case study on volkswagen

8/3/2019 Case Study on Volkswagen

1/6

MARKETING STRATEGIES OF VOLKSWAGEN

IN INDIA

ABSTRACT

The case examines the marketing strategies of Volkswagen Group India, the Indian subsidiary of

German automobile manufacturer, Volkswagen AG (Volkswagen). Volkswagen entered the

Indian passenger car market in 2001 by launching its car brand - Skoda. In 2007, two of its other

brands Audi and Volkswagen, were also launched in India. Volkswagen Group India emphasized

on all aspects of marketing mix including product, price, place and promotion. The company

offered three brands including Audi, Skoda and Volkswagen that together comprised of 15

different models as of late 2009. Volkswagen Group India mainly catered to the luxury segment

of the Indian car market. The company had established presence in India through separate

distribution channels for each of its brands.

In its initial years, Volkswagen Group India primarily used the print media to promote its

products. However, considering the growth potential of India's automobile market, the company

started using electronic, digital and out of home media along with print media. In November

2009, the company launched an integrated marketing campaign to strengthen its brand image.

The case describes the marketing campaign and ends with a discussion on the growth prospects

of the company in future.

It also illustrates the main marketing strategies that Volkswagen is adopting to penetrate Indian

market as:

Huge promotions in IPL (Event Advertising) Double marketing in India


2/6

KEYWORDS

Volkswagen Group India, Volkswagen India Private Limited, Indian Passenger Car Industry,

Marketing Mix, Brand Awareness, Print Ad Campaign, Television Commercials, Corporate

Branding Strategy, Integrated Marketing Campaign

CASE STUDY

INTRODUCTION

Volkswagen (VW) is one of the worlds leading automobile manufacturers and the largest

carmaker in Europe. As Volkswagen pursues its goal of becoming the number one automaker in

the world by 2018, India has become a key component of its strategy. India is currently the

worlds second fastest growing car market, with shipments expected to more than double by

2018.

As a relatively recent entry into the Indian automotive market, VW needed to raise brand

awareness. To address this challenge, Volkswagens marketing team focused one of its key

brand pillars, innovation, to make a strong impact throughout the roll-out in India. Innovation

was showcased not only in Volkswagens product introductions, but also in its communications

and advertising.

Over the years, Volkswagen Group India not only launched several products, but also ensured

that its brands were well known among the Indian consumers. Although, the company had a

presence in the Indian car market since 2001 and the Skoda and Audi branded cars were well

known among consumers, the Volkswagen brand was not well recognized in the country.

Therefore, in November 2009, the company launched an integrated marketing campaign to build

its brand image. It also launched a marketing campaign for its iconic model, the Beetle.

Volkswagen India expected that with its brand building exercise, it would be able to increase its

sales and capture a significant market share in the Indian car market.


3/6

ABOUT VOLKSWAGEN

The history of Volkswagen (which means 'people's car' in German) can be traced back to the

1930s when Ferdinand Porsche, a reputed automobile engineer and designer, started designing an

affordable car for the common man. In 1936, the first prototype of the car, called the KdF-

Wagen, was designed in Stuttgart, Germany.

MARKETING STRATEGIES IN INDIA

Volkswagen entered the Indian market in 2001 by setting up its Indian subsidiary Volkswagen

Group India. As of 2009, Volkswagen Group India had two group companies - Volkswagen

India Private Limited (Volkswagen India) and Volkswagen Group Sales India Private Limited

(VGSIPL)...

MAIN MARKETING STRATEGIES IN INDIA

INNOVATIVE MARKETING STRATEGIES RAISING AWARENESS

VW India created groundbreaking campaigns such as the worlds -Best talking newspaper,

which used light-sensitive chips to speak to readers about Volkswagen as they turned the pages

of their morning newspaper. The talking newspaper ad created a sensation in India, and

garnered worldwide attention for taking print advertising to a new level. In one year, brand

awareness more than quadrupled, increasing from 8 percent to a high of 37 percent. Volkswagen

next turned to digital media to extend its success and create new opportunities for customers to

connect with the brand.


4/6

Lutz Kothe, Head of Marketing for VW India, says, At Volkswagen, innovation is woven into

everything we do. In formulating our digital strategy, we looked beyond the obvious for

innovative ways to engage our audience. We knew that for many people, their car affects their

professional life and their professional identity affects their car choices.

This made LinkedIn a natural choice to connect with current and potential car buyers among the

growing Indian professional population.

Indian car market growth second fastest globally,

RECOMMENDATION ADs

Next, Volkswagen launched a series of Recommendation Ads encouraging more customers to

join the conversation. Each ad showcased endorsements of actual LinkedIn members, and

invited the community to recommend their favorite Volkswagen model. Volkswagen used

LinkedIns broad reach (100 million members worldwide, 9 million in India) and precise

targeting capabilities to connect with professionals who matched the buyer paroles for their

different models.

Lutz Kothesaid, Volkswagen was the 1st company in India to use LinkedIn RecommendationAds, and the campaign was a success. We went in with a goal of inspiring 500 recommendations

among current and prospective car buyers. In less than 30 days, over 2,700 Volkswagen fans

had stepped forward to recommend their favorite cars and share these recommendations with

their professional networks. In the same time period, we gained over 2,300 followers who asked

to stay abreast of the latest news and developments from Volkswagen.

Kothe concludes, In a world where people spend an increasing amount of time at work, thinking

about work, and interacting with their work colleagues, we believe its important to fosterdiscussion about Volkswagen products in a professional context. Our innovative partnership

with LinkedIn lets our customers learn about Volkswagen products and provides insights


5/6

DOUBLE MARKETING TO POSITION BRAND

Double Marketing is NOT stuffing multiple messages into one campaign. It's running multiplecampaigns on different messages concurrently. Coke was the only company that typically tried

this, because of their huge marketing budget - by engaging different ad agencies and pitting them

against each other. Many times they would run different ad campaigns at exactly the same

time. This is close to Double Marketing, but the campaigns didn't really work together. Contrast

this with the approach created by the smart team at CP+B when they took over the Volkswagen

account. In the span of the last few months, they have launched the edgy "Unpimp my ride"

campaign about design, control and the "obeying your fast" for the GTI - as well as the "safe

happens"jarring TV ad spots for the Jetta. Despite the controversy, the tandem efforts work

nicely to push the counterintuitive marriage of speed and safety as benefits at the heart of the

VW brand. The campaigns are brilliant examples of how to use Double Marketing to push your

core messages, even when they happen to conflict. In doing so, VW doesn't have to isolate or

marginalize any audience it doesn't want ignore, or position the brand in a single light. This is

yet another marketing strategy and series of campaigns from CP+B that others should pay

attention to.

STRETCHING A BRAND BY CHANGING ITS PERCEPTION NAD BY

RE-POSITIONING THE BRAND

Volkswagen (VW) is a famous international brand name that has traditionally been associated

with the mass market, its most famous model being the Beetle. Indeed, it is currently exploiting

nostalgia with the new Beetle retro-model.

However, not content with sticking to the categories where it enjoys success, the company is also

attempting to move into the prestige- and luxury-car segments dominated by established brands

like Mercedes and BMW.
http://www.businessweek.com/autos/content/feb2006/bw20060216_472866.htmhttp://youtube.com/watch?v=cv157ZIInUk&search=commercialshttp://youtube.com/watch?v=cv157ZIInUk&search=commercialshttp://www.vwfeatures.com/http://www.projectfast.com/http://www.vw.com/jetta/features_safety.html?ic_id=promo_jettacrash2006http://www.vw.com/jetta/features_safety.html?ic_id=promo_jettacrash2006http://www.youtube.com/watch?v=euC3YyX6sBchttp://www.nytimes.com/2006/04/24/business/media/24volkswagen.html?_r=1&oref=sloginhttp://www.nytimes.com/2006/04/24/business/media/24volkswagen.html?_r=1&oref=sloginhttp://www.youtube.com/watch?v=euC3YyX6sBchttp://www.vw.com/jetta/features_safety.html?ic_id=promo_jettacrash2006http://www.vw.com/jetta/features_safety.html?ic_id=promo_jettacrash2006http://www.projectfast.com/http://www.vwfeatures.com/http://youtube.com/watch?v=cv157ZIInUk&search=commercialshttp://youtube.com/watch?v=cv157ZIInUk&search=commercialshttp://www.businessweek.com/autos/content/feb2006/bw20060216_472866.htm


6/6

Its first venture into this market segment is with the new Passat V6 Syncro, which is out of the

price range of the typical VW buyer. Evidently, other models are planned at higher level

segments and prices. Even though VW owns Audi, Bentley, and Lamborghini, amongst other

brands, many people are skeptical that it can stretch its own brand upwards, when consumer

perceptions still associate the VW-branded cars with smaller and less prestigious vehicles. Its

"badge value" (brand associations) would not appeal to customers of BMW, Mercedes, or even

Audi. Additional problems arise when consideration is given to the fact that other brands such as

Volvo and Toyota's Lexus are also shifting their position to target the prestige market that

demands performance, luxury, and marque. VW acknowledges the issues but says it will give

customers more products. But is product what the luxury car owners are really buying? More

likely, according to research, it is status, prestige and self-expression that determines their

decision and VW will need to do a considerable amount of consumer perception management

and distributor education to successfully bring any of its VW branded models into that league.

Questions:

1. Explain the dynamics of the Indian passenger car market?2. Analyze the marketing strategies of Volkswagen in India?3. What are the future prospects of Volkswagen in India?4. Examine the growth strategies of Volkswagen India over the years?

case study on volkswagen

Documents