The New Beetle Case Study
Casey
Fei
Isaac
Derek
Programme
3Cs Issues Recommendations
3Cs - Company
3Cs - Company
A German car company in a little turmoil The situation is:
Sales have been declining Japanese competition, appreciation of Deutschemark, etc.
600 000 500 000
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Ya er T ta V o l W
200 000
100 000
3Cs - Competition
Mapping out everyones position:
Uniqueness New Beetl e
American Cars (Ford, Chevrolet, Dodge)
Japanese Cars (Honda, Toyota, Nissan)
Reliability
3Cs - Consumers
There are:
The old fogies The new generation
The general opinion: the peoples car - VW offers a unique, individualistic experience - affordable German engineering
3Cs - Consumers
Percentage of Small Cars Sold in 1997
Chevrolet Cavalier
VW Golf 0.9 %
VW Jetta 4.1%
Dodge Neon For Escort Geo Prizm Honda Civic Hyundai Elantra Isuzu Stylus Mazda Protg Mercury Tracer Nissan Sentra Plymouth Neon Pontiac Sunfire Saturn Suzuki Esteem Toyota Corolla Toyota Tercel VW Golf VW Jetta
Suburu Impreza 4w
The Present Situation
600000 500000
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Year Total VW
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100000
Drivers Wanted campaign boost Now the New Beetle
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5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
Next up: ISSUES
Issues (1 of 3)
How much of the cars heritage should the new positioning use to leverage?
Play on the nostalgia Appeal to the new generation
Designing a marketing scheme that would appeal to a majority of consumers in both target groups.
Issues (2 of 3)
How to rebuild VWs image through the New Beetle?
Belief that VW product line is tired and old compared to Japanese cars
Overall Opinion VW and Key Competitor- U.S.
100 90 80 70 60 50 40 30 20 10 0 Dec-95 Mar-96 Jun-96 Sep-96 Dec-96 Mar-97 Jun-97 Sep-97 Dec-97 Time % Excellent/Good Opinions
VW Nissan Saturn Toyota
Issues (2 of 3 contd)
How to rebuild VWs image through the New Beetle?
Improve the reliability Make regular innovations Strengthen its brand equity
Price
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VW N N ew rZ 24 iss an
av al ie
How to price the New Beetle?
Issues (3 of 3)
Price of Small Cars 1998 - U.S.
Brand
This is in contrast with VWs heritage of affordability.
Be et le Se nt ra SE Sa tu To rn yo SC ta 2 C or D ol od la ge LE C he Ne ro on le tC R T av al Fo ie rL rd S E To sc or yo tS ta E C or C ol he la ro VE le tC av N al iss ie r an S D Fo en od rd tra ge Es Ne co on rt L C om X pe tit on Sa tu rn SL
Issues (3 of 3 contd)
How to price the New Beetle?
If the price is set too high, consumers might trade up into a higher-priced segment If the price is set too low the car might not be attractive enough to dealers due to low margins and thus fall short of VWs profitability goals
Finally: the RECOMMENDATIONS
Recommendations (1 of 3)
Approaching the Consumer
Two generations in target audience: Baby Boomers and Young Generation More effort should be focused on campaign to attract Young Generation consumers and appeal to their mentality, behaviour and attitude. A campaign for Baby Boomers would be straightforward by using nostalgic images to bring back good memories from the past and rekindle their interest in the Beetle.
Recommendations (2 of 3)
Pricing Options
Two versions of New Beetle for two different generations of consumers. Basic and cheap model will appeal to younger generation of consumers who will be more budget conscious. Enhanced model with popular options will be catered to Baby Boomers who can afford to spend more on a new car (or any other wealthy person).
Recommendations (3 of 3)
Media Channels
Theres an opportunity to use the positive media coverage to Volkswagens advantage. Get the media involved to spread the word about the Beetle! Other suggested options to increase Beetles exposure: Print Advertising in magazines and showcasing car at big events.
END.
