Skoda Auto Motors: Marketing Assignment Essay
Skoda was founded in 1895 by a mechanic named Vaclav Laurin and the book-seller Vaclav Klement, both bicycle enthusiasts, started manufacturing bicycles of their own design ( Skoda Auto website 21/3/11) Motor bikes were the only sort of vehicles with engines as cars would not be invented until 1905. After reading the history of the company on the Skoda site the two Czech inventors of the Skoda motorcycles first automobile was a great success. The architecture of their first car became a Czech classic and soon found themselves in the position to distribute on a widescale.
It soon exceeded even a private company and in 1907 the founders of the Company initiated conversion to a joint-stock company. ( Scoda facebook) Scoda as a joint-company continued to excel on a national scale even throughout the world war as it produced engines for the planes and trucks of the armed forces. In 1925 Lauren and Klement joined with Pilsen Skoda Co where together they managed to make new models of cars which were huge successes in the Czech republic and internationally as they were known for their reliability.
In 1989 Skoda decided to join forces with another huge automobile company so that they both could secure international competitiveness within the company. In 1990 Skoda motors decided on a joint venture with the German group Volkswagen and began operating in April 16th 1991. ( www. scoda-auto. com ). Scoda and Volkswagen together became created cars known for reliability and safety becoming a healthy competitor in their particular market. To this day Scoda cars tend to be a great success in Ireland as they are very popular with farmers and people commuting long distances.
In 2000 the company was taken over wholly by the Volkswagen group. I have been promoting Skoda for the last three years and a lot of money is spent on advertising and market research and has been a great success especially since the review on Top Gear for the Skoda Yeti which was outstanding. After giving the marketing manager of Skoda Ireland a call for information on the brand he said “The review of the Skoda Yeti on Top Gear has has almost trebled the sales of that particular model in the UK and Ireland alone. We couldn’t have put a price on the review it was so valuable” ( Ray Main Competitors There are many competitors with Scoda as there are so many different car companies at the moment but the two main competitors are Audi and BMW as they produce similar models of cars to a similar target market but at a higher price than Skoda as Audi and BMW are seen as a more expensive brand. To improve its performance in the competitive car market, Skoda management needed to assess its brand positioning.
Brand positioning means establishing a distinctive image for the brand compared to competing brands. Only then could it grow from being a small player. ( http://www. thetimes100. co. uk/downloads/skoda/skoda_13_full. pdf ). Skoda used a SWOT analysis to take advantage in the market they were in and to analyse the opportunities and threats for the company. Strengths To identify the strengths, Skoda carried out research by asking customers directly what they thought about their cars. Over 20,000 surveys have been done by a market research team called JD Power.
Skoda has been in the top five manufacturers in this survey for the last 13 years! In Top Gear’s 2007 customer satisfaction survey, 56,000 viewers gave their opinions on 152 models and voted Skoda the ‘number 1 car maker’. Skoda’s Octavia model has also won the 2008 Auto Express Driver Power ‘Best Car’. ( www. thetimes100. co. uk ) Weaknesses After the swot analysis, Skoda were able to see the areas within the company that needed to be addressed which included the brand positioning which was particularly low compared to other big players in the market. Skoda has only 1. 7% market share. This made it a very small player in the market for cars. The main issue it needed to address was: how did Skoda fit into this highly competitive, fragmented market? This weakness was partly due to out-dated perceptions of the brand. (www. thetimes100. co. uk). These related to cars in the past that were poorly designed and assembled compared to other competitors. This poor perception that Skoda had was decreasing sales as most car buyers care mostly about image.
Once Volkswagen took whole ownership of the Skoda brand this negative image was reversed for the best. A survey done in 2006 still showed that Skoda had a neutral image within their target market. ( Skoda manual from work ). “ our image didn’t change for the best until Skoda decided to stop being so defensive minded about their promotional campaigns and began promoting Scoda with a brand new image of a car that was as stylish and reliable as the other main competitors” ( Ray marketing manager, Skoda ) Opportunities Opportunities that arise can be good or bad for the company depending on how we approach it. ( Ray Skoda ). The swot analysis showed that big brands such as BMW have sayings that emphasise what their companies ethos is all about ( the ultimate driving machine, BMW ) Skoda decided to focus on their “happy Skoda customers” as their opportunity just to differentiate them from the competition. It is now Skodas unique selling point within the industry.