THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT NEW DELHI

PROJECT REPORT ON

Volkswagen is Known for Its Cutting Edge Advertising across the World

SUBMITTED BY:

Name: Piyush Goyal Batch: SS/2010-12ISBE-A10110 (NA-1152) Section: SF4 E.mail id- piyushgoyal.feb@gmail.com Mobile no- 91-9911078452 IIPM NEW DELHI

I SUBMITTED BY:
Name: Piyush Goyal Batch: SS/2010-12ISBE-A10110 (NA-1152) Section: SF4 E.mail id- piyushgoyal.feb@gmail.com Mobile no- 91-9911078452 IIPM NEW DELHI

NDEX

1. Introduction 2. Theoretical Review 3. Review and Research 4. References

INTRODUCTION
Volkswagen India With its headquarters in Pune, Maharashtra (India), the Volkswagen Group is represented by three brands in India: Volkswagen, Audi and Skoda. The Volkswagen Group is completing 10 years of its India journey which began with the entry of the Skoda brand in 2001, Audi brand and Volkswagen brand in 2007. Each brand has its own character and operates as an independent entity in the market.

Volkswagen Group India is a part of Volkswagen AG, which is globally represented by 9 brands- Audi, Bentley, Bugatti, Lamborghini, Scania, Seat, Skoda, Volkswagen Commercial Vehicles (Volkswagen Nutzfahrzeuge) and Volkswagen Passenger Cars. The product range extends from lowconsumption small cars to luxury class vehicles and trucks. The Group operates 60 production plants around the world. In total more than 370,000 employees produce more than 26,600 vehicles or are involved in vehiclerelated services each working day.

The highest volume brand of the Group is Volkswagen. Europes most successful car brand has made successful inroads into the Indian market. Volkswagen presents itself in a variety of segments as a premium

manufacturer of high-volume models. As a first step, the Volkswagen brand launched the globally successful Passat in 2007. To expand its portfolio and cater to the mid segment, Volkswagen launched one of the brands bestselling models, the Jetta, in India in July 2008. Both the sedans are being assembled locally. The iconic New Beetle and the high-end SUV Touareg were introduced in December 2009. Also available is the high-end automobile Phaeton.

From December 12, 2009 the new Pune plant has started rolling-out the hatchback version of the Volkswagen Polo.

Skoda entered the Indian market in 2001. Its plant in Aurangabad, which assembles a total of eight models including the Audi A6 and Audi A4 as well as the Volkswagen Passat and Volkswagen Jetta, has been instrumental in this achievement. For Indian customers, the name of Skoda stands for highquality, robust yet affordable cars in the compact, lower mid-size and midsize ranges. In terms of models, the Skoda product offering in India ranges from the Fabia through the Octavia, the Laura to the Superb. Skoda lifted the veil off its international bestseller SUV Yeti for the first time in India at the Auto Expo 2010.

Audi offers high-end models of interest to Indian customers. With the A8 and the Q7, the A6, the A4 and not forgetting the R8, the TT and the recently introduced Q5, Audi offers top-quality, technically brilliant cars with an exclusive flair in the relevant luxury segments. Audis positioning as a leading manufacturer of such high-class vehicles, both assembled in India and imported through Audi India, will be systematically pursued in future. At Auto Expo 2010, Audi also unveiled the Audi Sportback Concept a fivedoor model offering a glimpse into Audi's future design vocabulary.

Recognizing the importance of an extensive dealer network towards scripting a long-term success story, the brands of the Volkswagen Group are setting up dealerships spanning the entire country with Volkswagen, Skoda and Audi having in total around 120 dealerships across the country today. They are not only laying the foundation for a substantial increase in sales but also doing the groundwork for offering a first-class all-round service, taking customer satisfaction to the highest level. Keeping this in mind they launched their first Group Logistics Service facility recently that would help make their dealer network become more efficient and smoothen the entire process of service. In the period between January 2009 and December 2009, the three brands of the Volkswagen Group have together sold around 19,000 vehicles in India, an increase of 1.4% over 2008 in a year marked by recession in the auto industry.
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A crucial element of the Volkswagens strategy is to establish a long-term presence in India is the Groups production facility near Pune in the Chakan Industrial Park. The investment with a total sum of around INR 3,800 crore (580 million Euros) is the biggest investment of a German company realized in India so far. The plant, one of the most modern in the Volkswagen Group has a high level of vertical integration not least attributable to the high share of local suppliers. The recruitment is of some 2,500 employees at the end of 2010, primarily from the region itself. With the investment, the vertical integration of suppliers and the employment of people Volkswagen will thus demonstrate its commitment to the new site. Simultaneously Volkswagen contributes to a positive development of the economy of the region and of Maharashtra at the same time.

The new plant was inaugurated by The Honourable Governor of Maharashtra, His Excellency Shri. S. C. Jamir, and Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Group Production end of March 2009 and has begun building the Skoda Fabia compact car in May 2009. The launch of Polo, the hatchback car, is a visible testimony to Volkswagens vision of Mobility - Made in India. By mid of 2010 the hatchback version will be followed by a sedan, also based on the new generation of the Polo but entirely different to the hatch.
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In recognition of its efforts in India, Volkswagen India won the coveted Automotive Company of the Year 2010 award at the Inaugural Golden Steering Wheel Awards India presented by the leading automotive magazine, Auto Bild India.

THEORETICAL REVIEW
Volkswagen (VW) is one of the most popular car brands, being represented in more than 70 countries throughout the world. The main headquarters and assembly lines of Volkswagen are in Wolfsburg, Germany. Over the course of time, the Group has developed four regional markets and today is represented in more than 70 countries.

Volkswagen entered the American market some time after World War II, in 1960. Over the years, the Group has changed and modified its brands, but the classical bug has survived from the very beginning. The present range includes the Lupo, Golf, Polo, New Beetle, Bora, Passat, Touran, Sharan, Phaeton, and Touareg models. Accordingly, the Group has modified not only the models, but also the advertising and communicational campaigns that it has used to promote the VW image.

VW had a very dark beginning. The idea of building a car that was affordable for people with a medium living standard and accommodates a whole family was suggested by Adolf Hitler in 1933. Later, during the war, the vehicle use was restricted to the military. After the war, VW started to build its first series. However, at the very beginning, the brands image was negative because it was associated with the Nazi regime. The spectacular economic recovery of

Germany and the change in the Groups orientation allowed VW to expand worldwide.

In order to penetrate the American market they needed to create a very persuasive and appealing message. This message had many facets, but one of the main communication channels they focused on was advertising. In this process they had to carefully select two main elements: the media channel and the creators of the message. Media channel analysis The New Yorker is a magazine with a long tradition in the American media environment. Its satirical and cultural orientation has carved out for it over the decades a very selective public. Readers in academia, cultural areas, and intellectuals represent the main audience of the magazine. Young professionals and students are also treated with special attention. On the other hand, there is another consistent segment represented by senior citizens, either in the last phase of their professional activity or retired.

They have had a long and rich life experience but are still involved in the society. The majority of The New Yorkers readers are cosmopolitan and have higher education. The target audience presents a special interest in arts, but at the same time they have a need to stay connected to the latest

political news. A sense of humor, irony and sarcasm, creativity, and selfcriticism are psychological imperatives for these loyal readers.

The audience has diverse tastes and politico-cultural orientations, but is homogenous because of shared attitudes and values. Even if The New Yorker is published and is primarily addressed to New Yorkers, it is spread nationwide. In addition, a considerable percent of the target audience is international, especially in Europe and Southeast Asia.

The New Yorker already enjoyed wide recognition and considerable prestige by 1960 when VW entered the North-American continent. From 1960 until now, the target audiences characteristics of the magazine have remained relatively stable. Some changes have occurred over the last ten years because the magazine has started to treat political issues in a more detailed way. This has led to a repositioning, especially among those very loyal to the artistic and cultural aspects. Over the same period, people from the business and political communities started to appreciate The New Yorker.

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It is very interesting to analyze the similarities between The New Yorkers target audience and the VWs target market. VW decided that its brand needs credibility, recognition, extensive coverage, and access to a selective market. Taking advantage of Pavlovs Classical Conditioning principle, they tried to associate the magazines image with the commercials they would have to print in United States. Message encoders VW needed an aggressive advertising campaign for its brands. Since the media channel was a selective one and the target market extremely selective, they needed a strong, striking, and unique communicational approach. They decided to hire the best available professionals. A number of long-established advertising agencies operated at that time: McCannErickson, J. Walter Thompson, Batten, Barton, Durstine, & Osborne (BBDO), Leo Burnett, Ogilvy&Mather, and Doyle Dane (Sivulka, 302). Traditionally the objective of most ads had been to gain attention and interest, but now the emphasis shifted to the product. The product became the masterpiece of the advertising. VW asked the DDB agency to provide a campaign that would to decide the success of VW in America.

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The beginning 1959 In 1959 the ad makers decided to turn the VWs apparent shortcomings into well-crafted virtues. The main focus was to use style and candor in order to transform the utilitarian, low-power bug into a unique, high quality product with a sensible price (only $1.02 per pound, or about $1595). The copywriter Julian Koenig and the art director Helmut Krone made the ads seem as unusual as the car. The Think small commercial featured a tiny image of the car with oceans of white space and austere sans serif typeface. This was one of the ads that played a significant role in the launch of VW in America through The New Yorker.

Entering the market 1960-1965

The American consumers are placed in the middle of the high and low context culture of Halls cultural concept. This means that a creative and unique ad is desirable, but factual information is also vital. The Lemon ad was published in 1960 and provided straightforward facts. The headline simply said Lemon while the text stated the things nobody but the bug could have. This commercial also wanted to suggest that simplicity could be a powerful persuader. An announcement published in an issue of The New Yorker from 1964 underlines the phenomenon of globalization that was then just at its inception. The cosmopolitan audience of the magazine had a multilateral perspective. The same with Volkswagen. They wanted to
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associate the brands name with the tradition it has in Europe. Factual information and plenty of white space where offered to the readers in order to create strong focal points. Building a reputation 1966-1977 Starting with 1966 each commercial focused on selling a single advantage. The vast majority featured a simple picture and straightforward copy explaining why consumers should buy the car. The commercials were published in The New Yorker with a regular frequency. Another major characteristic of VW ads was that they caused readers to smile. Actually, this specification also seems to be preserved by present day ads. One compared the unique shape of the VW to an egg: Some shapes are hard to improve on. Ask any hen. You just cant design a more functional shape for an egg. And we figure the same is true of the Volkswagen. Dont think we havent tried. (As a matter of fact, the VW has been changed nearly 300 times). Another one showed a lunar landing vehicle instead of the car and had but one line of copy: Its ugly but it gets you there. (Sivulka, 304). The campaigns DDB produced for VW in this period have come to be considered not only the best of the decade, but among the best of all time.

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The New Yorker is very popular for its complex sense of humor. Thus, DDB found that creating an innovative and comic ad would match not only the magazines public, but will also effectively address one of its target markets: fun seekers. Volkswagen means in German the car of the people. This is why they offered a wide range of products designed to fit different segments. They stressed the importance of giving each brand a personality so that it could meet the requirements of a diverse market. However, the bug was the emblem of the Group. But even in the case of a simple product, they needed to appeal to individual characteristics and values in order to persuade people to buy it. The believer aimed at altruists and people who need a trustworthy and pertinent speaker in order to accept the message. The commercial also lists a whole series of instrumental information designed to support the sentimental message with factual content. The builder is maybe the example that best illustrates this transition period between inception and maturity on the American market. Using the old magazine, VW tried to show the potential customers that the bug is in a superior stage of development. Even though preserving the practical and unique design was crucial, they tried hard to show that the comfort and the technical specifications were being continuously improved.

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In 1949, William Bernbach, along with colleagues, Ned Doyle and Maxwell Dane, formed Doyle Dane Bernbach (DDB), the Manhattan advertising agency that would create the revolutionary Volkswagen ad campaigns of the 1950s and 1960s.

Bernbach's artistic approach to print advertising was innovative, and he understood that advertising didn't sell products. The strategy was to keep customers by creating and nurturing them as brand ambassadors rather than attempting to attract the attention of those who were uninterested in the product. Bernbach's team of "agency creatives" was headed by Helmut Krone, who pioneered the idea of simplicity in print media advertisements. His repeated use of photographs as opposed to the embellished illustrations used traditionally by competing agencies, spawned comfortably-consistent, yet unique, print ads that met DDB's goal of making a stark departure from existing advertisement techniques.

The corporate headquarters and factory that produced Volkswagens was located in Wolfsburg, Germany. Because Volkswagens advertising budget in 1960 was only $800,000 DDBs bare-bones, black-and-white approach, coupled with a projected common theme of irreverence and humor, fit Wolfsburgs needs well. Each Volkswagen ad was designed to be so

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complete that it could stand alone as a viable advertisement, even without addressing all aspects of the automobile.

Taken as a sign of the campaign's runaway success, research by the Starch Company showed that these Volkswagen advertisements had higher reader scores than editorial pieces in many publications, noting that Volkswagen advertisements often didn't even include a slogan or logo. The 1959 Think Small Volkswagen series of advertisements were voted the No. 1 campaign of all time in Advertising Ages 1999 The Century of Advertising.

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REVIEW AND RESEARCH

Starting with 1970, American consumers began to diversify their tastes. As a response, VW had to come with a more diverse and sophisticated offer. Moreover, they had to survive in the face of their competitors by trying to establish a reasonable balance between price and quality. In-between was published in The New Yorker in 1971. In the next years several ads fought with the competitors. In this mission they used visual comparison and straightforward text. At the same time they inserted several confidence-inspiring endorsers, such as the Consumer Research Group.

By the end of the 70s VW was like a growing child who is ready to enter adulthood. And like the majority of teenagers, who want to demonstrate that they are capable of taking on high responsibilities, VW wanted to show that its identity was ready for the maturity phase. This characteristic can be found in all the VW ads published in The New Yorker at the end of the 70s. The copy of these adds conveyed a more serious tone and the images that were used attempted to build trust and recognition. VW already had a position on the American market and now they were aiming at increasing their market share. The new set of commercials preserved the same design principles, but the attitude was slightly changed. This was so because the target market had also changed. It was the people from the middle class who bought the
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car, but also those with higher incomes who started to trust the brand. The New Yorker, a reliable communication channel, combined with a mixture of serious and humorous commercials, and strong PR, prepared VW to enter this next stage in good form. The end? The person who had read The New Yorker in 1994 and picked up a copy in 2004 would notice that a lot has changed and yet a lot has been preserved in Volkswagen commercials. Being now in its maturity stage on the US market, VW has to be more innovative than at any previous time.

The classical design with plenty of white space and sans serif type is still used. The eternal logo placed on the bottom right of the page preserves the same features. Several slogans have been changed in the meanwhile. Economy without sacrifice had great success in 1977 and was intended to promote a particular feature. In 2004, Drivers wanted underlines the idea that VW has any kind of car (Polo, Golf, Passat, Phaeton, etc) for any type of consumer: fun-seekers, altruists, strivers, intimates, introverts or extroverts. Comparing the ad from 1960 with the one from 2004 one might say that nothing changed in their advertisement. But from Think small to Thank you and good night VW has changed products, objectives, and strategies. The brands identity, however, is still based on tradition and specific values.

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REFERENCES
Volkswagen Group www.volkswagen.de

Volkswagen America www.vw.com

Volkswagen Romania www.vw.ro

Juliann Sivulka - Soap, Sex, and Cigarettes, Wadsworth Publishing Company, 1998

The New Yorker 1960, 1961, 1964, 1969, 1971, 1973, 1977, 2003, 2004

http://people.westminstercollege.edu/staff/bknorr/html/links.htm

www.vwmagazine.com/history/bughist.html

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