Download - Marketing Strategy of Volkswagen Beetle
The New Beetle Case StudyGROUP - 7
One of the worlds leading automobile manufacturer and the largest car maker in Europe is in a financial
crisis in 1998 in the US automotive market due to declining sales.
Volkswagen , a German car company in a little turmoil in 1998.
The situation is:Sales have been decliningJapanese Players ( Honda & Toyota) , US
Players (Ford , GM , Chrysler) have penetrated.
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THE PLOT -
Lets see how Volkswagentranslate this problem into an opportunity…
Liz Vanzura , the Marketing Director of Volkswagen has a meeting with Charlie Waterhouse , Director of product development (VW) and Steven Keys , Director of Public Relations
Liz Vanzura has to propose an innovative marketing Strategy to boost up the sales of VW Beetles thereby leading to an increase in revenue for Volkswagen.
THE CASE
MISSION CALLED BY MEDIA – MISSION IMPOSSIBLE
1955Volkswagen
Started
1958First Ad Campaign
( Success )
1962 – Launched Beetle , Rapidly Expanded in US
1970s – US Beetle Sales Took Off ( 50
Lakh Cars being sold)
1982 – US Recession ,
Declining Popularity
1990 – Sales only 20% of what it was in 1970’s
1993 – 50,000 Cars … Pullout from
US ?
1998 – Hired New Advertising Agency
“ ARNOLD”
New Product Positioning , Carried their own Marketing
Research
TIMELINE
Next up: ISSUES
Q1 . Lets see how the Advertising Campaign worked ? Was it a Success ?
Toy car to real drivable car
Mission impossible
Vintage yet modern
Baby boomers to Gen X
People car to personal car
Focus on public relation
Low advertising budget compared to competitors
Q2 . Elucidate on the Appeal of the New Beetle.
Automotive icon car of 1960s,
darling of Detroit motor show
Advanced , modern & most up
to date features included
Heritage positioning, real,
drive-able car
Emotional essence of Volkswagen
attached to beetle
Affordable, less maintenance cost,
budget minded users
Cutting edge technology
Good advertisements,
promotional contests & stories around it
More connected to the road, drivers
wanted campaign
Loved first car of value
conscious users
Q3 . Why the positioning decision has been termed as “Mission Impossible” ?
Positioning Decision: Mission Impossible
• The new Beetle needs to take two important factor into consideration in order to leverage them while positioning the product: Play on the nostalgia Appeal to the new
generation
These two factors make the positioning strategy for beetle a cumbersome task.
• The main factor of this positioning dilemma is the target segment.
• The target segment for the new Beetle is 18-34 years olds and baby boomers. Both the segment may have different perspective towards the car.
• For baby boomers the Beetle is a practical car
• For new generation it is a fun to drive car.
• While the major chunk of buyer for the Beetle will be new generation buyers in long run, the value proposition of the new Beetle which is “nostalgia of old good days” does not associate with this segment of customers.
• All the other value being promised by the new Beetle like being fun car, German Technology, driver’s delight etc are not the best differentiators for the Beetle though these may be the differentiator for Volkswagen.
• Another major challenge at the hands of marketing team and the agency is to keep the positioning of the Beetle and the positioning of Volkswagen as the corporate brand in sync.
• The positioning of the new Beetle will have significant affect on the corporate brand positioning of VW.
• Thus the “ Drivers Wanted” campaign was aimed at strengthening the corporate positioning of VW which is affordable German technology automobile which is also best in its class with respect to drivers’ delight.
Q4. Discuss the PROS and CONS of various positioning options.
POSITIONING STRATEGIES1. Target the younger,GenX audience:
PROS CONS1. Design 1. Pricing
2. Fun aspect of the car
3. Emotional Connect
4. Drivers Wanted Campaign
2. Target the baby boomers:
3. Target both Gen-X and Baby Boomers:
PROS CONS
1. Financially stable 1. Change in preference
2. Strong emotional connect
3. Can be approached through print media
4. German Engineering Concept
PROS CONS
1. Target market becomes broader
1. Increased Advertising costs
2. Advertising message could get drowned
Q5 . How would the Pricing and Media Selection Choices be affected by the positioning of the car?
Pricing and Media Selection Choices
Target market : 18-34 years old & baby BoomersPricing Options
Two or more versions of New Beetle with different configuration for two different generations of consumers
Different pricing strategy as per different positioning
Basic and cheap model will appeal to younger generation of consumers who will be more budget conscious.
Enhanced model with popular options will be catered to Baby Boomers
Media Channels
– Campaign to attract Young Generation consumers and appeal to
their mentality, behaviour and attitude.
A campaign for Baby Boomers would be by using nostalgic images
to bring back good memories from the past and renew their
interest in the Beetle
– Use Positive media coverage to Volkswagen’s advantage
– Get the media involved to spread the word about the Beetle!
– Print Advertising in magazines and showcasing various big
events.
– Automobile Magazines : Car and Driver , Motor Trend,
Automobile digest etc
Volkswagen Global Marketing Mix
2
3
4
Brand portfolio Volkswagen Audi Seat Škoda Bugatti Bentley Lamborghini Commercial vehicles1
Unique brand identity for
each nameplate Complete product range Mostly standardized products
with minor adaptations
Setting prices with regard to
competitors Price discrimination across
regions No price competition in
emerging markets Strict cost controlling
Localized communication Emphasis on the European
market Brand advertising Emotionalization
Development of
distribution
partners Separated
distribution channels
for each brand International
standardization of
dealers
Global Marketing Mix
THE CURRENT SCENARIO - 2013
Mil. Vehicles
Fiat/Ferrari
PSA
Nissan
Volkswagen
DaimlerChrysler
Ford/Volvo
GM
Toyota/Daihatsu
8.2
6.8
4.7
6.7
5.2
3.4
2.9
BMW
Honda
1.2
3.0
Renault 2.5
1.9
Car Sales According to Groups, Worldwide 2013
Source: manufacturer`s data, JAMA*Numbers in millions.
Volkswagen Global Marketing Mix
2
3
4
Brand portfolio Volkswagen Audi Seat Škoda Bugatti Bentley Lamborghini Commercial vehicles
1
Unique brand identity for
each nameplate Complete product range Mostly standardized products
with minor adaptations
Setting prices with regard to
competitors Price discrimination across
regions No price competition in
emerging markets Strict cost controlling
Localized communication Emphasis on the European
market Brand advertising Emotionalization
Development of
distribution
partners Separated
distribution channels
for each brand International
standardization of
dealers
Global Marketing Mix
The Volkswagen Exhibit Space at the Frankfurt Auto Show 2013
Volkswagen Beetle