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Critical Analysis Of Brand Strategy Of VGI

Abstract

This report is a depiction of the brand strategy followed by a car company Volkswagen. This generally covers the brand management by the company including the critical evaluation of the brand strategy adopted with context to its brand value, brand image and brand setting. The report supplies the reader to acquire critical research of the brand management and by the end of the report a conclusion is drawn based on analysis in the torso of the statement. In main area of the report there exists VIP analysis implemented Boston matrix and product life cycle for the thorough explanation of matter. Various brand strategies adopted by the business are also handled in this part of the report. The conclusion is accompanied by some suitable recommendation of the brand strategy management of the company.

Introduction

Branding

The concept of branding in market is related to the development of brand and in the views of Hankinson & Cowking (1993) that branding is tagline which used to differentiate product from other rivals in market.

Branding is thought as "identification of a particular product, service or business. A brandname may take many varieties, including a name, signal, symbol or slogan. The world brand began simply as a way to notify one person's cattle from another through a hot flat iron stamp. The term brand started has extended to develop to encompass individuality- in effect the personality of o product, company or service. "

In the views of Johnson and Scholes (2002, pp. 140) "branding is an important feature for saturated market and then for the slow growing markets".

The brand provides reputation and allows adding value, image and position to the company. A highly effective brand strategy is very useful for the success and future progress of company. Branding is employed to promote the merchandise of the company in an easier and effective way. It accumulates identity as well as for communicating the storyline of brand just as India the concept of storytelling is popular tool for advertising.

Importance of Branding

The branding is the face of the product that company offers to its customers hence every company has to toss their branding strategy effectively. Since this is beneficial to make the impression of product or services in your brain of customers. A highly effective and impressive brand name always attracts the clients and keeps the positioning and image of the business in their thoughts. This even gains to make the customers think and transferred towards the utilization of another product of same company to that they are not familiar.

A good quality brand image in business matters a lot; the brand of the company is usually seen as in differential area of the company which ultimately shows its value and quality. With an effective and strong brand the image of the business goes surge.

Strong make of business help other brands to link with the other person different products of the business. The brand name of company used for the several products of the business for effective offering in market. (Source - Hankinson & Cowking, 1997 pp- 156)

Company Introduction

"VOLKSWAGEN DAS AUTOS"

The auto company is well known for its services and higher satisfaction amongst their customers. Volkswagen group of India is subsidiary of worldwide famous Volkswagen AG. It switches to make of Volkswagen in addition to two other existed brands of Skoda and Audi in Indian market. These brands possess its own identity manoeuvres in an autonomous manner. The establishment of the subsidiary was at time 2007. In Indian autos market the brand image is included by the size of vehicle, systems of driving and different features like Abdominal muscles, EPS and air hand bags and galvanized body of cars.

Multi branding v/s Commercial Branding

There are two main concepts taken corporate and business branding and multi branding that are explained as followed by the business:

Multi Branding: Concept of multi branding in the company mainly based on the objective to become most innovative produced volume complies with best value product specifically considering medium to long term classless. With theme and slogan "Vorsprungdurch Technik" of Audi brand in regarded as sound brand in motor vehicle premium segment. In addition brand of Skoda is a combination of intelligent ideas in using space and complex innovation also covering the design and good money value (Kapfere, 2009, pp 276).

Corporate Branding: Volkswagen bears three main brands by having information of "responsible" "innovation" and "providing Enduring Value". The car under the corporate brand there is passenger cars present consistency and quality and executive of German skills at the global level. This facilitate in becoming the first choice in an incredible number of the clients when buying a car.

Critical Analysis of Brand Strategy of VGI

In the views of Porter (1993), for successful administration of your company there has to be an recognized strategy that itself provide as a position and must have the ability to handle competition through brand strategy of the business and is generally differentiate into three parts as. Cost management strategy, differentiation strategy and concentrate strategy.

Brand strategy of Volkswagen is well looked after. As India is important market for the tactical marketing especially in automotive industry. There are good opportunities for future progress as a result of exceptional conditions of needs. But the noticeable condition is that there surely is high competition full with troubles of conditions of market, different lifestyle, and behavior of consumers.

Branding is key success factor for Volkswagen to be able to get good market position and competitive advantages so that it become very successful in the Indian Automobiles of market. As branding takes on a vital part for the Volkswagen and make it differentiate from other rivals in market. Kotler has looked at his touch upon the command that "an expense leadership is extremely hard, differentiate is their competitive strategy" (Kotler, 2008, p. 468). Also Varey considered brand as unique and for offering the proposition in the growing markets.

Branding Value of Volkswagen

The brand value can be an important aspect of a brand. This is illustrate as the clients are usually ready to spent or pay more to the product that relates to any known brand, they preferred brand that the product. The brand value is hence defined as "that extra money made by an organization or can be made from the offering of its products in solely way only because of the name of its brand". For instance For Volkswagen group India there exists late accessibility of the Volkswagen band of India on the market when compared with other competitor competitors. Because of this company has shortage to get the first mover advantages in market and hence less gain in the brand value. For even more development the company in order to enhance its brand value it follow the strategy by making corporate statement "innovation for everybody".

While marketing any product, significantly in India, the most crucial factor is quality and price of product as India is at a halt an unhealthy country.

Brand Image for Volkswagen

Brand image is specified as those features that are related to the connection to customers with the particular brand. It really is expressed as the individuals behaviour and their wants and desires, but not enough it also affiliates with the situational use, price and quality of the brand. Here example can be taken as the Mercedes Benz which has a string brand image due to its product quality and features and their price, this emerged to make a graphic of brand in the brains of customers about this particular product. The brand image is not an inherent character for a company brand though this is achieved through the advertising and promotions.

Brand image is individuality of the merchandise in market and is a symbol of the business that produce its impression and image in the heads of customers. The Volkswagen with its new brand name "Das Vehicle" along using its vision, the company will create new image by adjoining proximity and convenience via affordable improvements. The Volkswagens brands of Skoda and Audi been able in such a way that curved their position in stiff advertisement competitive auto market and creating their baton of brand image in consciously hypersensitive market segments like India.

Brand Positioning

In the view of Armstrong (2002), "brand setting zeroes in on customers and provides them a reason to buy something in preference to others; it differentiates a product from other products predicated on qualities. Walter (1997) also says that position of brand is perception among aim for customers. The Volkswagen band of India as came back into market following the period of ten years it has going to put its brand again in the heads of their customers and in market. The company has located its brand bracketed to set of above midsection classed customers whose income is above average and have the thrill to show off as and where compared to brand Audi which is expensive and incredibly showing type is made for those types of consumers that are sporty and want to show off more with expensive expenses. On contrary the Volkswagen brand is suited to the average persons and also full the desire showing off. The business has been able them with a separate position in market. Relating to a statement distributed by the director of VW travellers automobiles Mr. Neeraj Garg that the company will take a while to make its position and there is a slow process to get position into the brains of customers of India.

Segmentation

In India most driving a vehicle factor is recognized affordability, due to this the market of domestic vehicles is segmented on to accordance with their prices. You can find price structured competition in Indian market therefore the car is segmented as below:

Multi Segmentation

Geographical segmentation

Demographical segmentation

Social Class

Marketing Strategy

Marketing Strategy implemented by Volkswagen brand after its launch in India in 2007 with regards to marketing Mix

Marketing Mix

Marketing mix of Volkswagen Brand

Source: Kotler, P & Armstrong, G (2004)

For brand strategy of Volkswagen there may be involvement of first P according to marketing blend is Product as detailed in model. The product in this model is defined as that mixture of services and goods sell to the clients by the business or company in target market (Armstrong & Kotler, 2005). From research it is found that product is also a part of Brand. Design and quality are the main product features that own variety in them. Here an example can be quoted for a brand of Volkswagen Touareg that is bought from India comprises of a package of seating, engine unit, breaks and engine etc. (Volkswagen India, 2009). Hence for product strategy the business has variety and design in their products including warrant for the coffee lover which in turn brings about good response from the customers and make sure they are satisfied and bring devotion in them.

The second P in this model if marketing mixture is price. Price is of something or service is defined as that amount which is paid by customer to the company or company for buying their products offered to them (Armstrong & Kotler, 2005). While discussing the price strategy it has been discovered that there are 61 dealership offers high prices for the products to market in India when compared with their rivals like Honda city and Ford, but there is variation that the company charge interest by 4. 5 - 5. 0 % rather than other competitors make with 8% or even more as a lending options given by banking companies or building societies of other rival car makers. This facility is attributed by the Volkswagen financial Services that aided to support the sales of the company to their customers.

There is next P for the marketing combine is Place that is also very vital in Brand management. The area usually described that place where there is option of products of company to their customers. Such as worried to Volkswagen the company involved with using dealers and distributors for the intended purpose of the sales of their products. You will find two settings for the traders to get authorised either through franchised or direct ownership of company. For the business their network related to their dealers is vital and is taken care of in an effective way because the product of the company are released through those to the customers, hence it is vital. In the views of Kotler 2005 the company usually show their deficits and profits both with the dealers for purpose to maintain the grade of cost leadership. At present the Volkswagen has fine romantic relationship with their sellers in India and also require in the working with their products with Skoda with 61 leaders (Top Reports, 2010).

The last and fourth one P is Advertising. The promotion has variance in their goals that has to be achieved in market. The advertising is usually treated with the tool of advertisement. The offers for customers are added through the advertisements that results in the enthusiasm among them. The aim of promotion is to draw in focus on consumers. These campaigns are based on the program of non income but in turn results the income for the business (Bradley, 1993). Including the Volkswagen Company in time 2009 has launched a advertising named "Pre Monsoon marketing campaign" shared by Motor unit beam, 2009. This promotion is for the purpose to determine the brand of company India. In India the company offered a number of range of services with their customers and fro the corporation is getting profit from the campaigns of the business brand.

Pricing strategy

Pricing strategy of Volkswagen: Within the vies of Lowe and Doole (et al 2006), for any company at the initial stage of unveiling in market released with two followed strategies for costs, an example may be marketing skimming price strategy and other some may be market penetration pricing. The business Volkswagen has choose the strategy of market penetration rates. In this strategy previously the prices were establish high so that there can be coverage of primary investment this is so because the company had invested a lot of money available to set up the unit in Pune, Maharastra.

Ansoff Growth Matrix Model for Strategy

Source: Kotler, P & Armstrong, G (2004)

For further evaluation there is discourse relative to the given style of Ansoff Progress Matrix for Volkswagen. This model usually depicts different areas of market development of the product of the business. This development is at relationship with company and that aspect that are incredibly very important to the diversification of market. The thing is that the corporation has been diversified as it gets into into new market.

Market development

According to Reiziger (et al, 2003) "whenever a company took access into a fresh market and kick off themselves by adding existing products this is came to know as the introduction of market, and the primary aim of the business is to lure the clients from the their existing rivals in that exiting market i. e. new market". The business Volkswagen has got the accessibility into Indian market in 2007 by starting their product Jetta, then after 2 yrs in '09 2009 the business has launched two new automobiles in market with their existing brand using the brand value in market these cars are ionic beetle and the Touarge sedans (Volkswagen India, 2010).

Diversification

Again in the views of Reizger (2003) this is actually the entry of any new company with getting the launch of their new product under its brand is termed to be diversification. This strategy is commonly accepted as most risky one as there may be introduction of two new entities some may be market and other the first is product. For the Volkswagen diversification is not so risky, as it has recently successfully launched a number of cars on the market with its own brand and in accordance with its brand image and with every brand it includes inched higher and created sense of the demand in the market on every launch of new products. Most the company has as technology there are four new car that has truly gone to be launched in 2012 and these new returning products are SUVW, Few, Up and Blue Sport (Volkswagen, 2010).

As from above dialogue it is figured Volkswagen offers a highly effective branding strategy but there are some factors that must be taken into consideration for the company to make its brand VIP. In India the corporation is symbolized by three brands i. e. Audi, Skoda and Volkswagen and posses their own personal information and features and an unbiased manner in market. The brand of Volkswagen along with Audi and Skoda provide good level of consistency and excellence on the market within the existing value, image and position of its brand in target market of automobiles. It has additionally been figured the company implemented brand leveraging strategy. The merchandise launched by the company are good from all aspects and given for strengthen the brand image and identity in market. Having dialogue within the marketing mix all the aspects of the marketing mixture by the Volkswagen are taken care of in an effective way, company cover every area of price, promotion, place and product well but there may be some need to pay emphasis over the advertising and price facet of the brand technique to get the good response in market. Additionally it is concluded that there may be lack of commitment element in Indian market of Auto brands when compared with the other market segments. The company Volkswagen is new in the market and hence there is low brand knowing of the company in market. There has to be raise of awareness among all the required areas of market. There must talk about some improvements and creation of the brands. Just as Indian market which is basically driven by the price and prerequisites, company Volkswagen carry on its brand with the quality factor only. This is criticised here because this strategy will create hindrance in the brand development and wealth of the company. The factor of Cannibalization is seen as it can pay an important role for the Volkswagen way for the branding i. e. multi branding way and hence resulting in the brand that are new take the business enterprise away from that which are already proven in market.

There are some ideas that the company can adopt for the effective brand management are to drive the response of the customers as they are the key hyperlink for the success of the business and there has to be online and offline programs of marketing.

The company should be mixed up in Build Brand Engagement process to understand how the consumer needs to link up with the make of product. They need to continue to strive at increasing the customer loyalty.

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