The New Beetle Case Study

Case : The New Beetle

Q1) What meaning does the VW Brand Convey

The Brand VW has always conveyed the message as an affordable car. The companies product have been looked upon as one which offered the benefits of German engineering affordably, emotionally. The cars represented completely different driving experience - more connected to the road - different way of driving - more connected to the world. Heritage of German engineering and the car's more fun, pleasurable driving experience were the powerful strengths. Affordability was one of the key factors as against most of the other German cars makers who represented only the high end of the Segment. It also focused on Drivability - Unique driving experience not just on the car's ability to get people from one point to other, faster or cheaper - a focus of several Japanese competitors. The Company also focused on more unique individualistic driving experience. The products of the company were Invitational, approachable and not exclusionary.

Q 2) What is the appeal of the new Beetle?

The appeal of the new Beetle was mainly the Retro looks with new advanced features. The car had the same classic elements and basic shapes and adding cutting edge technology and modern features. Also the car had to have the best and the latest of the German Technologies and offer superior driving performance. The shape of the car which had rounds and circles also found emotional attachment with the people as the people could correlate the same to some of the basic human shapes like Eyes, Head etc and also a complete circle represented wholesomeness, completeness etc. Further circle was preferred against square and triangle as it had no sharp edges.

The company had provided the following in the new car and the following features were kept in the car. Keeping retro looks re-engineered top of the line golf platform, the New beetle housed an engine that was now in front and water cooled, offered front and side airbags and air-conditioning n the standard package and emitted music from a six speaker sound system. Access to the 12 cubic feet of storage space in the rear hatch was hidden beneath a large VW badge on the back. It was more spacious than the concept 1 design. Drum breaks to four wheel disc brakes to ensure that in all aspects of the car. Yet the shape, although more refined and modern than its predecessor, was instantly recognizable.

Further the most appealing factor in the new Beetle was that it carried the same Retro look appealing the emotional quotient of the customers.

Q 3) Why is the positioning decision termed "mission impossible"

The positioning decision for the car was termed as 'mission impossible' because the company marketing team had to make a decision on the following,

- Target Customers

- Pricing of the car

- Advertisement campaign for the New Beetle

The difficulties faced under each of the heads were as under,

Target Customers :-

The marketing team had the task to decide the customer segment which they wanted to target. Whether they would like to go with Baby Boomers or whether they would like to with young generation. If the Company was to target the Baby Boomers segment with a value proposition of 'indulging in nostalgia' then the problem faced was that the recent trend shows that these baby boomers were changing preference to larger cars and also the company had changed its strategy of positioning the brand behind the Drivability of the car to target the younger generation.

The consumers were demographically diverse but they all had certain common characteristics like confidence, individualism and a desire for centre of attention.

Pricing of the Car :-

The Company faced a typical problem with the pricing because the brand was always perceived to be an affordable and a low priced car. But in the small size car segment prices ranged from as low as $11,035 for a 2 door Saturn coupe to $17,239 for a Sentra SE 4 door sedan. The New Beetle had a base price tag of $15,200 and till it reaches the end customer it would range in the price range of $17,000 to $ 18,000 which was a concern for the marketing team. This price tag was not in line with the brand image which the car had as an affordable low priced car. The company was not in a position to lower the price since that would have affected the margins and also the dealers would have been adversely affected by lower margins. Also if they keep the price at this high level then they had the fear of loosing customer who would go in for a car in the higher segment in the expanding market.

Advertisement campaign for the New Beetle

VW marketing team and advertising agency has to accept the challenge to maximize the impact of brand with the limited advertising budget. They could spend less than25% of typical market budget (100 million dollar - budget ) as used for a new car launch by most of the companies. Also there was a pressure of allocation out of this to the New Passat which was launched six months back. Even the company had to decide as to which media to be considered for mass appeal and reach. Television media had the maximum coverage but the cost of the same was not affordable within the budget. The company had already had a very positive coverage by the press but the same was not sufficient for capturing the market. If the Company was to target the Baby Boomers segment with a value proposition of 'indulging in nostalgia' then the problem faced was that the recent trend shows that these baby boomers were changing preference to larger cars and also the company had changed its strategy of positioning the brand behind the Drivability of the car to target the younger generation.

Hence the task of positioning the car was termed as 'Mission Impossible.'

4.What are the advantage and disadvantage of the different positioning options :

There are two positioning options :

1. Baby- boomers:

2. Young Generation.

Advantages of targeting