Marketing Volkswagen Cars - the Beetle and new Beetle

by s3314547 (student)

University Degree Business and Administrative studies

Ariana Mugica s3314547

HBR case: The New Beetle

The meaning of the VW brand

The multinational German automotive group was originally created by a Nazi organization called the German Labour Front. The company hired Ferdinard Porche to design the first Volkswagen car which was produced at the Wolfsburg factory (Lal, 2005). However the factory was destroyed during the Second World War. After that, Volkswagen benefited very much in the post-war when Germany supported their automotive industry. The problem was that their only car at the moment, was not very popular because its physical aspect very rounded in comparison with the more square cars popular at the moment (Haig, 2004). Additionally, the image of the brand around the world was affected by a strong association with the Nazis (Haig, 2004).

It was until 1959 when Volkswagen hired their first advertising agency (Doyle Dayne Bernbach) to change their brand positioning. It was then, when they decided to call their only car Beetle and break down with the negative associations (Haig, 2004).

After the success of the Beetle, Volkswagen had several launches that contributed greatly to enhance its image. It spread the market by offering different products to different target markets, for example it launched the Golf (in the medium segment) and the Passat and Variant Passat in the luxury segment (Madeira, Furlanetto, Palacios & Almeida, 2000).

Volkswagen has demonstrated to have longevity through their strong brand and products. They have maintain their image by improving their models since they where created. Which have position them as a reliable brand, very important from the customer perspective in this industry. Not for nothing it literally means "the people's car". (Haig, 2004)

On top of the quality, Volkswagen continues to produce their cars with distinctive personalities. A piece of evidence, is the Beetle as a character in Disney movies "Herby", and the multiple nicknames across the world (James Aitchison and Geoffrey Precourt, 2008).

Moreover it is known that thanks to a deep analysis of buying behavior in order to connect to the customer mind set, have distinguished Volkswagen and take it to success in each of their communication strategies (Direct Marketing Association, 2010). On example that actually remains in the advertising history is their “Think Small “ campaign, performance in the 50s where not only succeed with sales but change they way to advertise since "It was one of the first advertising campaigns to treat audiences like they had some intelligence” (Teague, 2007).

The appeal of the New Beetle

By the time it was planed to launch the New Beetle, VW identify that the brand equity was low same than sales. Thanks to the research conducted, they gained a deep understanding of the consumer perceptions and liberated a new appealing accordingly. The results indicated that VW drivers were young, educated and more passion about life. Additionally VW cars were perceived as affordable and more unique than other companies. However, they also found contradicted opinions since other people saw the car as toy and with low quality (Lal, 2005).

The ...

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The appeal of the New Beetle

The 1990s was a decade of extremes and contradictions for Americans, in one hand they were building larger houses and driving more expensive cars in the other hand they were also working more hours and being oppressed by their jobs in order to pay for such things(Cengage, 2000).

It wasn’t any different for VW. Although many analyst suggested that the New Beetle would mainly attract baby boomers that owned the original, Volkswagen realize that could appeal “cut across traditional automotive demographic boundaries” since people of all ages responded with a big smile (Stanfel. 2007). It was called a mission impossible for the agency since they found them selves in a very contradicted situation as well, they wanted to keep their classic car but make it more modern, attract mature audiences and young at the same time.

Finally, the results of the research leaded VW to appealed consumers differently from the competition or any way they did before, the challenge was to bring a legend from the past into a present environment, reaching into consumers memories. They managed to evoke emotions using some of the product benefits but more focused in perform a sensitive and original approach, something that had never done before (Bob Liodice, 2010).

Overall, they tried to connect with their consumers in a more personal way and the fact that the Beetle was looked as a funny, cute, or even a toy made it easy, because all of these associations were positive and acceptable for the personality’s car.

Understanding the success of the current advertising campaign

In order to understand the success of the New Beetle, is important to highlight that all the previous research done was the driver to condense the key objectives needed to be done. Although the target market they found, was a difficult and challenging goal to reach, it was the base to build a strong and very focused strategy.

For instance, they produced adds for both of their target markets. While the copy in one print ad, "Comes with wonderful new features like heat," approaching particularly the baby boomers that knew the original Beetle's heating system problems, the use this other tagline "Reverse-engineered from UFOs" appealed to younger drivers, specifically Generation X consumers who where more sensitive to science fiction trends (Stanfel, 2007).

Additionally, they used trendy music among college students in their spots or more technological futurist themes such as "Beetle 2.0." (Stanfel, 2007). They amazing thing is that they found a way to approach both generations which it doesn't sound so crazy particularly knowing that there where retro-crazed Generation Xers and baby boomers towards being more modern.

Advantages and disadvantages of the different positioning.

Making the New Beetle to position as a more luxury car was very risky. For instance the product was approaching to the customer drastically different. The research proved that the Beetle was previously perceived as “affordable” and now they wanted to take into a more luxury level. Although it turn to be a success in America back in Germany people though was deemed too expensive (Stanfel, 2007).

Moreover, even though baby boomers proved to have a strong attachment to the Beetle because it reminded them their youth, their economical situation was improved to a more comfortable living situation in big suburban homes and driving SUVs for example. Which means that they were able to afford other level of vehicles (Stanfel, 2007).

In the other hand for the group under 35 a high price could drove them away as customers since they were probably first-time car buyers. At the same time this target market was precious to Volkswagen since they could remain in the Volkswagen family and as they aged and saw their incomes rise would achieve a more expensive product but always loyal to the brand (Stanfel, 2007).

While some rival car companies released narrative campaigns that portrayed quirky characters or elaborate story lines, Volkswagen's strategy for the New Beetle was to focus on the car and inviting the audience to respond to the advertising according to their own experiences, values and personality (Advertising Age, 2008 ).Nonetheless, television shows were also part of the strategy, since were very popular with consumers under 30, such as The X-Files, Melrose Place, Seinfeld, and Suddenly Susan (Advertising Age, 2008).

"Its success would not only be measured in sales of new Beetles, but in the overall growth of the brand and increased sales of VW's other models," (Adweek, 2007). Other piece of evidence of the success of the media used, was the shape of the car position and easy to recognize, this was actually same successful as the Coca-cola bottle (Gordon Pincott, 2009).

Beetle 2012

The Volkswagen Beetle 2012 was introduced last year. It’s the second time this car has been redesign and this time although is a ver modern and innovative product they brought back some of the legendary Beetle. One of the highlights is the similarity with the original silhouette combined with some stylistic elements in the interiors but obviously with the latest technology involved. Some other features are the TDI Clean Diesel technology, fuel efficient and a bluetooth include (VW Beetle Blog, 2011). [See exhibit 1]

It was first presented in the final episode of the Oprah’s show. The followed presentation was in a commercial during the Super Bowl in 2011 (The Car Connection, 2011). After that to expand globally Volkswagen partner with MTV.The reveal began in Shanghai followed by Berlin and New York City (Gotbroken.com, 2011). On April 2011, in the Auto Shangai and New York VW announced the drop of the word New and recover the original name Beetle ( Chee, 2012).

One of the innovative special editions was the E-Bugster a very future-forward design that holds an all-electric motor and pumped-up, speedster styling (Emma McDonald & Hugh Wilson, 2012) [See exhibit 2]

Volkswagen has a strong presence in social media, for example their recent website called : funtheory.com. is a place where they produced three YouTube videos of behaviour change (none of which involved a VW car) and then encouraged people to make their own suggestions. The videos rapidly went viral with over 23 million people viewing the YouTube films and is aiming to collect and gain a deep understanding of the consumers (Emma McDonald and Hugh Wilson, 2012). Ones again Volkswagen is preparing for the future by research.

Conclusions

Overall I think Volkswagen success can be wrapped in two things: Research and improvements. Their excellent understanding in the market and the way the implement their finding in their products and marketing communication strategies is the perfect combination to remain in the market.

Exhibits

Exhibit 1: Beetle 2012

Exhibit 2: The E-Bugster

REFERENCES

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Blogs.vw.com, (2012). Plug in, Bug out: VW unveils E-Bugster concept car at the Detroit Auto Show. January 10, 2012

Blogs.vw.com, (2012). Now available in (Think) Blue: VW reveals the Beetle TDI Clean Diesel at the Chicago Auto Show February 8, 2012

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Liodice B. (2010) Ten Big Risks Brands Have Taken. Source: ANA Magazine. Issue: 100th Anniversary, 2010

Teague K. (2007). Volkswagen of America, Inc.: All Grown Up. Sort Of. campaign. Source: Encyclopedia of Major Marketing Campaigns. Issue: Volume 2, 2007

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Madeira J. L., Furlanetto A. , Palacios Bertini C. and Almeida R. (2000). Volkswagen: Construction of a Methodology for Thinking Strategically about the Brand. Source: ESOMAR: Automotive Marketing, Lausanne, February 2000

McDonald E. and Wilson H. (2012) Social media marketing. Source: Admap, April 2012.

VW Beetle Blog (2011). 21st Century Beetle reveal with MTV events. Now that’s what we call “A Coming Out Party”: VW debuts the 21st, May 3, 2011.