Beetle Hbs Case Study

Product:

The Old Beetle

The Volkswagen Beetle was born in the mid 1930's by Ferdinand Porsche's designs.

Beetle was the most successful car model of its time, more than 21 million Beetles were sold. It was also a huge success in America and had become a true American icon.

The Beetle had a huge fan following in the new generation of Americans. It had become a symbol of individuality and personal style

Beetle found a place in Disney movies as Herbie the love bug and also in the lives of the common American as a member of his family. People were having fun of the flaws of the car. For instance, they were running contests such as how many people could fit into a car and the like.

In 1979, because of the inability to meet with two major legislations of the United States, Volkswagen stopped selling cars in the United States.

The new Beetle

Designers of the new Beetle tried to keep the spirit of the old Beetle while improving the design in a more efficient way.

By research, the company found out that people love round shapes. Therefore the company decided to use the design basics in terms of roundness, with the new Beetle. The new look of the new Beetle became more attractive with many color options and a stronger, German design, front wheel engine.

The successful launching and promotion to the dealers are also come up with the new Beetle.

Place: It was not easy to enter the United States car market but Volkswagen managed to do so. By the end of 1954, there were about 8913 Volkswagen cars sold to America. In 1955, the company incorporated as a subsidiary and became Volkswagen of America.

Pricing: With a base price tag of $15,200, price of the most new Beetles was around $17,000- $18,000 with some extras such as CD player and sunroof. In the small car market though, the price for the small cars were ranging between $11,035 and $17,239.

Promotion: The TREK/K2 promotion allowed the company to customize the cars and sell the customized products to the customers effectively.

Company:Volkswagen is a German car company and it has some problems to resolve such as to increase the declining sales and to stay strong against the Japanese competition. It also gives value to appreciation of Deutschemark.

The company started advertisement by giving value to uniqueness and effectiveness while they started the advertisements in the NYC by the early 1955's.By 1968,with the help of other models, Volkswagen was selling about a half million cars annually in the United States. During 1970's however, Volkswagen started to lose money on almost every car sold in the United states as the appreciation of the Dutch mark against United States dollars threatened to price the cars sold. The 1982 recession with the drop in oil prices led the company to stop selling Beetle in the States. In 1993, sales were at an all time low for the company. Therefore, in 1994, the company began laying out a strategic plan to regain the success of the company. By the end of 1997, Volkswagen increased its sales by %178 and regained its success in the United States market.

Customers: When Volkswagen started to work with Arnold Communications, this small sized advertisement firm discovered that the customer base of Volkswagens' is relatively young, affluent and more educated than an average car purchaser. Additionally the Volkswagen customers were enjoying a more active role while driving. Also the Volkswagen customers were well informed, more adventurous, creative, confident, self sufficient and experimentalist.

Competitors: In comparison to some strong car brands such as BMW and Mercedes, Volkswagen was perceived as the people's car by the customers. Additionally compared to the Japanese brand such as Toyota and Honda, Volkswagen was offering a more individualistic and unique driving experience.

Volkswagen was the only company that was offering the benefits of German engineering affordably.

Compared to the Japan firms Honda and Toyota as well as Mazda and Nissan brands, Volkswagen is more drivable, substantial, individual and spirited. On the other hand compared to Volvo, Mercedes and BMW, Volkswagen is more approachable, more likeable, means more value as well as perceived as more human. (exhibit 3).

1. If you were Liz Vanzura, who would be in your target market for the New Beetle?

It can be said that Volkswagen's major problem is to decide whom to target and how to communicate the New Beetle's benefits and characteristics, utilizing a launching campaign with a limited budget, which implies deciding which aspects of the product to emphasize, media to use, price to determine, and positioning to use, consistent with the new brand message