Product and Target Market Description
Promotion Strategy
Pricing Strategy
Marketing Mix adjustment strategies
In this report, we present a detailed integrated marketing communication report for Volkswagen CC. It covers the IMC tools used in the marketing of the product, a description of the outcome of my investigation, as well as a marketing strategy, product segmentation. Also included are the product and target market description, product strategy, promotion strategy, pricing strategy, marketing mix adjustment strategies, conclusion and recommendation. The presentation also contains a reflection of what I learn about the report process and my ability to complete it.
In this report, we present a detailed integrated marketing communication report for Volkswagen CC. It covers the IMC tools used in the marketing of the product, a description of the outcome of my investigation, as well as a marketing strategy, product segmentation. Also included are the product and target market description, product strategy, promotion strategy, pricing strategy, marketing mix adjustment strategies, conclusion and recommendation. The presentation also contains a reflection of what I learn about the report process and my ability to complete it.
Introduction
Marketing is a term that has two faces (Lamb et al.,2010) .The first face of marketing is noted to be philosophical and attitudinal, a perspective and a management orientation that has a deep emphasis on customer satisfaction. The second phase is noted to involve activities as well as processes that are used in the implementation of the above mentioned philosophy. The American Marketing Association defined marketing as an activity, processes as well as set of institutions that are used in the creation, communication, delivery as well as exchange of offerings that can add value to clients, customers, partners as well as the society at large. Integrated marketing Communication on the other hand, is a customer-centric and yet data driven technique of communication with clients. It involves the coordination as well as seamless integration of all the marketing communication tools, sources as well as functions within a corporation into a program that can help in the maximization of the impact of clients as well as other end users at the least possible cost (Clow & Baack,2007).As mentioned earlier, in this presentation, we present a detailed integrated marketing communication report for Volkswagen CC. It covers the IMC tools used in the marketing of the product, a description of the outcome of my investigation, as well as a marketing strategy, product segmentation. Also included are the product and target market description, product strategy, promotion strategy, pricing strategy, marketing mix adjustment strategies, conclusion and recommendation. Our emphasis is however on the product and target market description, product strategy, promotion strategy, pricing strategy, marketing mix adjustment strategies, conclusion and recommendation.
Product and target market description
The Volkswagen CC is a car which is also known as Volkswagen Passat CC (Lavrinc,2008). Is a 4-door coupe version of the famous Volkswagen Passat. The car debuted in 2008, January at the North American International Auto Show in the city of Detroit. The CC stands for the word Comfort Coupe . The Volkswagen CC is manufactured and marketed by Volkswagen as a luxurious car that the standard VW Passat saloon car (VW,2008). The car falls between the Phaeton and Passat in Volkswagen’s range. It has a sharing wheelbase of 27mm longer while it is 50mm lower than the Passat. The car is also 36mm wider than the usual Passat.
Brown (2008) noted that in terms of capacities, the car can carry 4 people while its cargo capacity is rated at 13 cubic feet. The car’s fuel tank can hold close to 18.5 gallons of premium unleaded gas (recommended).
In regard to safety issues, the car has standard safety equipment that includes 4-wheel disk brakes with antilock protection, electronic stability as well as traction control, emergency braking assistance as well as front and head air bags.
In regard to price for the 4-cylinder Sport model, it starts at U.S.$26,790. There is a however a huge uptick in the V-6 models’ prices with the highest starting at close to $39,300.
The car’s engine transmission is 3.6 liter and 24-valve V6 engine with the ability to develop about 280 horsepower and 265 pound-feet at about 2,750 rpm.
Target market
The car’s target market is the young and affluent clients. The company is noted to expect to sale more than 26,000 units per annum (Carter,2008)
Product Strategy
Product is the essence of starting a new business. The development of a product strategy is therefore one of the most crucial decisions in the marketing of a product because a product plays an important role in the demand, success as well as competitiveness of a given company .It is therefore crucial for the marketing teams and managers to comprehend the ramifications of the chosen product strategy on the other areas of marketing such as price, promotion and distribution.
Before formulating the appropriate product strategy, it is worthwhile to have a unique selling proposition. This means that every marketer must be able to determine a unique marketing proposition of the given product (in this case our product is Volkswagen CC) within the public relation team’s vision. It is this particular unique proposition that will then be used in carving out the niche for Volkswagen CC as a product that can endure over the existence of competing products.
Other competing brands like Acura and Lexis for instance introduced at almost the same time high-priced and yet luxurious models into a category which is mainly dominated by BMW and Mercedes Benz. While all the above mentioned competing brands/car are relatively successful, Volkswagen Passat can establish itself in the market by advertising itself with its unique slogan “Engineered in Germany, Born in the U.S.A.” As a selling proposition of its engineering excellence and be cut slightly above the rest in terms of quality finish and affordability.
It is important for Volkswagen to push its Passat CC product amidst growing competition from Mercedes Benz, BMW, Acura and Lexus. They should do this by starting an aggressive campaign to source new customer segments as well as by referencing the heritage of their car quality while they introduce their new design.
Therefore, before formulating a product strategy, it is important to perform a thorough evaluation of the competing products in all possible dimensions in terms of price, distribution and promotion in order to determine the winning category. This would be used in the determination of the product’s success. The information that is gathered should then be factored into Volkswagen CC’s product strategy.
Customer demand
Before formulating the product strategy, it is important for the level and type of consumer demand to be established. This is because the consumer’s needs as well as desires can effectively influence the development and well as marketing of a product. The needs as well as desires can be translated to mean sales demand. Most products are developed to meets certain need. These products that are tailored to meet the needs as well as desires of the consumers are noted to have a higher chance of success within the competitive marketplace.
The Volkswagen CC should therefore be positioned as a luxurious coupe which is available at affordable prices.
. SWOT analysis
Strength
Weaknesses
1. Has stylish and yet very luxurious exteriors
2. Is very Elegant, spacious and possesses comfortable interiors
3. Is very powerful with a very smooth drive
4. The constant innovation of the Volkswagen Passat over the years has led to an improvement of its brand presence
1. Is not very attractive to the middle income segment of the market as a result of an expensive brand perception
2. Has a high price which effectively limits penetration in the emerging economies
Opportunities
Threats
1. Increasing its overall fuel economy
2. Going green through the introduction of eco-friendly alternatives as well as technologies
3. Launching as well as marketing the product in the emerging economies
1.Stiff government regulations on pollution, taxation as well as competition
2. Intense competition from other competing products from other manufacturers like
Promotion Strategy
The promotional strategy to be used by Volkswagen CC is to include various aspects of advertising techniques that are used by car manufacturers as well as marketing agencies that they work closely with. The various changes in the lifestyles, tastes, economic fluctuations as well as brand loyalty must be taken into account.
For Volkswagen to effectively promote its Volkswagen CC product, it must;
Market its products to the younger audiences
Sell the cars to the female market,
Use internet as well as showrooms to promote the car
Employ various communication styles in the promotion of its products
Before deciding on the appropriate promotional strategy, it is important for us to evaluate the historical changes in the car and economy, the changes in the functionality of cars, the relationship between cars and lifestyles as the concept of brand loyalty.
We must also ensure that we make a decision to push the brand or the specific models into the minds of the consumers. Volkswagen CC being a product of a well-known brand (reputable brand) can be pushed on its own. The adverts to be used must be tailored to the lifestyles of the target market.
The internet as a promotional tool must be treated with utmost importance. The manufacturer must realize the full potential of the internet as a promotional tool. Showrooms must also be used as tool or mediums of promoting Volkswagen CC. TV adverts too are also not to be forgotten. Hesterberg (2009) noted that the use of internet in the sales of automobiles is becoming commonplace. According to Hesterberg (2009) the use of traditional media in the marketing of automobiles is rapidly changing. Close to 90% of all new vehicle buyers are noted to use internet in their shopping process. Close to 95% of researchers are also noted to find vehicle reviews and ratings to be the most important aspects of internet based information in their process of shopping for vehicles online. This is then followed by reviews from dealers, enthusiast sites, online videos and blogs. Yet again 70% of car internet users are noted to view user generated content in their shopping process.
Close to 72% of all internet users are noted to use the internet search engines like Google and Yahoo! Search in finding their local dealerships.
The use of internet as a marketing tool is noted to allow offline dealers in accessing very savvy and equally serious car dealers. This is in contrast to the passive audience derived from radio and TV commercials. Volkswagen can therefore use online marketing in accessing core sectors of the motor vehicle dealership in order to build stronger relationships. The fact that online marketing is a more measurable alternative due to the existence of web analytics as opposed to the use of traditional media makes is a suitable alternative in the meeting of various performance goals as well as delivery of a Return on Investment.
A study by J.D Powers and Associates indicated that close to 63% of online shoppers are concerned about vehicle ratings while 38% are more concerned with accessing of dealer ratings. This has forced 75% of auto dealers to rely on search engine optimization. Volkswagen CC must therefore be aggressively marketed via the internet in order to exploit the rising trend of buyers to initiate their purchase intensions from online blogs, forums, websites etc. (Limbada,2006).
The company must also promote their products in line with sustainability and eco-friendly guidelines. Fuel efficiency is an important determinant of sales intention within the mid-sized luxury car segment. Environmental awareness messages and technologies must be included in the car’s promotion strategy (Zettlemeyer et al., 2005).
An example of a promotional tool used by Volkswagen CC in engaging its target market is the internet. The can create several online advertisements and promotional gadgets such as digital badges to be used in the promotion of the car.
The advantages of the internet as a promotional tool
The use of internet s a promotional tool has several advantages. The most important one is that there is a possibility of reaching greater audience. The internet is also a noted to be a far more affordable and efficient promotional tool.
The disadvantages of the internet as a promotional tool
The disadvantage of this tool is that some individuals are never keen on using the internet in doing of their daily activities. The ‘offline’ people may never get a chance of seeing the promotions.
The suitability of internet as a promotional tool for Volkswagen CC’s target market
The car targets the young and successful teenagers. This group forms the largest part of online internet users. The internet is therefore a suitable tool for promoting the product.
Pricing Strategy
The pricing strategy used by Volkswagen has seen several changes in the last couple of years. For instance in 2004, the company changed its pricing strategy. The pricing strategy used by Volkswagen is according to the geographical location, competition, engine size, sports versions etc. This is to say that the pricing strategy is customized to meet the demands of several variables with competition being put in mind.
Marketing Mix adjustment strategies
The integrated marketing communication is aimed at the provision of a consistent message as well as the achievement of complementarities in the use of media. The concepts to be used in the marketing of Volkswagen CC includes the use of online marketing channels programs/campaigns, SEO, affiliate marketing, e-mail, pay-per-click, banners, blogs, RSS, Internet radio, Podcasts as well as internet TV. The offline marketing channels would include the use of traditional print, mail order, industry relations, public relations, billboards, television as well as traditional radios. Volkswagen can also develop a special marketing mix using the product, place, price and promotion variables. The marketing mix elements such as product, price as well as promotion can be adjusted appropriately in order to ensure that the product at hand (Volkswagen CC) is marketed and successfully sold to the target market.
Adjustments to the product strategy
Volkswagen Passat can establish itself in the market by advertising itself with its unique slogan “Engineered in Germany, Born in the U.S.A.” As a selling proposition of its engineering excellence and be cut slightly above the rest in terms of quality finish and affordability.They should do this by starting an aggressive campaign to source new customer segments as well as by referencing the heritage of their car quality while they introduce their new design.
Therefore, before formulating a product strategy, it is important to perform a thorough evaluation of the competing products in all possible dimensions in terms of price, distribution and promotion in order to determine the winning category. This would be used in the determination of the product’s success. The information that is gathered should then be factored into Volkswagen CC’s product strategy.
Adjustments to the promotion strategy
The promotion strategy should also involve the use of the internet. The internet as a promotional tool must be treated with utmost importance. The manufacturer must realize the full potential of the internet as a promotional tool. Showrooms must also be used as tool or mediums of promoting Volkswagen CC. TV adverts too are also not to be forgotten. Hesterberg (2009) noted that the use of internet in the sales of automobiles is becoming commonplace
Adjustments to the pricing strategy
The pricing strategy should be adjusted to reflect variations in geographical location, competition, engine size, sports versions etc. This is to say that the pricing strategy is customized to meet the demands of several variables with competition being put in mind.
Conclusion
The Company can focus on its key competencies and resources in gaining a competitive advantage in the marketing of its Volkswagen CC product line. This must be done while considering the brand loyalty and consumer trends across the globe.
Recommendation
The marketing mix must be tailored in way that allows for the tracking of its success. The pricing strategy on the other hand is an integral element of market-positioning decision. Volkswagen CC must therefore be marketed with pricing as one of its main attractive features. The pricing structure for the product must therefore be set in a manner that reflects the variations in the geographical costs, demand, purchase timing, market-segmentation, order levels, guarantees, delivery frequencies, service contracts as well as other equally important factors.
References
Brown, W 2008. Volkswagen CC, a sedan that looks like a coupe.
http://seattletimes.nwsource.com/html/motoring/2008537170_vwcc19.html
Carter, M 2008. VW Expects the U.S. To be the Biggest Market for the 2009 VW CC
http://www.thetorquereport.com/2008/04/vw_expects_the_us_to_be_the_bi.html
Clow, Kenneth E.; Baack, Donald 2007. Integrated Advertising, Promotion, and Marketing Communications 3rd edition. Pearson Education. pp. 9 — 10. ISBN 9780131866225
Hesterberg, EJ 2009.The Impact of Online Marketing in Automotive Retailing. Available online at http://www.autonews.com/assets/html/09_anwc/pdf/pres_hesterberg.pdf
J.D Powers and Associates 2008.Stats and Facts
http://www.exteresauto.com/content-statsFacts.html
Lamb, CW 2010.Marketing. South-Western College/West; 11 edition
Limbada, S 2006.How the internet supports the consumer decision process: The case study of McCarthy-Call-a-Car.
Available online at http://eprints.ru.ac.za/961/1/Limbada_MCom.pdf
Lavrinc, D 2008. Volkswagen drops “Passat” sticks with “CC” for new sedan.
http://www.autoblog.com/2008/04/03/volkswagen-drops-passat-sticks-with-cc-for-new-sedan/
Montgomery, a 2004.Designing a better Shopbot. Management Science, 50 (2):189-206
Zettlemeyer et al. 2005.How the internet lowers prices: Evidence from matched survey and auto transaction data. Journal of Marketing Research.NBER Working Paper No.W11515
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