Consumer Behavior Master Course

CONSUMER BEHAVIOR

Professor BABAK HAYATI

FINAL REPORT

Student Name: Viet Ha Thi Nguyen (Vivian)

Student ID : 21990444

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Q1: What criteria did VW choose to segment the market? Why? On what basis did VW select its target markets? Do you agree with VW's segmentation and targeting strategies?

1. VW Criteria to choose Market segment.

1. Personal Assessment of VW India Market segmentation.

Personally, I do agree on what VW marketing team has decided on their customer segmentation. To specifically demonstrate my opinion about its effectiveness and profitability, I will give my evaluation based on following criteria: identifiability, measurability, sustainability, accessibility, responsiveness and actionable:

• Identifiability and measurability: On exhibit 6, it can be clearly seen that the 5 clusters of customers in each segment which VW marketers choose can be easily distinguished and approximately measured according to its size – together constituted 46% of the total market, location (E.g.: metro) and market from within Indian market.
• Sustainability/ stability: This market segments that are large and steady enough for a long enough period to provide a foundation for the development of successful market segmentation that they could pay to go after with a specially designed marketing program. To be specific, the customers in this target are mostly from 25-40 years old and have successful educational and professional career, which will ensure a continuation of affluent income and lifestyle.
• Accessibility; The market segments can be effectively reached and served because targeted customers are those who very modern, hi-tech, educated and they have the need to own a car not just as a pure utility, but also to show off their ability and status in the society.
• Actionable; Market segments are actionable because VW identification provides guidance for decision on the effective specification of the marketing instruments.

Q2: What elements did VW incorporate in its corporate brand identity? Why? How did these elements help VW in its positioning strategy? 

1. Elements in VW brand identity

The Figure below illustrates VW’s brand identity from adaptation of Kapferer’s brand identity (prism). This prism identifies brand attributes of VW through industry information and prior knowledge. It highlights how VW successfully communicates their brand identity through their relationship between the consumer and the brand through personal anecdotal experiences they advertise.

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1. How did these elements help VW in its positioning strategy?

Wheeler (2012) states that brand identity is a strategic tool and an asset that provides quality reporting, increased recognition and competitive differences. VW brand identity offers a possibility to position its brand and encourages strategic approach while managing it. The VW brand name and logo evoke in the customers’ mind of a German car company and associating its name with its heritage of people’s car in German. Regarding the blue and white color, which illustrates connotations of sustainability, class and excellence are also what VW stands for. Primary research conducted found 100% of respondent answered “blue” when asked what color first comes to mind when they think of VW. This reinforces how strong the color blue is associated with the brand.  When it comes to the brand culture, VW reminds people of trust in German engineering and the quality of vehicles itself; which is very integral to its positioning as an effective brand identity needs to resonate with customers, differentiate the brand from competitors and represent what the organization can and will do over time. Moreover, the right adaptations for the Indian market with tagline ”German Engineering, Made in India” has enabled VW to differentiate itself from domestic and international competitors and generate growth. VW India’s strategy was to present a region-specific approach focused on vehicle safety, fuel efficiency, and environmentally friendly vehicles.

Q3: What were the campaign objectives of Passat in India? Was the campaign designed effectively to achieve these objectives? 

1. Campaign Objective

• The first objective of Passat campaign in India is create mass awareness about the re-launch of the product with design modernization and technological updates. As it is stated by the Product Head: “Typically in the auto industry, product gets a facelift after every 5 years.” this campaign in India reflected a strong desire on the part of the car companies to renew their existing product image. Although Passat existed in the market already, it is necessary for the brand to inform about the new changes happening to it that differentiate both the product and the brand from competitors out there.
• Another strategic branding goal, brand image reinforcement, showed a strong desire on the part of the car companies to maintain and strengthen awareness about their existing brand image. VW has already established a good reputation of being a brand with high quality German engineering and its products are made for people with big aspirations, trying to prove himself in the society. Volkswagen India have projected themselves as a “premium, innovative brand” that offers value to people and tells them how its technology can change their lives. Even though the market share for premium category was less, VW positioned itself in the premium segment because the European mindset of premium was perceived in India as luxury. Three motives is to display a status symbol, utility and personal space were kept in mind while positioning VW in India.

2. Campaign Success Evaluation

Regardless of the success of DDB Mudra’s creative strategies there is the underlining issue as to whether Volkswagen’s communication strategy successfully differentiates VW from key competitors as a way of successfully increasing brand awareness and purchase intention amongst target consumers, to help reach Volkswagen’s objective of being placed amongst the top three market shareholders or not. I don’t think the campaign designed effectively enough to achieve those objectives because of these following reasons: