Saturday, December 16

Das Ist New Age Marketing!

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      Das Ist New Age Marketing

Few automobile brands in the world evoke the kind of reverence that Volkswagen does. One of the largest car manufacturers, the Volkswagen AG group owns and controls most of the renowned automobile manufacturers such as Audi, Bentley Motors, Bugatti Automobiles, Automobili lambhorgini and Skoda Motors among others. Volkswagen commands an almost rabid fan base who swears by its precision engineering, innovative marketing strategies and excellent after-sales support. Moreover all the brands under the Volkswagen group have retained their respective differentiated brand image and continue to operate independently. These practices have helped the group in capturing a substantial market share of nearly 12.2% percent. The quarterly reports for the year 2010 show a jump in sales revenue to € 33,162 million up from € 27,203 million last year ( A healthy increase of 21.9 %) with a profit before tax of 6% as a percentage of sales revenue . The share price development reports are also encouraging as can be seen from the figure 1 below. In fact the proliferation of the brand is of such level that every fifth car in Europe that rolls out of the assembly line is from the Volkswagen stables.

Figure. 1: Source: Volkswagen Half-Yearly Report January- June 2010.

Volkswagen as a brand was incidentally the brainchild of Adolf Hitler who required a basic vehicle which could transport 2 adults and three children at a speed of 62 miles per hour. Renowned engineer Ferdinand Porsche was appointed for the same and the first Volkswagen or “The People’s car” rolled out in 1936. In spite of fears of closure following Germany’s defeat in World War II, the Stuttgart factory bravely carried on and has never looked back since.

Volkswagen’s points of differentiation lie in the way it constantly changes its strategies; be it engineering or marketing. It was one of the first manufacturers to introduce Mc-Pherson struts when its competitors were using torsion bars. Similarly, it was one of the few companies who adopted and benefited from the double marketing strategy.


 Mistaken by many as stuffing multiple messages in one campaign, double marketing is essentially launching multiple campaigns on different messages concurrently. Volkswagen has been using the same to pit their GTI and Jetta models against each other. Advertising agency CP+B has been intuitive in marketing these two models. While on one hand it launched campaigns like “Unpimp My Ride” and “Obeying your Fast” to showcase the speed characteristics of the GTI, on the other hand they attempt to highlight the safety features of the Jetta with the “Safe Happens” campaign. Despite the controversy, the tandem efforts work nicely to push the counterintuitive marriage of speed and safety as benefits at the heart of the VW brand.  The campaigns are brilliant examples of how to use Double Marketing to push the core messages, even when they happen to conflict. By doing so Volkswagen catered to different segments of audience and also refrained from positioning its brand in a single light.


Readers of The Hindu and The Times of India were pleasantly surprised when one morning they found their newspapers extolling the virtues of the new Volkwagen Vento in an audio recording. The talking newspaper advertisement launched in 5 cities at a budget of nearly Rs. 5 crore created ripples across the nation. DDB Mudra, the advertising agency behind the ad used the newspapers as a medium as they have far larger reach in urban and semi-urban households in India than Internet or Television when compared to western countries. Although mired by controversies regarding plastic pollution, marketing gurus hail it as New Age Marketing for its sheer innovation.

Volkswagen has also managed to increase its reach by launching its wap site and entering the mobile space. The freely downloadable Volkswagen Polo challenge games have helped generate customer awareness and interest about the Polo model as well. Also of notable mention are the short online films on the International website which attempts to make the customers aware of the salient features of their new offerings. This is done through 30-second humorous clips which showcase the features of the vehicle in the end.


Volkswagen has experimented with cost leadership strategy for the Indian market. While the strategy of selling the products at relatively low prices can stave off competition, it can also have adverse effects such as price wars. This may ultimately push the margins to unrealistic levels. However Volkswagen seems to have understood the markets in emerging economies quite well, as was evident from the launch of its Polo model in India at a very competitive price thus beating competition from Honda’s offerings.

Volkswagen intends to strengthen its base in other countries like Indonesia. It has collaborated with Ogilvy and Mather Indonesia for an integrated marketing plan regarding launching VW products. With this decision, the group aims to increase its presence in Indonesia through the upcoming Indonesian motor show and boost sales of the existing offerings.

Similarly Volkswagen has provided more compelling reasons for Canadian customers to buy their products. Besides reducing the prices of their 2008 models, Volkswagen aims to increase its customer base in Canada with their “German Engineering at value price” campaign.Special mention also needs to be made of VW’s new “Think Blue” campaign which primarily emphasizes on Volkswagen’s efforts to produce more environment-friendly cars. Conceived by marketing genius Luca De Meo who recently joined Volkswagen, the vision of the group is clearly stated by their statements in a recent press conference; “Our goal is to establish Think Blue as an expression of our corporate mindset and a firm feature of the Volkswagen brand’s ecologically sustainable activities. We have deliberately chosen an international slogan because environmental protection knows no national boundaries. “


For decades Volkswagen did not have a proper sports coupé model to satiate the needs of the European customers. The sports coupé, Audi TT, was the closest that came to cater to the market left vacant by the demise of Coraddo.

All that changed when Volkswagen unveiled its latest model Iroc at the Berlin festival. Iroc was the upgraded version of the Scirocco which was well received in European as well as U.S. markets.With Iroc, Volkswagen intends to reclaim its share of the sports coupé market.Analysts predict that the new Scirocco will fulfill Volkswagen’s need for more emotional brands. The move was also viewed as a strategy by Volkswagen to increase sales by taking advantage of the emotional attachment its popular yesteryear models had among a niche segment of car buyers.


All these marketing practices in the international market, acquisition plans and strategies strongly suggest the aggressive expansion plans of Volkswagen. Clearly Volkswagen attempts to wrest away the title of largest automobile manufacturer from Toyota. Rustling up feathers in the competitors’ camp, the Volkswagen AG group certainly seems poised to be a market leader in the years to come.


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