2010

Mission Impossible: Launch of the New Beetle

[NEW BEETLE CASE STUDY]

Vanzura would have to content with 25% of the typical budget size. of value propositions from the old beetle such as strong heritage value. which turned to be great success. heightening. due to lack of availability of spare parts and costly repairs. died out completely by 1981. new environmental legislations all led to a dramatic decline in the sales of the Volkswagen Beetle. declining hatchback popularity. However. y The Beetle had a huge fan following in the new generation of Americans. Germany¶s existing image problem in the market. such as Deutsche Mark appreciation. which would further shrink if Vanzura would have to allocate dollars towards promotional expense of the New Passat which had debuted just 5 months ago. INTRODUCTION At a time when American¶ were skeptical about the purchase of imported cars. due to strengthening of Deutsche Mark. the company marketing manager set out to decide the marketing strategy to be followed for the new Beetle. It was also a huge success in America and had become a true American icon. more than 21 million Beetles were sold. reliable. Due to recession in 1982. In 1994 a campaign was launched to revive VW and a plan for relaunching Beetle in 1998 was also considered.following by the 60s. and also in the lives of the common American as a member of his family. VW of America was set up as a subsidiary to VW. simple and original to design the New Beetle. competition from cheaper Japanese brands VW saw its sales declining in US during 1970s. the company decided to re-model the Beetle to incorporate design features such as ± honest. VW also took a hit and sales dropped to less than 50000 by 1993. It had become a symbol of individuality and personal style. However due to factors. A few car models were also launched like Rabit. With this constraint on its budgetary resources. the company¶s marketing manager Vanzura had decided to target the Baby boomers with a proposition aimed at µindulging in nostalgia. A brief history of VW and Beetle After the launch of Beetle in America. While rival companies spent upwards of 100 million dollars towards promotional budget. However Beetle was still the leading car model for VW as it always contributed more than 65% sales (by volume) for VW till 1974. The sales after peaking in 1968. Subsequently with a renewed focus to leverage a no. After meeting with success through its initial promotional campaigns. Volkswagen introduced the Beetle in 1949 which turned out to be a phenomenal success and envisaged a cult. y y To illustrate the development of target market segments To link the processes of market segmentation. focus on unique driving experience and delivering German technology at an affordable value. market targeting & product positioning 2. The Old Beetle y Beetle was the most successful car model of its time. Microbus and Karmann Gia sport coupe which were successful as well. declining popularity of hatchbacks and inability to comply with the environmental legislation Beetle was withdrawn from the US markets.1. y Beetle found a place in Disney movies as ³Herbie the love bug´. PROBLEM IDENTIFICATION & ANALYSIS The fundamental problem came down to targeting a broad customer base by advertising in the televisions or to position itself to cater to a niche category by advertising in the print media. [2] .

One of the major challenges was to remove the misconceptions about Beetle. But they have common characteristics such [3] . The nostalgia surrounding the car coupled with innovative promotions and attractive lease financing schemes all represent a favourable proposition for the marketing of the car. Chairman Volkswagen AGBoard of management. Weakness: One of the concerns which would keep the marketing unit busy at work would be the µtoy car¶ image which has been tagged to it in the market.Bring back the Beetle ³What are you waiting for Doc? Bring back the Beetle.e. which the owners can associate with it. New Beetle: SWOT analysis Strength: The new beetle enjoys an iconic heritage. 3. This image of Beetle needed a repair to ensure the New Beetle is looked upon as a ³Real. The Beetle did have a segment of potential customers. the New Beetle had its fair share of fans. Positioning of the new Beetle with the backdrop of old Beetle¶s image & success coupled with a limited advertising budget was a challenging job and was considered as ³Mission : Impossible´ for a marketer. However the main concern for the new Beetle was the limited advertisement budget at its disposal and the consequently low ad recall that emanated from it. But there were some challenges which were to be addressed before the launch. Efforts to retain Baby Boomers were also required because the New Beetle was not a replica of the old Beetle. And finally. The strong brand image of yesteryears associated with the TYPE I Beetle definitely acts as one of its strength. The primary being the emergence of a new generation of fun loving consumers who wanted to express themselves by showing off to the world their car and the confidence associated with it. Threats: While the above discussion paints a rosy picture of the new Beetle. which reinforce its penchant to use classic elements and basic shapes with the help of cutting edge technology and modern detail is symbolic of its spirit and historical strength. the new Beetle seeks to explore the revelation of people¶s love for round shapes using this as an opportunity to promote its simple yet modern designs. Beetle was considered to be a ³toy car´. This coupled with the propositions of competition from Japanese auto makers. there were several opportunities in the market for the new Beetle which it could take advantage of.´ This was the opening sentence of a letter to Dr Ferdinand Piech. reliable and original. its design principles ± honest.´ Another weakness of the new Beetle was that it was one of the more expensive cars in the segment which was contrary to its customer¶s perception of affordability that they attached to its predecessor. which appeared in Chicago Tribune. i. PROPOSITION Product positioning should ideally answers 3 questions: a) Who are the customers? Since Beetle itself has big target market comprising of the baby boomers & young drivers of age group 18-34 years old with diversified demography. all isn¶t well with the car and/or the market in general. A decrease of 5% in the small car segment might be indications of a contract market. And hurry. simple. Driveable car´. Thus positioning of Beetle was the key concern for VW. However the case exclusively quotes that ³While many people saw the car as more of a toy. Opportunities: Notwithstanding the above facts. but for a sustained growth it also had to look beyond and exploit the appeal which Beetle had in other customer segments. it is the successor of a car which enjoyed cult following among the mass and the elite alike during its hey-days. the Baby Boomers. in terms of price and volume represents a growing threat which the new Beetle must look to effectively counter. In addition the new Beetle in today¶s age of technology leverages its strength of affordable German engineering to provide its users with the joy of a unique driving experience. In addition. This reflected the enthusiasm and the anticipation prevailing in the market for the New Beetle. In addition the loss of exclusivity of dealers meant that the dealers«.

200 which can go upto $18.000 for the luxury model. [4] . Since Beetle is falling in midsize segment the pricing of the car in this segment varies from $11. Since this new Beetle is conceptualized based keeping Beetle spirit and sense of history with the blend of modern technology embedded in its features the recall of the new Beetle is immense.300 for a sedan. The base pricing of Beetle starts from $15. individualism and a desire to be centre of attraction. Keeping the above factors the pricing needs to be kept in mind the affordability of the segment being targeted and the similarly the media for covering the Beetle will be a mass media and some extent of print media. Also they love to drive German engine. superior driving performance with German technology and most important a people car with affordability and reliability c) Why is the product the best option to satisfy those needs? Seeing the history of Beetle and the legacy it has created there was no competitor in this segment.000 to $17.as confidence. b) What is the set of needs that the product fulfills? Beetle fulfills the desire to express individuality. If the car is positioned as the people¶s car then the pricing and media to be selected which will cater to the mass market. No other brand was able to create the nostalgia that beetle has created with its design. It was neither a small segment car nor a mid size car but the looks of the car put it in the small size car segment.

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.