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

400 000

300 000

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

400000

300000

Year Total VW

200000

100000

Drivers Wanted campaign boost Now the New Beetle

1 3

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

10000

15000

20000

25000

5000

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.