Volkswagen Case Study

Marketing Management

Case Write-up 2

The New Beetle

A Project report submitted to Institute of Management Technology, Dubai

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BY

SMBA

SECTION - B

GROUP – 5

Under the guidance of Dr. Waheed

By

Vikas Singhal (SMBA152061)

Mohammad Munawar Alam Sayyad (SMBA152032)

Sai Harish (SMBA 152060)

Nihit Singhal (SMBA 152034)

Nischal Kanth (SMBA 152068)

Introduction:

• Volkswagen is an automotive manufacturer from Germany.
• Founded by the German Labour front in 1936.
• Aimed to create an affordable car for normal households.
• Formally established as Volkswagen in the year 1946 after the Second World War.
• Today it’s one of the largest automobile companies in the world.
•  It is now a part of Volkswagen group with owns many other German car brands including Porsche and Bugatti.
• Started selling its automobiles in United States from 1949 with Volkswagen Beetle Type 1 as its offering.
• Reached 1 million sales by 1955.
• Volkswagen has further sold highly successful models like the Golf, Jetta and Passat.
• The Beetle is still sold today after going through generations of change though the production of type 1 ended in 2003.
• It was succeeded by the new Beetle till 2011 and then Beetle A5 soon after.
• Through ought its production run, the original Beetle Type 1 sold more than 24 million units and is widely regarded as the most influential car of the century.
• It has faced considerable competition from the Japanese automobile manufacturers.
• By 1980’s the hatchback market started losing its popularity.
• Due to continuous lacklustre performance, Volkswagen has decided to launch the New Beetle as the successor to Type 1 in 1997.

SWOT Analysis:

Strengths:

• It is considerably advanced than its Japanese competition.
• It is the successor to the successful model.
• High safety ratings.
• Brand value.

Weaknesses:

• Brand Loyalty.
• It is a small car, small cars only constituted 27% of the total market and the losing popularity.
• Costlier compared to its Japanese counterparts, even today.
• Service costs are substantially higher.

Opportunities:

• Has a considerable fan base.
• The new styling is more appealing.
• Many positive reviews from Press and Media.
• A memorable car, as it is based on the earlier design.

Threats:

• Decline in small car market.
• Less appealing design to Males.
• Large number of cheaper options available from other automobile manufacturers.
• Not a budget car compared to its predecessor, in fact the current beetle costs more than many SUV’s.

4P Analysis:

Product:

• German engineering.
• Built to last a lifetime.
• Legendary Design.
• Substantially powerful to cars of the same segment.

Price:

• More expensive compared to its competition.
• Costs as much as an SUV.
• High price is justifiable due to a powerful engine output and handling.

Promotion:

• Widely promoted through TV campaigns.
• Print media was as utilized at a substantial rate.
• Featured in a number of Magazines.
• Advertised through TV shows and movies.

Place:

• Sold via the Volkswagen dealerships in the United States.

CASE QUESTIONS

1. How do you evaluate the success of the advertising campaign?

• The original advertising campaign “Think Small” was able to influence the buyer’s perception of the product.
• Till then Volkswagen had a negative perception as Hitler’s car.
• The advertising campaign was considered a success as the sales of the car increased by leaps and bounds.
• By 1981 the car sold 20 million units.
• It was crowned the best-selling car of all time in 1991.
• The Arnold communications campaign for the New Beetle was fairly successful with a 16% annual increase in sales.
• Another advert from 1997 proved to be a massive success as the sales were 173% in that year compared to 1993.

How can the success be measured?

• The first step would be checking the sales before and after the promotional campaign.
• Number of visits to the car dealers.
• Number of enquiries for the car.
• Survey can also help measure the success.

2. Discuss the meaning of the brand to the consumers?

• Brand values are of utmost importance to the consumers.
• The younger audience of drivers preferred brands.
• Brand value gives the promise to deliver to the customer.
• Brands are due to consumers and not due to companies.
• Because of brand value, people have certain expectations from the product.
• Volkswagen brand was trying to be invitational and approachable to the consumers.
• Consumers judge and evaluate the brand value before conducting business with the firm.
• Brands consist of both tangible and intangible elements. For example,

1. brand logo,
2. message,
3.  packaging,
4.  dimensions

• Brand awareness is a crucial part of marketing.

3. Describe the appeal of The New Beetle to the consumers?

• New beetle is having a German design coming at an affordable price as compared to Mercedes Benz.
• It Is having a unique driving feeling.
• New beetle comprised of a unique design with a “smiling front” and round shapes.
• Many users remember it as their first kiss car, associating it with earlier, carefree times.
• It was popular among people who wanted to express their individuality.
• It was having four simple ingredients of design- simplicity, reliability, originality and honest design.

 4. Why is the positioning decision termed as Mission Impossible?

Answer: Beetle has to consider two important factors while taking into consideration of leverage factors of positioning the new product:

• Attract the new generation with new version
• Consider the nostalgic features.

          The above factors make the positioning strategy for Beetle a complicated task.

• The main dilemma was about the target segment.
• The target segment was the age group of 20-34 year people and the baby boomers.
• Baby boomers considered the Beetle version to be practical.
• For new generation people it was more often a general car to have fun rides.
•  Most of the buyers in the long-run comprises of new generation people, but taking the old records the segment ratio was not matching and is considered to be impractical because it didn’t consist of new age group people.
• Marketing team had a problem as to sync. the brand of Beetle with that of Volkswagen.
• The positioning of New Beetle had later effect with the brand of Volkswagen.
• Thus the campaign of “Drivers Wanted” was aimed to strengthen the corporate positioning of Volkswagen with affordable German Technology make it as driver’s delight as a whole.

        They even had the concepts such as “The day you sell your car it would be a Black Tuesday”- A Common Volkswagen Beetle.