Critical Issues / Background Data: Volkswagen’s challenge is to launch the “New Beetle” with a smaller than typical budget , identify target market segments, and determine the unique value proposition and positioning of the “New Beetle” with effective pricing in the small car category to determine the most effective strategy for the market launch.
VW & Beetle Brand Perceptions: The VW brand has had issues, including customer perception of poor quality and reliability, low brand awareness, and eroding dealer confidence due to poor sales. The strength of the brand appears to be the combination of German engineering and a fun driving experience. Newer research shows that folks that purchase VWs cut across demographic lines.
The common theme amongst beetle drivers is confidence, quest for individuality, a love of driving, and an appreciation for German engineering. The beetle is viewed with nostalgia and positive memories by the Baby Boomer generation. It is therefore up to Volkswagen to take this research and apply it to their marketing campaign to attract their desired target market.
Target Market: Volkswagen wants to optimize their market while targeting specific Various venues appeal to different demographics and one of the demographics Volkswagen is hoping to attract are the baby boomers that have fond memories of the original beetle. For the baby boomers the price tag is not likely to be a deterrent as they will likely be in their peak earning years. Volkswagen’s responsibility is to recreate this nostalgia towards the beetle while creating a new edge that makes the baby boomers feel young again.
That feeling can be recreated by focusing on its superior handling ability and the driver that pushes the boundaries of driving. The younger generation of 18 – 34 year olds represents the other target market Volkswagen needs to usher in a new era of Volkswagen drivers.
Recommendations: Volkswagen should limit their advertising budget towards the baby boomers as it may represent an inherent market with little need to goad the baby boomers into buying another beetle and instead Volkswagen should target the younger generation as the face of the new beetle because the image Volkswagen is looking to evoke is one of energy and vigor. Volkswagen needs to portray youth as the driving force behind the Volkswagen image to reinvigorate the brand on more than one level.
The younger drivers that express themselves with this bold statement further show their confidence and ability to assert themselves amongst drivers just as Volkswagen looks to do with the U.S. automotive industry. As a new generation grows up with the beetle it helps build long term brand equity. Therefore as the generation’s taste change they may look to a Passat or Jetta. The younger generation is still aware of the nostalgia that the original beetle created and the memories that were tied to it and as they seek new adventures in their lives the beetle provides them with the same opportunity.
Plan : The most effective engine for growth depends on Volkswagen’s ability to target the 18 – 34 year old demographic. The next question Volkswagen has to address is how to reach this demographic.
The limited budget that Volkswagen is working with forces them to pursue more creative options however in order to achieve widespread excitement quickly television is known to be the quickest way to gain product awareness; therefore specifically targeting timings and programs that the demographic tune into may be necessary initially to blitz the market and once the awareness is created Volkswagen can have dealerships use salespeople to drive test cars near areas that are conducive to college students and young professionals.
This would be an inexpensive way to market the new beetle while visually capturing their imagination. Volkswagen could then rely on the television air time to sell its benefits to draw younger drivers in to the dealerships.