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- piyushgoyal.feb@gmail.comMobile no- 91-9911078452IIPM NEW DELHI

I SUBMITTED BY:Name: Piyush GoyalBatch: SS/2010-12ISBE-A10110 (NA-1152)Section: SF4E.mail id- piyushgoyal.feb@gmail.comMobile 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

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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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