2014/12/10

brand strategy adopted by an automobile company Volkswagen

brand strategy adopted by an

automobile company Volkswagen
This report is a depiction of the brand strategy adopted by an automobile company
Volkswagen. This primarily covers the brand management by the company including the critical
evaluation of the brand strategy adopted with context to its brand value, brand image and
brand positioning. The report provides the reader to have critical analysis of the brand
management and at the end of the report a conclusion is drawn on the basis of analysis in the
body of the report. In main part of the report there is VIP analysis followed Boston matrix and
product life cycle for the detailed explanation of topic. Various brand strategies adopted by the
company are also touched in this part of the report. The conclusion is followed by some
suitable recommendation of the brand strategy management of the company.

Introduction
Branding
The concept of branding in market is related to the production of brand and in the views of
Hankinson & Cowking (1993) that branding is tagline that used to differentiate product from
other competitors in market.
Branding is defined as identity of a specific product, service or business. A brand can take
many forms, including a name, sign, symbol or slogan. The world brand began simply as a way
to tell one persons cattle from another by means of a hot iron stamp. The word brand began
has continued to evolve to encompass identity- in effect the personality of o product, company
or service.

In the views of Johnson and Scholes (2002, pp.

140) branding is an important feature for
saturated market and for the slow growing
markets.
The brand provides recognition and allows adding value, image and position to the company.
An effective brand strategy is very useful for the survival and future growth of company.
Branding is used to promote the products of the company in an easier and effective way. It
builds up identity and for communicating the story of brand as in India the concept of
storytelling is popular tool for advertising.

Importance of Branding
http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

1/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

The branding is the face of the product that company offers to its customers hence every
company has to toss their branding strategy effectively. Since this is beneficial in making the
impression of product or services in the mind of customers. An effective and impressive brand
name always attracts the customers and keeps the position and image of the company in their
minds. This even gains to make the customers think and moved towards the use of another
product of same company to which they are not familiar.
A good quality brand image in business matters a lot; the brand of the company is always seen
as in differential part of the company which shows its value and quality. With an effective and
strong brand the image of the company goes rise.
Strong brand of business facilitateStruggling
other brands
to link
with each other
to meet
your
different products of
the company. The brand name of deadline?
company used for the different products of the company for
effective selling in market. (SourceAvoid
- Hankinson
& Cowking, 1997 pp- 156)
disappointment.

Company Introduction

Order Now (/order/)

VOLKSWAGEN DAS AUTOS

The automobile company is well known for its services and higher satisfaction among their
customers. Volkswagen group of India is subsidiary of worldwide famous Volkswagen AG. It
switches to brand of Volkswagen in addition to two other existed brands of Skoda and Audi in
Indian market. These brands possess its own character manoeuvres in an autonomous
manner. The establishment of this subsidiary was in year 2007. In Indian autos market the
brand image is featured by the size of vehicle, technologies of driving and different features
like ABS, EPS and air bags and galvanized bodies of automobiles.

Multi branding v/s Corporate Branding

There are two main concepts taken corporate branding and multi branding that are explained
as followed by the company:
Multi Branding: Concept of multi branding in the company mainly based on the objective to
become most innovative manufactured volume complies with best quality product specifically
considering medium to long term classless. With theme and slogan Vorsprungdurch Technik
of Audi brand in considered as solid brand in automotive premium segment. In addition brand
of Skoda is a combination of intelligent concepts in using space and technical innovation also
covering the design and good money value (Kapfere, 2009, pp 276).
Corporate Branding: Volkswagen carries three main brands by having messages of
responsible innovation and providing Enduring Value. The car under the corporate brand
there is passenger cars convey reliability and quality and engineering of German skills at the
global level. This facilitate in becoming the first choice in millions of the customers when
buying a car.

Critical Evaluation of Brand Strategy of VGI

http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

2/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

In the views of Porter (1993), for successful administration of a company there must be an
identified strategy that itself serve as a position and must be able to handle competition
through brand strategy of the company and is primarily differentiate into three parts as. Cost
leadership strategy, differentiation strategy and focus strategy.
Brand strategy of Volkswagen is well maintained. As India is important market for the strategic
marketing especially in automotive industry. There are good opportunities for future growth as
a result of outstanding conditions of demands. But the noticeable condition is that there is very
high competition full with challenges of conditions of market, different lifestyle, and behaviour
of consumers.
Branding is key success factor for Volkswagen in order to gain good market position and
competitive advantages therefore it become very successful in the Indian Automobiles of
market. As branding plays a vital part for the Volkswagen and make it differentiate from other
competitors in market. Kotler has viewed his comment on the leadership that a cost
leadership is not possible, differentiate is their competitive strategy (Kotler, 2008, p.468). Also
Varey considered brand as unique and for selling the proposition in the emerging markets.

Branding Value of Volkswagen

The brand value is an important aspect of a brand. This can be illustrate as the customers are
usually willing to spent or pay more for that product that is related to any known brand, they
preferred brand that the product. The brand value is hence defined as that extra money made
by a company or can be made from the selling of its products in solely way only due to the
name of its brand. For example For Volkswagen group India there is late entry of the
Volkswagen group of India in the market as compared to other competitor rivals. Due to this
company has lack to gain the first mover advantage in market and hence less gain in the brand
value. For further development the company in order to strengthen its brand value it follow the
strategy by making corporate statement innovation for everyone.
While marketing any product, importantly in India, the most crucial factor is quality and price of
product as India is at a halt a poor country.

Brand Image for Volkswagen

Brand image is specified as those qualities which are related to the association to customers
with the particular brand. It is expressed as the human behaviour and their wants and desires,
but not enough it also associates with the situational use, price and quality of the brand. Here
example can be taken as the Mercedes Benz which possesses a string brand image due to its
product quality and features and their price, this came to make an image of brand in the minds
of customers about that particular product. The brand image is not an inherent character for a
company brand though this can be achieved through the advertising and campaigns.
Brand image is identity of the product in market and is a symbol of the company that make its
impression and image in the minds of customers. The Volkswagen with its new brand name
Das Auto along with its vision, the company is going to create new image by surrounding
proximity and convenience via affordable innovations. The Volkswagens brands of Skoda and
Audi managed in such a way that curved their position in stiff ad competitive automobile
market and creating their baton of brand image in consciously sensitive markets like India.

http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

3/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

Brand Positioning
In the view of Armstrong (2002), brand positioning zeroes in on customers and gives them a
reason to buy a product in preference to others; it differentiates a product from other products
based on attributes. Walter (1997) also states that position of brand is perception among target
customers. The Volkswagen group of India as came back into market after the period of ten
years it has going to position its brand again in the minds of their customers and in market.
The company has positioned its brand bracketed to set of above middle classed customers
whose income is above average and have the thrill to show off as and where compared to
brand Audi which is expensive and very showing type is designed for those types of consumers
that are sporty and want to show off more with expensive expenditure. On contrary the
Volkswagen brand is suitable for the average persons and also full the desire to show off. The
company has managed them with a separate position in market. According to a statement
given by the director of VW passengers cars Mr. Neeraj Garg that the company will take some
time for making its position and there is a slow process to gain position into the minds of
customers of India.

Segmentation
In India most driving factor is recognised affordability, due to this the market of domestic cars
is segmented on to accordance with their prices. There is price based competition in Indian
market therefore the car is segmented as below:
Multi Segmentation
Geographical segmentation
Demographical segmentation
Social Class

Marketing Strategy
Marketing Strategy adopted by Volkswagen brand after its launch in India in 2007 in relation to
marketing Mix

Marketing Mix
Marketing mix of Volkswagen Brand
Source: Kotler, P & Armstrong, G (2004)
For brand strategy of Volkswagen there is involvement of first P according to marketing mix is
Product as described in model. The product in this model is defined as that combination of
services and goods sell to the customers by the company or organisation in target market
(Armstrong & Kotler, 2005). From analysis it is found that product is also a part of Brand name.
Design and quality are the main product features that possess variety in them. Here an
example can be quoted for a brand of Volkswagen Touareg that has been sold in India
comprises of a package of seating, engine, breaks and engine etc. (Volkswagen India, 2009).
http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

4/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

Hence for product strategy the company is equipped with variety and design in their products
including warrant for them which in turn results in good response from the customers and
make them satisfied and bring loyalty in them.
The second P in this model if marketing mix is price. Price is of a product or service is defined
as that amount which is paid by customer to the organisation or company for buying their
products or services offered to them (Armstrong & Kotler, 2005). While discussing the price
strategy it has been found that there are 61 dealership offers high prices for the products to
sell in India as compared to their rivals like Honda city and Ford, but there is variation that the
company charge interest rate by 4.5 5.0 % instead of other rivals make with 8% or more as a
loans given by banks or building societies of other rival car makers. This facility is attributed by
the Volkswagen financial Services that aided to support the sales of the company to their
customers.
There is next P for the marketing mix is Place that is also very crucial in Brand management.
The place usually referred to that place where there is availability of products of company to
their customers. As in concerned to Volkswagen the company involved in using dealers and
distributors for the purpose of the sales of their products. There are two modes for the dealers
to get authorised either through franchised or direct ownership of company. For the company
their network related to their dealers is very important and is maintained in a proper way
because the product of the company are introduced through them to the customers, hence it is
very important. In the views of Kotler 2005 the company usually share their losses and profits
both with their dealers for purpose to maintain the quality of cost leadership. At present the
Volkswagen has fine relationship with their dealers in India and also involve in the dealing of
their products with Skoda with 61 leaders (Top News, 2010).
The last and fourth one P is Promotion. The promotion has variance in their objectives that has
to be achieved in market. The promotion is usually handled with the tool of advertisement. The
promotions for customers are added through the advertisement that results in the excitement
among them. The aim of promotion is to pull in target consumers. These promotions are based
on the scheme of non profit but in turn results in the profit for the company (Bradley, 1993). For
example the Volkswagen Company in year 2009 has launched a promotion named Pre
Monsoon campaign published by Motor beam, 2009. This promotion is for the purpose to
establish the brand of company India. In India the company offered a variety of range of
services to their customers and fro this company is getting profit from the promotions of the
company brand.

Pricing strategy
Pricing strategy of Volkswagen: In the vies of Lowe and Doole (et al 2006), for any company at
the initial stage of launch in market introduced with two adopted strategies for pricing, one is
marketing skimming price strategy and other one is market penetration pricing. The company
Volkswagen has choose the strategy of market penetration pricing. In this strategy previously
the prices were set high so that there can be coverage of initial investment this is so because
the company had invested a lot of money in the business to set up the unit in Pune,
Maharastra.
Ansoff Growth Matrix Model for Strategy
Source: Kotler, P & Armstrong, G (2004)
http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

5/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

For further analysis there is discussion in accordance with the given model of Ansoff Growth
Matrix for Volkswagen. This model usually depicts the different areas of market development of
the product of the company. This development is in relation with company and that aspect that
are very important for the diversification of market. The thing is that this company has been
diversified as it enters into new market.

Market development
According to Reiziger (et al, 2003) when a company took entrance into a new market and
launch themselves by introducing existing products this is came to know as the development of
market, and the main aim of the company is to lure the customers from the their existing
competitors in that exiting market i.e. new market. The company Volkswagen has got the entry
into Indian market in 2007 by launching their product Jetta, then after two years in 2009 the
company has launched two new cars in market with their existing brand using the brand value
in market these cars are ionic beetle and the Touarge sedans (Volkswagen India, 2010).

Diversification
Again in the views of Reizger (2003) this is the entrance of any new company with having the
launch of their new product under its own brand is termed to be diversification. This strategy
is commonly recognised as most risky one as there is introduction of two new entities one is
market and other one is product. For the Volkswagen diversification is not so risky, as it has
already successfully launched a variety of cars in the market with its own brand and in
accordance with its brand image and with every brand it has inched higher and created sense
of the demand in the market on every launch of new products. Most currently the company has
as innovation there are four new car that has gone to be launched in 2012 and these new
coming products are SUVW, Couple, Up and Blue Sport (Volkswagen, 2010).

Conclusion & Recommendation:

As from above discussion it is concluded that Volkswagen has got an effective branding
strategy but there are some factors that has to be taken into consideration for the company to
make its brand VIP. In India this company is represented by three brands i.e. Audi, Skoda and
Volkswagen and posses their own identity and features and an independent manner in market.
The brand of Volkswagen along with Audi and Skoda provide good level of consistency and
excellence in the market within the existing value, image and position of its brand in target
market of automobiles. It has also been concluded that the company adopted brand leveraging
strategy. The product launched by the company are good from all aspects and given for
strengthen the brand image and identity in market. Having discussion over the marketing mix
all the aspects of the marketing mix by the Volkswagen are handled in an effective way,
company cover all areas of price, promotion, place and product well but there is some need to
pay emphasis over the promotion and price aspect of the brand strategy to get the good
response in market. It is also concluded that there is lack of loyalty factor in Indian market of
Auto brands as compared to the other markets. The company Volkswagen is new in the market
and hence there is low brand awareness of the company in market. There must be raise of
awareness among all the required fields of market. There must bring up some improvements
and creation of the brands. As in Indian market which is basically driven by the price and
prerequisites, company Volkswagen carry on its brand with the quality factor only. This is
http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

6/7

2014/12/10

brand strategy adopted by an automobile company Volkswagen

criticised here because this strategy will create hindrance in the brand development and
prosperity of the company. The factor of Cannibalization can be seen as it can pay an
important role for the Volkswagen approach for the branding i.e. multi branding approach and
hence resulting in the brand that are new take the business away from that which are already
established in market.
There are some suggestions that the company can adopt for the effective brand management
are to drive the response of the customers as they are the key link for the success of the
company and there must be online and offline programmes of marketing.
The company has to be involved in the Build Brand Engagement process to learn how the
consumer wants to link up with the brand of product. They must continue to attempt at
increasing the customer loyalty.

To order your own custom written Essay, Dissertation or Coursework, call UK Essays on:

0115 966 7955

or visit our website at:

www.ukessays.com
Copyright 2003 - 2014 - UK Essays is a trading name of All Answers Ltd, a company registered
in England and Wales. Company Registration No: 4964706. VAT Registration No: 842417633.
Registered Data Controller No: Z1821391. Registered office: Venture House, Cross Street,
Arnold, Nottingham, Nottinghamshire, NG5 7PJ.

http://www.ukessays.com/essays/marketing/brand-strategy-adopted-by-an-automobile-company-volkswagen-marketing-essay.php

7/7