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SRI SATYA SAI UNIVERSITY SCHOOL OF BUSINESS MANAGEMENT ACCOUNTING AND FINANCE
BRAND MANAGEMENT ASSIGNMENT “VOLKSWAGEN BRAND AUDIT” Submitted by: Ranjan Sharma IInd MBA, 07471
Brand Inventory HISTORY:
When in 1937 the company known as "Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH" was founded, no one could have guessed that it would one day be Europe's largest carmaker. The history of the company - with all its trials and tribulations - is first and foremost a story of impressive success. On May 28th, 1937 the "Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH" company is founded, and on September 16th, 1938 it is renamed "Volkswagenwerk GmbH". In early 1938, in what is today Wolfsburg, work begins on construction of the Volkswagenwerk plant which is to house production of the new vehicle designed by Ferdinand Porsche. After the end of the Second World War, in mid June 1945, responsibility for Volkswagenwerk is placed in the hands of the British Military Government. Under the management of Major Ivan Hirst, mass production of the Volkswagen Beetle is started. On March 8th, 1950 the Type 2 goes into production, expanding the company's product range. The Volkswagen Bus, still today known to many as the "VW Bully", soon creates rising demand thanks to its multifunctional capabilities. In 1956 a separate manufacturing base for the Transporter is established in Hanover, at the same time setting down the roots of today's Volkswagen Commercial Vehicles brand. In 1973 the Passat is the first model of the new generation of Volkswagen vehicles to go into production - with front-wheel drive, a water-cooled four-cylinder engine and a range of engines up to 110 bhp. The Passat is built in line with the modular strategy, by which standardised components usable in a range of different models provide significant rationalisation. In January 1974 the first Golf is built at the Wolfsburg plant. in June 1983 production of the second-generation Golf begins. The car is designed for a largely automated assembly process, and in the specially erected final assembly hall, designated Hall 54, robots are deployed for the first time in vehicle manufacture.
With the production launch of the Lupo 3L TDI, the first production car to offer fuel consumption of just three litres per 100 kilometres, in July 1999, Volkswagen once again makes automotive history. In August 2002, at Volkswagen Slovakia, mass production of the Touareg, a luxury-class off-road vehicle, is started, marking the Volkswagen brand's move into an entirely new market segment. In December 2002 the "Auto 5000 GmbH" company, operating a plant at the Group's site in Wolfsburg, starts production of the Touran compact van. A special collective pay model has been developed, aimed at implementing lean production and involving flat hierarchies, team working, flexible working hours and the deployment of more process expertise by the workforce. In 2003 production of the fifth-generation Golf is started, embodying a new dynamism in its design and engineering.
THE VOLKSWAGEN GROUP: The Volkswagen Group with its headquarters in Wolfsburg is one of the world’s leading automobile manufacturers and the largest carmaker in Europe. In 2007, the Group increased the number of vehicles delivered to customers to 6.189 million (2006: 5.734 million), corresponding to a 9.8 percent share of the world passenger car market.
The Group is made up of nine brands from seven European countries: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda, Scania and Volkswagen commercial vehicles. Each brand has its own character and operates as an independent entity on the market. The product range extends from low-consumption small cars to luxury class vehicles. In the commercial vehicle sector, the product offering spans pick ups, busses and heavy trucks. The Group operates 48 production plants in thirteen European countries and a further six countries in the Americas, Asia and Africa. Around the world, more than 360,000
employees produce almost 25,400 vehicles or are involved in vehicle-related services each working day. The Volkswagen Group sells its vehicles in more than 150 countries. It is the goal of the Group to offer attractive, safe and environmentally sound vehicles which are competitive on an increasingly tough market and which set world standards in their respective classes. The Group consists of eight brands: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and Volkswagen Commercial Vehicles.
PRODUCT RELATED ATTRIBUTES:
• • • • • • • •
Stylish sleek design German engineering Performance Luxury Reliability Comfort Speed Safety
VOLKSWAGEN BRAND PORTFOLIO: Volkswagen includes a plethora of brands catering to different market segments. Volkswagen has small car segment, middle size/sedan, Suv, Luxury sedan and commercial vehicles. The small car is targeted towards youth and small families, who need a fun filled ride at the same time keeping it under budget. Volkswagen small cars are highly performance oriented, keeping alive the thrill and adrenaline of driving a small car. It has following variants under this segment.
Cross polo Polo GTI Golf estate Golf GTI Golf R32 Golf plus New beetle New beetle cabriolet
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Mid size/ sedan/ luxury: These sedans are targeted towards the executives and families who do not mind spending extra buck for a top notch comfort and performance. It has following variants.
• • • •
Jetta Eos Scirocco Passat
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Passat estate Passat R36 Passat CC
Suv/muv: Targeted towards adventure seekers and big families. Volkswagen suv’s boast of “civilization and wilderness”. These are suv’s with the design of a genuine sports car.
• • •
Touran Sharan Touareg
Touareg Touareg R50
Commercial vehicles: The commercial vehicles are targeted towards people who love expedition, outdoor enthusiasts, artists and professional carriers.
• • • • • • •
Caddy Transporter Caravelle Crafter Caddy life Multivan California
Ultra luxury: For the rich and affluent with swankier lifestyles.
COMMUNICATION, PRICING AND DISTRIBUTION: Most of the Volkswagen communication takes place through print media in magazines and newspapers. This is supported by communication through TV advertisements and point of sales promotion. Now a days a good company has a state of the art web portal, Volkswagen websites are highly informative, interactive and a pleasure to watch. One can get any amount of detailed information regarding the prices, features, retailers, and support services etc. There are company specified retailers and distributors throughout the world who are in constant touch with the parent and comply implicitly. Dealers also have round the clock servicing and repair. Volkswagen also has a used car portal where one can choose and buy his/her appropriate model. They also have bodyshops in several parts of the town or cities and an exclusive workshop for their luxury model “phaeton”
Volkswagen pricing ranges from affordable to exorbitant. A GOLF car ranges around 5,280 – 6,500 pounds, a beetle around 15,100-19,757 pounds, passat cc around 21,130-31,050 pounds, tiguan: 18456-23570 pounds, phaeton: 38,670-75,260 pounds, commercial vehicle range starts from 10,750 pounds onwards.
BRAND EXPLORATORY Customer knowledge: Volkswagen has successfully leveraged its history and tradition of excellence along with innovation to become one of the most famous and recognized carmaker in the world. Beetle was a phenomenon. Till today customer talk about beetle. Typical consumer brand associations for Volkswagen might be “heritage”, “stylish”, “powerful”, “elegant”, “performance”, “sporty”. Sources of brand equity: The Volkswagen name one of the oldest in the history of car makers, is no doubt is an important source of brand equity. But being a German car is also a key source of brand equity. The symbol with two v crossing is a known symbol all over the world. The fact that it’s a German engineered car adds a ton to its brand equity, Germans are the best engineers in the whole world. Volkswagen does not make use of the celebrity endorsers much but recently they hired “Andrew flintoff and kevin pieterson as a brand ambassadors for luxurious 4x4, the touareg. Sponsorships: Official car supplier for the England cricket team. Games: Volkswagen cars are the exclusive vehicles in pc and psp games like gti racing, need for speed carbon and test drive unlimited. Philanthrophy: Volkswagen has environmental friendly programs in which ‘Volkswagen de mexico awards research funds and prizes for species protection. They also have blue motion technology which reduces fuel consumption and thereby reducing the emissions. Apart from these Volkswagen has a variety of initiatives for the safeguard of our environment, from waste disposal to vehicle recycling. One can get a fair amounf of detail about these environment friendly issues by visiting their official website.
(Volkswagen mental map)
The customer based brand equity pyramid (CBBE): The Volkswagen customer based brand equity is equally strong on the left and right hand sides. It is also strong from bottom to top, enjoying the highest brand awareness of a carmaker as well as high repeat purchase rates and customer loyalty. To a certain extent Volkswagen has successfully focused on both the superior product attributes and the imagery associated with owning and driving a Volkswagen.
State of the art technology and quality: world class cars, innovation and design, clever design, simple to operate.
Top notch quality and comfort: high loyalty, high repeat purchase, premium comfort, Resonan ce
Exceptional customer service, good resale value, less maintenance, less polluting, superb on road performance,
Social approval and self respect, environment concern.
Feelings Historical and classic image: since world war II, associated with racing events, beetle model,
Salience High awareness: german marvel, best in the class, excellent finish.
(Volkswagen CBBE pyramid)
Recommendations: Competition: There is a sudden increase in competition from the other car manufacturers in all the segments. BMW is the prime competitor then there are others like saab, Volvo, Honda , Toyota etc. The competitors are launching new products everyday to have a greater pie of the market share as well as the customer mind.
The trends and scenarios are constantly changing in the consumer market. The silver generation with a demand for mobility and financial strength needs something which appeals to them. The lifestyles have changed. There must be individualization and differentiation between lifestyles and products. Volkswagen must keep this in mind and develop products. Technology: Market needs products with excellent networking but simple interaction. Customer’s environmental sensitivity is increasing. Environment is becoming a competition factor. Nevertheless Volkswagen takes necessary steps towards environment protection and development but the need of hour is to develop vehicles powered with renewable sources of energy. E.g Honda’s hybrid car. Product differentiation must be done through technology and emotion and a clear product and a brand image. Volkswagen can recreate the magic as it had done during 70’s beetle launch. Volkswagen must extend product leadership especially regarding design, driving experience and quality. Volkswagen must specifically address image generators and developing loyal, long term customer relations. Volkswagen must connect to the women consumer too. Most of the cars are masculine and performance oriented. It always talk about the adrenaline rush and thrill of driving. But there is a huge untapped female consumer market. Volkswagen can design and develop products exclusively for this segment. Merchandising: Company can sell t-shirts, mugs apparels of Volkswagen logo in order to build a strong brand equity. Collector’s items.
Points of parity German automaker Quality enginnering Durable Stylish,sleek designs Attractive
Points of difference History and heritage Vv symbol Number of variants Environment
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