Assignment for Week 10 Jennifer Mininno 04/13/2012

1. What are the various market targets for the New Beetle available to Volkswagen? Describe each both demographically and psychographically. What are the pros and cons of each option? What are the appeals of the New Beetle to each group? The New Beetle target markets included VW new core audience of 18-34 and Baby Boomers. Gen-X audience: - Younger people (18-34), single or married without children, students or professionals - Enjoy active role in driving, challenging winding roads, not always obey to speed limits, see the car more than a way to get from one place to another. - Unique attitude towards life: well informed, adventurous, creative, confident, selfsufficient, experimenters. Pros: - Consistent with the VW overall target, which skewed to a younger, more affluent and more educated consumers - The design of the new Beetle (honest, simple, reliable, original, safe and high performance car) appeals to the Gen X audience. - They connect with the fun aspect of the car and with the individual driving experience: My job is very conservative, but thats not really the way I am. () But when I get out of work, Im not that. I mean its fun, its a fun car. - They connect with the social aspect of owning a car: how people look at me because of the car I drive? With the New Beetle consumers can express their individuality, their personality in a bold and confident way: I see it for someone who is unique who knows they will attract attention without being pretentious, the car is going to make the person . - Its unique design cues like the use of circular shapes (representing human forms like the eyes, heads and the smiling face stance). They make the car personable, human and individual the Gen-Xers can relate to that. - Even though they did not have past experience to draw from, the cars strong heritage enables an emotional connection to the New Beetle. The overall VW Drivers Wanted campaign applies directly to this audience. VW can continue promoting this car to the Gen Xers under this umbrella. Promotions like the Trek/K2 are very appealing for this audience Cons: - The pricing of the car ($15,000+) may put the car out of the affordability range of this segment. Baby Boomers: Age 45-64 Higher income that Gen X Confidence, individualism, desires to be the center of attention, love to drive. Pro: They are financially stable and they are able to afford the higher price tag ($15,000+) of the new Beetle. They have a strong emotional connection with the previous Beetle. The New Beetle awakened their memories of the old Beetle (honeymoons, college days, etc)

Cons: Consumer trends among this group revealed changing preferences to larger cars. Overall VW strategy had shifted towards a younger generation of drivers (for example, the 1997 Golf ad and the Drivers Wanted campaign.) Appeals for VW: Generation X group is the new target group for the company, aiming to invite new and younger potential drivers and customers. This approach was in line to the original target audience of the original Beetle back in the early 50: round shape, low price, individuality and style expression appealed at that time to a young generation of Americans (students and young drivers who bought their first car). Baby Boomers group have a strong emotional connection with the car, due to the nostalgia factor of their personal history and emotional ties to the Beetle brand. Moreover, they can afford the $15,000+ price tag for the car. 2. What are the positioning options available to Volkswagen for each of the target markets? Describe each. What are the risks and opportunities of each? How would each be differentiated from competition? Positioning option for the Generation X target: Affordable, invitational, approachable. Unique driving experience. In this case, the company would offer the benefits of German engineering at an affordable price (high quality/reasonable price), in contrast with other European brands which offered high quality at higher prices. VW would be then perceived as the peoples car, that is more approachable, more likable, more value, more human and more affordable. Moreover, the unique driving experience would convey a different, individual and personalized driving experience, tying in the lifestyle element, in contrast with Japanese cars, which are more perceived as standardized cars that bring people from one place to the other. In this case, VW would be able to meet the need in the American society of expression and individualization, by owning a personality car. The high price of $15,000+ could be a risk, as it would position the car as one of the most expensive in the small-car segment, which would be inconsistent with the proposition of affordability. Positioning option fro Baby Boomers target: Indulging in nostalgia, personal history and emotional tie to the Beetle brand. Competitors dont have a revamped historical iconic car on the market, so they cannot compete at the same level, giving a great advantage for the company in the small car segment. This option focuses on the emotional tie-in that this generation of consumer have with the Beetle brand, recalling them their youth days (first car, marriage, college days, etc) associated with the product. Moreover, this option would focus on the wealthier segment that can afford and spend on a personality car, even though it is one of the most expensive in the category. On the other hand, even though baby boomers would connect emotionally with the brand, they preferred larger cars than could meet more their needs (family, kids). 3. Which target market(s) do you recommend for Volkswagen? What positioning should they use? I would suggest targeting the Generation X segment for the following reasons: New generation of drivers Tie-in with the Drivers Wanted successful campaign Car characteristics seem to be more attractive for this segment Resemble the first target audience and positioning of the original Beetle (younger audience).

I would suggest using the following positioning: Revival of a classic iconic car Personality car: express own individuality, unique driving experience (driving for the fun of doing it, not just for the purpose of moving from one place to another). Affordability: an affordable, high quality, unique, distinctive car. 4. What communications strategy and media vehicles would you recommend for this target market / positioning? Why? Integrated Marketing Campaign: advertising (TV, online), PR (continue with distributors and press initiatives), Social Media campaigns, Guerrilla Marketing (unconventional). Communication strategy: I would suggest including the New Beetle launch within the Drivers Wanted campaign, first because this campaign was successful among the target segment, generating an increase in sales and establishing a new relationship with a new segment of consumers. Second, because the launch of the New Beetle would be consistent with this overall successful campaign, generating awareness and buzz not only for the new model but for the VW brand in general. Media Vehicles: In order to obtain awareness I would suggest TV and targeting shows that have the Generation X audience (such as The Bing Bang Theory, How I Met Your Mother, American Idol, etc). I would also suggest Display advertising for building awareness on targeted websites and social media, together with a YouTube video campaign.