INTERNATIO

NAL
MARKETING
ASSIGNMEN
T 1.3
SCOPE: Reasons
for success of
Global Brands in
India

VOLKSWAGEN

SUBMITTED BY:
Prasad Suryawanshi
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History
Volkswagen translates to "people's car" in German. The company's current international advertising
slogan is just "Volkswagen", referencing the name's meaning. Volkswagon (Shortended as VW) is a
German founded company in 1937 . It is headquartered in Wolfsburg, Federal Republic of Germany. It is
the flagship marque of the Volkswagen Group, the largest automaker by worldwide sales in 2018 and
2019. The group's biggest market is in China, which delivers 40% of its sales and profits. On the 26th
May 1938 the “Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH” (Society for the
preparation of the German people’s car) was launched and the company’s original model went into mass
production.

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 Section 1
1. Reasons for selecting India and products/services ( Why ?)
India is the biggest market after china in terms of volume and consumption.
Volkswagen arrived in the Indian market in 2001 by setting up its Indian subsidiary
At that time India was still raw in terms of development and hence got attention of many foreign players
to set up a presence in India. Also the new Indian consumer was always on a growing verge with the GDP
growth rate better than the rest of the world it offered a lot of opportunities and avenues to explore.
One of the main reasons for they foray into India would be the purchasing power of Indians. Indian
customers are well travelled and are looking for more luxurious ways of travel, while ensuring it is not
too harsh on the pocket. The sales have been growing at the rate of 1.4% year on year.

2. Consumer Profiles (When?)

Volkswagen adopted a differentiated marketing approach in India. It entered the Indian market by
targeting the B segment. They believed that the middleclass consumer wouldn’t mind paying a little extra
for value. Their primary target consumer in India was middle to upper income professionals who needed
value for money and comfortable riding conditions in their city. Primary business target includes mid-
sized to large sized corporates who want to provide their employees with transportation facility to ease
their life. It also looked for opportunities to tap into the rural market and expand its presence in the
corporate segment for expanding its market share in India. It also targets the younger generation with its
new, modern launches and the hybrid models.

3. Describe products, business architecture and business model (What?)

Volkswagen India offers three brands in India that are Audi, Skoda and Volkswagen each brand is
exclusive in its segment and is considered as a respected option. Earlier due to products ranged only in
premium and luxury segments the sales figures were not so high but as they have entered with more
product line in the mid-size segment and compact car segment the figures are growing at rapid pace. One
excellent opportunity for Volkswagen is that Indian customers are not very brand loyal and can shift
brands if they find better deal in the same or nearly same budget. Volkswagen with its attractive designs
and high end technology is emerging as a successful option.
Product Range

 Hatchbacks
 Sedans
 SUVs
Some of them are
1) Volkswagen Polo, “German Engineering, Made in India”
2) Volkswagen Beetle, “Curves are back”
3) Audi R8, “Born of ideas”
4) Skoda Superb, “Epitome of Opulence”

As Indian market is mostly dominated by the budget and compact car segment so they came up with
models like Skoda Fabia and Volkswagen Polo to meet the demand. This decision worked successfully

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and so they are also moving in budget cars segment through our upcoming model “UP”. Volkswagen also
provides the Volkswagen Warranty to all its customers in order to keep them satisfied with “after sales
services” this helps in building loyalty and good word of mouth for our company
4. Phased business expansion plan (When?)
Volkswagen has started expanding to the smaller towns in India, since most people are looking for
aspirational vehicles and have developed an aspiration to drive a premium car. This has been the
motivation for Volkswagen to move into Class 2 and Class 3 towns. It has taken up Initiatives like Luxe
drive and Brand tour in order to move to smaller cities to engage with prospects and fans. These provide a
one of a kind experience complete with live music, dancing and food. They have also undertaken
effective placement and pop up stores in these areas to promote the products.
Volkswagen is laying out its 2020 strategy with more emphasis on growth and thrust. They have been
trying to increase the revenue earned by them without mounting up the costs. They are capitalizing on the
growing middle-class population in India, while further expanding their reach, both geographically as
well as demographically.
5. Geographical business architecture and markets (Where?)
Volkswagen has a wide-spread network of car showrooms spread throughout the country. There are
approximately 126 Volkswagen car dealers operating in India as of Aug 2020. Volkswagen car
showrooms in India are spread across 23 states and 99 cities and include well established as well as new
Volkswagen car dealers. Carandbike gives you access to the addresses and contact details of the
Volkswagen car dealerships and you may locate the one that’s nearest to you.
6.Technology and processes including business processes (How?)
Volkswagen is known to be one of the safest cars in the current times. It is known for its safety and uses
advanced technology including shatter proof windscreens, airbags, crumple zones and collapsible. These
are all used in order to make the driver and passenger journey more comfortable and enjoyable.
It also has top notch customer service, where they look at pleasing the customer right from the time of
making the purchase to the usage post the purchase. Volkswagen has realised that customer service can
no longer be seen as an ancillary service and is very essential to ensuring the customer is happy and sales
are high. Keep this in mind, they have launched ‘Service on Wheels’ which helps in getting close to the
customer, in case of dealership in the remote areas. These packages are rolled out to a period of 10 years
from the date of purchase and is seen as a stimulus that lowers the ownership costs.
On the business front, Volkswagen has made use of technology in its plants. It has been using new
technology at its plants in order to ensure that the cars are manufactured in the most efficient and
effective way possible. This use of modern technology is reflected in the cars manufactured by
Volkswagen in India.

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 Section 2
A. Innovation leadership
1. World Leader in Platform Sharing
Volkswagen, which has partnerships with nearly 30 other makes and manufacturers in its group, manages
to save costs without reducing the unique personality of any of their vehicles. In fact, they have one of the
most diverse-looking vehicle lineups of any major auto group.
Their secret lies in their ambitious MQB platform program. These modular vehicle bases allow for
thousands of different possible combinations while sharing a common family of parts. The only fixed
measurement is the distance between the front axle and the firewall. Everything else, from the wheelbase
to the front and rear overhangs, can be altered dramatically. For the Volkswagen brand alone, the MQB is
used in the Polo, Golf, Scirocco, Jetta, Tiguan, Touran, Passat and several others.

2. Letting Drivers Take a Backseat

Stanley, who now resides at the Smithsonian Air & Space Museum in Washington D.C., won the US
Department of Defense’s 2005 Grand Challenge for autonomous vehicles. As you may have guessed,
Stanley is the name of a car — a 2004 Touareg to be exact.
Using a sophisticated 3D scanning camera in conjunction with a GPS system, Stanley navigated a
grueling course through the Mojave Desert to beat out the other competitors. The race included a
precarious mountain pass that would force any sloppy robot driving to cause the vehicle to plummet
hundreds of feet.
Stanley won the race in six hours and 54 minutes, beating the runner up by ten minutes. Stanley’s
successor, a 2006 Passat Wagon named Junior, won the race again in 2007.
3. Putting as Much “Oomph” Into the Road as You Need
Active suspension technologies have been improving over the past few decades, but few can match the
control and precision of VW’s DCC Adaptive Chassis Control System. Their version uses electronically-
controlled suspension struts that react to changes in the road environment within milliseconds.
One thing that sets VW’s version apart from competitors is that it has precision-tuned profiles to change
the feel of your ride with the press of a button. For casual driving, you can choose “Normal” or
“Comfort” settings, which work harder to reduce shock and vehicle movement as you pass over bumps or
through curves. A “Sport” setting stiffens the ride up for better braking, acceleration and turning.
4. Getting You There with Less Fuel
Looking like a vehicle straight out of the future, VW’s XL1 model is one of the most fuel-efficient cars in
the world. Its tiny 1 litre twin cylinder diesel engine uses only 2.0 L/100 km. Combined with the on board
electric motor, that efficiency increases to 0.9 L/100 km.
Even though the tiny twin cylinder only generates 55 kW, the light 795 kg curb weight lets it accelerate
from 0 to 100 km/h in 11.9 seconds. An XL Sport concept promises even more power, harnessing the
might of the Ducati 1199 Superleggera engine.

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Don’t hold your breath on getting one of your own, though. Only 250 were made and have been sold
using a lottery system. Expect this sort of technology to drive efficiency in other hybrid Volkswagens
down the line.

5.Changing the Way We Interact with Cars

Volkswagen turned heads at the 2015 Consumer Electronics Show in Las Vegas, Nevada with their Golf
R Touch concept. While this vehicle looks ordinary on the outside, it holds the possible key to the future
of vehicle control in its interior.
Three LCD screens govern literally all of the functionality and information display in the car. A digital
Active Information Display shows the instrument cluster, a large touch-screen controls infotainment and
navigation, and a smaller screen is dedicated to climate and audio controls.
These screens may sound like nothing new, but what sets them apart is that touching them is completely
optional. Cameras mounted throughout the car let drivers use gestures like pointing for button presses to
avoid taking their eyes off the road — or smudging the beautiful screens with fingerprints. To open the
sunroof, all you have to do is stick your hand up and pretend to push the glass backward. To adjust the
seat, place your hand underneath it and use gestures to indicate direction.

B. Cost Leadership
Earlier Volkswagen India mainly catered the luxury and premium segments of the Indian car market. This
lead into a brand image of a “very expensive brands” and therefore sales were limited, but later on with
Fabia, Polo and other upcoming low priced models, sales are booming. Volkswagen’s one major
advantage is their financial service which operates solely in India for providing car loans to all
Volkswagen brand buyers at 4%to 5% where as other brands offer loans at no less than 9%.

C. Service excellence
1. Contactless sales, services:
The new procedure called will allow a prospective customer to book, test drive or even get the delivery of
new vehicle at his or her doorstep. The company also said dealership layout/floor plan, including
customer waiting areas have been re-organised to ensure appropriate social distancing. This shows that
Ford is highly adaptable to the changing environment as they were quick to react to keep the customers
happy.
2. Large dealer network spread across the nation:
To improve Affordability, Volkswagen has presented many spearheading activities, for example, Service
Price Promise, which permits clients to figure the vehicles' occasional upkeep costs even before booking
the administration at the business. Guaranteeing client accommodation, Volkswagen has selected Retail
wholesalers to sell Genuine parts the nation over. The retail appropriation has prompted Volkswagen
Genuine parts today being accessible across 3,500 touchpoints - 2000 of those are free fix shops.

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 Section 3
USP’s over competitor
1. Core Competencies and Competitive Advantage
Volkswagen’s core competencies are cutting edge technologies, innovative designs and nine world
renowned brands under its roof. One major factor of Volkswagen’s success can be the high end
technology that they possess and other local players in Indian market lack. This is the reason that with
received several prestigious awards like “Car of the Year award” for model Polo, “Premium car of the
year award” for model Jetta, “Performance car of the year award” for Audi A4 and Volkswagen India was
honored ‘Automotive Company of Year 2010’ at Auto India Golden Steering Wheel Awards

2. Product Positioning
Volkswagen India offers three brands in India that are Audi, Skoda and Volkswagen each brand is
exclusive in its segment and is considered as a respected option. Earlier due to products ranged only in
premium and luxury segments the sales figures were not so high but as they have entered with more
product line in the mid-size segment and compact car segment the figures are growing at rapid pace. One
excellent opportunity for Volkswagen is that Indian customers are not very brand loyal and can shift
brands if they find better deal in the same or nearly same budget. Volkswagen with its attractive designs
and high end technology is emerging as a successful option.
Some of them are
1) Volkswagen Polo, “German Engineering, Made in India”
2) Volkswagen Beetle, “Curves are back”
3) Audi R8, “Born of ideas”
4) Skoda Superb, “Epitome of Opulence”

Section 4

Tactics Used To Deliver Positive Emotions

Emotions are the driving force behind most of the buying decisions. Creating strong emotions helps to
build a bond between customers and the business. Positive emotions are important for providing a good
retail experience to the customers as well as generating loyalty in them towards the brand. A brand has a
connection with the consumer’s emotions known as ‘brand intimacy’ which can directly be responsible in
affecting the business growth.
The tactics it uses to convey these emotions
Celebrity endorsements: Volkswagen has leveraged celebrities like Neymar, John Mayor to build a
strong emotional connect with its customers.

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Auto Shows and racing events: Volkswagen organizes as well as participates in various Auto shows and
racing events globally and in India. This helps it to garner 1:1 customer interaction opportunity.

Digital Marketing: Volkswagen doesn’t believe in mass marketing. It builds connections with its
prospective customers by BTL marketing as per their interests.

CSR activities
In today’s time when we are part of a global pandemic that has disrupted the lives of everybody around
the globe, it is during such hard times that a company can really show the consumer how much they care
for them. As a responsible brand Volkswagen has always tried to be at the forefront to give it back to the
community.
Some of the initiatives by Volkswagen

1. Supports water management programmes for farmers in Latur district

2. Forming Green clubs in Zilla Parishad Primary Schools
3. Volkswagen with association with Lila Poonawala foundation helped in girls education

Communicating through various platforms

Apart from using social media and TVCs to put these messages out, the company has started several
platforms to communicate with the customers. These include “Volkswagen Lady “. This platform
encourages women to be outstanding in all their endeavors and help empower them. They try to link
women who are encouraged by the same idea of being themselves and letting people be their own self.
This is a platform where women can connect, engage with each other and share ideas, all while
encouraging each other and honoring each other. This platform is across various formats including
networking events and online social groups.
Section 5

Validate the Presence Of 4 Intenral And 6 External Variables

Internal factors that determine Volkswagen’s strength are as follows:
Clarity
Brand clarity happens when the strategy of the business is aligned with the customer experience.
Volkswagen as a brand stands for ‘People’s Car’. The brand is clear in its mission to serve the customers
with the latest, high technology and high quality products. It is successful in delivering the same via it’s
output as well as advertisements.
Internal Commitment of The Organisation
Across the country, Volkswagen as well as their dealers work together to prioritize the allocation of the
resources across the country.

Governance
Brand governance is very important to ensure that they are represented consistently and the rules
regulations and ethics are taken care of. Volkswagen has a strong corporate governance structure with a

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board-centric management. Their efforts are to conduct a transparent business management and promote
shareholder’s rights.
Responsiveness
Volkswagen has always stayed on top of the innovation game. It has always been at the forefront of
adopting new technologies into its products in order to provide the customers with the best experience
possible. This responsiveness also allows the brand to seize opportunities before any other competitor can
do so.
External factors that determine Volkswagen’s strength are as follows:
Authenticity
Volkswagen has always stood first in being authentic, it is highly essential to be authentic as the products
you are selling are a fixed asset to the consumer and if you cannot stay true to your word, you will not be
able to sustain customers. Guaranteeing client accommodation, Volkswagen has selected Retail
wholesalers to sell Genuine parts the nation over. The retail appropriation has prompted Volkswagen
Genuine parts today being accessible across 3,500 touchpoints - 2000 of those are free fix shops.
Consistency
Being consistent in delivering quality is one of the traits Volkswagen is known for, not just in India, but
in the global automobile industry.
Relevance
Staying relevant is the only way to sustain in an ever-changing environment like today. Innovations
should be at the forefront and no hesitation to adapt. Volkswagen does exactly that.
Presence
Volkswagen has a global presence. It has been enlarging this presence worldwide through strategic and
localised global production systems in major centres of the world. It has a strong presence in China, US,
India. This is mainly due to the fact that Volkswagen has been successful in adapting to the needs of
people of these different markets.
Differentiation
Volksagen is a part of the German Big Three in the automobile sector. It has differentiated itself by
evoking aspirational feelings in the customers. The largest target group for Volkswagen are those who
aspire to own such a car, which would provide them bot h luxury and safety. Volkswagen has portrayed
this via their advertisements and their customer engagement activities. They use their product to
encourage customers to dream and be the best version of themselves.

Engagement
Volkswagen organizes as well as participates in various Auto shows and racing events globally and in
India. Volkswagen doesn’t believe in mass marketing. It builds connections with its prospective
customers by BTL marketing as per their interests.

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References

 https://www.balise volkswagenfairfield.com/ volkswagen-vs-other-brands/

 loyalty-during-difficult-times/#5561b07f4e1b
 https://www.mbaskool.com/brandguide/automobiles/1297- volkswagen-motors.html
 https://www. volkswagen.com/in/en/ volkswagen-story/about- volkswagen/philosophy
 https://www.newindianexpress.com/business/2019/nov/26/ volkswagen-to-upscale-its-suv-
segment-i https://www.forbes.com/sites/jonpicoult/2020/04/14/3-tips-for-strengthening-
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 https://www.financialexpress.com/auto/car-news/ volkswagens-20-years-in-india-only-
realistic-competitor-to-maruti-suzuki-and-the-8-new-cars-to-drive-its-
growth/1222583/#:~:text= volkswagen%20Santro%20(1998%2D2014)&text=A
%20runaway%20success%2C%20the%20Santro,for%20more%20than%2015%20years.
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%20employees%20and%20visitors

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