Positioning Strategies for the New Beetle

Q1. What positioning alternatives were available to Liz Vanzura and her team? What were the advantages and disadvantages of each?

Arnold group’s research reveals that the target market for the new Beetle encompassed both Baby Boomers and the younger 18 to 34 year olds (Gen X’ers). This includes a very diverse group of people, but their research also showed that potential drivers shared some common characteristics like confidence, individualism and a desire to be the center of attention.

This means that there are two primary positioning strategies available to Vanzura and her team.

1.Target the younger, Gen X audience:The New Beetle target market encompasses young people (18-34), who are single or married without children, who having unique and active lifestyles. Advantages:

•The design of the new Beetle (honest, simple, reliable, original, safe and high performance car) appeals to the Gen X audience.

•They connect with the “fun” aspect of the car with its unique design cues like the use of circular shapes (representing human forms like the eyes, heads and the “smiling face” stance). They make the car “personable”, human” and “individual” – the Gen-X’ers can relate to that. •The car’s heritage in spirit should also connect emotionally with the Gen X audience. •The “Drivers Wanted” campaign applies directly to this audience. VW can continue promoting this car to the Gen X’ers under this umbrella. Promotions like the Trek/K2 are very apt for this audience and the features of the Car

Disadvantages:•The pricing of the car ($15,000+) may put the car out of the “affordability” range of the Gen X’ers.

2.Target the Baby Boomers:Advantages:•The Baby Boomers are financially stable, so they will be able to afford the higher price tag ($15,000+) of the new Beetle. •They have a strong emotional connection with the previous Beetle. The new Beetle rekindles their cherished memories of the old Beetle (their “first car”, their “honey moon car” etc). This makes this logical to position the new Beetle as a “nostalgia” play. •Baby Boomers can be approached well through the print media (magazines or newspaper). The advertising costs are generally lower with the print medium than TV, so the agencies can advertise more effectively and with higher frequency. •The “Affordable German engineering” concept relates very well to this targeting market.

Disadvantages:•Consumer trends among the Baby Boomers reveal change in preference to larger cars, such as sedans, SUVs, and pick-ups.

3.Target both Gen-X and Baby Boomers:Advantages:•Target market becomes broader. This has the potential to bring in a lot more new customers. Disadvantages:•Advertising would have to reach a broader audience. This would imply increased advertising costs (which are already stretched thin). •Lack-of-focus means the advertising message could get drowned.

Q2. What are the salient features of the VW brand (positive & negative)?

A mind map of Volkswagen brand would look like this:

Features of the VW brand PositiveFeatures of the VW brand (Negative)German engineeringImage of “Not for everyone”Affordable. Occasional quality problemsReliable, dependablebuilt in Mexico (some cars)Good craftsmanship, build quality.High repair costsEconomical transport with style, individuality.Good resale values.Fun to Drive, great handling.Sophisticated technologyAttractive styling. Contemporary yet retro“Cool”Great advertising campaigns, memorable commercials, tag lines. Connects with women and younger peopleNostalgia of the old Beetle

Q3. In your opinion, what positioning did Vanzura and her team select? Write out the formal positioning statement that you believe they selected.

Vanzura and her team selected to target the New Beetle to the Baby Boomers with a value proposition of “indulging in Nostalgia”. The “promise” in this positioning is the value of this Nostalgia, the memories it brings back and the chance to relive the lifestyle and enjoyments of old.

A formal positioning statement appropriate to this targeting would be:

For baby boomers, the New Beetle is the car that lets you relive the cherished memories of the past and brings out your personality because of its revolutionary “retro” design in a contemporary, fun-to-drive package.