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THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENTNEW DELHI
PROJECT REPORTON
Volkswagen is Known for Its Cutting Edge Advertising across the World
SUBMITTED BY:Name: Piyush GoyalBatch: SS/2010-12ISBE-A10110 (NA-1152)Section: SF4E.mail id- [email protected] no- 91-9911078452IIPM NEW DELHI
I SUBMITTED BY:Name: Piyush GoyalBatch: SS/2010-12ISBE-A10110 (NA-1152)Section: SF4E.mail id- [email protected] no- 91-9911078452IIPM NEW DELHI
NDEX
1. Introduction
2.Theoretical Review
3.Review and Research
4.References
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INTRODUCTION
Volkswagen India
With its headquarters in Pune, Maharashtra (India), the Volkswagen Group
is represented by three brands in India: Volkswagen, Audi and Skoda. The
Volkswagen Group is completing 10 years of its India journey which began
with the entry of the Skoda brand in 2001, Audi brand and Volkswagen
brand in 2007. Each brand has its own character and operates as an
independent entity in the market.
Volkswagen Group India is a part of Volkswagen AG, which is globally
represented by 9 brands- Audi, Bentley, Bugatti, Lamborghini, Scania,
Seat, Skoda, Volkswagen Commercial Vehicles (Volkswagen
Nutzfahrzeuge) and Volkswagen Passenger Cars. The product range
extends from low-consumption small cars to luxury class vehicles and
trucks. The Group operates 60 production plants around the world. In total
more than 370,000 employees produce more than 26,600 vehicles or are
involved in vehicle-related services each working day.
The highest volume brand of the Group is Volkswagen. Europe’s most
successful car brand has made successful inroads into the Indian market.
Volkswagen presents itself in a variety of segments as a premium
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manufacturer of high-volume models. As a first step, the Volkswagen
brand launched the globally successful Passat in 2007. To expand its
portfolio and cater to the mid segment, Volkswagen launched one of the
brand’s bestselling models, the Jetta, in India in July 2008. Both the
sedans are being assembled locally. The iconic New Beetle and the high-
end SUV Touareg were introduced in December 2009. Also available is
the high-end automobile Phaeton.
From December 12, 2009 the new Pune plant has started rolling-out the
hatchback version of the Volkswagen Polo.
Skoda entered the Indian market in 2001. Its plant in Aurangabad, which
assembles a total of eight models including the Audi A6 and Audi A4 as
well as the Volkswagen Passat and Volkswagen Jetta, has been
instrumental in this achievement. For Indian customers, the name of Skoda
stands for high-quality, robust yet affordable cars in the compact, lower
mid-size and mid-size ranges. In terms of models, the Skoda product
offering in India ranges from the Fabia through the Octavia, the Laura to
the Superb. Skoda lifted the veil off its international bestseller SUV Yeti for
the first time in India at the Auto Expo 2010.
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Audi offers high-end models of interest to Indian customers. With the A8
and the Q7, the A6, the A4 and not forgetting the R8, the TT and the
recently introduced Q5, Audi offers top-quality, technically brilliant cars with
an exclusive flair in the relevant luxury segments. Audi’s positioning as a
leading manufacturer of such high-class vehicles, both assembled in India
and imported through Audi India, will be systematically pursued in future.
At Auto Expo 2010, Audi also unveiled the Audi Sportback Concept – a
five-door model offering a glimpse into Audi's future design vocabulary.
Recognizing the importance of an extensive dealer network towards
scripting a long-term success story, the brands of the Volkswagen Group
are setting up dealerships spanning the entire country with Volkswagen,
Skoda and Audi having in total around 120 dealerships across the country
today. They are not only laying the foundation for a substantial increase in
sales but also doing the groundwork for offering a first-class all-round
service, taking customer satisfaction to the highest level. Keeping this in
mind they launched their first Group Logistics Service facility recently that
would help make their dealer network become more efficient and
smoothen the entire process of service. In the period between January
2009 and December 2009, the three brands of the Volkswagen Group
have together sold around 19,000 vehicles in India, an increase of 1.4%
over 2008 in a year marked by recession in the auto industry.
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A crucial element of the Volkswagen’s strategy is to establish a long-term
presence in India is the Group’s production facility near Pune in the
Chakan Industrial Park. The investment with a total sum of around INR
3,800 crore (580 million Euros) is the biggest investment of a German
company realized in India so far. The plant, one of the most modern in the
Volkswagen Group has a high level of vertical integration – not least
attributable to the high share of local suppliers. The recruitment is of some
2,500 employees at the end of 2010, primarily from the region itself. With
the investment, the vertical integration of suppliers and the employment of
people Volkswagen will thus demonstrate its commitment to the new site.
Simultaneously Volkswagen contributes to a positive development of the
economy of the region and of Maharashtra at the same time.
The new plant was inaugurated by The Honourable Governor of
Maharashtra, His Excellency Shri. S. C. Jamir, and Prof. Dr. Jochem
Heizmann, Member of the Board of Management of Volkswagen
Aktiengesellschaft with responsibility for ‘Group Production’ end of March
2009 and has begun building the Skoda Fabia compact car in May 2009.
The launch of Polo, the hatchback car, is a visible testimony to
Volkswagen’s vision of “Mobility - Made in India”. By mid of 2010 the
hatchback version will be followed by a sedan, also based on the new
generation of the Polo but entirely different to the hatch.
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In recognition of its efforts in India, Volkswagen India won the coveted
‘Automotive Company of the Year 2010’ award at the Inaugural Golden
Steering Wheel Awards India presented by the leading automotive
magazine, Auto Bild India.
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THEORETICAL REVIEW
Volkswagen (VW) is one of the most popular car brands, being
represented in more than 70 countries throughout the world. The main
headquarters and assembly lines of Volkswagen are in Wolfsburg,
Germany. Over the course of time, the Group has developed four regional
markets and today is represented in more than 70 countries.
Volkswagen entered the American market some time after World War II, in
1960. Over the years, the Group has changed and modified its brands, but
the classical bug has survived from the very beginning. The present range
includes the Lupo, Golf, Polo, New Beetle, Bora, Passat, Touran, Sharan,
Phaeton, and Touareg models. Accordingly, the Group has modified not
only the models, but also the advertising and communicational campaigns
that it has used to promote the VW image.
VW had a very dark beginning. The idea of building a car that was
affordable for people with a medium living standard and accommodates a
whole family was suggested by Adolf Hitler in 1933. Later, during the war,
the vehicle use was restricted to the military. After the war, VW started to
build its first series. However, at the very beginning, the brand’s image was
negative because it was associated with the Nazi regime. The spectacular
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economic recovery of Germany and the change in the Group’s orientation
allowed VW to expand worldwide.
In order to penetrate the American market they needed to create a very
persuasive and appealing message. This message had many facets, but
one of the main communication channels they focused on was advertising.
In this process they had to carefully select two main elements: the media
channel and the creators of the message.
Media channel analysis
“The New Yorker” is a magazine with a long tradition in the American
media environment. Its satirical and cultural orientation has carved out for
it over the decades a very selective public. Readers in academia, cultural
areas, and intellectuals represent the main audience of the magazine.
Young professionals and students are also treated with special attention.
On the other hand, there is another consistent segment represented by
senior citizens, either in the last phase of their professional activity or
retired.
They have had a long and rich life experience but are still involved in the
society. The majority of The New Yorker’s readers are cosmopolitan and
have higher education. The target audience presents a special interest in
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arts, but at the same time they have a need to stay connected to the latest
political news. A sense of humor, irony and sarcasm, creativity, and self-
criticism are psychological imperatives for these loyal readers.
The audience has diverse tastes and politico-cultural orientations, but is
homogenous because of shared attitudes and values. Even if The New
Yorker is published and is primarily addressed to New Yorkers, it is spread
nationwide. In addition, a considerable percent of the target audience is
international, especially in Europe and Southeast Asia.
“The New Yorker” already enjoyed wide recognition and considerable
prestige by 1960 when VW entered the North-American continent. From
1960 until now, the target audience’s characteristics of the magazine have
remained relatively stable. Some changes have occurred over the last ten
years because the magazine has started to treat political issues in a more
detailed way. This has led to a repositioning, especially among those very
loyal to the artistic and cultural aspects. Over the same period, people from
the business and political communities started to appreciate The New
Yorker.
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It is very interesting to analyze the similarities between “The New Yorker’s”
target audience and the VW’s target market. VW decided that its brand
needs credibility, recognition, extensive coverage, and access to a
selective market. Taking advantage of Pavlov’s Classical Conditioning
principle, they tried to associate the magazine’s image with the
commercials they would have to print in United States.
Message encoders
VW needed an aggressive advertising campaign for its brands. Since the
media channel was a selective one and the target market extremely
selective, they needed a strong, striking, and unique communicational
approach. They decided to hire the best available professionals. A number
of long-established advertising agencies operated at that time: McCann-
Erickson, J. Walter Thompson, Batten, Barton, Durstine, & Osborne
(BBDO), Leo Burnett, Ogilvy&Mather, and Doyle Dane (Sivulka, 302).
Traditionally the objective of most ads had been to gain attention and
interest, but now the emphasis shifted to the product. The product became
the masterpiece of the advertising. VW asked the DDB agency to provide a
campaign that would to decide the success of VW in America.
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The beginning – 1959
In 1959 the ad makers decided to turn the VW’s apparent shortcomings
into well-crafted virtues. The main focus was to use style and candor in
order to transform the utilitarian, low-power “bug” into a unique, high
quality product with a sensible price (only “$1.02 per pound”, or about
$1595). The copywriter Julian Koenig and the art director Helmut Krone
made the ads seem as unusual as the car. The “Think small” commercial
featured a tiny image of the car with oceans of white space and austere
sans serif typeface. This was one of the ads that played a significant role in
the launch of VW in America through The New Yorker.
Entering the market – 1960-1965
The American consumers are placed in the middle of the high and low
context culture of Hall’s cultural concept. This means that a creative and
unique ad is desirable, but factual information is also vital. The “Lemon” ad
was published in 1960 and provided straightforward facts. The headline
simply said “Lemon” while the text stated the things nobody but “the bug”
could have. This commercial also wanted to suggest that simplicity could
be a powerful persuader. An announcement published in an issue of The
New Yorker from 1964 underlines the phenomenon of globalization that
was then just at its inception. The cosmopolitan audience of the magazine
had a multilateral perspective. The same with Volkswagen. They wanted to
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associate the brand’s name with the tradition it has in Europe. Factual
information and plenty of white space where offered to the readers in order
to create strong focal points.
Building a reputation 1966-1977
Starting with 1966 each commercial focused on selling a single advantage.
The vast majority featured a simple picture and straightforward copy
explaining why consumers should buy the car. The commercials were
published in “The New Yorker” with a regular frequency.
Another major characteristic of VW ads was that they caused readers to
smile. Actually, this specification also seems to be preserved by present
day ads. One compared the unique shape of the VW to an egg: “Some
shapes are hard to improve on. Ask any hen. You just can’t design a more
functional shape for an egg. And we figure the same is true of the
Volkswagen. Don’t think we haven’t tried. (As a matter of fact, the VW has
been changed nearly 300 times)”. Another one showed a lunar landing
vehicle instead of the car and had but one line of copy: “It’s ugly but it gets
you there.” (Sivulka, 304). The campaigns DDB produced for VW in this
period have come to be considered not only the best of the decade, but
among the best of all time.
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The New Yorker is very popular for its complex sense of humor. Thus, DDB
found that creating an innovative and comic ad would match not only the
magazine’s public, but will also effectively address one of its target
markets: fun seekers. Volkswagen means in German “the car of the
people”. This is why they offered a wide range of products designed to fit
different segments. They stressed the importance of giving each brand a
personality so that it could meet the requirements of a diverse market.
However, “the bug” was the emblem of the Group. But even in the case of
a simple product, they needed to appeal to individual characteristics and
values in order to persuade people to buy it.
“The believer” aimed at altruists and people who need a trustworthy and
pertinent speaker in order to accept the message. The commercial also
lists a whole series of instrumental information designed to support the
sentimental message with factual content. “The builder” is maybe the
example that best illustrates this transition period between inception and
maturity on the American market. Using the old magazine, VW tried to
show the potential customers that “the bug” is in a superior stage of
development. Even though preserving the practical and unique design was
crucial, they tried hard to show that the comfort and the technical
specifications were being continuously improved.
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In 1949, William Bernbach, along with colleagues, Ned Doyle and Maxwell
Dane, formed Doyle Dane Bernbach (DDB), the Manhattan advertising
agency that would create the revolutionary Volkswagen ad campaigns of
the 1950s and 1960s.
Bernbach's artistic approach to print advertising was innovative, and he
understood that advertising didn't sell products. The strategy was to keep
customers by creating and nurturing them as brand ambassadors rather
than attempting to attract the attention of those who were uninterested in
the product. Bernbach's team of "agency creatives" was headed by Helmut
Krone, who pioneered the idea of simplicity in print media advertisements.
His repeated use of photographs as opposed to the embellished
illustrations used traditionally by competing agencies, spawned
comfortably-consistent, yet unique, print ads that met DDB's goal of
making a stark departure from existing advertisement techniques.
The corporate headquarters and factory that produced Volkswagens was
located in Wolfsburg, Germany. Because Volkswagen’s advertising budget
in 1960 was only $800,000 DDB’s bare-bones, black-and-white approach,
coupled with a projected common theme of irreverence and humor, fit
Wolfsburg’s needs well. Each Volkswagen ad was designed to be so
15
complete that it could stand alone as a viable advertisement, even without
addressing all aspects of the automobile.
Taken as a sign of the campaign's runaway success, research by the
Starch Company showed that these Volkswagen advertisements had
higher reader scores than editorial pieces in many publications, noting that
Volkswagen advertisements often didn't even include a slogan or logo. The
1959 Think Small Volkswagen series of advertisements were voted the No.
1 campaign of all time in Advertising Age’s 1999 The Century of
Advertising.
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REVIEW AND RESEARCH
Starting with 1970, American consumers began to diversify their tastes. As
a response, VW had to come with a more diverse and sophisticated offer.
Moreover, they had to survive in the face of their competitors by trying to
establish a reasonable balance between price and quality. “In-between”
was published in “The New Yorker” in 1971. In the next years several ads
fought with the competitors. In this mission they used visual comparison
and straightforward text. At the same time they inserted several
confidence-inspiring endorsers, such as the Consumer Research Group.
By the end of the 70s VW was like a growing child who is ready to enter
adulthood. And like the majority of teenagers, who want to demonstrate
that they are capable of taking on high responsibilities, VW wanted to show
that its identity was ready for the maturity phase. This characteristic can be
found in all the VW ads published in The New Yorker at the end of the 70s.
The copy of these adds conveyed a more serious tone and the images that
were used attempted to build trust and recognition. VW already had a
position on the American market and now they were aiming at increasing
their market share. The new set of commercials preserved the same
design principles, but the attitude was slightly changed. This was so
because the target market had also changed. It was the people from the
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middle class who bought the car, but also those with higher incomes who
started to trust the brand. The New Yorker, a reliable communication
channel, combined with a mixture of serious and humorous commercials,
and strong PR, prepared VW to enter this next stage in good form.
The end?
The person who had read The New Yorker in 1994 and picked up a copy
in 2004 would notice that a lot has changed and yet a lot has been
preserved in Volkswagen commercials. Being now in its maturity stage on
the US market, VW has to be more innovative than at any previous time.
The classical design with plenty of white space and sans serif type is still
used. The eternal logo placed on the bottom right of the page preserves
the same features. Several slogans have been changed in the meanwhile.
“Economy without sacrifice” had great success in 1977 and was intended
to promote a particular feature. In 2004, “Drivers wanted” underlines the
idea that VW has any kind of car (Polo, Golf, Passat, Phaeton, etc) for any
type of consumer: fun-seekers, altruists, strivers, intimates, introverts or
extroverts. Comparing the ad from 1960 with the one from 2004 one might
say that nothing changed in their advertisement. But from “Think small” to
“Thank you and good night” VW has changed products, objectives, and
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strategies. The brand’s identity, however, is still based on tradition and
specific values.
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REFERENCES
Volkswagen Group
www.volkswagen.de
Volkswagen America
www.vw.com
Volkswagen Romania
www.vw.ro
Juliann Sivulka - Soap, Sex, and Cigarettes, Wadsworth Publishing
Company, 1998
The New Yorker – 1960, 1961, 1964, 1969, 1971, 1973, 1977, 2003,
2004
http://people.westminstercollege.edu/staff/bknorr/html/links.htm
www.vwmagazine.com/history/bughist.html
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