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ASSIGNMENT

ON

Market Analysis
Of
Volkswagen New Beetle

Submitted to: Submitted By:


Dr. Liquat Ali Butta Singh (5871)
Gagandeep Uppal (5870)
MBA-II Sec C

SCHOOL OF MANAGEMENT STUDIES,


PUNJABI UNIVERSITY PATIALA

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ACKNOWLEGEMENT

“When you give yourself, you receive more than you give.”

The concepts learnt in academics are of no importance until they are practically applied.

In today’s world it is imperative for the students of any Post- Graduate course to keep pace with

the changing technology innovations taking place across the world. In alignment with this, we

prepared a market analysis report in our 3rd semester of MBA.

We would like to express our sincere gratitude to Dr. Liquat Ali for giving us the

opportunity to work on the Market Analysis for a Project. We would like to thank our friends for

giving us their valuable support. It was very enriching and enlightening experience. Last but not

least, we thank the almighty, and may he stand with all of us.

Butta Singh, Gagandeep Uppal

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CONTENTS

Page
List Of Graphs 4
Sr. No Chapter
I Introduction Market Analysis 5-11
II Automotive Industry and Volkswagen 12-16
III Review of literature, Rationale, Objectives 17-19
IV Research Methodology 20-21
V Data Analysis and Interpretation 22-26
VI SWOT Analysis 26-34
VII Findings and Conclusion 35-36

Bibliography 37
Annexure 38-39

List of Graphs

GRAPHS PAGE
5.1 Car brand being used currently 22
5.2 Type of car segment preferred 23
5.3 Affordable money for purchasing a car 24
5.4 Factor influence while purchasing a car 25
5.5 Preference of Foreign Brand 26

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CHAPTER I

Introduction: Market analysis

Market analysis is a necessary part of planning a profitable business. Invest time in this crucial

step now and reap the rewards of a successful business. Before investing any money in our

business, we must gather information about our potential customers and the demand for of

service. This information, or market analysis, is a necessary part of planning a profitable

business. Invest time in this crucial step now and reap the rewards of a successful business.

Benefits of market analysis

1) Faster Cash Flow

Knowing who our customer is, what we need, and where to find them is vitally important.

Targeting the right people is crucial for generating cash flow in the shortest time possible.

2) Greater Market Share

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An examination of current market conditions tells us who our competitors are, the size and

location of the market, current competitor pricing and promotional strategies, and types of

market niches which are underdeveloped.

Positioning our product for greatest exposure, while creating an image of quality and value for

our product, allow us to become a serious player.

3) Reduced Expenses

A leading cause of business failure is lack of capital - the business runs out of start-up funds

before becoming profitable. It's important to make every penny count. We reduce expenditures

by trying to predict outcomes before taking action. There is always a certain amount of risk with

any business venture; however, analyzing the market reduces that risk.

Conduct a Market Analysis

Overview

Whether we are starting a new business or launching a new product, conducting a marketing

analysis is the first step in determining if there is a need or audience for your idea. Knowing the

market's needs and how it is currently serviced provides us with key information that is essential

in developing our product/service and marketing plan. Too often, businesses spend thousands of

rupees launching a "new" idea with a limited market because of competition. The owner is

forced to reevaluate his strategy and determine if there is room for another player. Although the

quality of the product is critical, our development of the best product on the market will not

necessarily correlate with the most sales. Up to 50 percent of a product's price can be for

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marketing. The company who wins the marketing game generally will capture the larger share of

the market.

The marketing analysis process can be broken down into six steps:

1. Defining the problem.

2. Analysis of the situation.

3. Obtaining data that is specific to the problem.

4. Analysis and interpreting the data.

5. Fostering ideas and problem solving.

6. Designing a plan.

1. Defining The Problem

Defining the problem is crucial to conducting a successful marketing analysis. This may require

a great deal of time but it is well worth the time and energy expended. Defining the objectives is

crucial to a successful marketing campaign. Many individuals waste valuable time performing

good research on the wrong problem.

Many companies fail to understand the nature of the problem before trying to solve problems

related to sales. A classic example occurred in the soft drink industry when Coke and Pepsi, the

two top soft drink rivals increased the intensity of marketing efforts to battle for higher sales. At

the same time, Dr Pepper's revenues began to decline, a problem that was attributed to a weak

promotional campaign. Subsequently, the "Be a Pepper" slogan was instituted. Although the ads

were a hit, revenues continued to decrease. The marketing managers had to reanalyze their

problem.

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2. Analysis of The Situation

An analysis of the situation is an informal survey of what information is available in the problem

area. The analysis will help define the problem and ascertain the need for additional information.

This process entails informal talks with informed people. Informed individuals can be others in

the company or outsiders with knowledge about the industry or product. In some instances,

customers are contacted to provide information.

When the marketing manager is unfamiliar with the situation, the analysis step is of primary

importance. It is important to understand the problem area - including the nature of the target

market, competition, the marketing mix and the external environment. Without this knowledge,

costly mistakes may result. An example of this problem would be a retailer who wants to survey

his customers. A research firm is hired to do in-store interviews. However, as an example, the

contracted firm is not aware that many of the stores are in the process of being renovated. As a

result, the information collected reveals the customer's focus on the appearance, noise level and

difficulty finding items due to construction. The information would be of no value.

The analysis should focus on both primary and secondary research.

Primary research is research that is proactively created for a specific purpose. Primary research

may include focus groups, qualitative surveys and phone interviews. This is information we

collect our self.

In contrast, secondary research is research that has already been conducted for other purposes.

From it valuable information can be taken. Secondary research can be found in libraries, online,

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through periodicals, books, etc. The easiest and most efficient way of accessing this type of data

is on the Internet.

3. Obtaining Data Specific to The Problem

The next step requires gathering primary research and performing a formal research project.

Many approaches can be used to collect primary data. The purpose is for the research to identify

what customers think about some topic or behavior patterns. Research can be done in person or

through a survey. Questioning can be qualitative or quantitative. Another research option is to

use observation of customers and their purchases or utilization of a product or service.

Qualitative research utilizes open-ended questions to obtain in-depth answers. Closed-ended

questions requiring yes or no answers are avoided. The idea is to have people share their

thoughts on a topic without giving them extensive directions or guidelines.

Quantitative research differs from qualitative in that it gathers parametric statistical

information, i.e., information with a number to it. Sample sizes are generally larger and more

representative of the market. From the statistics or data generated, conclusions can be drawn.

Survey research is usually quantitative in nature. It seeks structured responses, which can be

summarized in numbers, like percentages, averages or other usable statistics.

4. Data Analysis and Interpretation

Data analysis and interpretation is critical in analyzing the market. What does this information

mean? Can one use the data in a constructive way to define the problem and then establish a

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plan? In quantitative research, this step most often involves statistics. In the marketplace one can

find many statistical packages (computer-based) to analyze the data.

It is impossible to collect data on every person in a select population; therefore samples are

necessary. A sample population is a part of the relevant population. How well the sample reflects

the relevant population dictates its validity. Results from a sample that is not representative will

negatively impact your marketing.

In addition to sampling and validity issues, marketing managers must make sure the data

supports the conclusions drawn. This is the interpretation step. Despite use of the correct

statistical tool and accurate calculations, the interpretation could be wrong. Example of Data

Misinterpretation: In a survey, parents were asked to rank five infant car seats for ease of use.

They were to rank the seats in order from "most preferred" to "least preferred." One car seat was

ranked first by slightly more respondents than any other car seat. The researchers reported that it

was the most liked car seat by parents with infants. They failed to report that 70 percent of the

respondents preferred that particular car seat least. So, the first-ranked car seat was most

preferred by only 30 percent of the parents.

5. Fostering Ideas and Problem Solving

In this step, the research results are used to make marketing decisions. The findings should be

applied in marketing planning. If the research doesn't provide the information necessary to make

these decisions, the company, whether small or large, has wasted its time, money and manpower

on unnecessary data. The final step must be anticipated throughout the entire process.

6. Marketing Plan

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This six-step process of market analysis is critical in designing a marketing plan that is tailored

to your specific product or service. The process can be extremely helpful in disclosing a

significant but previously unrecognized problem. By finding and focusing on the real problem,

the researcher and business owner can move quickly to a useful solution.

A marketing plan shows the specifics of how you will market or attempt to sell your product or

service. To reiterate the purpose of this discussion, the marketing plan is to provide us with

guidance in analyzing your market. Various resources and software packages are available to

enhance our marketing efforts. Software packages are numerous and include:

Business Plan Pro, Palo Alto Software.

Small Business Advantage, Encore Software.

Jay Conrad Levinson's Guerilla Marketing, Houghton Mifflin Interactive.

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CHAPTER II

Automotive industry

The automotive industry designs, develops, manufactures, markets, and sells the world's motor

vehicles. The automotive industry is one of the most important economic sectors by revenue.

The term automotive industry usually does not include industries dedicated to automobiles after

delivery to the customer, such as repair shops and motor fuel filling stations.

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Worldwide Trends

In 2007, worldwide production reached a peak at a total of 73.3 million new motor vehicles

produced worldwide.[1] In 2009, worldwide motor vehicle production dropped 13.5 percent to 61

million. Sales in the U.S. dropped 21.2 percent to 10.4 million units; sales in the European Union

(supported by scrapping incentives in many markets) dropped 1.3 percent to 14.1 million units.

China became the world's largest motor vehicles market, both by sales as by production. Sales in

China rose 45 percent in 2009 to 13.6 million units.[2] In recent years, private Chinese

manufacturers emerge.

About 250 million vehicles are in use in the United States. Around the world, there were about

806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of

gasoline and diesel fuel yearly.[3] In the opinion of some, urban transport systems based around

the car have proved unsustainable, consuming excessive energy, affecting the health of

populations, and delivering a declining level of service despite increasing investments. Many of

these negative impacts fall disproportionately on those social groups who are also least likely to

own and drive cars. The sustainable transport movement focuses on solutions to these problems.

Automobile industry in India

The Automobile industry in the Republic of India is the seventh largest in the world with an

annual production of over 11 million vehicles and exports of about 1.5 million. In 2009, India

emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and

Thailand. By 2050, the country is expected to top the world in car volumes with approximately

611 million vehicles on the nation's roads. A major chunk of India's car manufacturing industry

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is based in and around the city of Chennai and hence it is known as "Detroit of India". Chennai

accounts for 60 per cent of the country's automotive exports.

Volkswagen India

Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private

Limited that assembles, manufactures and distributes Volkswagen vehicles in India. It was

established in 2007.

Manufacturing Facilities

Volkswagen India Private Limited operates a manufacturing plant in Chakan which is capable of

producing 110,000 vehicles per annum. The plant is also shared by Skoda Auto India Private

Limited for assembling the Skoda Fabia.

Manufactured/Assembled Locally

• Volkswagen Polo

• Volkswagen Jetta

• Volkswagen Passat

• Volkswagen Vento

Imported

• Volkswagen Beetle

• Volkswagen Phaeton

• Volkswagen Touareg

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Volkswagen, one of the largest car manufacturers in Europe, is betting big on India with its small

car portfolio. Though India contributes a mere 0.3% to the global sales of Volkswagen group, the

company is planning to increase its market share in the country by 8 to 10% in the next four-to-

six years.

Volkswagen Beetle

The Volkswagen Beetle, also known as the Volkswagen Type 1, was an economy car produced

by the German auto maker Volkswagen (VW) from 1938 until 2003 with over 21 million

manufactured in its air-cooled, rear-engine, rear wheel drive configuration. Its platform

ultimately gave rise to successful variants, including the Volkswagen Karmann Ghia and the

Volkswagen Type 2 van.

In the 1950s, it was more comfortable and powerful than most European small cars, having been

designed for sustained high speed on the Autobahn, and ultimately became the longest-running

and most-produced automobile of a single design. It remained a top seller in the US, even as

rear-wheel drive conventional subcompacts were refined, and eventually replaced by front-wheel

drive models — owing much of its success to high build quality and innovative advertising.

New Beetle

In 1994, Volkswagen unveiled the Concept One, a "retro"-

themed concept car with a resemblance to the original

Beetle. Designed by J Mays and Freeman Thomas at the

company's California design studio, the concept car was based on the platform of the

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Volkswagen Polo. Strong public reaction convinced the company to develop a production

version which was launched as the New Beetle in 1998, based on the Golf IV's larger platform.

New Beetles are manufactured at Volkswagen Group's Puebla, Mexico assembly plant where the

last lines of factory-built air-cooled Beetles were removed from production.

A classic

Volkswagens are famed for their traditional quality and the New Beetle is naturally no exception

all materials used is carefully tested and has outstanding workmanship. The body is galvanized

giving reliable protection against rust. The high-strength panels on the New Beetle are given

additional stability at specific points which achieves a very high level of torsional rigidity. The

precision fit of body parts results in picture-perfect dimensions.

Self assured

Yes, we know it’s a small car. But when it comes to safety, the New Beetle gives you a feeling

of security the moment you are seated inside. With ESP, ABS and other safety features in tow,

the New Beetle comprises of a comprehensive active safety package, making it one of the safest

vehicles in its class. We have also equipped the New Beetle with a passive safety package that

gives you the greatest possible protection. The carefully matched restraint system, consisting of

four airbags and a 3-point inertia reel seat belt system at front and rear, is also part of the

standard equipment. Go ahead and enjoy the drive.

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Comfort and convenience

In a New Beetle, you enjoy the comfort and convenience afforded by an exclusive standard

specification. Right from the 116PS (85 KW) engine version, it includes electrically adjustable

and heated door mirrors, power steering, colour-keyed door mirror housings, door handles and

bumpers and, of course, the legendary flower vase.

CHAPTER III

Review of Literature

Kathuria (1996) analyses the Commercial Vehicles (CV) industry in India in a detailed

manner, dwelling on the concepts of vertical integration and subcontracting, production

technology and technological change. After an overview of the global auto industry, Kathuria

traces the developments in the Indian auto industry from the 1950s to 1991. To evaluate the

competitiveness of Indian commercial vehicles manufacturers in the domestic market, growth

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trends, structural trends, market shares, profitability, productivity ratios, prices, quality, dealer

network and performance are analysed. Macro and micro performance of India’s vehicle exports

with major markets and Indian vehicle characteristics have been outlined, along with an analysis

of global demand patterns.

Humphrey (1999) compares the impact of globalisation on supply chain networks in the

auto industry in Brazil and India. According to Humphrey, global auto industry hubs were

situated in three regions, namely, North America, Western Europe and Japan. Brazil and India

are examples of the countries which could develop the indigenous auto industry despite not being

situated very close to any of these regions. Hence, Humphrey compares the auto industries in

these two countries. This study considers auto industry as a producer-driven commodity chain,

wherein global auto assemblers control the entire supply chain from components to dealerships.

Veloso and Kumar (2002) provide an overview of the major trends taking place in the

global automotive industry, emphasizing on the Asian market. Consumer preferences,

government regulations and intense competition have been driving the firms towards new

technologies, modernization, research and changes in design and production. Market saturation

in Triad regions (the United States, Western Europe and Japan) and rapid emergence of markets

in Asia have led to increasing diversity in market needs. As a result, there are many models and

segments coming up rapidly.

ACMA (2006) presents the recent trends in the Indian auto industry as a whole and their

implications for automotive supply chain in India. The market-oriented growth and growing

automobile industry in India have ensured bright prospects for the Indian auto component sector,

which is vibrant and competitive. Huge future growth potential of the automobile industry and

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increased access to consumer finance may lead India to a place among the top five automotive

economies by 2025.

RATIONALE OF THE STUDY

As Indian automotive industry is one of the major growing Industries in the world. With

the impact of globalization, there are many new players in the Indian auto industry. As the

Volkswagen launched its new Beetle in India, which is mid-sized luxury car priced quite high.

So the research was carried out to have a market analysis regarding the new Beetle in Indian

Market.

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OBJECTIVE OF THE STUDY

1. To conduct the market analysis of Volkswagen New Beetle.

2. To conduct the SWOT analysis of the car.

CHAPTER IV

RESEARCH METHODOLOGY

Research Problem

Market Analysis of Volkswagen New Beetle

Research Design

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Research Design is exploratory and descriptive which helps me to explore and describe

the market potential and market factors to be considered for New Beetle by Volkswagen.

Sampling Design

The study aimed to survey 15 samples from Patiala. Samples consist of the customer or

prospects. The respondents were selected on the basis of convenience sampling.

Data Collection:

Both primary and secondary data have been collected for meeting the objectives of the

current study.

For the purpose of the collection of the primary data, personal interview of the

respondents was conducted. An unbiased, undisguised structured questionnaire was prepared

which was administered to the respondent for the purpose of getting the information. With the

reference of certain previously carried studies, certain statements for getting out the customer

perception were formulated and these were clubbed together to formulate the questionnaire.

For the purpose of secondary data, secondary sources of information like magazines,

newspapers, journals; studies conducted in past etc. have been referred. The main sources of

secondary data in the study

1. Magazines

2. Websites

Analysis Techniques

The questionnaire is having the alternative choices. Questions having alternative choices

have been analyzed by taking percentages.

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Scope of the study

The scope of the study is limited to the customers visiting to the Maruti & Tata

Showroom in Patiala.

CHAPTER V

Data Analysis and Interpretation

5.1 Car brand being used currently

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Analysis and Interpretation: Majority of the respondents are using the brand Maruti Suzuki

followed by Hundai. Data shows that majority of customers prefer to buy cars of Maruti Suzuki,

because it is the most popular, famous brand in Indian Automobile Industry. The interpretation

can be made that most of the customer prefer the small and mid segment cars.

5.2 Type of car segment preferred

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Analysis and Interpretation: Results shows that mostly the customers prefer the B segment

cars followed by A segment. This shows the demand structure and preference of Indian car buyer

which is also related to his income level.

5.3 Affordable money for purchasing a car

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Analysis and Interpretation: The customer can afford 5-10 lac for buying a car, which is

mostly for the B segment cars. So interpretation can be made that the mid segment cars are

mostly preferred as compared to luxury or small segment.

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5.4 Factor influence while purchasing a car

Analysis and Interpretation: Efficiency is the most important factor that is considered while

purchasing a car. Next important factor is comfort. As India is a developing country, mostly

people prefer to purchase fuel efficient cars. That’s why Diesel cars are preferred in Indian

market.

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5.5 Preference of Foreign Brand

Analysis and Interpretation: Majority of the respondents prefer to buy foreign car brands.

Reason may be interpreted as the availability of the foreign car manufactures in India. There is

no doubt that mostly the car brands belong to abroad, but now they manufacture and assemble

their product according to Indian customers preference.

CHAPTER VI

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SWOT ANALYSIS

Strengths

It stands apart from all other cars on the road - Volkswagen Chairman Ferdinand Piece is

even amazed at the car’s appeal. “It is different, and it makes you feel different, “he said. “It’s

like a magnet”. It’s curved outline, rounded fenders and oversized lights separate it from the

other vehicles on the road. The biggest-selling car design in history gets even better - It’s cute

and trendy, more comfortable than its predecessor and there are a whole lot more luxuries and

new technologies crammed into this nostalgic Beetle. The New Beetle’s safety surpasses the rest

- The 1998 model of the New Beetle is the safest small car that has been tested by the Insurance

Institute for Highway Safety.

Weaknesses

It’s not an SUV - Americans are showing a strong trend toward purchasing Sport Utility

vehicles rather than conventional sedans. A Gallup Pole recently asked 1,003 adults: Which of

the following best describes the type of vehicle you most recently purchased or leased?

Although recent purchase trends put sedans in the lead, projected trends are saying that

Americans are leaning toward SUVs. The survey showed that 51 percent of people planning on

purchasing within the next year are more likely to purchase and SUV compared to 39 percent

purchasing a new vehicle more than a year from now. Also an indicator, three out of four SUV

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owners say their next vehicle will also be an SUV4. The Volkswagen New Beetle is termed a

“small sedan.” Looking at its competing models (which will be discussed later) I would tend to

put the New Beetle in the ‘small car’ category which shows very little market favor. Brand

loyalties favor American vehicles - The preference for American vehicles is more than three

times higher than that of European vehicles. 78 percent of people surveyed in a Gallup Pole said

that they would definitely or probably consider buying an American vehicle while only 25

percent said that of a European brand, such as Volkswagen.

Opportunities

The New Beetle has a global appeal - Americans aren’t the only ones who love this car. There

is much opportunity for growth internationally. Japan is predicted to have the Potential to be the

second-largest New Beetle market. There is also hope that Beetle mania will spread across all of

Asia.

Capitalize on nostalgic cravings - The old Bug was the biggest-selling car design in History.

Baby boomers loved their groovy cars as young adults and today’s young adults are looking to

rediscover the age that passed. As we approach the next millennium there has never been a better

time to capitalize on the nostalgia Americans are craving. The Beetle is a strong representation of

the past and may find itself setting trends for the Future.

Threats

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Can trendy stay alive? - Will the New Beetle survive as long as its predecessor? We see many

trends come and go. Does the New Beetle have what it takes to survive?

Can the Beetle be duplicated? - Would another car company trying to duplicate succeed? If the

success of the New Beetle continues there will be other car makers wanting to hop a ride on the

bandwagon. Could the New Beetle survive if another company could produce more cars of

similar attributes faster?

Will history deter some drivers? - The first Beetles were manufactured in Wolfsburg,

Germany, at a plant built by the Nazis. Although the war is long since over, there are still many

people who will treat the Volkswagen Beetle with the same prejudice and distaste they feel for

the actions of the Nazis.

Market Segmentation

The New Beetle is unique from other cars in that its market is huge. The range of interest

for the automobiles is from 16-year-olds to 65-year-olds.The car appeals to drivers of many

social classes. From college students to CEOs the Beetle has found its way into garages of all

classes. What do all of these consumers have in common? Simple, they’re tired of driving the

same old pod-like cars and the nostalgia the Beetle gives off is comforting and energizing.

Target Markets

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Volkswagen executives refuse to be pinned down on the New Beetle’s target market saying only

that it is designed for “optimists.” Yet it’s clearly aiming wide. While many of the ads sport

jokes targeted at the previous Beetle generation, others are aimed squarely at Gen-X. Edmund’s

web page on automobile reviews identifies the target buyer as “men, women, young people or

people who are simply young at heart.” The New Beetle is marketed as classic, classy, unique,

and economical. It’s for the kind of person who likes to have fun, appear fun, and stand apart

from a crowd.

Competitor Analysis

Volkswagen’s top competitors (as a company) are Ford, General Motors and Toyota. All of these

companies are very successful in the American market and provide strong competition for VW

which has been struggling in this marketplace in past years. The primary competitors for the

Volkswagen New Beetle are the Honda Civic, Fiat, Hyundai. All are included in the same

approximate price range and are comparable for size, safety features and options. Different tests

rate one above another on many aspects but tend to vary depending on the researchers. The

safety of the New Beetle does consistently rate higher than the competing models. Volkswagen

competes with a lot of worthy contenders in the automobile industry. Everyone has their own

spin on value, style and economy and changes in the market refuse to slow down.

Social Responsibility/Ethics/Legal/Political Environment

There are a lot of cars on the road these days and increasing numbers of accidents so safety is

important as a social responsibility for auto makers. The New Beetle is keeping up to today’s

standards and far surpasses its predecessor on safety features. Energy-absorbing crush zones,

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pre-tensioning safety belts, daytime running lights, antilock breaks, dual airbags, and optional

side airbags for front-seat passengers top the list of safety features. The Beetle also scores

excellent in the bumper crash-test. New for 2000 are a brake-wear indicator, improved theft

protection, and an optional cold-weather package. The New Beetle also does its part for our

society by being economical and efficient. Volkswagen offers a Turbo Direct Injection diesel

engine that gets 48 miles per gallon on the highway. On the environmental side, the New Beetle

is equipped with a CFC-free air-conditioning system. Legally, the Volkswagen is responsible for

doing its part to meet legal requirements in different states.

Distribution/Place Characteristics

The automobile industry is unique from other industries in that many people chose to order

vehicles to their specifications and are willing to wait months for them to arrive. This has been

stretched even farther with the New Beetle. During, and even before, the introduction of the

Beetle people put their names on waiting lists to purchase the car. Some dealerships had waiting

lists of over 100 names long even before the cars were released on the market. People who

wanted a silver one would take blue just to get one. Since then availability has increased

although their limited output and the constant demand keep this distribution channel interesting.

Promotion Characteristics

Historically the Volkswagen Beetle has had one of the greatest ad campaigns in history. The

November 12, 1999 issue of the Portland Business Journal states that “The ad, and the work of

the ad agency behind it, changed the very nature of advertising— from the way it’s created to

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what you see as a consumer today.” The truth behind the Bug was that it was never meant to be a

massive seller. The company hoped to sell 50,000 New Beetles in 1998 but ended up selling

about 74,000. They put the car on the market to draw attention to the entire line of automobiles

that Volkswagen offers. It certainly appears to be doing its job. Volkswagen has experienced

a 59 percent increase in sales since the New Beetle’s arrival. People are drawn into the show

room to look at the beetle and stop to take a look at the other models. The excitement the Beetle

created spread among the brand. Volkswagen is using nostalgia to market the New Beetle. The

company is investing $560 million in the advertising campaign for the car putting the spark back

into the life of their company. The new advertisements, much like the old, are very simple. One

ad from the 1060s featured a small picture of the car with the headline “Think small.” Text

highlighted the advantages of driving the small Beetle versus a big car. Overall their ads

conveyed a message of frugality and sensibility. Today’s ads maintain the same simple format

but incorporate some more modern techniques such as original music that is created just for the

Volkswagen ads. Lance Mike. Jensen of Arnold Communications, the advertising firm

responsible for the New Beetle’s latest campaign, explains “People like to feel they’re not of the

herd. If a song comes on the air that they know but other people may not know, that makes them

feel good.”

Price Characteristics

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The New Beetle is the most expensive small sedan in America today, but Volkswagen

expects a new generation to discover the bug and be willing to pay for it. The company can still

afford this higher price due to the demand for the vehicle.

International Marketing Opportunities

The New Beetles are manufactured in Mexico in a plant that has a 100,000 – a - year

capacity for output of the popular car.

The car was introduced in Europe but didn’t catch on as well as it did in the United

States. In Europe the Volkswagen Golf is still preferred over the New Beetle although one source

stated that the company may try to introduce a less expensive model of the New Beetle to the

European market to see if it will do better.

Volkswagen Group Japan KK began accepting orders for the Volkswagen new Beetle in

June of 1999. The Japanese unit of Volkswagen (originally based out of Germany) is based in

Toyohashi, Aichi Prefecture. This manufacturing group offers two models of the New Beetle

with left-hand-drive. Pending the success of its introduction in Japan, the company plans to

branch across Asia.

Internet Opportunities

Volkswagen has the opportunity to follow other car manufacturers in providing its

customers the ability to research vehicle options and order a personalized car over the Internet.

Personalizing service is always good for a company and the more ways for consumers to buy, the

better.

Volkswagen does have several web sites that give information about the New Beetle.

Everything from pricing and dealership locations to customer testimonials are available through

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the web. Due to its popularity it also receives mention on numerous other sites and I have found

it involved in numerous promotions as the prize for drawings.

GM and Ford recently announced their plans to greatly increase the amount of business

activity they conduct on the Internet. It appears that this strategy will help to increase their

efficiency and profitability as well as cutting down their costs by working online with suppliers

instead of using face-to-face encounters. If their strategy works as planned, Volkswagen would

do well to follow suite in capitalizing on the services of the Internet for bettering their business

to business activities.

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CHAPTER VII

Findings of the study

1. Maruti Suzuki is the most preferred brand among Indian customers.

2. People prefer to buy B segment cars.

3. People can spend 5-10 lacs for purchasing a car.

4. Efficiency of the car is the most important factor when purchase is made.

5. People prefer the foreign car brands because their availability in Indian market.

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Conclusion

The research was carried out regarding the market analysis for launch of Volkswagen Beetle in

the Indian market. Both the primary and secondary data was collected for this purpose. By going

with the primary data analysis and the SWOT analysis, It can be concluded that though the

Beetle is having its own USPs but it can not do well in the Indian market. First of all the prize

factor is the reason for it. A customer can have a D segment car by paying the same amount as he

is supposed to pay for Beetle. Though it is attractive in nature, but being small sized and lack of

inner space make it lower as we compare it to other cars in this price. So these factors must be

kept in mind by the Volkswagen while launching it in Indian Market.

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Bibliography

Articles

1. Odgen, Mike. “Top ad campaign of century? VW Beetle, of course.” Portland Business

Journal 12 Nov. 1999:8, v.16, i.38.

2. Cisterna, Fred. “Driving music: Volkswagen uses a mix of existing and original tunes to

get drivers going.” Shoot 13 Aug. 1999: 26, v.40, i.32.

Websites

1. http://www.volkswagen.co.in/in/en/products/Beetle.html

2. http://www.netmba.com/marketing/market/analysis/

3. www.angelfire.com/.../New%20Beetle%20Market%20Analysis.pdf

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ANNEXURE

1
QUESTIONNAIRE
Dear Sir / Mam, this data collected is just for the research purpose and would not be used
for any other purpose.

Name ………………………………………………..…
Age ……….…
Gender: Male Female
Occupation……………………………………………….

1) Which car brand you are currently using?

Maruti Suzuki TATA Motors

Hyundai Any other

If any other, please specify……………………………

2) Which car segment do you prefer?

A segment B segment

C segment D segment

3) How much money you can afford to buy a car?

2- 5 Lacs 5- 10 Lacs

10- 15 Lacs More than 15 Lacs

4) What factor influence you most when you buy a car?

Safety Efficiency

Comfort Brand

5) Do you prefer foreign brands?

Yes No

Can’t say