Volkswagen Beetle.

Market Segmentation

Deciding on a target segment.

Volkswagen divided their mass market into different demographic groups which are
classified by an age range. Markets in each country are mainly divided by demographic
factors. Under normal circumstances, marketing executives usually target a market
segment based on how appealing their product would be to the people in that segment.
However, Volkswagen executives decided to take a gamble and target it at the mass
market. They knew when marketing the new beetle that age did not matter. They knew
that the younger generation would find the beetle’s new design appealing and that the
older generation would feel nostalgia with this new beetle. Their business gamble
actually did pay off, and they succeeded in gaining consumers across different
demographic groups.

Profile of the target market segments.

As mentioned above, the Volkswagen beetle appeals to people across the many
different marketing segments. An automobile review website quoted the new Beetle’s
target buyers as “ men, women, young people or people who are simply young at
heart”. The new beetle is marketed as a product that is classy, unique and economical
(in certain parts of the world). The product also appeals to people who are fun loving,
unique and want to be different from everyone else.

Volkswagen has done this by appealing to consumers in different consumer groups.

Each of these groups has a different image of the Beetle but they are all similar in the
fact that they are attracted to the Beetle.
For its consumers, the only car that would be in the same category as the beetle and
would as such pose competition is the Mini Cooper. For the younger generation, they
would also be attracted the mini’s stylish design and its compactness and its
exceptional performance for a car of its size. Not to mention the fact that all the latest
Mini Cooper’s come in a racing stripe paint job. For the older generation, the Mini
Cooper also brings about a sense of nostalgia, especially since the older models have
been featured in Mr Bean and the movie The Italian Job (the older one). Volkswagen,
however, manages to stay competitive by staying true to its brand promise and offering
its customers what was promised in its advertising campaigns.

Untapped marketing segments.

Due to the extensiveness of Volkswagen’s marketing strategies and the mass appeal of
its product, mainly due to its history, it appeals to most people. Thus, very few market
segments are not targeted. For example, the Volkswagen is not targeted at the highly
affluent. This is because the people in this segment seek products that represent luxury;
car interiors made from expensive upholstery, super advanced engines and designs
that speak ‘rich’. Also in Singapore, the Beetle is not targeted at consumers who are
looking for cheaper, more family oriented cars. Brands such as Cheery and Geely and
Tata, appeal to these consumers with their products. Volkswagen has created an image
with its Beetle. While that image may not necessarily fall under the categories stated
above, Volkswagen has been able to make substantial revenue from the sales of it
Beetle without having to compromise that image.

Segmentation strategy used and the rationale behind it.

Volkswagen’s executives have used the demographic segmentation as a means of

segmenting their consumer market. They have targeted their new Volkswagen Beetle at
both consumers from Gen Y and Gen X. They have done this by deferring their
advertising strategies in trying to reach out to their market segments. For advertising to
consumers of Gen Y, Volkswagen tried to show that the new Beetle was newer and
more modern then its predecessor. However, when marketing it to those from Gen X,
they tried to bring out the feelings of nostalgia in the consumers. To remember the old
times and how good they were, and that these consumers could actually rekindle that
feeling by buying the new Beetle. By using different marketing strategies for different
demographic segments, Volkswagen has actually succeeded in reaching out to a wider
group of consumers with the same, un-modified product and gained a wider consumer
base for the Volkswagen Beetle.

Positioning strategy adopted.

Volkswagen has adopted the more for less strategy with the new Beetle. Volkswagen
promises their consumers uniqueness and managed to deliver that due to the unique
chassis design of the Beetle, which is very different from all other cars in the market.
This gives their customers that “stand out from the crowd” feeling while still pricing their
cars relatively cheaper than other cars in the same market. Customers get that feeling
of being the unique individual when they are on the roads due to the fact that while they
see the same nissan’, toyota’s, and hyundai’s around them, they get a sense of
exclusivity from being the only beetle in that area. While having this unique design, the
Beetle still offers the same features, in terms of performance and safety,that are also
offered by cars in the same price range. Thus, Volkswagen manages to deliver products
to its consumers, which have an edge over its competition and still price it relatively
cheaper than other products in the same price range. And all of these factors give the
customer a feeling that they have made a worthwhile investment in their Beetle. In the
following graphs, the Beetle’s position as a product in the market is shown
Beetle
Volkswagen Beetle