Volkswagen in India

Volkswagen entered India in 2007 and for the first two years, it kept a low profile and tested the waters in the country with its international models Jetta and Passat which were in the executive and premium segment in India. Realising the potential in the Indian market, Volkswagen in 2009 decided to go full throttle promoting and marketing brand Volkswagen. Challenge

At that time the brand awareness for Volkswagen was a meager 9 per cent. Indian automobile market at that time was already a cluttered one with many international players entering the market and Volkswagen was a late entrant. The biggest challenge for the brand at that time was to increase its brand awareness and get people talking about it. Lutz Kothe, Head of Marketing and PR, Volkswagen Passenger Cars, Volkswagen Group Sales India says, “The challenge for brand building as a late entrant into any market is simultaneously a risk and an opportunity”.

The risk is in understanding the consumer’s rational and emotional needs and packaging the same with the profile of the brand and the product without building on the brand heritage. The opportunity, he said, is that one can start with a blank sheet of paper and keep growing while building aspirations around it as well. Strategy and Implementation

In 2009, Kothe took the reins of the Volkswagen Brand in India and the responsibility to make India talk about it. Kothe focused on a key consumer insight in the Indian auto sector: While features are important, brands that sell are the ones people talk about. And thus, Volkswagen’s strategy has been to focus on one big idea that creates big buzz and get people talking about the brand. Talking about the strategy, Kothe says, “If I throw a coin at you, you’ll catch it, if I throw ten, you’ll catch none”. Hence, Volkswagen decided to start with an idea that would get people talking and create a buzz. And that gave way to the first print roadblock in India in 2009.

The key newspapers displaying only Volkswagen cars (Beetle, Jetta and Taureg) one after the other, immediately created huge awareness for the brand. The first Roadblock positioned Volkswagen as an innovative brand at the same time it made a statement that the brand is serious about the Indian market. “We want to tell consumers that brands come and go but we are here to stay and we’ll be here forever,” says Kothe. The company shares that after the first roadblock (November 11, 2009), within two hours, Volkswagen became No.1 on Google search. It got people interested in the brand and the brand awareness which was only eight per cent in 2009 went upto 18 per cent. Hit hard once and then go selective

So the star strategy behind the Volkswagen success story in India is: Hit once hard and big to create awareness and then go very selective. For every new launch or campaign be it the Polo die-cut for Polo, the talking newspaper for the Vento, painting the newspapers blue for the Passat’s Think Blue campaign or the Silver Jacket for Jetta, Volkswagen has followed the same strategy. Kothe says, “We start with newspapers and then media wise go only into digital media or do TVCs but on very selective channels. For Jetta we did the silver jacket in print but we also had a TVC; we chose the channels where we knew exactly the TG is.”

Owing to this strategy (of first dominating and then going selective on media) helped making Polo and Vento the most awaited launches of 2010. In 2011, Jetta too was much awaited, courtesy the ‘Silver Jacket’ campaign in the newspapers. Clutter breaking ideas

Clutter breaking ideas and right execution is another strategy that has played an important role in Volkswagen’s success in India. “One has to go around with open eyes to have fantastic ideas and that’s what I did in India,” adds Kothe. Here is an interesting story on how the idea for one of the most talked about campaign of the Volkswagen brand came up: It was January 2010, coming back from the Delhi Autoexpo, Kothe and one of his colleagues were waiting for the flight at the Delhi Airport which was delayed by couple of hours.

So to kill the extra time Kothe decided to wear his thinking cap and brainstorm for some ideas with his colleague for the launch of Polo which was round the corner. After struggling for some time Kothe asked his colleague, “Has there ever been a newspaper with a hole in form of a car in India or in the world?” The person replied, “ I don’t understand your question. I don’t know where are you heading to?” Kothe picked up a newspaper and ripped in it sort of a car hole with his hand. That’s how the idea for the Volkswagen Polo’s die-cut campaign came up.

In March that year, Volkswagen made a car shape hole in 4.2 million copies of daily newspaper Times of India. Interestingly, the big buzz marketing campaigns by the company gives an impression that it has an extravagant marketing budget. But Kothe disagrees with that and he shared that Volkswagen is not even among the top 10 automobile spenders in India. “We are just doing it differently and we have a huge impact, so everybody assumes that we have the biggest marketing and PR budget in the world which is not true,” he adds. Targetting mass market with premium image

Volkswagen has focused on targeting the mass market (the compact and the mid-size segment) in India. The strategy seems appropriate also considering that the largest sales of the industry comes from the mass market. And thus to capture this market well the people’s car (the meaning of the German name Volkswagen) launched its first people’s car for India _ the Polo in the A2 segment - in Q1 of 2010. This was followed by the launch of mid market car Vento in September 2010. Both Polo and Vento have been the key models driving the numbers for Volkswagen and contribute the maximum to the company’s top lines.

An interesting point to note here is that mass market – the A2 and A3 segments are the biggest drivers of the automobile sector in India and majority of the automakers are targeting this segment. Volkswagen too decided to target that market but the challenge was to differentiate itself in a space that was cluttered with brands. There are more than 40 models from 14 automakers in the A2 and the A3 segment combined. And thus leveraging on its legacy, Volkswagen has positioned itself as an upper premium brand in each segment it operates, yet kept the price competitive. The strategy has been to reach the masses without losing the premium image.

The strategy has helped Volkswagen strengthen its position and make inroads in the Indian market. Additionally, the brand has Volkswagen Jetta and Volkswagen Passat in the higher end segment and the Beetle which targets a niche segment. Results

Volkswagen’s strategies worked well for the brand and it became the talk of the town with its innovative and big buzz marketing campaigns and the increasing top lines. For the record: The brand awareness of Volkswagen shot up by a whopping 550 per cent in the last two years and it stands at 44 per cent (as of October 2011) as against 8 per cent in 2009. And the impact is reflected in the company’s sales too. Sample this: In the year 2009 (Jan-Dec), Volkswagen sold 3,039 units, in 2010 (Jan-Dec) the sales were at 32,627 units a whopping over 1000 per cent jump in just one years’ time. In the first 10 months (Jan-Oct) of 2011 the brand has already sold 66,086 units.