AMB320 Advertising

Management

Assignment One: Volkswagen

Case Analysis

Prepared By: Emily Harvey (n8833257)

Tutor: Nicolas Pontes
Tutorial: Wed 3pm
Word Count: 1310
 1. Overview Of Situation

A 30% growth in the Indian automobile industry enticed Volkswagen to enter the Indian
market as a way of achieving their global ambition of becoming the worlds largest
automaker by 2018. However, due to Volkswagen late entrance to the Indian market,
consumers perceived the European vehicles as not suitable for Indian conditions and offered
little value for money as compared to already established competitors. To combat these
perceptions Volkswagen contracted the services of Doyle Dane Bernbach (DDB) Mudra
group to create a collection of creative strategies that communicated VWs brand values to
generate desirability for the brand and vehicles. The DDB Mudras strategies helped
increase brand awareness from 9% in 2009 to 37% in 2011 with consumers now seeing
Volkswagen as likeable, innovative, technically advanced and a good quality brand.

2. Statement Of Problem

Regardless of the success of DDB Mudras creative strategies there is the underlining issue
as to whether Volkswagens communication strategy successfully differentiates VW from key
competitors as a way of successfully increasing brand awareness and purchase intention
amongst target consumers, to help reach Volkswagens objective of being placed amongst
the top three market share holders by 2018.

3. Critical Factors Analysis

Key facts Explanation of relevance to problem

Purchase Volkswagen is the young progressives least preferred brand to purchase,
Intention however multiple advertising campaigns were target towards this segment
such as Polo and Vento. However, Volkswagen was noted as being the
most preferred brand to purchase amongst modern urban elite and new
business builders.
Volkswagen had the highest brand likeability compared to any other
corporate brand and was voted the 8th favourite company overall with a
average score of 7.7 out of 10; with the top two scores being 9 and 8.6
First purchase choice percentages were extremely low amongst
Volkswagen vehicles with the brands being the first choice of the consumer
Passat (2%); Jetta (4%); Touareg (1%), Vento (5%); Beetle (6%) and Polo
(13%) of the time.
Brand Need advertising message to stand out of the clutter and be heard and
Awareness seen by target audience to increase brand recall and awareness. Car
advertising was cluttered with established brands spending 10 billion
Rupes per annum on ad-spend.

Although Volkswagen was relaunching the Passat in 2011 ad spend for the
annum decreased from 1460 Rs. million in 2010 to 1104 Rs. Million in
2011, resulting in the share of voice attained by Volkswagen falling by more
then half; from 12% to 5%.

Excluding Polo, all other Volkswagens vehicles fell below the average
 scores of aided awareness and familiarity scores. However, Volkswagen
as a brand faired better with and average aided and unaided awareness
level; brand familiarity was still below average.

Differentiation VW and Skoda were direct competitors in three out of the six consumer
segments. With Skoda being perceived as the more up-market brand due
to its earlier establishment in India. Skoda corporate brand image also out
performed Volkswagen in terms of innovation, valuable and responsibility
all in which are core values of the VW brand. However, unlike Skoda VW
scored above average on all other components.

VW gradually introduced the innovative features from the high-end cars to

its lower end models.

Critical acclaim awards were given to:

Polo for Premium hatchback of the year 2010
Vento for Premium compact sedan of the year 2010
Passat for Green car of the year
Jetta for Executive car of the year

Segmentation Products are placed in all segments except for the lower end segments A
and B.
With the exclusion of the Lower D segment, most segments are
experiencing more purchases, helping to increase market share for each
segment. B+, Lower C and Upper C all saw growth of above 30,000
additional cars being sold over the year.

4. Alternative Solutions

Solution Advantages Disadvantages

1 Implement an Creates aspiration toward Popular culture in India is
advertising initiative Volkswagen, as popular public heavily flooded by an array
that connects figures will be linked to using of advertisers and
Volkswagen with Volkswagen vehicles. obtaining a brand
relevant pop culture ambassador of becoming a
such as the use of a major sponsor can be
Bollywood star or by extremely costly.
becoming a lead
A smaller reach of
sponsor of a cricket
advertisement may be a
team or tournament.
result if certain consumer
segments arent interested
in the popular culture used
to advertise through.

2 Include a greater Volkswagen would be able to Consumer may only

emphasis on critical differentiate itself from become interested in
acclaim awards, as a competitors by using its award Volkswagen car that have
way of increasing status to justify its top of class won awards.
brand awareness position.
 amongst Volkswagen Gives competitors a criteria
vehicles sheet in which they can
Purchase intention would be
compare their vehicles to in
encouraged by the prestige
advertisements to show
nature of owning a car that has
consumer that they also
recently been recognized as top
have the same or better
of it class.
specification as the award
winners.
Strengths brand perception that
Volkswagen produces quality
vehicles; which will have a flow on
affect to other vehicles in the
Volkswagen fleet.

Opportunity to target more

segments without having to create
individual campaigns to satisfy
their wants and needs.
3 Further increase the VW will no longer be in direct Price increase without the
price of Volkswagen competition with Skoda. increase of new technology
to place a greater will impact the price/quality
emphasis on the ratio resulting in a decline
exclusivity of the Helps to further build brand in sales and market share.
brand as a method of aspiration.
differentiation against
a lot easier to obtain
competitors.

4 Increase advertising More advertisement being High cost to compete in

expenditure to obtain scheduled will lead to better brand
a greater share of awareness and recall.
voice against
competitors.
Innovative advertisements
campaigns help create brand
connection as well as forming
brand preference.
cluttered car advertising.
Clutter with the category
may result in the wrong
objective being taken away
from the ad or the message
not being received at all
due to consumers being
bombarded with car
advertisements

5 Target more Segment is more likely to engage Cost to target more specific
appropriate consumer with purchasing of product. groups may be impacted
segments with higher by missing potential
purchase intention customers of large-scale
campaigns.
5. Recommended Course Of Action

Through the analysis of the above alternative solutions I believe the most feasible way of
assisting Volkswagen achieve its objective of being one of Indias top three market share
holder is by placing a greater advertising emphasis on the critical acclaim awards that a
selection of Volkswagen vehicles have achieved; as currently consumers are failing to
establish brand awareness for Volkswagens vehicles and only have brand recall.
As an initiative to keep the advertising tone and feel consistent, it is recommended that the
DDB Mudra group be re-enlisted to help in the creation of this campaign, as they were
responsible for the development of Volkswagens now distinctive personality within the
Indian market.
The critical acclaim campaign will need to consist of a collection of print and interactive
advertisement that are tasked at positioning critical award winners as the best purchase
choice of their segment class. An emphasis however, will also need to be placed on the
quality of Volkswagens remaining fleet of vehicles that are yet to acknowledged with an
award. For example an advertising message could take the form of: From the creator of the
premium hatchback of the year comes the equally impressive VW Touareg.
I believed that the critical acclaim campaign will assist in generating higher purchase
intention amongst segments that contain Volkswagen as consumer shopping in these
segments would now recognise Volkswagens vehicles as being a viable option due to the
consumers perception of quality that has been created through increasing the awareness of
Volkswagens award winning vehicles.