Mission Impossible

By:

Kunal Jain

Kushagra Sharma,

Pavan Daxini,

Prodyot Parashar

Raj Kumar Singh

Branding The Beetle

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Volkswagen trying to re-launch its Old and best- “Beetle”in US market.

A decade ago Beetle was USA’s one of the best selling cars, but due to non compliance of few new homologation rule they stopped selling it in USA.

Volkswagen

It is a German auto car maker since 1938 .

It entered in American market in 1949 and by 1968 it was selling half of a million cars.

Beetle- “One of the most successful car in USA” recorded more than 50% total car sales of Volkswagen in USA in 1960’s.

During 1980’s the beetle run in the US ended due to non compliance of new homologation requirements namely National highway act & Clean air act.

During the same period the Beetle sales hit the all time low due to

a) Heavy competition from new and advance Japanese brands.

b) Exchange rate volatility.

As a result of all the reasons state above the total sale of Volkswagen cars in US market were at all time low. In the year 1993 the numbers have dropped 49533 from 569696 of 1970.

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In 1994 Volkswagen team brain storm at the reason and remedies of the falling sales in USA.

They decided to reintroduce their best oldie in new avatar.

While starting with the work of reinventing the Old Beetle Volkswagen team with the help of Arnold communication did a extensive market research to understand the new age customers and their perception regarding the VW and Beetle.

Arnold communication covered 95 out of 100 top dealers

Drove the VW car for more than 50000 miles to understand themselves.

After the Market research the Arnold team came up with following option for the VW team.

A new campaign is required to boost the sales of existing VW models in the market

“Drivers Wanted”

And Beetle will have to over come following issues in the process of new launch

How much of the car’s heritage should the new positioning use to leverage?

Play on the nostalgia

Appeal to the new generation

How to rebuild VW’s image through the New Beetle?

Belief that VW product line is tired and old compared to Japanese cars.

Overall Opinion VW and Key Competitor- U.S.

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How to rebuild VW’s image through the New Beetle?

Improve the reliabilityMake regular innovationsStrengthen its brand equity

What would be the pricing strategies of the New Beetle?

This is in contrast with VW’s heritage of affordability.

Price of Small Cars 1998 - U.S.

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The New Beetle

The New Beetle : What it was?

• Successor to the most successful car of its time - the original Beetle

• Pressure to live up to the legacy

• Strategic importance to revive VW in America

• Old and new ads

The Design

• Challenge: to combine the equity of the past with the design geometry of the future

• The four design principles - Honest, Simple, Reliable and Original

• Round shapes - Inviting, Friendly, Completeness

• Iconic design meets state of the art German engineering

• 1993 - The Concept 1

Positioning the New Beetle

• Turn the excitement surrounding the car into actual sales

• Identify a target market and develop a compelling value proposition

• Market research - polarizing opinions

• Taking the opinions of - consumers, dealers, sociologists

• “The toy car” tag

• Drivers Wanted campaign?

The Beetle Customer

• Demographically diverse

• 18-to-34 year olds/Baby boomers

• Qualities - Confidence, individualism and desire to be center of attention

• Love of driving, spirited design, German engineering

• Shift from People’s car to Personal car

The Engineering

• Engineered based on the top-of-the-line Golf platform

• Front-housed engine, water cooled

• Four wheel disc breaks

• Access to 12 cubit feet of storage space in rear hatch

• Front and side airbags, air-conditioning, six-speaker sound system now included in the standard package

• The implication - higher price tag

4 P’s Analysis

Product : More than Vehicle

• German Engineering• Cutting edge technology

• Up to Date elements

• Superior driving Performance

• Spirited Design• Circular shapes

• Heritage & Originality

• Six vivid Colors

VW New Beetle

Japanese Cars

(Toyota, Nissan)

Domestic Cars (Ford, Chevrolet)

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Price : Small but High-end Car

• Price Segment• Range was $ 11000 - $ 17500.

• Beetle base model $ 15200.

• Competitors• Domestic brands (Chevrolet, Ford)

• Japanese car manufacturers (Toyota, Nissan)

• Premium Price Strategy• 3 Premium : Performance, Heritage, Design

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Place : Dealers & Flagship Stores

• VWV (VW Value-sharing Program)• German management, Loyalty, Motivation

• Flagship store : Museum of the New Beetle• New York, LA, San Francisco

• Pop-up Store, Show-case

• Lease than purchase ‐ Financial Support Program

Promotion : Not widespread but Focused

• Journalists invited to Wolfsburg, Germany• Meet with management and preview New Beetle

• Drive Beetle for 1 day & 1 night through different communities

• TV commercial: ‘Drivers Wanted’ by VW

• Focused on Print Media : Magazines• Car & Driver, Motor Trend, Automobile Magazines

• Architectural Digest, Vogue, Spin

Contd..

Point of Difference (POD)

• Styling and shape

• Heritage

• Individualism

Point of Parity (POP)

• Modern Technology

• Compliance with Homologation

• Reliability and Performance

Brand Asset Valuator Model

Recommendations : Approaching the Customers

• Two generations in target audience: Baby Boomers and Young Generation

• More effort should be focused on campaign to attract Young Generation consumers and appeal to their mentality, behaviour and attitude.

• A campaign for Baby Boomers would be straightforward by using nostalgic images to bring back good memories from the past and rekindle their interest in the Beetle.

Recommendations : Pricing Options

• Two/Three stage price strategies.

• Two or more variants with different configurations

Recommendations : Media Channels

• There’s an opportunity to use the positive media coverage to Volkswagen’s advantage. Get the media involved to spread the word about the Beetle!

• Other suggested options to increase Beetle’s exposure: Print Advertising in magazines and showcasing car at big events.

• Exploit the Secondary source of Brand Knowledge.

Encashing Brand Equity

Thank You !!

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