Consumer Behavior Final Project- 062711

Automobile Brand Analysis Consumer Behavior

Spring 2011Victor J. Chow

Irene DaiSam Lin

Key Objectives

1. Analyze Volkswagen’s brand strength and entity in comparison to competitors

2. Develop action plan to shift the Volkswagen TW brand to ideal location while matching German headquarters branding guidelines

Agenda

1. Automotive Market Overview

2. Market Analysis and Sales Reports

3. Competitor Performance Analysis

4. Volkswagen Brand Vision

5. Survey format regarding Brand Image Perception

6. Brand Image Perception Ratings – Survey results and key findings

7. Suggestions for VW based on Survey results

Agenda





5. Survey format regarding Brand Image Perception6. Brand Image Perception Ratings – Survey results and key findings


Analysis of Taiwan's automotive market

398,882413,746

484,292514,628

366,317

326,781

229,495

294,423325,000

0

100,000

200,000

300,000

400,000

500,000

600,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 (F)

Past trends

Present/Future trends

Analysis of Taiwan's automotive market

Taiwan's auto market reached a record high in 2005 with. 514,628 units sold. 2008 saw Taiwan’s auto market decrease to a low of 229,495 units

Past sales trends indicated annual car sales of approximately 450,000 units, while current and future trends indicate a total market decrease to approximately 350,000 units per annum.- With 2 million Taiwanese (10% of total population) moving

abroad to China for business and the Taiwanese habit of buying new cars every 10 years contributed to this drop of 100,000 units per annum shift.

The Taiwan auto market is highly mature, with little possibility of large overall growth or shrinkage.

Taiwanese customers place an emphasis on deep-rooted brand image, a high degree of attention to customer service, customer satisfaction, word of mouth recommendations.

Domestic vs. Imported

With Taiwan's entrance into the WTO, tariffs on imported vehicles have gradually decreased from 29% to 17.5%.

The import car market has grown year by year, increasing from 14.6% in 2005 to 23.6% in 2010. In contrast, the domestic car market decreased from 85.4% in 2005 to 76.4% in 2010.

This difference is approximately 9%.

CKD CKD CKD CKD CKD CKD

CBU CBU CBU CBU CBU CBU

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 (F)

9%

Seven domestically manufactured brands

The seven brands are as follows: Toyota is the largest, with Mitsubishi, Nissan and Honda as the “middle three brands” and Ford, Mazda and Luxgen as the “three small brands”.

Mitsubishi, Honda and Nissan’s market share is relatively stable. Mazda’s market share has declined slightly, while Ford has faced the largest market share shrinkage.

It should be noted that Luxgen emerged in 2010 at an alarming growth rate; but whether it has the ability to maximize its momentum with follow-up products remains to be seen.

20.3 23.6 21.0 20.115.7

19.1

0.4

3.45.8

6.65.3 4.8

10.78.2

7.65.5

6.1

5.9

4.56.0

8.78.7

8.7

8.3

12.711.0 11.0

10.911.3

11.8

16.8 15.314.3

15.915.6

14.7

29.2 29.3 32.1 34.6 38.132.0

4.14.3

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 (F)

Toyota

Mitsubishi

Nissan

Honda

Ford

Mazda

Luxgen

其它

Agenda





5. 2010 and 2011 Strategy and Results




Sources: Chunghwa Telecom

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CBU 61,185 51,735 49,226 52,414 55,788 61,454 52,174 48,777 35,493 54,925 66,132

CKD 251,879 209,752 258,504 280,406 328,553 358,419 238,481 217,904 150,050 195,497 215,471

Total 313,064 261,487 307,730 332,820 384,341 419,873 290,655 266,681 185,543 250,422 281,603

Growth -0.10% -16.47% 17.68% 8.15% 15.48% 9.24% -30.78% -8.25% -30.43% 34.97% 12.45%

Market Analysis – YoY (Excluding LCV)

CBU, 23.48%

CKD, 76.52%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

BENZ, 3.4%

LEXUS, 2.3%

BMW, 3.1%

VW, 3.0%

TOYOTA, 4.9%

MITSUBISHI CKD, 8.2%

FORD CKD, 5.8%

HONDA CKD, 9.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2004 2005 2006 2007 2008 2009 2010

Top 5 Brands (CKD / CBU)

VW is No. 4 CBU brand in 2010

TOYOTA CKD, 28.2%

NISSAN CKD, 12.6%

12.0%

22.0%

32.0%

CBU

11April 9, 2023

Agenda








Market Analysis – Top 10 Brands (CKD / CBU)Year 2010

No. CKD Brand Quantity % to CKD % to Total No. CBU Brand Quantity % to CBU % to Total

1 TOYOTA 79,453 36.87% 28.21% 1 TOYOTA 13,734 20.77% 4.88%

2 NISSAN 35,588 16.52% 12.64% 2 BENZ 9,520 14.40% 3.38%

3 HONDA 27,417 12.72% 9.74% 3 BMW 8,668 13.11% 3.08%

4 MITSUBISHI 23,115 10.73% 8.21% 4 VW 8,526 12.89% 3.03%

5 FORD 16,462 7.64% 5.85% 5 LEXUS 6,544 9.90% 2.32%

6 MAZDA 13,315 6.18% 4.73% 6 VOLVO 2,652 4.01% 0.94%

7 LUXGEN 10,994 5.10% 3.90% 7 AUDI 2,311 3.49% 0.82%

8 HYUNDAI 7,956 3.69% 2.83% 8 MAZDA 1,953 2.95% 0.69%

9 TOBE 966 0.45% 0.34% 9 SUZUKI 1,829 2.77% 0.65%

10 CHERY 332 0.15% 0.12% 10 NISSAN 1,676 2.53% 0.60%

CKD Total 215,471 100% 76.52% CBU Total 66,132 100% 23.48%

Total 281,603 - 100% Total 281,603 100%

Agenda








“The goal is for the Volkswagen brand to become the most innovative high-volume manufacturer offering the best quality in the respective classes.”Martin Winterkorn, Handelsblatt, 19 March 2007

“Volkswagen – the world’s most innovative

high-volume brand.”

The Volkswagen Vision

“Volkswagen –the world’s most innovative high-volume brand.”

The vision’s global objectives do justice to the Volkswagen world brand.

In the long term, Volkswagen will use innovations to differentiate itself from the competition in all areas.

Innovations at Volkswagen are always oriented to the needs of the high-volume market! Affordable advanced technologies in the high-volume seg-ment are the goal.

“It is our goal, to give more clarity to the Volkswagen brand and to sharpen its profile. In the next ten years, it will evolve to the most innovative volume manufacturer. Therefore, the attribute ‘innovative’ describes a further and new brand value of Volkswagen. Innovative does not mean technology for its own sake – we always focus the customers’ needs.”(Speech PhD Winterkorn, Mallorca, 05/15/07

The Volkswagen brand guidelines

VALUABLE

INNOVATIVE

RESPONSIBLE

• Volkswagen offers more performance for the price: more car, more service, more value.

• With its outstanding vehicles and services, Volkswagen sets standards in every class.

• Volkswagen embodies the virtues of German car manufacturing: precision, dependability and competence. The result: its products are robust and retain their value.

• Quality and dependability are primary brand characteristics that assure customers that they have made the right choice.

The “valuable” brand value

• Volkswagen is always one step ahead of time and consistently places the needs of its customers at the centre of its actions. Speed and flexibility are the most salient characteristics of its activities.

• Volkswagen develops high-quality innovations that remain up-to-date and offer the customer the greatest individual benefit.

The “innovative” brand value

• Volkswagen acts with the future in mind and takes responsibility for people, the environment and society. Volkswagen thus makes a crucial contribution to a world worthy of being lived in – now and for future generations.

• Volkswagen’s products are accessible to many people. They symbolise constancy and vision.

• Volkswagen is a trusted partner that guarantees its customers carefree mobility on roads all around the world.

The “responsible” brand value

Why these values specifically?

Innovative: Only through innovative products, technologies and services can Volkswagen differentiate itself from competitors to sustainable and long-term effect.

Responsible: As a global player, Volkswagen takes responsibility for people, the environment and society.

Valuable: Expresses an indispensable quality in the car market, satisfies customers’ basic rational and emotional needs and is an extremely important factor in reclaiming customers for Volkswagen worldwide.

The combination of the three Volkswagen brand values is credible, relevant and differentiating. The Volkswagen brand values are a key to the long-term success of the brand. RESPONSIBLE

Agenda








Study DesignObjective To provide information on awareness and images of the principal car brands and

models sold in TaiwanMethod Online surveySurvey scale (with 1= definitely no, with 2= mostly no, with 3= neither, with 4= mostly yes 5=

definitely yes)Surveyed brands Volkswagen, Toyota, Nissan, Ford, HyundaiSample size 38Interviewing period June 22 to June 26 2011Contents Overall impression of car brands and brand image ratings

The Automotive Brands

1. Volkswagen- Das Auto/Drivers wanted2. Toyota- I love what you do for me3. Nissan- Shift the way you move4. Ford- Built Ford tough5. Hyundai- Drive your way

The Questions

1. Is concerned about making safe cars2. Makes good quality, reliable cars3. Makes cars which are reasonably priced4. Makes technically advanced cars5. Makes well-styled cars6. Makes cars which are fun to drive7. Makes cars which have low running costs 8. Provides good after sales service9. Makes cars that have personality and character10. Is a company that acts in an ethically and socially

responsible way

Agenda








Make safe cars

4.1

3.63.2

3.1

2.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

VW Toyota Nissan Ford Hyundai

Makes good quality, reliable cars

3.8 3.8

3.2

3

2.6

0

0.5

1

1.5

2

2.5

3

3.5

4


Makes cars which are reasonably priced

2.9

3.8

3.4 3.4 3.5

0

0.5

1

1.5

2

2.5

3

3.5

4


Makes technically advanced cars

3.8

3.53.3

2.9 2.9

0

0.5

1

1.5

2

2.5

3

3.5

4


Makes well-styled cars

4.2

33.3

2.9 2.8

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5


Makes cars which are fun to drive

4

3.43.4

3.23.1

0

1

1

2

2

3

3

4

4

5


Makes cars which have low running costs

2.9

4.4

3.6

3

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5


Provides good after sales service

3.5

4

3.7

3.33.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0


Makes cars that have personality and character

4.4

3.23.5 3.3

2.9

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5


Is a company that acts in an ethically and socially responsible way

3.53.7

3.43.2

3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0


Demographics

What is your gender?

70%

30%

Male Female

DemographicsWhat type of automobile(s) do you currently own?

Positioning Map

Volkswagon

Toyota

Nissan

FordHyundai

Makes safe cars

Makes good quality, reliable cars

Makes cars which are reasonably priced

Makes technically advanced cars

Makes well-styled cars

Makes cars which are fun to drive

Makes cars which have low running cost

Provides good after sales service

Makes cars that have personality and character

Acts ethically and socially responsible way

Dimension I (65.2%)

Dim

en

sio

n I

I (3

2.9

%)

Key FindingsOn the positioning map, Volkswagen is seen as a brand that: Makes cars that have personality and character Makes well-styled cars Makes cars which are fun to drive

The Volkswagen brand is seen somewhat correlated to the following: Makes cars which are fun to drive Makes safe cars

The Volkswagen brand is not correlated to the following: Makes good quality, reliable cars Acts ethically and socially responsible way Provides good after sales service

The Volkswagen brand is seen negatively correlated to the following: Makes cars which have low running cost Makes cars which are reasonably priced

Valuable, Innovative responsible

ConclusionsVolkswagen is in the upper range of overall brand impression brandings, with a brand image that is positive with consumers.

The brand power of Volkswagen is very strong, but the current purchase intention is very low when compared with other KD brand competitors. Survey showed that there was only 1 Volkswagen owner

versus 15 Toyota owners, 7 Nissan owners and 7 Honda owners.

However, Volkswagen in Taiwan is not correlated enough with the Volkswagen headquarters characteristics of Valuable, Innovative and Responsible.

Agenda








SuggestionsIncrease Marketing & Communications activities to focus on value, innovation and responsibility. Further educate consumers on the value of German craftsmanship and engineering to

improve attitudes and perceptions.- Maximize country of origin effect.

Educate salespeople sell their product’s value to their prospects rather than the price.- Sales are a very important in-store factor.- Do not compete on price. Show Volkswagen’s value: more performance for the price.

Improve & increase activities of Volkswagen Owners Club for post purchase customer satisfaction.

Make high quality innovations more well known, through conventional and grass roots marketing campaigns.

Educate consumers on Blue Motion technologies through increased education and exposure.

- It's a whole range of innovations and refinements that help you save fuel and money, without taking the fun out of driving.

- Strong message arguments that focus more on “Steak” rather than “Sizzle”. Increase model mix of diesel and hybrid models. Promote VW 5 Star ratings in Euro NCAP (safety performance standard testing in Europe)

- Higher than BMW or Mercedes

SuggestionsContinue increasing brand power and presence in Taiwan market through marketing strategies like:Brand/Product Placement in Top Television Dramas Joint Promotion with Rental Car Companies

- Allow every person the opportunity to drive a Volkswagen vehicle to increase positive word-of- mouth

Have product launches that are visible to both the media and public

Utilize celebrities as communications sources that are in line with Volkswagen brand values to enhance company images and brand attitudes

Improve purchase environment, maximize influence in store environment through store image and atmospherics.

Suggestions

Utilize Halo Effect as physically attractive source leads to attitude change.More directly and simply put, use more beautiful girls!!!

Thank you !

Documents

Consumer Behavior Final Project- 062711