 http://www.porsche.com/pap/aboutporsche/principleporsche/
 http://www.slideshare.net/derekmitchell562/porsche-strategic-marketing-analysis-
17225184

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 http://www.stephenzoeller.com/target-market-segment-strategy-porsche/
 http://www.grin.com/en/e-book/269113/a-detailed-analysis-of-porsche-ag-and-its-
industry-segment
 http://www.businessdictionary.com/definition/brand-loyalty.html#ixzz3V5vNc3vW

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BENTLEY

Differen
tiation and Positioning in
International Markets

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Introduction:
Bentley Motors Limited is a British luxury automaker, a wholly owned subsidiary of the
German company Volkswagen AG which produces best cars in their class and remained
unchanged it was expressed eloquently by its founder. It is an international company developing
and crafting one of the world’s most desirable and of course traditional luxury cars. There are
many characteristics like distinctive design, hand crafted luxury, supreme comfort, ultimate
performance and a refined and exhilarating driving experience. It is the company’s brand
imaging through differentiation and positioning that makes the quintessentially British brand
unique today. To many, owning a Bentley is not about getting from A to B but about getting
there with flair infused with advanced technology and breathtaking power as well as time
hallowed tradition and classic hand craftsmanship at the pinnacle of British luxury motoring.
Based around the concept of “Britishness” in image and design.

Its principal activity is the design, engineering, manufacture, and distribution of luxury
automobiles sold under the Bentley marque. Based in Crewe, England, Bentley Motors Limited
was founded by W. O. Bentley in 1919 in Cricklewood near London. Bentley Motors Limited is
the direct successor of Rolls-Royce Motors, which Volkswagen AG purchased in 1998. The
purchase included the vehicle designs, model nameplates, production and administrative
facilities, the Spirit of Ecstasy and Rolls-Royce grille shape trademarks, but not the rights to the
use of the Rolls-Royce name or logo, which are owned by Rolls-Royce Holdings plc and were
later licensed to BMW AG. Bentley vehicles are sold via franchised dealers worldwide, and as of
November 2012, China was the largest individual market for Bentley automobiles. Most Bentley
cars are assembled at the company's plant in Crewe, with a small number of Continental Flying
Spurs assembled at the Transparent Factory in Dresden, Germany Automobile bodies for the
Continental model line are produced in Zwickau, Germany. Bentley cars are largely hand-built
and crafted with British tradition and heritage.

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  What is the international market segmentation? What challenges does it pose to
Bentley?

Ans.

The process of defining and subdividing a large homogenous market into clearly identifiable
segments having similar needs, wants, or demand characteristics. The four major segmentation
variables are Geographic, Demographic, Psychographic and Behavioral. Its objective is to
design a marketing mix that precisely matches the expectations of customers in the targeted
segment. The United States, United Kingdom and Europe are the traditional markets of Bentley
Motors. These were identified by using two of the traditional international market segmentation
variables which are the level of a nation’s economic development and per capital gross domestic
product (GDP).

Though cross market segmentation helped Bentley to make a high sale in economically
developed markets it also posed some challenges to Bentley which are:

 In 1990s Bentley struggled a lot to reach the same level of sales they made in the boom of
1980s which led the company to a major investment, new product development and brand
re-positioning in 1999.
 In 2008, due to the global financial crisis triggered by collapse of Lehman Brothers
Bentley’s traditional market sales slumped at a great rate. To be specific sales dropped by
24% that year compare to 2007.
 The company was forced to stage a seven-week production shut down in 2009.

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  Using the full spectrum of segmentation variables, describe how Bentley segments
and targets the international luxury car market.

Ans.

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  Has Bentley differentiated and positioned its brand effectively? Explain.

Ans.

Besides segmenting the international market Bentley also need to decide on a value proposition
so that it can create differentiated value for targeted segments and what positions it wants to
occupy in those segments. The mission of this definitive British luxury car company is to
produce best cars in their class. Bentley has succeeded effectively in differentiating its position
in the global luxury car market through a market-drive strategy based on cross-market
segmentation. It is the company’s brand imaging through differentiation and positioning that
makes the quintessentially British brand unique today.

Differentiation and Positioning

Differentiation involves differentiating the offerings of an individual firm in order create

superior value for the customers and Positioning consists of arranging those market offerings to
occupy a clear distinctive and desirable place in the minds of both traditional and non-traditional
customers.

Bentley has always been true to its pinnacle positioning of building the best car in its class with
heritage, tradition, luxury, cutting-edge technology and of course “Britishness”. There are many
unmistakable characteristics that define a Bentley—distinctive design, handcrafted luxury,
supreme comfort, ultimate performance, and a refined and exhilarating driving experience. It
defines its car by the important attributes of tradition and handcraftsmanship, relative to the
quality of other competitors. It stayed true to its proposition through an integrated and high-touch
differentiation program in each of its markets.

Bentley not only produces luxury cars but also offers an exclusive collection of limited non
motoring products such as: luxury leather travel products in vibrant colors, high-end range of
sunglasses, ophthalmic frames and innovative ski products in England. In addition with UK
other traditional markets of Bentley which are United States and Europe, this company regularly
invites customers to take part in national golf tournaments and the winner is crowned with the
Bentley “Continental Cup”.

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 Differentiation of Bentley

Bentley positioned the brand in such a way that differentiates its image in terms of uniqueness
from its other competitors. In its newly found market in the emerging economy of China,
Vietnam, Cambodia, Kazakhstan, Philippines , Brazil and India, Bentley increases publicity to
raise awareness of its brand through motor shows, exhibitions, opening of grand showrooms and
signing of exclusive dealerships. This high touched positioning through tailored marketing
programs in its new markets played a vital role in its recovery since the sale slumps in 2008.

Bentley teamed up with luxury hospitality brands to reinforce its value proposition around the
world. The Bentley room at London, Bentley living room at the headquarters in Crewe, the
Bentley Suite at St. Regis hotel in New York are the symbol of luxury, craftsmanship and style

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associated with this brand. It helps this brand to position and differentiate its brand image
effectively.

 Given the economic downturn in developed and slowdown in emerging economies

such as China, will Bentley continue to grow? Why or why not?

Ans.

Although the economic downturn in developed economies and slowdown in emerging

economies such as China, Bentley will still continue to grow because of their growth potential
given the fast market growth. Bentley targets high-income segments, and builds its brand by
serving a luxury segment of the car market. It produces superior-quality products distributed
through exclusive dealerships and is never shy about charging a typically high price. It is
strongly positioned as a quintessentially British brand steeped with tradition and heritage, and it
communicates this proposition through consistent and believable associations with high-end
brands in the luxury consumer goods and hospitality sectors. In doing so, it draws its existing and
prospective customers to style, luxury prestige, heritage and exclusivity. Through these well-
tuned competitive advantages, it had sold well in its traditional markets until the economic
downturn in 2008, when buyers became more cautious in their spending. It has since recovered
the following expansion into high-consumption-growth segments in the emerging economies by
carrying out effective cross-market segmentation, targeting and positioning. The pent-up demand
for luxury cars in the emerging economies is remaining strong, with Bentley and other European
sports car brands all reporting sales and orders. However, there are already signs of a slowdown
in some of Bentley’s new markets, such as China, which reported the slowest economic growth
in the past decade. Furthermore, increasing sales aggressively in these new markets may imply
less distinctiveness and exclusivity for the Bentley brand.

Vietnam, Cambodia and other emerging economies become Bentley’s new markets. The Chinese
market is now the third most important single market for the company, in terms of sales, these
cars will only add to the voracious Chinese appetite for all things luxurious. Since Bentley
entered China in 2002, then their sales have grown. People who have the ability to buy Bentley
will buy their car. Even though their economy has a downfall, high network people who have
investable amount in China. In traditional market there is a growth in high network people by
16.6%, Bentley will continue to grow because the potential customers grew. If remove the
consumption, if Bentley continue to maintain STP, they will continue to the form well.
Economies are cyclical, the sales growth in the US during 2008 crisis. Reinforce relationship
with existing customers is important.

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  What recommendations would you make to help ensure Bentley’s future growth?

Ans.

Bentley targets high-income segments and builds its brand by serving a luxury segment of the
car market. It produces superior-quality products and doesn’t hesitate about charging a very high
price. It made its position in the market as a British brand steeped with luxurious tradition and
heritage. Through this well-tuned advantages, it had sold well in its traditional market. But to
ensure its future growth, it can look forward to ample opportunities in the years to come,
especially in the existing emerging economies.

Product/market expansion grid can be the used as a vital device to understand or identify
Bentley’s future growth opportunities through its fours steps which are market penetration,
market development, product development or diversification.

Existing products New products

Existing markets Market Product

penetration development

New markets Market Diversification

development

Figure: Product/market expansion grid

Market penetration would be suggested as a step to ensure Bentley’s future growth. It is the
technique of increasing sales of current products to current market segments without changing
the original product. They can add new showrooms in their current market areas to make it easier
for the customers to visit. Improvements in advertising, prices, services or showroom design
might encourage customers to stop by more often, stay longer or even buy more.

Market development can be defined as a growth of a company by identifying and developing

new segments for current company products. By using this technique, Bentley could review new
demographic markets, perhaps new groups-could be encouraged to visit or to buy their cars. It
could also review new geographic markets by expanding more in non-U.S. or non-U.K. markets,
especially in Asia.

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Product development can be another step in the process of ensuring Bentley’s future. It can be
defined as the growth of Bentley by offering modified or new model cars to current market
segments. In this process, they can integrate their cars to performance and modify technological
aspects such as Bluetooth, Wi-Fi connections, touch screen system or fully automated system to
attract their customers.

Figure: Bentley’s SITEOPS

Diversification is the idea to start up or acquire businesses outside its current product categories
and markets. Bentley already doing this by offering an exclusive collection of limited non-
motoring products such as luxury leather products, high-end range of limited edition sunglasses
and innovative ski products etc. Offering more innovative and exclusive non departmental
products can be another excellent recommendation for Bentley.

Bentley also could do localization by making a little modification on appearance and styles for
cars in different markets. Localize the maintenance service and keep the brand DNA through
different channels- could be of great help for the company to ensure its future growth.

At last, this company can also analyze its brand value by testing its products with new audience
and energizing through product and communications. It can make proportional investment
considering risks and opportunities in luxury sector. It can also Investment in Crewe as heart of
brand for future – designing, engineering, manufacturing and competence. By using all these

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techniques, we can hope to have a safe and secured future growth of this British luxurious car
company, Bentley.

References:

 http://www.bentleymotors.com/en.html
 http://en.wikipedia.org/wiki/Bentley
 http://www.businessinsider.com/bentley-to-build-the-worlds-fanciest-suv-2013-7
 http://www.slideshare.net/aguness/bentley-company-case
 https://shop.bentleymotors.com/en/enthusiast/accessories/

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