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New Beetle Essay

1538 words - 7 pages

w 2010

Mission Impossible: Launch of the New Beetle

[NEW BEETLE CASE STUDY]

1. INTRODUCTION
At a time when American¶ were skeptical about the purchase of imported cars, due to lack of availability of spare parts and costly repairs, heightening, Germany¶s existing image problem in the market, Volkswagen introduced the Beetle in 1949 which turned out to be a phenomenal success and envisaged a cult- following by the 60s. However due to factors, such as Deutsche Mark appreciation, declining hatchback popularity, new environmental legislations all led to a dramatic decline in the sales of the Volkswagen Beetle. The sales after peaking in 1968, died out completely by 1981. Subsequently ...view middle of the document...

The Old Beetle y Beetle was the most successful car model of its time, more than 21 million Beetles were sold. It was also a huge success in America and had become a true American icon. y The Beetle had a huge fan following in the new generation of Americans. It had become a symbol of individuality and personal style. y Beetle found a place in Disney movies as ³Herbie the love bug´, and also in the lives of the common American as a member of his family. A brief history of VW and Beetle After the launch of Beetle in America, which turned to be great success, VW of America was set up as a subsidiary to VW. A few car models were also launched like Rabit, Microbus and Karmann Gia sport coupe which were successful as well. However Beetle was still the leading car model for VW as it always contributed more than 65% sales (by volume) for VW till 1974. However, due to strengthening of Deutsche Mark, competition from cheaper Japanese brands VW saw its sales declining in US during 1970s. Due to recession in 1982, declining popularity of hatchbacks and inability to comply with the environmental legislation Beetle was withdrawn from the US markets. VW also took a hit and sales dropped to less than 50000 by 1993. In 1994 a campaign was launched to revive VW and a plan for relaunching Beetle in 1998 was also considered.

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Bring back the Beetle ³What are you waiting for Doc? Bring back the Beetle. And hurry.´ This was the opening sentence of a letter to Dr Ferdinand Piech, Chairman Volkswagen AGBoard of management, which appeared in Chicago Tribune. This reflected the enthusiasm and the anticipation prevailing in the market for the New Beetle. But there were some challenges which were to be addressed before the launch. One of the major challenges was to remove the misconceptions about Beetle. Beetle was considered to be a ³toy car´. This image of Beetle needed a repair to ensure the New Beetle is looked upon as a ³Real, Driveable car´. The Beetle did have a segment of potential customers, i.e. the Baby Boomers, but for a sustained growth it also had to look beyond and exploit the appeal which Beetle had in other customer segments. Efforts to retain Baby Boomers were also required because the New Beetle was not a replica of the old Beetle. Thus positioning of Beetle was the key concern for VW. Positioning of the new Beetle with the backdrop of old Beetle¶s image & success coupled with a limited advertising budget was a challenging job and was considered as ³Mission : Impossible´ for a marketer. New Beetle: SWOT analysis Strength: The new beetle enjoys an iconic heritage; it is the successor of a car which enjoyed cult following among the mass and the elite alike during its hey-days. The strong brand image of yesteryears associated with the TYPE I Beetle definitely acts as one of its strength. In addition the new Beetle in today¶s age of technology leverages its strength of affordable German engineering to provide its users with the joy of a unique...

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