Case: The New Beetle

BRAND MANAGEMENT

26th, October 2023

Submitted to: Prof. Abdul Waheed

Submitted by: Group 1

Roll no Name

2210120227 Bhakti Garg

2210120276 Eresh Sharma

2210120476 Preeti

2210120643 Vanshika Kaushik

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Acknowledgment

We would like to express our sincere gratitude to all those who have contributed to the successful
completion of this case study analysis submission. This project has been a challenging and rewarding
experience, and we couldn't have done it without the support and guidance of several individuals and
resources.

First and foremost, we would like to thank Professor Abdul Waheed for assigning this case study and
for providing valuable insights, feedback, and support throughout the project. Your expertise and
dedication to teaching have been instrumental in our academic growth.

We are also thankful to our peers and classmates for their collaboration and constructive discussions,
which enriched our understanding of the case and helped us refine my analysis.

Additionally, we appreciate the patience and understanding of our families and friends during the time we
devoted to this project. Your support and encouragement were essential in maintaining our motivation
and focus.

Lastly, we want to thank the case study authors and organizations involved for their valuable insights and
the opportunity to examine their real-world challenges and solutions.

Sincerely,

Bhakti Garg

Eresh Sharma

Preeti

Vanshika Kaushik
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Case Overview

The New Beetle is a case study that explores the launch of the Volkswagen (VW) New Beetle in 1998.
The New Beetle was designed to revive VW's brand image and sales in the US market, which had been
declining for years. The case highlights the challenges VW faced in designing and marketing a car that
would appeal to American consumers while staying true to its German engineering roots.

The case begins with a brief history of VW and its struggles in the US market. It then delves into the
development of the New Beetle, which was inspired by the classic Beetle that was popular in the US in
the 1960s. The design team faced numerous challenges in updating the classic Beetle while retaining its
iconic shape and appeal.

The case then discusses the marketing strategy for the New Beetle, which was aimed at a younger, hipper
audience than VW's traditional customer base. The marketing campaign was highly successful, leveraging
social media and pop culture references to create buzz around the car. The case also explores the
challenges VW faced in managing the supply chain and production of the New Beetle, which required
significant investment in new manufacturing facilities.

The case concludes with an analysis of the New Beetle's impact on VW's brand image and sales in the US
market. While the New Beetle was initially successful, sales declined in subsequent years, and VW
struggled to maintain its momentum in the US market. The case highlights the importance of balancing
innovation with brand identity and the challenges of appealing to a new target market while retaining
existing customers.
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Introduction

In the diverse of automotive history, the tale of the New Beetle stands as a remarkable testament to the art
of reviving a classic brand and carving a niche in an evolving market. Volkswagen's daring decision to
reintroduce the iconic Beetle in the late 1990s proved to be a masterstroke, propelling the company to
new heights of success. The reimagined New Beetle captivated a fresh generation of car enthusiasts,
captivated by its blend of retro charm and contemporary appeal.

The original Volkswagen Beetle, also known as the Type 1, was a groundbreaking automobile that
symbolized Germany's post-war economic revival. Its affordability, reliability, and fuel efficiency made it
a global sensation. However, by the 1970s, the Beetle's design started to lose its luster, and sales began to
dwindle. In 1978, Volkswagen made the difficult decision to discontinue the Beetle, but the car's legacy
remained etched in the hearts of many.

In the early 1990s, Volkswagen embarked on a journey to resurrect the Beetle's spirit. Designers at the
company crafted a concept car that reinterpreted the Beetle's iconic design for the modern era, and the
response was overwhelmingly positive. Volkswagen decided to bring this concept to life, and in 1998, the
New Beetle made its grand debut.

The New Beetle was an instant sensation, capturing the hearts of car enthusiasts worldwide. Its design
struck a perfect balance between retro nostalgia and modern sensibilities. The car offered a unique driving
experience, exuding a personality unlike any other vehicle on the market. Both men and women were
drawn to the New Beetle's charm, and it played a pivotal role in attracting new customers to the
Volkswagen brand.
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Analysis

SWOT Analysis

Strengths

● Iconic design and brand recognition: The New Beetle leveraged the nostalgic appeal of the
classic Beetle, which had a strong brand identity and recognition in the US market.
● Successful marketing campaign: The innovative and creative marketing strategy helped
generate significant buzz and interest in the New Beetle, attracting a younger and hipper
audience.
● Strong supply chain and manufacturing capabilities: VW invested in new manufacturing
facilities to meet the demand for the New Beetle, showcasing their ability to efficiently produce
and distribute the car.

Weaknesses

● Declining sales and market share: Despite initial success, the New Beetle faced declining sales
in subsequent years, indicating a weakness in sustaining consumer interest and market share.
● Limited target market: The New Beetle's appeal was primarily limited to a specific
demographic, potentially limiting its overall market reach.
● Reliance on nostalgia: While the nostalgic appeal attracted some customers, it also limited the
car's ability to appeal to a wider range of consumers looking for more modern features and
technology.

Opportunities

● Product innovation and differentiation: VW could explore opportunities to update the New
Beetle with more modern features and technology, appealing to a broader customer base.
● Expansion into new markets: The success of the New Beetle in the US market could be
replicated in other regions, potentially increasing VW's global market share.
● Electric vehicle (EV) adaptation: With the growing popularity of EVs, VW could consider
launching an electric version of the New Beetle to cater to environmentally conscious consumers.

Threats
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● Intense competition: The automotive industry is highly competitive, with numerous established
players and new entrants. VW faces the threat of losing market share to competitors that offer
more appealing and innovative products.
● Changing consumer preferences: Consumer preferences and trends can quickly change, making
it challenging for VW to adapt and stay relevant in the market.
● Economic factors: Economic downturns or fluctuations in the market can impact consumer
purchasing power and demand for cars, posing a threat to VW's sales.

BCG Matrix Analysis

Based on the BCG Matrix, the New Beetle can be classified as a "Question Mark" or "Problem Child" in
terms of its market growth and market share. Initially, the New Beetle had high market growth potential
due to its unique design and marketing strategy, but its market share declined over time. This
classification suggests that VW needs to carefully assess the future potential of the New Beetle and invest
resources strategically to maintain or increase its market share.

The BCG Matrix, also known as the Growth-Share Matrix, classifies products or business units into four
categories based on their market growth rate and market share. However, since the case is about a specific
product, the New Beetle, we will analyze it within the BCG Matrix framework.

The New Beetle can be classified as a "Cash Cow" in the BCG Matrix due to its low market growth rate
and relatively high market share. Initially, the New Beetle had high market growth potential with its
successful launch and strong sales. However, over time, the market growth rate for the New Beetle
declined, indicating that it has reached a mature stage in its product life cycle.

As a Cash Cow, the New Beetle generates steady cash flows for Volkswagen (VW) but has limited
growth potential. It has a significant market share and brand recognition, which allows VW to benefit
from economies of scale and maintain profitability. However, the market for the New Beetle may be
saturated, and its growth prospects may be limited.

To maintain the New Beetle's position as a Cash Cow, VW needs to focus on cost optimization, efficient
production, and effective marketing strategies to continue generating profits from the existing customer
base. Additionally, VW could explore opportunities to enhance the New Beetle's appeal through product
updates or adaptations to cater to changing consumer preferences and extend its product life cycle.
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5 C’s Analysis

Company

● Product: The New Beetle is a retro-styled car that is based on the original Volkswagen Beetle.
● Brand: Volkswagen is a well-known and respected brand with a strong reputation for quality and
reliability.
● Competitive advantage: The New Beetle's unique styling and design make it stand out from other
cars in its class.
● Challenges: The New Beetle is a niche product that may not appeal to a wide audience. It is also
more expensive than some of its competitors.

Customers

● Target market: The New Beetle is targeted at young, urban professionals who are looking for a
stylish and fun car.
● Customer needs: The New Beetle's target market is looking for a car that is stylish, fun to drive,
and reliable.
● Customer wants: The New Beetle's target market also wants a car that is unique and stands out
from the crowd.

Competitors

● Direct competitors: The New Beetle's direct competitors include the MINI Cooper and the Fiat
500.
● Indirect competitors: The New Beetle also competes with other small cars, such as the Honda Fit
and the Toyota Yaris.
● Competitive edge: The New Beetle's unique styling and design give it a competitive edge over its
rivals.

Collaborators

● Dealers: Volkswagen has a strong network of dealers who are able to sell and service the New
Beetle.
● Suppliers: Volkswagen has a strong relationship with its suppliers, who are able to provide the
company with the parts and materials it needs to produce the New Beetle.
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● Marketing partners: Volkswagen has partnered with a number of marketing agencies to promote
the New Beetle.

Climate

● Economic climate: The New Beetle was launched during a time of economic prosperity, which
helped to boost sales.
● Social climate: The New Beetle's retro styling appealed to the nostalgia of many consumers.
● Technological climate: The New Beetle was one of the first cars to be equipped with a number of
new technologies, such as airbags and anti-lock brakes.
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Conclusion
The case of the New Beetle showcases the successful revival of an iconic brand, Volkswagen, through the
reintroduction of a modernized version of its classic Beetle model. The New Beetle was able to capture
the attention and enthusiasm of consumers by combining nostalgia with contemporary design and
features.

Volkswagen recognized the value of leveraging its heritage and brand equity to create a unique selling
proposition in the highly competitive automotive market. By reintroducing the Beetle with a modern
twist, Volkswagen was able to appeal to a wide range of consumers, including those seeking a fun and
distinctive vehicle.

The case study highlights the importance of understanding consumer preferences and adapting to market
trends. Volkswagen identified the growing demand for retro-inspired designs and capitalized on it by
reimagining the Beetle with a contemporary aesthetic while preserving its iconic shape. This strategy
resonated with consumers, resulting in a successful relaunch and strong sales performance.

The New Beetle's marketing and branding efforts played a crucial role in its success. Volkswagen
effectively positioned the New Beetle as a lifestyle vehicle, targeting consumers who valued individuality
and self-expression. The brand created a sense of community and belonging among Beetle owners,
fostering a loyal customer base.

The reintroduction of the New Beetle was a strategic move by Volkswagen that paid off. The case study
demonstrates the power of leveraging brand heritage, understanding consumer preferences, and executing
effective marketing strategies. The success of the New Beetle not only boosted Volkswagen's sales and
brand image but also served as a testament to the enduring appeal of iconic designs.