The New Beetle

 


Segmentation

The New Beetle’s target market should be people who are “psychologically young,” individualistic, confident and nonconformist.  Research indicates that potential New Beetle drivers embodied qualities such as confidence, individualism and a desire to be the center of attention.  They loved to drive and appreciated a spirited design and German engineering.  The segmentation method that would be most appropriate would be the psychographic method, which is based on personality characteristics and lifestyle.  Using the Values and Lifestyles Survey (VALS), the segment that would be most responsive to the New Beetle are the Experiencers.   VALS describes Experiencers as young, vital, enthusiastic, impulsive and rebellious.  They seek variety and excitement, savoring the new, the offbeat and the risky.  They also have higher resources like income, education and self-confidence.   Also, by focusing on a psychologically young as opposed to chronologically young segment, Volkswagen (VW) can address the two populations that are likely to be most responsive: young people (ages 18 to 34) and baby boomers who would like to recapture the fond memories of their youth and the original Beetle.   Weaknesses of the psychographic segmentation method are that it is difficult to determine how to identify and market to people who possess certain personality characteristics such as confidence, individualism and desire to be the center of attention.  

 The demographic segmentation method focuses on factual, quantitative information such as age and income and is not appropriate because research showed that fans of the New Beetle were from a wide spectrum of consumer backgrounds – crossing boundaries of age, income and gender.   The benefit segmentation method focuses on the benefits consumers seek, e.g. fuel efficiency or luxury.  Since the New Beetle’s comparative advantage is that it is a unique style car with a history as a piece of Americana, it doesn’t fit easily into a benefit segmentation model.  

The comparative advantage of the New Beetle is its unique style and strong heritage.  As a piece of American history, it evokes fond memories from Baby Boomers yet also evokes an emotional connection from younger people who see the car as symbolic of fun, confidence and individuality.  In addition, as a member of the VW family, the New Beetle offers German engineering and “drivability”. Its unique selling proposition is that it is a unique car for people who enjoy their individuality.  Like its predecessor, the original Beetle, which was an icon of the counter culture in the 1960’s, the New Beetle is for people who are daring, fun, original and enjoy going against the status quo. VW should position the New Beetle as the car for people with these characteristics.  It should tout itself as number one in individuality.  

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Since Beetle is a small car, VW should focus on its competition in the small car market segment.  Some of the main competitors in this segment include Chevrolet Cavalier, Ford Escort, Saturn SL, Toyota Corolla, Nissan Sentra, Honda Civic, and Dodge Neon.  These cars make up over 50% of the small car market, so for the New Beetle to compete it will have to steal market share from these competitors.  Most of these cars offer moderate style and performance at affordable prices (see perceptual map on p.7).  The New Beetle offers superior style and performance than most of these competitors ...

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