Facing the “mission Impossible” - Volkswagen Beetle

...

- Volkswagen needed a refreshing brand image urgently.

The success of VW’s original Beetle during the 1960s and 1970s in the U.S. market was a single-product success. Nevertheless, the senior management leaders in Germany would never expect VW come back to the one-car company again. Instead, they would like to see VW’s separate car models all sell well in America.

The nostalgia marketing strategy would not bring a refreshing brand image, especially when the target market was only baby boomers. So only targeting on new generation of customers could meet VW’s urgent need to recreate their brand.

Younger Generation as the Main Target Market

Arnold Communications, VW’s newly-hired advertising agency, conducted market research of VW’s cars in 1994. It found out important information of VW’s consumers as follows:

- They were younger, slightly more affluent and more educated than the average car buyer.

- They enjoyed a more active role in driving, e.g. driving on challenging winding roads and neglecting speed limits.

- They shared a unique attitude towards life: well informed, more adventurous, creative, confident, self-sufficient, experimenters, and making and taking the most out of their life.

The information formed the foundation of the Drivers Wanted campaign, and helped identify the target market and develop a new brand positioning.

The target market was younger people with more active attitude toward life. The brand positioning was invitational and approachable – it’s the only brand that offered the benefits of German engineering affordable. Moreover, VW wanted to represent a unique driving experience – more connected to the road – and a different way of living – more connected to the world.

The campaign brought successful sales and brand recovery. Consequently, it’s impossible for the marketing team to ignore the new target market, especially the younger consumers. If targeted them as the main market, VW would get at least two advantages:

- VW would consolidate its brand positioning created by the Drivers Wanted campaign immediately.

If the marketing team targeted the younger generation as the main market, the brand positioning of VW established under the Drivers Wanted campaign would be consolidated.

We can suppose that if, even, the New Beetle became a car popular among young people, but not, at least not only a nostalgia product for baby boomers, VW would get a more clear and definite brand image suddenly. It would be beneficial for VW’s recovery in the U.S. market in the long run.

- Following the existing Drivers Wanted campaign is another way to save advertising budget.

Targeting the younger generation market means joining the Drivers Wanted campaign is acceptable. Consequently, it would be another way for the marketing team to save budget, because the campaign had invested huge amount of money in different media, and it had received huge awareness among the younger consumers already.

But still there were disadvantages of such marketing strategy:

- Baby boomers would feel lost.

If a strong advertising aiming at younger generation came out, the baby boomers would feel lost, which would even reduce their enthusiasm to buy the New Beetle. So it was evident that nostalgia topic could not be given up entirely, though it could not be the main theme as well.

- VW should reconsider the price.

The New Beetle’s estimated list price tag ranging from $17,000 to $18,000 would be a bit expensive for the younger generation, so VW should reconsider the price and adjust it a little lower to meet the younger consumers’ need.

Recommendations and Summary

As far as I concerned, the main target market of the New Beetle should be the younger generation VW consumers. Because it could consolidate VW’s brand positioning at that time and it would be more profitable in the long run.

However, at the meantime, in order to maintain the baby boomers consumers, a bit nostalgia topic should be added into the marketing strategy.

What’s more, VW should reconsider the New Beetle’s price and reduce a little to meet the young people’s financial status. However, since the baby boomers would usually be the parents of the younger generation consumers, there would be no need to reduce the price too low.

Comparing to baby boomers, the New Beetle should belong to the new generation consumers. Only through that could VW become a new popular car brand in the U.S. market again. Nostalgia was toward the past, but the brand positioning should always direct itself into the future.