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MARKETING STRATEGIES OF VOLKSWAGEN IN INDIA

ABSTRACT
The case examines the marketing strategies of Volkswagen Group India, the Indian subsidiary of German automobile manufacturer, Volkswagen AG (Volkswagen). Volkswagen entered the Indian passenger car market in 2001 by launching its car brand - Skoda. In 2007, two of its other brands Audi and Volkswagen, were also launched in India. Volkswagen Group India emphasized on all aspects of marketing mix including product, price, place and promotion. The company offered three brands including Audi, Skoda and Volkswagen that together comprised of 15 different models as of late 2009. Volkswagen Group India mainly catered to the luxury segment of the Indian car market. The company had established presence in India through separate distribution channels for each of its brands. In its initial years, Volkswagen Group India primarily used the print media to promote its products. However, considering the growth potential of India's automobile market, the company started using electronic, digital and out of home media along with print media. In November 2009, the company launched an integrated marketing campaign to strengthen its brand image. The case describes the marketing campaign and ends with a discussion on the growth prospects of the company in future. It also illustrates the main marketing strategies that Volkswagen is adopting to penetrate Indian market as: Huge promotions in IPL (Event Advertising) Double marketing in India

KEYWORDS
Volkswagen Group India, Volkswagen India Private Limited, Indian Passenger Car Industry, Marketing Mix, Brand Awareness, Print Ad Campaign, Television Commercials, Corporate Branding Strategy, Integrated Marketing Campaign

CASE STUDY
INTRODUCTION
Volkswagen (VW) is one of the worlds leading automobile manufacturers and the largest carmaker in Europe. As Volkswagen pursues its goal of becoming the number one automaker in the world by 2018, India has become a key component of its strategy. India is currently the worlds second fastest growing car market, with shipments expected to more than double by 2018. As a relatively recent entry into the Indian automotive market, VW needed to raise brand awareness. To address this challenge, Volkswagens marketing team focused one of its key brand pillars, innovation, to make a strong impact throughout the roll-out in India. Innovation was showcased not only in Volkswagens product introductions, but also in its communications and advertising. Over the years, Volkswagen Group India not only launched several products, but also ensured that its brands were well known among the Indian consumers. Although, the company had a presence in the Indian car market since 2001 and the Skoda and Audi branded cars were well known among consumers, the Volkswagen brand was not well recognized in the country.

Therefore, in November 2009, the company launched an integrated marketing campaign to build its brand image. It also launched a marketing campaign for its iconic model, the Beetle. Volkswagen India expected that with its brand building exercise, it would be able to increase its sales and capture a significant market share in the Indian car market.

ABOUT VOLKSWAGEN
The history of Volkswagen (which means 'people's car' in German) can be traced back to the 1930s when Ferdinand Porsche, a reputed automobile engineer and designer, started designing an affordable car for the common man. In 1936, the first prototype of the car, called the KdFWagen, was designed in Stuttgart, Germany.

MARKETING STRATEGIES IN INDIA


Volkswagen entered the Indian market in 2001 by setting up its Indian subsidiary Volkswagen Group India. As of 2009, Volkswagen Group India had two group companies - Volkswagen India Private Limited (Volkswagen India) and Volkswagen Group Sales India Private Limited (VGSIPL)...

MAIN MARKETING STRATEGIES IN INDIA

INNOVATIVE MARKETING STRATEGIES RAISING AWARENESS


VW India created groundbreaking campaigns such as the worlds -Best talking newspaper, which used light-sensitive chips to speak to readers about Volkswagen as they turned the pages of their morning newspaper. The talking newspaper ad created a sensation in India, and

garnered worldwide attention for taking print advertising to a new level. In one year, brand awareness more than quadrupled, increasing from 8 percent to a high of 37 percent. Volkswagen next turned to digital media to extend its success and create new opportunities for customers to connect with the brand.

Lutz Kothe, Head of Marketing for VW India, says, At Volkswagen, innovation is woven into everything we do. In formulating our digital strategy, we looked beyond the obvious for

innovative ways to engage our audience. We knew that for many people, their car affects their professional life and their professional identity affects their car choices. This made LinkedIn a natural choice to connect with current and potential car buyers among the growing Indian professional population. Indian car market growth second fastest globally,

RECOMMENDATION ADs
Next, Volkswagen launched a series of Recommendation Ads encouraging more customers to join the conversation. Each ad showcased endorsements of actual LinkedIn members, and invited the community to recommend their favorite Volkswagen model. Volkswagen used LinkedIns broad reach (100 million members worldwide, 9 million in India) and precise targeting capabilities to connect with professionals who matched the buyer paroles for their different models. Lutz Kothe said, Volkswagen was the 1st company in India to use LinkedIn Recommendation Ads, and the campaign was a success. We went in with a goal of inspiring 500 recommendations among current and prospective car buyers. In less than 30 days, over 2,700 Volkswagen fans had stepped forward to recommend their favorite cars and share these recommendations with their professional networks. In the same time period, we gained over 2,300 followers who asked to stay abreast of the latest news and developments from Volkswagen. Kothe concludes, In a world where people spend an increasing amount of time at work, thinking about work, and interacting with their work colleagues, we believe its important to foster discussion about Volkswagen products in a professional context. Our innovative partnership with LinkedIn lets our customers learn about Volkswagen products and provides insights

DOUBLE MARKETING TO POSITION BRAND


Double Marketing is NOT stuffing multiple messages into one campaign. It's running multiple campaigns on different messages concurrently. Coke was the only company that typically tried this, because of their huge marketing budget - by engaging different ad agencies and pitting them against each other. Many times they would run different ad campaigns at exactly the same time. This is close to Double Marketing, but the campaigns didn't really work together. Contrast this with the approach created by the smart team at CP+B when they took over the Volkswagen account. In the span of the last few months, they have launched the edgy "Unpimp my ride" campaign about design, control and the "obeying your fast" for the GTI - as well as the "safe happens" jarring TV ad spots for the Jetta. Despite the controversy, the tandem efforts work nicely to push the counterintuitive marriage of speed and safety as benefits at the heart of the VW brand. The campaigns are brilliant examples of how to use Double Marketing to push your core messages, even when they happen to conflict. In doing so, VW doesn't have to isolate or marginalize any audience it doesn't want ignore, or position the brand in a single light. This is yet another marketing strategy and series of campaigns from CP+B that others should pay attention to.

STRETCHING A BRAND BY CHANGING ITS PERCEPTION NAD BY RE-POSITIONING THE BRAND


Volkswagen (VW) is a famous international brand name that has traditionally been associated with the mass market, its most famous model being the Beetle. Indeed, it is currently exploiting nostalgia with the new Beetle retro-model. However, not content with sticking to the categories where it enjoys success, the company is also attempting to move into the prestige- and luxury-car segments dominated by established brands like Mercedes and BMW.

Its first venture into this market segment is with the new Passat V6 Syncro, which is out of the price range of the typical VW buyer. Evidently, other models are planned at higher level segments and prices. Even though VW owns Audi, Bentley, and Lamborghini, amongst other brands, many people are skeptical that it can stretch its own brand upwards, when consumer perceptions still associate the VW-branded cars with smaller and less prestigious vehicles. Its "badge value" (brand associations) would not appeal to customers of BMW, Mercedes, or even Audi. Additional problems arise when consideration is given to the fact that other brands such as Volvo and Toyota's Lexus are also shifting their position to target the prestige market that demands performance, luxury, and marque. VW acknowledges the issues but says it will give customers more products. But is product what the luxury car owners are really buying? More likely, according to research, it is status, prestige and self-expression that determines their decision and VW will need to do a considerable amount of consumer perception management and distributor education to successfully bring any of its VW branded models into that league.

Questions: 1. Explain the dynamics of the Indian passenger car market? 2. Analyze the marketing strategies of Volkswagen in India? 3. What are the future prospects of Volkswagen in India? 4. Examine the growth strategies of Volkswagen India over the years?