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The New Beetle

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Adib Hazlami

on 9 November 2012

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Transcript of The New Beetle

the new beetle case analysis TEAM 12 : Yilin Qie
Shasha Tang
Andrena Dicks
Derek Thwaits
Adib Hazlami the rise fall of Volkswagen in America 1949 1990's 1970's Volkswagen sold it first 2 cars, Type 1 (model name for Beetle) in the US. 1955 VW was incorporated to VW of America, a subsidiary of VW AG.
Dr. Carl Hahn, head of VW America, decided that the company needs a unified corporate image and began the first Advertisement campaign for VW.
Campaign done by DDB-First Ad came on New York Times in 1959, which would eventually help VW become one of the most known brands in US. 70: VW sold half a million cars in US
75: Dealers began defecting for Japanese brands.
78: Produced Rabbit (which is now Golf) but its fortune was short lived. 1982 Sales declined due to recession and declining popularity of hatchbacks.
Beetle stopped production unable to comply with new environment norms. 90: Sale was only 20% of 1970.
93: VW was in the verge of pulling out from the US market.
94: Marketing team of VW planned a strategic recovery plan to reinvigorate VW Franchise.
´Doing Things Differently'.
Most significant change ever made.
VW ended 35 yr old relation with DDB(Doyle, Dane &Bernbach) and hired Arnold Communications. WHY IS THE CURRENT ADVERTISING CAMPAIGN successful? WHAT IS THE APPEAL OF THE NEW BEETLE? WHAT are the different markets available for the new beetle, and why are they attractive to vw? why did Newsweek term Vw's positioning decision "mission Impossible?" what are the different options available to VW? what are the advantages and disadvantages of each? how could the pricing and media selection choices be affected by the positioning of the car? QUESTIONS? BEETLE Two organizational efforts to improve dealer relationships:
(1) Flew its entire base of dealers to company headquarters
(2) Company wide training session
Helped dealers to understand the value of creating a total brand experience for consumers.
Build loyalty to the franchise from dealerships.
Encouraged a large number of pre-orders for the New Beetle. Target Audience and Positioning
Wide spectrum of consumer backgrounds-crossing the boundaries of age, income, and gender
Target market encompassed both VW’s new core audience of the 18- to 34-year-old and baby boomers
Embodied qualities such as confidence, individualism, and a desire to be the center of attention Advertising Campaign – Consumer Perspective Proper Segmenting
-Small, midsize, large, and luxury
-Segmenting variables:
Demographic: Young, confident, daring lifestyle, more active driving style
Psychographic: Personal characteristics and lifestyles
Behavioristic: Brand loyalty and user status
“Creating a synergy between the medium and message”
-Align target audience strategy with creative execution and editorial voice
-Never buy solely on CPM or coverage Advertising Campaign-Consumer Perspective The Relationship with Dealers Reinterpreting the original Beetle
-Same classic and recognizable elements with a new spin
Cutting edge technology, Modern detail
New concept – honest, simple, reliable, and original
Included the most up-to-date elements of German engineering
-Offered superior driving performance 3C Program:
Company Why target markets are attractive to VW? A German car company in a serious turmoil
The situation is:
Sales have been declining dramatically
Japanese competition
Constraint budget
Singleness of product Company There are:
The old people and new people
The general opinion is from “the people‘s car ” to “the personal car”
- VW offers a unique, individualistic experience
- Affordable German engineering Consumer: Competition: New Beetles—about $17,000-18,000

Premium-price strategy Potential Issue

Too high: more competitors
Too low: not attractive to dealers
low margin Price Competitors— $100 million on advertising:

80% television,
15% print mediums
5% radio and billboards

New Beetles— $25 million on advertising Media Four Segments Sales had dropped over the years
Target market was not clear
Very low ad budget
Old Beetle ads were extremely famous Who to target?
Baby Boomers?
Younger drivers? Target Market for New Beetle Unclear Most brands had been spending upwards of $100 million in advertising for a single car launch.
VW had less than $25 million to spend on advertising.
This $25 million had to be used not only for the New Beetle but for the new Passat that had recently been introduced. Low Advertising Budget Buy Low, Sell High
Lemon Ad
Had a general “fun” and “affordable” feeling Advertisements for original Beetle were very popular “Real, Driveable Car” instead of “Toy Car”
Retro or Modern advertising?
Senior Management in Germany:
-Faddish, niche product?
-Or redefine VW as Beetle car brand? Positioning of the New Beetle If Beetle is perceived as “Toy Car”, it will miss out on lots of opportunity
Don’t want to make the car a “fad”
If you go too retro on advertising, it may upset people that the car is certainly no replica of the old one.
If again established as Beetle car brand, could cause problems Positioning of the New Beetle:
Disadvantages of Some Options VW had the chance to change people’s opinions of the Beetle from “Toy” to “Real”
Retro Themed Advertisements: Baby Boomers
Less Retro: Possible New Consumers
Could help redefine VW –but is that a good thing? Positioning of the New Beetle:
Advantages of Some Options “Despite all the high expectations we have for the New Beetle, one thing is for sure, Volkswagen will never be again the one-car company.”
–Dr. Ferdinand Piech, Chairman of Volkswagen AG Board of Management VW New Beetle Positioning Television:
build brand awareness

reach a specific demographic Media Plan Market—about $11,000-17,000
Full transcript