marketing strategy of volkswagen beetle

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The New Beetle Case Study GROUP - 7

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Page 1: Marketing Strategy of Volkswagen Beetle

The New Beetle Case StudyGROUP - 7

Page 2: Marketing Strategy of Volkswagen Beetle

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.

Page 3: Marketing Strategy of Volkswagen Beetle

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.

0

100000

200000

300000

400000

500000

600000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Year

Total VW

THE PLOT -

Page 4: Marketing Strategy of Volkswagen Beetle

Lets see how Volkswagentranslate this problem into an opportunity…

Page 5: Marketing Strategy of Volkswagen Beetle

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

Page 6: Marketing Strategy of Volkswagen Beetle

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

Page 7: Marketing Strategy of Volkswagen Beetle

Next up: ISSUES

Page 8: Marketing Strategy of Volkswagen Beetle

Q1 . Lets see how the Advertising Campaign worked ? Was it a Success ?

Page 9: Marketing Strategy of Volkswagen Beetle

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

Page 10: Marketing Strategy of Volkswagen Beetle

Q2 . Elucidate on the Appeal of the New Beetle.

Page 11: Marketing Strategy of Volkswagen 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

Page 12: Marketing Strategy of Volkswagen Beetle

Q3 . Why the positioning decision has been termed as “Mission Impossible” ?

Page 13: Marketing Strategy of Volkswagen Beetle

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.

Page 14: Marketing Strategy of Volkswagen Beetle

• 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.

Page 15: Marketing Strategy of Volkswagen Beetle

• 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.

Page 16: Marketing Strategy of Volkswagen Beetle
Page 17: Marketing Strategy of Volkswagen Beetle
Page 18: Marketing Strategy of Volkswagen Beetle

Q4. Discuss the PROS and CONS of various positioning options.

Page 19: Marketing Strategy of Volkswagen Beetle

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

Page 20: Marketing Strategy of Volkswagen Beetle

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

Page 21: Marketing Strategy of Volkswagen Beetle

Q5 . How would the Pricing and Media Selection Choices be affected by the positioning of the car?

Page 22: Marketing Strategy of Volkswagen Beetle

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

Page 23: Marketing Strategy of Volkswagen Beetle

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

Page 24: Marketing Strategy of Volkswagen Beetle

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

Page 25: Marketing Strategy of Volkswagen Beetle

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.

Page 26: Marketing Strategy of Volkswagen Beetle

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

Page 27: Marketing Strategy of Volkswagen Beetle
Page 28: Marketing Strategy of Volkswagen Beetle

The Volkswagen Exhibit Space at the Frankfurt Auto Show 2013

Page 29: Marketing Strategy of Volkswagen Beetle

Volkswagen Beetle