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 world’s 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 VW’s brand values to
generate desirability for the brand and vehicles. The DDB Mudra’s 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 Mudra’s creative strategies there is the underlining issue
as to whether Volkswagen’s 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 Volkswagen’s 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
Intention
Volkswagen is the young progressives least preferred brand to purchase,
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
Awareness
Need advertising message to stand out of the clutter and be heard and
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 Volkswagen’s 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
advertising initiative
that connects
Volkswagen with
relevant pop culture
such as the use of a
Bollywood star or by
becoming a lead
sponsor of a cricket
team or tournament.
Creates aspiration toward
Volkswagen, as popular public
figures will be linked to using
Volkswagen vehicles.
Popular culture in India is
heavily flooded by an array
of advertisers and
obtaining a brand
ambassador of becoming a
major sponsor can be
extremely costly.
2 Include a greater
emphasis on critical
acclaim awards, as a
way of increasing
brand awareness
Volkswagen would be able to
differentiate itself from
competitors by using its award
status to justify it’s top of class
position.
A smaller reach of
advertisement may be a
result if certain consumer
segments aren’t interested
in the popular culture used
to advertise through.
Consumer may only
become interested in
Volkswagen car that have
won awards.
amongst Volkswagen
vehicles
Purchase intention would be
encouraged by the prestige
nature of owning a car that has
recently been recognized as top
of it class.
Gives competitors a criteria
sheet in which they can
compare their vehicles to in
advertisements to show
consumer that they also
have the same or better
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
price of Volkswagen
to place a greater
emphasis on the
exclusivity of the
brand as a method of
differentiation against
a lot easier to obtain
competitors.
VW will no longer be in direct
competition with Skoda.
4 Increase advertising
expenditure to obtain
a greater share of
voice against
competitors.
More advertisement being
scheduled will lead to better brand
awareness and recall.
Helps to further build brand
aspiration.
Innovative advertisements
campaigns help create brand
connection as well as forming
brand preference.
5 Target more
appropriate consumer
segments with higher
purchase intention
Segment is more likely to engage
with purchasing of product.
Price increase without the
increase of new technology
will impact the price/quality
ratio resulting in a decline
in sales and market share.
High cost to compete in
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
Cost to target more specific
groups may be impacted
by missing potential
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 India’s 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 Volkswagen’s 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 Volkswagen’s 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 Volkswagen’s 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 Volkswagen’s vehicles as being a viable option due to the
consumers perception of quality that has been created through increasing the awareness of
Volkswagen’s award winning vehicles.