Product & Positioning
Volkswagen offers models such as: Passenger Cars, Luxury Cars, Vans and Buses. Volkswagen has a reputation for producing vehicles with safety and reliability in mind. They are also very concerned with the environment. Despite producing automobiles, Volkswagen also provides the Financial Services including leasing, banking and insurance.
Passenger and Commercial Cars:
Passat, Jetta, Golf (Volkswagen Passenger Cars), SKODA, SEAT
Target: young single professionals between the ages of 18 and 27
married couples with children who value safety
retired couples aged 50 ...view middle of the document...
Their products typically have a high price, on average 10 percent higher than competitors (reference: consumer report by Volkswagen, 2012); however, the return is more upscale driving and ownership experience.
In recent years, their pricing strategy has decreased to only 5 percent higher (reference: the interview with the PR president). This decrease in price was due in fact to the belief among consumers that Volkswagen passenger cars are too expensive for the quality delivered. Their premium pricing strategy has caused them to lose some market share to competitor brands. This was not a substantial problem in the past, but competitors are increasingly offering better price for their products like some Japanese automakers including Honda and Toyota, so Volkswagen has to adapt in order to keep the market share. Volkswagen has taken this into account and has decided to lower base prices on some of their models to attract more customers. The seventh generation of the Golf launched in 2012 proved the tendency, which was considerably cheaper despite being better equipped (Volkswagen Annual Report, 2012).