The New BeetleCase Study

Casey Fei Isaac Derek

Programme

• 3Cs

• Issues

• Recommendations

3Cs - Company

3Cs - Company

• A German car company in a little turmoil• The situation is:

Sales have been decliningJapanese competition, appreciation of

Deutschemark, etc.

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Total VW

3Cs - Competition

Mapping out everyone’s position:

American Cars (Ford, Chevrolet, Dodge)

Japanese Cars(Honda, Toyota, Nissan)

New Beetle

Uniqueness

Reliability

3Cs - Consumers

• There are:– The old fogies– The new generation

The general opinion: “the people’s car”

- VW offers a unique, individualistic experience

- affordable German engineering

3Cs - Consumers

Percentage of Small Cars Sold in 1997

Chevrolet Cavalier

Dodge Neon

For Escort

Geo Prizm

Honda Civic

Hyundai Elantra

Isuzu Stylus

Mazda Protégé

Mercury Tracer

Nissan Sentra

Plymouth Neon

Pontiac Sunfire

Saturn

Suburu Impreza 4wd

Suzuki Esteem

Toyota Corolla

Toyota Tercel

VW Golf

VW Jetta

VW Golf 0.9 % VW Jetta 4.1%

The Present Situation

• “Drivers Wanted” campaign boost• Now the New Beetle…

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Next up: ISSUES

Issues (1 of 3)

• How much of the car’s heritage should the new positioning use to leverage?– Play on the nostalgia– Appeal to the new generation

Designing a marketing scheme that would appeal to a majority of consumers in both target groups.

Issues (2 of 3)

• How to rebuild VW’s image through the New Beetle?– Belief that VW product line is tired and old

compared to Japanese carsOverall Opinion VW and Key Competitor- U.S.

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Nissan

Saturn

Toyota

Issues (2 of 3 cont’d)

• How to rebuild VW’s image through the New Beetle?– Improve the reliability– Make regular innovations– Strengthen its brand equity

Issues (3 of 3)

• How to price the New Beetle?

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

Price of Small Cars 1998 - U.S.

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Issues (3 of 3 cont’d)

• How to price the New Beetle?– If the price is set too high, consumers might

trade up into a higher-priced segment– If the price is set too low the car might not be

attractive enough to dealers due to low margins and thus fall short of VW’s profitability goals

Finally: the RECOMMENDATIONS

Recommendations (1 of 3)

• Approaching the Consumer– 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 (2 of 3)

• Pricing Options– Two versions of New Beetle for two different

generations of consumers.– 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 who can afford to spend more on a new car (or any other wealthy person).

Recommendations (3 of 3)

• 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.

END.