Group 8

Volkswagen India --Marketing

Strategy in India
 Volkswagen in German language means people’s car was founded 75 year years ago by
Ferdinand Porsche at Wolfsburg, Germany with the slogan- Das Auto ("The Car"). It serves 153
countries with - Audi, Bugatti, Bentley, Lamborghini, Porsche, SEAT, Skoda, Volkswagen and
Scania CVas subsidiaries.

Volkswagen products are well known by consumers for German engineering at an affordable
price. In the mid 1970's Volkswagen made a fundamental shift in their efforts from
manufacturing cars that were solely economical to cars that can out-perform others in their
weight class. Today, this focus is in full effect as customers demand performance along with
modern options that improve the driving experience.

The marketing mix of Volkswagen is not something unique than the other competitors, but the
size of it makes the difference. In terms of products, Volkswagen gives a large range of products;
they are presented in the following order: Up, Polo, Golf, Beetle, Jetta, Passat, Passat CC,
Sirocco, Tiguan, Eos, Touran, Sharan, Touareg, Phaeton. The order of the models presented in
the table starts from the least exclusivist with not many optional variety of choice for customers,
to the most exclusivist and larger choices for extra features in the car.

Volkswagen in one of the most organized car companies worldwide. It is the strongest company
from the economical perspective, with a continuous increase. Each Volkswagen model has broad
optional features possibilities for a customer to choose, which makes it be market oriented,
leaving the customer choosing the “car of his/her dreams”. It has a strong internal financial
power, because of the Volkswagen Portfolio Company of which acquired many brand with high
demand, or extremely exclusivists (Bentley, Lamborghini, Bugatti).

The prices of a car can be from affordable to expensive, depending on the level of exclusivity,
size, options, and the power of the engine (performances). However, in comparison with the
other brands within the Volkswagen portfolio, the prices are slightly cheaper (but not much, as a
large lowering would have been destroying the entire car industry). Of course, it is important to
note that each product line of a specific model has several options for the size of engine, which
affects the performance and the price (the bigger the engine and performance, the higher the
price).

In terms of promotion, as each car brand, much advertising should exist in order to attract
customers, and to gain customer confidence at the same time. Volkswagen’s most used way of
advertising is by placing many bog panels on the roads; furthermore, Volkswagen is often
present by sponsorships on sports events, as well as in any kind of event or organizations (this
factor was a good ethical point, for corporate social responsibility). As both promotion and price
marketing principle of Volkswagen, the company allows customers who would like to have a
Volkswagen to buy it through leasing; in other words, the customer doesn’t need to pay for the
car at once, but with a monthly rate.
Each car is made in key locations worldwide virtuous labor force and strategic reasons. The
major factory and distribution base, and the first one since the existence of Volkswagen, is
inWolfsburg. Volkswagen is present and specialized in 14 locations:

Country City/ Factory Name Model Specialization

Germany Wolfsburg Golf, Tiguan, Touran
Germany Emden Passat
Germany Zwickau Golf, Passat CC
Germany Dresden Phaeton
Belgium Brussels Polo, Golf
Spain Pamplona Polo
Portugal Palmela Eos, Sharan
Slovakia Bratislava Up, Polo, Touareg
Mexico Puebla Jetta, Beetle
Brazil Curitiba Golf
Brazil Achieta Golf, Polo
South Africa Uitenhage Polo, Golf, Jetta
China Changchun Golf, Jetta, Passat
China Shanghai Polo, Passat, Touareg

Each model of Volkswagen car is segmented with dedication to a specific type of customer
(shown in segmentation and targeting table). The models are segmented according to process as
well; the prices range according to how exclusive and the amount of feature each car has. An
extra group within Volkswagen is the “R” edition, meaning the race product line made
exclusively for Gold, Passat CC, Sirocco, and, Touareg. Each product line is equipped with
different engines, which influence the price.

Model Segmentation and Targeting

Up Very small city car. Very low price.
Polo Small city car. Affordable price.
Golf Small-medium class, but with 4 doors, so a family car.
Small, but more exclusive than the golf for its traditional name that raised
Beetle the brand.
Small sedan. Same type as Passat but with a lower quality and less
Jetta features. Good for a family.
Sedan. Very good and affordable for middle-class people. High demand for
Passat company car as well. Good for a family.
The market targeting, in general, all the product lines of Volkswagen are dedicated to customers aged
18-49 years old. Most of the cars offered by Volkswagen are categorizes as more affordable and efficient
for any person and for a corporation activity.

Volkswagen differentiates its cars by dividing models in classes, size, engines, and by optional features.
The types of engines differentiate from sizes of the very small 1000cm3, to the enormous 6000cm3. In
accordance to other brands, Volkswagen also divides cars by the fuel consumption of Petrol and Diesel
(VW is known for very efficient and effective engines using diesel).

As about positioning, Volkswagen produces his cars all around the world: Brazil, China, India,
Germany, Slovakia, North America, Hungary, Japan, Russia, Nigeria, Spain, Argentina, Portugal,
Poland, Mexico, and, South Africa. All Volkswagen models are present in every state with high
demand for cars, knowing after extensive market research where should the company position a
model more than the other one (SUV’s in states with bad condition roads, pick up cars in South
America or Asia, smaller cars in crowded cities, or more sedans or limousine in large business
districts).

Volkswagen entered the Indian passenger car market in 2001 by launching its car brand - Skoda. In
2007, two of its other brands Audi and Volkswagen, were also launched in India. Volkswagen Group
India emphasized on all aspects of marketing mix including product, price, place and promotion. The
company offered three brands including Audi(10), Skoda(4) and Volkswagen(7) that together
comprised of 21 different models as of May-2013.Volkswagen Group India mainly catered to the
luxury segment of the Indian car market. The company had established presence in India through
separate distribution channels for each of its brands.

The market research gave the input as under

 70% of passenger cars are small cars in India.

 The pricing needs to be within the competition.
 Need for changing its market strategy for India.
 Majority of Indians did not know anything about Volkswagen, not even the pronunciation.
 Brand awareness was 4% as compared to 70% which competition enjoyed.
 India is an important market for Automobile manufacturers.
 Indian automobile market is growing market.
 Easy Financing Options are available
This provided a challenge to VW India of Expertise in Premium cars Priority to performance Skewed
towards compact cars Priority to economy.
Strategies adopted by VW –India
Print Media
  Volkswagen took advertising to a new level with an innovative audio advertisement in
newspaper. On Tuesday September 21, 2010 as readers opened the newspaper a lightsensitive
chip attached to the page announced the arrival of “a perfectly engineered car” – the Vento.25
lakh readers of The Times of India and The Hindu were taken by surprise.It cost VW 5 crore
rupees.
Social media
 VW India’s FB fan page has more than 1.5 million likes and Twitter page has more than 11,000
followers. Official YouTube channel for VW 57 million subscribers worldwide Broadcast
numerous videos for promotion and brand awareness.

Keeping the Five P’s in Picture VW India worked

Product
 21 different models under 3 brands.Produced at Chakan Plant, near Pune
 To have Competetive advantage more units/plants are planned
Price
 Targeted mainly for the luxury segment in the Indian market.
 Plan to capture bigger market by launching many new cars priced sub-10 lakh rupees.
Place
 Significant presence – Currently, the company has around 200 dealerships and outlets
across major cities which would double the number of dealerships by 2015 and thus
increasing the proximity of the dealerships for the customers.
Promotion
  Launched Integrated Marketing campaign in November, 2009 in Collaboration with DDB
Mudra to evoke consumer awareness of VW as a brand.
 Innovative promotional campaigns – OOH, print ads, TVCs ,Print media – Communicating
benefits and brand building through Television Commercial
Purpose
 Building brand image through innovative promotional campaigns with core focus on luxury
segments and Achieve significant awareness of Low cost VW Polo for targeting masses.
 Showcase German engineering coupled with “Made in India” promise.

https://www.youtube.com/watch?v=OBmyZ_OOz-0

http://articles.economictimes.indiatimes.com/2010-09-22/news/27575760_1_print-advertisement-
marketing-advertising-campaign

Above two links are for the advertisments which can be played in the class