Beetle Case Study Essay
The New Beetle Question 1: Why was the current advertising campaign a success? In 1993 Volkswagen had record low sales but by the end of 1997 the VW brand had sold 137,885 cars. That was an increase of 178% from it’s 1993 slump. It is safe to say that the the ’94 relaunch of VW on the American Market was a success. The “Drivers Wanted” campaign, developed by Arnold Communications, I believe was successful as a result of excellent market research and positioning. Arnold Communications undertook extensive market research in order to understand the modern VW buyer and their position in the industry.
They set about collecting primary data through extensive interviews, visiting 95 of the top VW dealers and drving VX over 50,000 miles to experience the cars for themselves. Recollecting primary data was probably length but essential in my opinion as the modern car buyer and extent of affiliation to the VW brand may have change since the last time VW commission research. Through this up to date research it was now possible for VW to realistically define the market segments and to develop the most appropriate segment for them.
Hollensen 2007 suggests characteristics in which effective IMS (international market segmentation) can be based, these include general characteristics such as demography, education, economy and also specific characteristics such as culture, lifestyle, personality and attitudes. Arnold Communications found from their analysis that VW consumers in general were younger, slightly more affluent and more educated than the average car buyer. But they found specifically, and more interesting that they all shared very similar attitudes.
They were seen to be adventurous, experimenters, self-sufficient, creative, well informed and wanted to get the most out of life. The research of VW within the industry showed how the brand was perceived. It was appealing for its affordability and approachability versus other European car brands and for its unique and indidvidualistic image versus Japanese cars. VW therefore repositioned their product and the brand essence through the “Drivers Wanted” campaign. This campaign reached its young and fun, yet well informed and educated consumer by appealling both rationally and emotionally to them.
Highlighting its affordable German engineering through a campaign displaying a more unique, more connected, different lifestyle. Question 2: What is the meaning of the VW Brand? What is the appeal of the new Beetle? The essence behind the VW brand very well displayed through the Drivers Wanted campaign. The campaign succeeded in positioning VW as a rational and emotional choice for a younger consumer. Highlighting in particular its inclusivity, affordibilty, unique style/lifestyle of its consumer and top of the line German engineering. It had as much statement as a premium car but at the prices of a standard.
The new Beetles appeal was also very emotive, drawing on the huge amount of nostalgia that still existed from the its original hay day in 50’s and 60’s America where the car acheived near cult status. After huge public reaction to the display of a prototype new Beetle in the 1994 North American International Auto Show in Detroit, VW were compelled to reintroduce this car to the market. Again Arnold Communications undertook a significant amount of Primary research to truely gauge what it was that caused such a emotional reaction and draw to the Beetle.
They used primary research techniques such as nation wide man to man interviews on the street with a wide and diverse range of people. They also interviewed industrial designers and sociologists to capture more perspectives on what the cars appeal may be. The interviews revealed a broad spectrum of potential consumers. The plus 40 or baby boomer market had a strong nostalgic draw to the car. The younger market still had an emotional connection to car through the Beetles strong hertitage. They perceived the car to be a statement of individulaity, fun, daring, for someone who is daring and not snobbish.
Through interviews with industrial designers they discovered peoples natural attraction and assumptions to circular shapes. Round shapes conger up inviting, friendly images. They represent completeness, wholeness that mant are draw to. The sociologists suggested that the “Bug” phenomenon in the 60’s was seen as countercultural and that small is beautiful. These values could still be leveraged in modern American society where there is a move to standarize. The Beetle could still be counterculatural and used in the modern quest for individuality. Question 3: How would you evaluate the different positioning options?
Hollensen 2007 states the third phase in the IMS model is the screening of the markets. Following Arnold Communications research, VW had assessed and developed their potential markets. Now was the time to select and screen the best of the segment opportunities. VW had deduced that their two main target markets would be 18 to 34 year olds and the baby boomers in the over 40’s range. Both of these markets, much like the VW research showed similar persnality traits. However, due to VW’s lack of budget it was not possible to target both markets. VW had to decide where to position the new Beetle.
For the younger market, utilising the successful Drivers Wanted campaign and therefore putting the Beetle under the VW umberalla. Or for the baby boomers, by developing a seperate campaign to fully utilise the nostalgic leverage and to use the Beetle as a Hero brand for VW. 18 to 34 year olds have been a successful for the drivers wanted campaign They connect with the fun, confident, alternative lifestyle that the campaign potrays The Beetle’s hertitage resonates with the modern young american The main disadvantage to this market is the high price range of the new Beetle.
The current industry price range for the small car segment was between $11,035 to $17,239. The Beetle, at a base of $15,200, would be top of the price range between $17 to $18,000. With the potential to out price the majority of people within this target. The advantages of targeting the baby boomers market would be: Utilising all the strong nostalgic emotion that encouraged the production of the Beetle in the first place. This target market is more affluent and therefore would be able to afford the high price tag.
The disadvantages would be: The changing preference to larger cars within this age bracket, such as SUVs and Pick-ups. Personally, I feel Beetle ultimately made the wrong decision to target baby boomers. I dont believe the plus 40’s bracket would have been as sustainable versus the 18 to 34’s, as there is not as much growth. I think because of their budget constraints they should have utilised the already successful Drivers Wanted campaign, which showed high levels of unaided awareness and loyalty.
Also through their initial VW research, it showed the younger VW market to be more affluent. It also proved successful in the launch of the New Passat which was a high price tag car at $20,000, and worked to strengthen VW image despite going against the affordability value. Question 4: How will the pricing and media selection choices be influenced by the positioning of the car? The positioning of the car in either the 18 to 34 year old market or the baby boomer market has an effect on the pricing and media selection.
The pricing of the car as mentioned in the case study was always an issue of contention. The high base price of the beetle ment that its retail price range would be between $17 -18,000. The younger market would potentially be priced out at the higher range and there would also be potential for consumers of both segments to move up to a medium size car in a similar price range. This would open up the Beetle industry competitors. If priced too low it was feared the Beetle would not be attractive to dealers. The media in which the Beetle would be promoted would also be affected.
The budget was stated to be 25% of the an average car launch budget. The options were between TV or Print. Tv was desired as it would reach a more broader customer base. While Print was more specific and a much cheaper option. Should the Beetle have elected TV as their main media, the positioning would have affected the choice of TV programmes, channels and potentially times in which the commercials would have been aired. The print option would have been cheaper for the new Beetles budget and also would have had a more specific audience.
The types of publications they would choose would depend on the publications circulation figures and target market. Exhibit 14 of the case study displays tools such as Simmons Descriptors and J. D. Powers Driver Profile for defining the target markets of the magazines. This additional information regarding each publication makes the task of reaching either of the Beetles potential markets vastly easier. Bibliography Hollensen, Svend (2007), Global Marketing: A Decision-Oriented Approach (4th ed. ). London: Prentice Hall.