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?
According to Arnold communication’s research, there are 2 groups of target audience for the New Beetle: new core audience of 18 to 34 years-olds and baby boomers. Although the consumers include a very diverse group, the research shows that the potential buyers share some common characteristics like confidence, individualism, and a desire to be the center of attention. Moreover, they love to drive and appreciate a spirited design and German engineering.
For the younger generation, also called generation X, even though they didn’t have past experiences associated with the original Beetle, they still have an emotional connection to the New Beetle’s heritage in spirit. According to the research, younger consumers use words such as ”fun” and “unique” to describe the car, and these features of the New Beetle make them feel confident and help them attract more attention. Most of the young people (18-34 years-old) are single or married without children, who having unique and active lifestyle. The New Beetle exactly fits what they want, a small and special car. Moreover, the “Drivers Wanted” campaign applies directly to this audience. Promotions like the Tre/K2 are extremely appropriate for this audience. However, the price of the car may influence the buying decision because it may be unaffordable to them.
For baby boomers, they had precious memories with the original Beetle, for example, the college life or the honeymoon car. In other words, baby boomers have a strong emotional connection with the original Beetle, which makes it easier to promote the New Beetle to them. Baby boomers also have more stable financial status, so they’ll be able to afford the price of the car. Besides, they can be reached well by print advertising, which is more cost-effectively to VW. Although target to the baby boomers seems to be the right choice, recent consumer trends among them reveals changing preferences to larger cars, such as sedans, SUVs, and pick-ups.
VW can also target both younger generation and baby boomers. In this case, the car would be sold to a broader customer base. However, in order to reach a broader audience, VW must increase the advertising budget, which is hard for the company. Moreover, lack of focus may distract the attention of target audience, which causes an opposite effect.
2. What positioning (marketing approach) options are available to Volkswagen for each of the target markets? Describe each. What are the risks and opportunities of each? How would you differentiate each from competition?
For younger generation, VW can position the New Beetle as a “real, drivable car” instead of a “toy car”. The company can also strengthen the faddish, niche image of the car. In this case, VW can obtain more young and new customers by campaigns that appeal to their mentality, behavior and attitude because young generation not only want a car that is fun and unique but also reliable. This kind of positioning can easily differentiate the New Beetle from other competitors because it reveals that the New Beetle is not only attractive and special than Japanese cars but also reliable as European brands. However, if the VW strengthened the faddish, niche image of the car, it may make the car become a “fad” instead of a “consistent want and demand”. Also, VW may have to increase the budget on advertising to launch a television campaign, which is more effective in building brand awareness among a broader customer base. Since the budget is already tight, it seems difficult to do.
For baby boomers, VW can play on the nostalgic to bring back the good memories and experiences from the past and increase the interest in the New Beetle. This positioning seems logic and easier since the baby boomers already had cherished memories of the original Beetle and those memories came willing up at the sight of the New Beetle. It can also differentiate the New Beetle from other competitors by highlighting the individualistic driving experience and the good old memories. Nevertheless, emphasize the connection between the Original Beetle and the New Beetle may disappoint the consumers that the car is only the replica. Moreover, VW may be defined as Beetle car brand (one-car company) once again, which is possibly bad to the company.
3. Which target market(s) do you recommend for Volkswagen? What positioning should they use?
In my point of view, I recommend VW targets to baby boomers. Baby boomers not only have stronger connection with the Beetle but also have stable financial status to afford the New Beetle. While some may argue that recent consumer trends among them revealed changing preferences to larger cars, I believe that the nostalgic of the Beetle will still enkindle a desire for the New Beetle. Moreover, VW has relatively low advertising budget. Since baby boomers can be reached well by print advertising and are already familiar with the Beetle, target to them is definitely more cost-effectively.
To the positioning, VW can play on the nostalgic since the baby boomers already had cherished memories of the original Beetle and those memories came willing up at the sight of the New Beetle. However, VW should emphasize the difference between the original and the New Beetle so that the consumers won’t think the car is only the replica.