The New Beetle Case Study Casey Fei Isaac Derek

Programme 3Cs Issues Recommendations

3Cs - Company

A German car company in a little turmoil The situation is:  Sales have been declining  Japanese competition, appreciation of Deutschemark, etc.

3Cs - Competition Mapping out everyone’s position: American Cars (Ford, Chevrolet, Dodge) Japanese Cars (Honda, Toyota, Nissan) New Beetl e Uniqueness Reliability

3Cs - Consumers There are: –The old fogies –The new generation The general opinion: “the people’s car” - VW offers a unique, individualistic experience - affordable German engineering

3Cs - Consumers

The Present Situation “Drivers Wanted” campaign boost Now the New Beetle…

Next up: ISSUES

Issues (1 of 3) How much of the car’s 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 VW’s image through the New Beetle? –Belief that VW product line is tired and old compared to Japanese cars

Issues (2 of 3 cont’d) How to rebuild VW’s image through the New Beetle? –Improve the reliability –Make regular innovations –Strengthen its brand equity

Issues (3 of 3) How to price the New Beetle? This is in contrast with VW’s heritage of affordability.

Issues (3 of 3 cont’d) 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 VW’s 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 –There’s an opportunity to use the positive media coverage to Volkswagen’s advantage. Get the media involved to spread the word about the Beetle! –Other suggested options to increase Beetle’s exposure: Print Advertising in magazines and showcasing car at big events.

END.