Overview of Volkswagen AG, Its Market and Existing Portfolio of Products - Research Paper Example

? Marketing a new product Contents Overview of company, market and existing portfolio of products/brands 3 Portfolio of Brands and Products 3 Analysis of the Market Performance of Volkswagen 3 Need for Developing on its Product Lines 4 Explanation of/rationale for new product 4 Identification and justification of target market 5 Target Market in North America 5 Target Market in Europe 5 Identification and rationale for brand positioning 6 Marketing mix strategies 8 Product Mix 8 Price Mix 8 Place Mix 9 Promotion Mix 9 References 10 Bibliography 11 Overview of company, market and existing portfolio of products/brands Portfolio of Brands and Products The automobile manufacturer Volkswagen AG hosts a large number of international brands under its banner. International brands like Skoda, Audi, Seat, and Bentley among others are encompassed by Volkswagen under its banner. Apart from just designing and manufacturing automobiles the group also works to render large number of services to its consumer profile. These services rendered by the company are generally related to the mobility parameters and thus encourages the consumers to purchase the automobiles for a safer and hassle free journey. Though the company encompasses a large number of automobile brands yet the company endeavours to render an individual identity to each of the different brands falling under the banner. The individual brands and companies working under the common banner of the Volkswagen group perform in a collaborative fashion to enhance revenue and market potential of the company in the international market (Volkswagen, 2010). Analysis of the Market Performance of Volkswagen The market performance of the Volkswagen shows that the company has gained a huge market acceptance both in terms of market shares and revenues. It is found that for consecutive ten months of the financial year 2011 the company recorded a sales of around 6.80 million vehicles through conducting sales from its different branches. This sales figure reflects a rise of around 13.8 percent in respect of the sales occurring in the previous year. In regards to delivery figures the company records an increase of around 21.2 and 21.8 percent rise in respect of regions like North America and United States. Similarly in various European regions the Volkswagen Group recorded a high sales figure which rose by around 21.8 percent in respect to the previous years (Volkswagen, 2011). Need for Developing on its Product Lines It is found that regions like North America and in other European countries where the company has targeted in expanding its operation base is also subjected to large amount of snow falls. Snow falls in this region is likely to grow to around 25 inches in height mainly in the months ranging from November to April. Thus in regards to this fact the automobile company is required to devise new strategies in product development by adding wipers in the side mirrors of the cars manufactured. This development made in the product line would help the users get rid of blurred vision caused due to damaged windows (NaturalHazards.org., n.d.). Explanation of/rationale for new product It is observed from the above discussion that the company gains a larger portion of the sales revenues through its enhanced sales in the North American region and in other European markets. To address the expansion activities in these regions in an effective fashion the company requires strategising and customizing its products. One of the effective strategies in regards to customization is the addition of wipers to side mirrors of cars. This creation of wipers helps in enhancing the effectiveness of the vehicles running in these regions. Creation of wipers along the side mirrors would help the automobile company counter contingencies like heavy snow fall or rainfall. This creation of wipers acts as a value addition to the automobiles manufactured by the company in regards to the North American and European regions. Through the use of side wipers the consumers can drive safely in the North American and European roads mainly in the winter months starting from November. Thus value addition is considered in greatly helping in the enhancement of the sales of the cars in these regions where both the market shares and revenues is expected to rise to large numbers. Identification and justification of target market Target Market in North America The target market for Volkswagen based in United States depicts a market which desires to grow on innovation. This market desires to avail such prime products as cars and capital items which would help the people gain new tastes as new and spicy food products. Automobile manufacturers like Volkswagen are thereby required to render large innovations in their products to help in enhancing the parameters of customization particularly while endeavouring to market the products in North American markets. The target market of cars in North America is not based on people who would only like to drive the cars but are innovation centric. Thus Volkswagen in order to meet the needs of the North American population needs to work largely on the parameters of quality and innovation. These parameters would help in enhancing the niche base of consumers in North America in largely attracting the consumers to buy the innovative and customized cars. Thus it is felt that addition of wipers in the side glasses of the cars would certainly help in enhancing the customization parameters of the cars. However while countering activities in regards to innovations and customization the company needs to control the prices of the products. The target market for Volkswagen in North America would like to avail products which are affordably priced (Kiley, 2008). Target Market in Europe The target market of automobiles based in European countries is such that they demand luxury and high priced cars. Moreover the consumers based in the European countries are figured as such that they desire to drive luxurious cars in a crazy manner. Most of the people in the target markets in the European countries are such that they tend to drive high priced luxury cars manufactured in western countries. The target market population in the European countries are found to be highly educated and of fashion loving nature. Moreover the per capita income of the people in the European nations is considered to be quite high which would help the people ride in high priced fashionable cars. Their potential of procuring and driving high priced fashionable cars tends to create a sense of pride in their mind. Thus Volkswagen can easily endeavour to develop newer and innovative models to help in attracting large number of consumers to the purchasing of developed and customized models. Volkswagen thus to enhance its sales in the target markets continually focused on investing largely in advertising and promotional activities. Largely investing in sales and promotional activities the company can largely work to help in the enhancement of brand positioning in the European markets. Thus active campaigning can be worked out by Volkswagen in order to help the consumers get a hand on experience of the high priced luxury cars. Volkswagen thus can work on high priced innovation while tending to cause value additions in the cars. This value addition rendered to the cars would help in attracting large number of European consumers in purchasing the high priced automobiles produced by Volkswagen. Further the people in the region desired to regard them as drivers and thus needed to drive effective and fashionable cars in the European roads (Wells, Burnett and Moriarty, 2007, p.9). Identification and rationale for brand positioning Volkswagen, a global brand has positioned itself as a premium brand in the markets of Europe and North America. Its main competitors such as General Motors and BMW are also brands which fall on the league of premium cars. The people of Europe love to drive luxuries car and Volkswagen Group have correctly targeted the market. With its innovation and new style of cars it has achieved the rank which it has always desired for. North America desires to grow in innovation, and innovation being the core competency of VW, has made it among the top manufacturing car brands. The positioning strategy that would be adopted by Volkswagen in the European and American market is of innovation as well as technology. This is because of the fact that the company is known for its quality of technology and caters to the need of its customers in the target market. The new innovation strategy of wipers in the side glass of the car would help the customers to drive safely. No other brands have come up with such an idea thus it would prove to be beneficial for VW to launch the cars with an added feature on it. The reputation for Volkswagen is considered to be unbreakable even after 10yers of service. The cars are known for their high quality technology. As compared to its competitors, sales of Volkswagen resulted to 20.8% whose brand name gives a meaning of ‘people’s car’ (Naughton & Cremer, 2011). Volkswagen has portrayed its brand as unbreakable, which applies innovation in its products and brands and takes care of the consumer’s needs and wants. An example of innovation and quality of technology is its Polo Blue motion car. With the orders from European Commission to deliver eco friendly car models, VW has come up with the Polo Blue motion, which runs on diesel rather than petrol and delivers about 70 miles (Pym, 2007). With its launch of new beetle, the company gained much more than expected. The excitement that the new beetle created spread among the Volkswagen brand. The group has used nostalgia motion to market the new Beetle. One of the major strength with the Volkswagen Group is its innovation strategy that it applies in all of its cars. According to Wnterkorn, the company is competitive to remains its position in the first lane, VW expertise in designs and technology which allows the company to provide a diverse, environmental and attractive range of products which meets the customer’s needs and their desire (European Motor News, 2011). BMW has positioned itself as a luxury car segment whereas VW and its brand have captured not only the luxury segment but also the segment of customers who are price sensitive. But BMW and VW are tough competitors, with BMW sells the most luxury cars in USA, VW being the most desired brand of the European market because of its innovation and quality. Volkswagen has well positioned itself in the European market and in US along with its brand scale such as Audi which targets the high end segment, Volkswagen for the upper middle class, Seat for the lower middle class and Skoda for customers who are price sensitive. This brand has targeted the price segment with an individual brands. Thus the company Volkswagen has been able to stand on to the desired requirements and this is because Volkswagen executes a multi brand strategy for each of it segment. Marketing mix strategies The marketing mix strategies for Volkswagen would be based on the four Ps of marketing pertaining to the parameters of product, price, place and promotion. Product Mix The Volkswagen Group tends to produce products on a global scale which are limited in number and based on large scale diversification by focusing on the production of different product lines through the introduction of large number of brands. The different brands produced by the company largely differentiate in its features and brand positioning elements while aiming to attract the target population (Jeannet and Hennessey, 2005, p.279). Price Mix In regards to its price strategies the automobile company Volkswagen is tending to produce cars which would be low priced but seemingly attractive and would bear high quality features. This price strategy taken by Volkswagen would be a shift from its original strategy of rendering high prices for its products. The comparatively low priced models are expected to help the company gain an enhanced market share in regions like North America (Higgins, 2011). Place Mix Volkswagen as a large automobile company is focusing on hinting on potential markets through carving out an effective marketing and expansion plan. This marketing and expansion plan aims at developing of local sites through the opening up of local branches and operational warehouses which would help in the getting of cheap labour. Moreover apart from localising its manufacturing and production activities the company works on separate Joint Venture and franchising plans to open up large number of outlets in the various regions (Lorenzen, 2011, p.7). Promotion Mix The promotional mix for Volkswagen reflects that the company aims to attract the consumers while tending to promote its quality and innovative features. The quality features in the advertisements are also accompanied through the increased focus rendered on the advantages the consumers ought to derive from the same. Further the promotional elements would also encompass a slogan that marks its position in the target market for automobiles in the related region (Slade, 2006, p.173). References European Motor News. (2011). Volkswagen Group Maintains profitable Growth Trajectory. [Online]. Available at: http://europeanmotornews.com/2011/07/29/volkswagen-group-maintains-profitable-growth-trajectory/. [Accessed on November 29, 2011]. Higgins, T. (2011). VW’s Browning Says Jetta Pricing Strategy Is Working. [Online]. Available At: http://www.bloomberg.com/news/2011-02-09/vw-s-browning-says-jetta-pricing-strategy-is-working-update1-.html. [Accessed on November 26, 2011]. Jeannet, J., and Hennessey, H. (2005). Global Marketing Strategies (6Th Ed.). Dreamtech Press. Kiley, D. (2008). VW's Sales Target: Bold or Bull? [Online]. Available At: http://www.businessweek.com/autos/autobeat/archives/2008/01/vws_sales_target_bold_or_bull.html. [Accessed on November 26, 2011]. Lorenzen, A. (2011). Volkswagen's Way East - Brownfield or Greenfield Investments: Business Location Decisions. GRIN Verlag. NaturalHazards.org. (No date). Visualizing a Safer Planet. [Online]. Available At: http://www.naturalhazards.org/hazards/snow/index.html. [Accessed on November 26, 2011]. Naughton, K. & Cremer, A. (2011). Mulally Pushes Greener German Fords to Break Volkswagen: Cars. [Online]. Available at: http://www.bloomberg.com/news/2011-07-15/mulally-makes-ford-push-greener-german-vehicles-to-break-volkswagen-cars.html. [Accessed on November 29, 2011]. Pym, H. (2007). VW backing diesel in green drive. [Online]. Available at: http://news.bbc.co.uk/2/hi/business/6421961.stm. [Accessed on November 29, 2011]. Slade, G. (2006). Made to break: technology and obsolescence in America. Harvard University Press. Volkswagen. (2010). Brands and Products. [Online]. Available At: http://www.volkswagenag.com/content/vwcorp/content/en/brands_and_products.html. [Accessed on November 26, 2011]. Volkswagen. (2011). News. [Online]. Available At: http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2011/11/VW_Group_Aak.html. [Accessed on November 26, 2011]. Wells, W., Burnett, J., and Moriarty, S. (2007). Advertising: Principles and Practice, 7/E. Pearson Education India. Bibliography Dubrin, A. J. (2011). Essentials of Management. Cengage Learning. Read More