Volkswagen (VW) means ‘people car’ in German. It is the biggest automakers in German and second biggest automakers in the world. It founded by Ferdinand Porsche in Wolfsburg, Germany at 28 May 1937. Recently, VW has three cars in the top 10 list of best selling cars. They are Volkswagen Golf, Volkswagen Beetle, and Volkswagen Passat. Martin Winterkorn, the chairman of the board of management has pronouncements Strategy 2018.
The Strategy 2018 is focus on positioning the Volkswagen Group to overtake both Toyota and GM and become the world’s number one automaker by 2018 to become a global economic and environmental leader among automobile manufacturers and decreed that VW will sell 1 million cars in the United States by 2018. They have defined four goals that are intended to make VW the most successful and fascinating automaker the world by 2018. Firstly, VW intends to deploy intelligent innovations and technologies to become a world leader in customer satisfaction and quality. Nowadays, technology has become more and more high tech such as voice control to ask your smart phone to act the command you ordered.
Therefore, VW intends to make its car more and more high tech also to catch up with nowadays’ high tech life style within customer satisfaction and quality to stimulate the desire of buying. Secondly, the goal is to increase unit sales to more than 10 million vehicles a year; in particular, Volkswagen intends to capture an above-average share of the development of the major growth markets. While customers are satisfied with VW’s products, it can cause the sale increases. Sales increases will also affect to the share of VW. Thirdly, VW intends to increase its return on sales before tax to at least 8% so as to ensure that the Group’s solid financial position and ability to act are guaranteed even in difficult market periods.
Together with disciplined cost and investment management, these efforts play a major role in ensuring that VW reach their long-term profitability targets and safeguard solid long-term liquidity. Lastly, VW aims to become the top employer across all brands, companies and regions; this is necessary in order to build a first-class team. (Volkswagen annual report 2011) Goals are an observable and measurable end result having one or more objectives to be achieved within a more or less fixed timeframe. I think that the chairman of the board of management, Martin Winterkorn’s pronouncements about 2018 is a legitimate goal. It has many objectives to achieve. These objectives can also be the motivation to motivate employee to work.
To achieve these objectives, the company should give a clear and definite direction and command or either short term training to all employees for increase their knowledge and creative to make better the finished goods. The new and innovative ideas can attract new customer to consume with VW. Consequently, with the more creative ideas and more qualitative VW’s vehicles will improve the sales and enlarge their market.
Volkswagen has launched a new simple short tagline “Das Auto”, German for ‘The Car’. VW used the backdrop of to launch its new TV and print campaign in February, 2007’s Frankfurt Motor Show across Germany and we can be sure it will be spreading across the globe in no time. VW’s previous tagline was “Aus Liebe zum Automobil,” which was launched at the 2003 Frankfurt Show and translates into “For the love of the automobile.”
Compare the two tagline VW has used, ‘Das Auto’ is better than ‘Aus Liebe zum Automobil’ that is because ‘Das Auto’ translates to roughly the similar meaning in many of the world’s major languages. The tagline is meant to work in the same way as Coca-Cola is to cola soft-drinks and Hoover is to the vacuum cleaner. At the same way, Das Auto is to a car. (Motor Authority, Oct 3, 2007) Communication experts generally agree that the overall requirement of effective communication and persuasion are fixed and do not vary from country to country.
The same is true of components of the communication process: The marketer is the source of the message; the message must be encoded, conveyed via the appropriate channel (s), and decoded by a member of the target audience. Communication takes place only when the intended meaning transfers from the source to receiver. Four major difficulties can compromise an organization’s attempt to communicate with customer in any location. Firstly, the message may not get through to the intended recipient.
This problem may be the result of an advertiser’s lack of knowledge about appropriate media for reaching certain types of audiences. The similar wording may make people confuse with its real meaning. Secondly, the message may reach the target audience but may not be understood or may even be misunderstood. This can be the result of an inadequate understanding of the target audience’s level of sophistication or improper encoding.
Thirdly, the massage may reach the target audience and may be understood but still may not compel the recipient to take action. This could result from a lack of cultural knowledge about a target audience. And lastly, the effectiveness of the massage can be impaired by noise. Noise, in this case, is an external influence, such as competitive advertising, other sales personnel, or confusion at the receiving end, which can detract from the ultimate effectiveness of the communication. (Global Marketing, 2013) Global marketing is defined as individual and organizations using a global vision to effectively market goods and services across national boundaries.
To make the distinction, we can refer to global marketing standardization. Global marketing standardization presumes that the markets throughout the world are becoming more alike. Firms practicing global marketing standardization produce ‘globally standardized products’ to be sold the same way all over the world. Uniform production should enable companies to lower production and marketing costs and increase profits.
For example, Coca-cola, Colgate-Palmolive, and McDonald’s as successful global marketers. However, that the success of these three companies is really based on variation, not on offering the same product everywhere, McDonald’s, for example, changed its salad dressings and provides self-serve espresso for French tastes. It sells bulgogi burgers in South Korea and Falafel burger in Egypt.
It also offers different products to suit tastes in Germany (where it offers beer) and Japan (where it offer sake). Further, the fact that Coca-cola and Colgate- Palmolive sell some of their products in more than 160 countries does not signify that they have adopted a high degree of standardization for all their products globally. Only three Coca-cola brands are standardized, and one of them, sprite, has a different formulation in Japan. (Global Marketing, 2013)
The key question for global marketers is whether the specific adverting message and media strategy must be changed from region to region or country to country because of environmental requirements. Proponents of the ‘one world, one voice’ approach to global advertising believe that the era of the global village has arrived and that tastes and preferences are converging worldwide. According to the standardization argument, people everywhere want the same products for the same reasons. This means that companies can achieve significant economies of scale by unifying advertising around the globe.
(Global Marketing, 2013) Another global marketing strategy is to maintain the same basic product but alter the promotional strategies which call adapting. Adapting is a communication campaign consists of altering its different components to the characteristics of each country. The company designs a specific communication for each target market, the chosen stance for these markets can be different to the one used in the domestic market. The factor of using adapting of communication is because the differences of social cultural. Alongside a tendency towards corresponding behaviors and profiles analyzed on certain markets and products, many social-cultural differences still remain.
Individuals across the world differentiate themselves by their needs (separate to their basic needs) and by their contentment. Consumers across the world have different habits of behavior and consumption and use, which mean a different reaction to advertisements. This observation is confirmed in countries within the borders of Europe, or those countries where the existence of nationalities and micro-cultures does not favor a standardized advertising campaign. In this context, it is important to alter adverts and communication in general, so as to meet the appropriate requirements for each consumer.
(Global Marketing, 2013) Advertisers who prefer the localized approach are skeptical of the global village argument. Instead, they assert that consumers still differ from country to country and must be reached by advertising tailored to their respective countries. Proponents of localization point out that most blunders occur because advertisers have failed to understand-and adapt to- foreign cultures. (Global Marketing, 2013) In VW’s advertising, the ‘Das Auto’ tagline encourages potential buyers to associate the brand with its German heritage, ‘The Car’. It is the right approach for VW.
VW use the standardization marketing strategy to do their advertising around the world. When people see the tagline ‘Das Auto’ will direct call to mind and imaging to Volkswagen ‘The Car’. So, uses the same tagline in all country advertising, people will not get consume which is the actual tagline of Volkswagen. Rival present the strongest competitive threat to VW’s strategic plans is Toyota. Toyota is a Japan based company that deals in automobiles and has its headquarters in Aichi, Japan. First time it introduced its product Corona in the United State of America in 1965.
By the 70’s, Toyota was the best-selling import brand in the United State of America. During the 80’s, it started manufacturing vehicles in the United State of America. In 2006, it had globally become the second largest car seller and third largest car sellers in the United State of America having more than fifteen percent market share. It is estimated that by 2008 it is going to be the number one car producer and seller both in the United State of America and across the world. United State of America is the top market to the Toyota.
In 2010, Toyota was declared as the largest manufacturer of automobiles in the world in terms of production. It is a tremendously successful company.
This profound success of Toyota is associated with its most proficient market strategy. The case of Toyota notably proves that how important is market strategy in the life of a company to be a market leader. Toyota has its own top selling cars in the list. They are Toyota Camry, Toyota Corollas, and Toyota Prius. In 2011, the goal looked near: Not Winterkorn, but the most powerful earthquakes had happened in Japan, it had stopped Toyota’s developing. And half a year later, torrential rains in Thailand drowned Toyota again. Toyota has faced serious crack down to these natural disasters. Now, Toyota is back.
A spokesman for New York based on Toyota North America, Javier Moreno said that, they have recovered greatly from the earthquake and tsunami. Toyota is back and it looking good and stronger than ever. Meanwhile, Volkswagen is faced with a little trouble at home and cannot treat Toyota lightly. Interesting, actually, 10 million vehicles a year never was the goal for Volkswagen. The goal was, as related to me by a Volkswagen top executive who was in the meetings, Volkswagen want to be better than Toyota, not just in units, but in profitability, innovation, customer satisfaction, everything, no later than 2018.
The similar strategy of Toyota is threatened to Volkswagen. Volkswagen should use its strong point to improve their products and services to cement and expend their market to increase the sales and more closer to the goal – Strategies 18. In conclusion, Volkswagen is successful mainly that is because of manufacturing automobile parts, rather than waiting for the manufacture of a new car and launching it. Most of the major brands that they own were purchased by them.
People were to some extent aware of those brands. But they did not hold much bigger market value. Nowadays, people are awake with their quality and comfortable designed product. Especially to the Beetle, it has a long time period of history and few versions to remind people how long it had been go through.
References: Global Marketing, Seventh Edition, Warren J. Keegan & Mark. C. Green Marketing By Charles W. Lamb, Joseph F. Hair, Jr., Carl D. MacDaniel http://www.motorauthority.com/news/1026205_vws-new-tagline-das-auto http://www.ukessays.com/essays/education/international-marketing-stretegy-of-volkswagen-group-of-companies.php
Volkswagen Aims for the top In May 2011, production began at Volkswagen’s new $ 1 billion assembly plant in Chattanooga, Tennessee. The Passat Sedans coming off the line are a striking symbol of the German automaker’s ambitious strategic goal: Volkswagen CEO Martin Winterkorn intends to overtake both Toyota and GM and become the world’s number one automaker by 2018 and has decreed that VW will sell 1 million cars in the United States by 2018.
Volkswagen executives acknowledge that if they are triple the number of vehicles sold in the United States they must make cars that appeal to American drivers. A potential stumbling block in Volkswagen’s quest for global leadership in the auto industry is the fact that the company unveiled new versions of several key vehicles within the span of just a few months.
Volkswagen got a few of product strategy to expand its market, such as Jetta, Beetle, and Passat. Christoph Sturmer is a director at HIS Global Insight consultancy. Summarizing the strategic challenges facing Volkswagen, he said, ‘VW has to get it right. Get adjusted to American standards of what on-the –road quality is. It is a big challenge for a company so deep-dyed German.’
The following criteria will form the basis of allocation of marks for this task:
Criteria| Marks Allocated| Marks Awarded| Essay formats – introduction, conclusion, layout, reference list, appendices, suitable academic style and tone of writing.| 4| | Content – Exhibit understanding of concepts. Able to identify and highlight the differences in the strategies. Smooth flow of thoughts, linkages, number of examples, implications and etc.| 12| | Quality of the work – clear development and organisation of ideas, sources of data and info, correct use of Harvard/APA style referencing and presentation of supporting materials and error-free text and grammar. | 4| |