Himanshu Project

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PROJECT REPORT

ON

ADVERTISMENT STRATEGY

OF

DAS AUTO.

SUBMITTED IN PARTIAL FULLFILMENT FOR THE AWARD OF

DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED BY: SUBMITTED TO:

HIMANSHU SONI MRS. SWATI MISHRA

B.B.A (REGULAR) ASST. PROF.

6TH SEM. I.S.B.M. DEPT.

___________________________________________________________

SURESH GYAN VIHAR UNIVERSITY

MAHAL, JAGATPUR, JAIPUR, 3020252012-2013

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http://en.wikipedia.org/wiki/File:Volkswagen_logo.svg


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ACKNOWLEDGEMENT

I EXPRESS MY SINCERE THANKS TO MY PROJECT GUIDE

MRS.SWATI MISHRA MY FACULTY GUIDE FOR GUIDING MERIGHT FROM THE INCEPTION TILL THE SUCESSFULLCOMPLETION OF THE RESEARCH REPORT. I SINCERELYACKNOWLEDGE HER FOR EXTENDING THIER VALUABLEGUIDANCE, SUPPORT FOR LITERATURE, CRITICAL REVIEWSOF RESEARCH AND ABOVE ALL THE MORAL SUPPORT SHEHAD PROVIDED TO ME WITH ALL STAGE OF THIS PROJECT.

HIMANSHU SONI(SIGNATURE)

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Table Of Content

Chapter Particulars Page no.

1 Organisation profile 52 History 63 Introduction about Volkswagen group 74 A brief journey through a long history 8

5 Description of firm 96 Problem faced by Volkswagen 127 Volkswagen strategy 148 Porter five forces model 179 Volkswagen advertising strategy 1810 Boston consulting group 1911 Volkswagen strategy in India 2012 Volkswagen g-local strategy 2113 e-business activities 2414 Volkswagen responsibilities for the environment

and the climate24

15 Volkswagen design and market research initiative 2516 Swot analysis 2617 How to do Volkswagen ad. 3718 RESEARCH METHODOLOGY 4219 CONCLUSION 4320 BIBLIOGRAPHY 44

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Industry Automotive

Founded 28 May 1937

Founder(s) Ferdinand Porsche

HeadquartersWolfsburg,

Germany

Area served Worldwide

Key people

MartinWinterkorn:Chairman of theBoard of Management,Ferdinand Pich:Chairman of VolkswagenSupervisory Board

Products Cars

Production output4,591,851 units

(2010)

Revenue

80.251 billion(2010)(US$119 billionUSD)

Employees 368,500 (2009)
http://en.wikipedia.org/wiki/Martin_Winterkornhttp://en.wikipedia.org/wiki/File:Volkswagen_logo.svghttp://en.wikipedia.org/wiki/Martin_Winterkorn


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ORGANISATION PROFILE

In 1949, William Bernbach, along with colleagues, Ned Doyle andMaxwell Dane, formed Doyle Dane Bernbach (DDB), the Manhattanadvertising agency that would create the revolutionary Volkswagen adcampaigns of the 1950s and 1960s.

Bernbach's artistic approach to print advertising was innovative, and heunderstood that advertising didn't sell products. The strategy was to keepcustomers by creating and nurturing them as brand ambassadors ratherthan attempting to attract the attention of those who were uninterested inthe product. Bernbach's team of "agency creatives" was headed byHelmut Krone, who pioneered the idea of simplicity in print mediaadvertisements. His repeated use of photographs as opposed to theembellished illustrations used traditionally by competing agencies,spawned comfortably-consistent, yet unique, print ads that met DDB's

goal of making a stark departure from existing advertisement techniques.

The corporate headquarters and factory that produced Volkswagens waslocated in Wolfsburg, Germany. Because Volkswagens advertising

budget in 1960 was only $800,000 DDBs bare-bones, black-and-whiteapproach, coupled with a projected common theme of irreverence andhumour, fit Wolfsburgs needs well. Each Volkswagen ad was designedto be so complete that it could stand alone as a viable advertisement, evenwithout addressing all aspects of the automobile.

Taken as a sign of the campaign's runaway success, research by theStarch Company showed that these Volkswagen advertisements hadhigher reader scores than editorial pieces in many publications, notingthat Volkswagen advertisements often didn't even include a slogan orlogo. The 1959 Think Small Volkswagen series of advertisements werevoted the No. 1 campaign of all time in Advertising Ages 1999 TheCentury of Advertising.

Following the success of Think Small, a follow-up ad-campaign titled"Lemon" left a lasting legacy in America - use of the word "Lemon" to

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Parent Volkswagen Group

Website www.volkswagen.com
http://www.volkswagen.com/http://www.volkswagen.com/


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describe poor quality cars.. "Lemon" campaign introduced a famoustagline "We pluck the lemons, you get the plums."

Volkswagen AG is a Germany-based automobile manufacturer. The

Company develops vehicles and components, and also produces and sellsvehicles, in particular Volkswagen brand passenger cars and commercialvehicles. The Company consists of two divisions: Automotive andFinancial Services division. The Automotive division is responsible forthe development of vehicles and engines, the production and sale of

passenger cars, commercial vehicles, trucks and buses, and the genuineparts business. The Financial services division's portfolio of servicesincludes dealer and customer services in the field of financing, leasing,direct bank, insurance and fleet business. The Company's brands includeVolkswagen, Audi, Bentley, Bugatti , Lamborghini, SEAT, Skoda,Scania and Volkswagen Commercial Vehicles and each brand offers a

product range from low-consumption small cars to luxury class vehicles,as well as pickups, busses and heavy trucks in the commercial vehiclesector.

History

For most of the people , VW is a new and unknown brand but the truth is

that VW or Volkswagen is a renowned German Automotive companythat actually owns an umbrella of brands that are released all over theWorld. Volkswagen Group is the largest manufacturer in the Europe andis ready to tip Toyota as the worlds largest car manufacturer. In rawterms, it is an automotive giant with a global reach.

Das Auto- The Car in German language is the tagline of the VW. TheMeaning Volkswagen also means peoples car/wagon in a near sense.Volkswagen is a very common brand in Germany and has a huge

presence all over Europe. It also reaches out in US with its many models .One would be actually surprised that the following models are all fromthe VW group.->Skoda Auto->Audi group (The luxury car brand of VW, comprising of Lamborghini,Seat and Audi series)->Bentley->Volkswagen brand series->Bugatti ( Veyron is the Fastest car in the world

Introduction about Volkswagen Group

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Type Pubic Company Aktiengesellschaft Industry Automotive FoundedGerman Headquarters Wolfsburg, Germany Number of locations 61

production plants in countries Area served Worldwide Key people

Ferdinand k Piech (Chairman of the supervisory board)Martin Winterkorn (CEO and Chairman management)Product Automobiles, commercial vehicle, engines Production output6,054,829 units for sale in 153countries (2009) Services financial servicesVolkswagen was founded on 28 May 1937as the GesellschaftzurVorbereitung des Deutschen Volkswagens mbH("Society for the preparation of the German People's Car, sometimesabbreviated to Gezuvor ) by the Nazi Deutsche Arbeitsfront (GermanLabour Front).The purpose of the company was to manufacture the

Volkswagen Type 1, later better known as the Volkswagen Beetle. On 16September1938, the company was renamedVolkswagenwerk GmbH ("Volkswagen Factory limited liabilitycompany").After the Second World War in June 1945, Major Ivan Hirstof the British Army Royal Electrical and Mechanical Engineers (REME)took control of the bomb-shattered factory, and tried to dismantle it andship it home. However, no British car manufacturer was interested; "thevehicle does not meet the fundamental technical requirement of a motor-car ... it is quite unattractive to the average buyer ... To build the carcommercially would be a completely uneconomic enterprise.

In 1960, upon the floatation of part of the German federal governmentsstake in the company on the German stock market, its name becameVolkswagenwerk Aktiengesellschaft (usually abbreviated toVolkswagenwerk A).On 1 January 1965, Volkswagenwerk acquired AutoUnionGmbH from its parent company Daimler-Benz. The new subsidiarywent on to produce the first post-war Audi models, the Audi F103 series,shortly afterwards. Another German manufacturer, NSU MotorenwerkeAG, was merged into Auto Union on 26 August 1969, creating a new

Company, Audi NSU Auto Union AG (later renamed AUDI AGin1985).From the late 1970s to 1992, the acronym V.A.G was used byVolkswagen AG as a brand for group-wide activities, such as distributionand leasing. Contrary to popular belief, "V.A.G" had no official meaning.On 4 July 1985, the company name was changed again - to VolkswagenAktiengesellschaft (usually abbreviated to Volkswagen AG), to reflectthe company's increasing global diversification from its headquarters and

main plant, the Volkswagen work in Wolfsburg. In 1986, Volkswagenacquired a controlling stake in the Spanish car manufacturer SEAT,

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S.A.and in 1991, koda automobilov a.s. of Czechoslovakia became awholly-owned subsidiary. Three prestige automotive marques were addedto the Volkswagen portfolio in 1998: Bentley, Lamborghini

INTRODUCTION AT A GLANCE

Literally, the word "Volkswagen" means "people's car." As a carmaker,they are under an obligation to their customers and society to supplyhigh-quality products that are safe and environmentally compatible. TheVolkswagen Group with its headquarter in Wolfsburg is one of theworlds leading automobile manufacturers and the largest car producer inEurope.

The "Volkswagen Group" consists of some of the biggest names in theAutomobile Industry. The Group consists of eight brands: Volkswagen,Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and VolkswagenCommercial Vehicles. Each brand has its own character and operates asan independent entity on the market. The product range extends fromlow-consumption small cars to luxury class vehicles. The VolkswagenGroup's models are sold in more than 150 countries.

Group Values

Customer Nearness

Top Performance

Added Value

Renewabilty

Respect

Responsibility Sustainability

The Board of Management of Volkswagen AG comprises five members.Each Board Member is responsible for one or more functions within theVolkswagen Group. Prof. Dr. Martin Winterkorn is the Chairman. Thework of the Board of Management of Volkswagen AG is supported bythe boards of the brands and regions as well as by the other group

business units and holdings. The Supervisory Board is responsible for

monitoring the Management and approving important corporatedecisions. Moreover, it appoints the Members of the Board of

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Management. The Supervisory Board of Volkswagen AG comprises 20members and conforms to the German Co-determination Act. Dr.Ferdinand K. Pich is the Chairman of the Supervisory Board ofVolkswagen AG.

The aim of the Group is to offer attractive, safe, environmentally friendlyvehicles which are competitive on increasingly tough markets andrepresent the global benchmark in their respective classes.

A BRIEF JOURNEY THROUGH A LONG HISTORY

When in 1937 the company known as "Gesellschaft zur Vorbereitung desDeutschen Volkswagens mbH" was founded, no one could have guessedthat it would one day be Europe's largest carmaker. The history of thecompany - with all its trials and tribulations - is first and foremost a storyof impressive success. It is this very company that today we come toknow as VOLKSWAGEN.

1937-1945

On May 28th, 1937 the "Gesellschaft zur Vorbereitung des Deutschen

Volkswagens mbH" company was founded, and on September 16th, 1938it was renamed "Volkswagenwerk GmbH". In early 1938, in what istoday Wolfsburg, work begans on construction of the Volkswagenwerk

plant which was to house production of the new vehicle designed byFerdinand Porsche.

1945-1949

After the end of the Second World War, in mid June 1945, responsibility

for Volkswagenwerk was placed in the hands of the British MilitaryGovernment. Under the management of Major Ivan Hirst, mass

production of the Volkswagen Beetle was started.

1949-1960

On March 8th, 1950 the Type 2 went into production, expanding thecompany's product range. The Volkswagen Bus, till today known tomany as the "VW Bully", soon created rising demand thanks to its

multifunctional capabilities. In 1956 a separate manufacturing base for

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the transporters was established in Hanover, at the same time settingdown the roots of today's Volkswagen Commercial Vehicles brand.

1960-1980

On February 17th, 1972 Volkswagen broke the world car productionrecord: with 15,007,034 units assembled, the Beetle surpassed thelegendary mark achieved by the Ford Motor Company's Model T,

popularly known as the "Tin Lizzy", between 1908 and 1927.

In 1973 the Passat became the first model of the new generation ofVolkswagen vehicles to go into production. The Passat was built in line

with the modular strategy, by which standardized components usable in arange of different models provide significant rationalization.

1980-1990

In June 1983 production of the second-generation Golf began. The carwas designed for a largely automated assembly process, and in thespecially erected final assembly hall, designated Hall 54, robots weredeployed for the first time in vehicle manufacture.

1990-2000

With the production launch of the Lupo 3l TDI, the first production carcame to offer fuel consumption of just three liters per 100kilometers, inJuly 1999, Volkswagen once again made automotive history.

2000-2003

In August 2002, at Volkswagen Slovakia, as in Bratislava, massproduction of the Touareg, a luxury-class off-road vehicle, was started,marking the Volkswagen brand's move into an entirely new marketsegment.

In December 2002 the "Auto 5000 GmbH" company, operating a plant atthe Group's site in Wolfsburg, started production of the Touran compactvan. A special collective pay model had been developed, aimed atimplementing lean production and involving flat hierarchies, team

working, flexible working hours and the deployment of more processexpertise by the workforce.

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2003 production of the fifth-generation Golf was started, embodying anew dynamism in its design and engineering.

DESCRIPTION OF FIRM

Volkswagens Products and Positioning

Size, Growth Rates, and Main Products

In 2006, Volkswagen sold 5,192,576 vehicles worldwide, and sales in2006 amounted to 5,192,576 million Euro. Volkswagen is headquarteredin Germany, and the European Community (EC) represents by far thelargest market for Volkswagens, with sales to EC countries comprisingnearly 60% of Volkswagens global sales. Sales in Germany (27%) andBrazil (14%) account for the most significant segments of Volkswagenstotal sales. The U.S., Mexico, and Canada are, respectively, the seventh,thirteenth, and eighteenth largest markets for Volkswagen vehicles, with

North Americans purchasing around 6% of all Volkswagens sold.

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Last year, the firm's global advertising budget was $1.1 billion, with non-U.S. advertising at $933 million. This contrasts heavily with the global

balance of advertising outlays for many automobile firms. For example,Toyota has an advertising budget of $1.7 billion, with non-U.S. spending

of $989 million. Volkswagens proportionally smaller marketing focuswithin the U.S. serves to illustrate the relative unimportance of the U.S. toVolkswagen from a global perspective.

However, the importance of North American markets has beenincreasing. The automaker predicts total sales of 250,000 in 2008 in theU.S., and envisions a steady double-digit growth pattern in Canada andU.S. in the coming years. NAFTA will almost certainly act as acatalyzing factor in this growth.

Volkswagen products sold in North America include the Passat, the Jetta,the Golf, the old Beetle (only in Mexico) and the new Beetle. The Jetta isVolkswagen's best seller in the United States.

PROBLEMS FACED BY VOLKSWAGEN

Implementation of the North American Free Trade Agreement (NAFTA).Has had a dramatic impact on the automobile industry in North America.

The provisions of the NAFTA have led to significant changes in thenature of automobile production and purchasing within Canada, theUnited States, and Mexico.

IMPACT OF NAFTA ON VOLKSWAGEN

The Threat of Competition

Possibly the largest challenge facing Volkswagen as a result of theNAFTA is the reality of increased competition in Mexico from North

American competitorsnamely General Motors, Ford, Chrysler, andNissan. For the first eight years of the NAFTA (until 2002), firms that donot assemble cars in Mexico were prevented from importing, leavingthese five firms to battle for market share in Mexico.

In 1991, Volkswagen's share of the Mexican market stood at 38%, withVolkswagen holding a strong lead over its competitors. However,

NAFTA appears to have had an immediate impact by 1995, when Mexicowas in the throes of currency devaluation, Volkswagen had fallen to

fourth, behind General Motors, Ford, and Nissan.

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Volkswagen's market share has recovered somewhat since, amounting to23.1% in 1997, second only to General Motors at 26.7%. However,competition in Mexico from firms that prior to NAFTA had not placedmuch emphasis on the Mexican market remains a significant threat to the

success of Volkswagen in North America.Domestic Content Requirements

Another challenge confronting Volkswagen deals with the issue of partssourcing. Presently, only automobiles that meet a standard of 56% NorthAmerican content under the NAFTA rules of origin may be shipped dutyfree, and this standard will be increased in another four years to a

permanent level of 62.5%. Although Volkswagen did not have a greatdeal of trouble meeting the initial standard of 50% North American

content (largely because it already faced a 36% Mexican contentrequirement prior to NAFTA), complying with the higher 56 and 62.5%standards has and will continue to affect the firm. This requirement hasforced Volkswagen to adjust its sourcing practices, causing it to rely moreheavily on parts suppliers within the U.S. and Canada, rather than on theGerman sources that have historically supplied the largest portion of partsto the Puebla plant. If Volkswagen is unable to meet the strongerdomestic content requirements, then it will face the significantcompetitive disadvantage of having to pay a 2.5% duty on exports to the

U.S.

Labour Issues

The impact of NAFTA provisions pertaining to labour was particularlybad; these measures had an impact on Volkswagens operations inMexico. The Puebla plant had already experienced its share of labourdifficulties, suffering through a major strike that crippled production for atime in 1993. Despite the NAFTA Labour Commissions lack of direct

authority, public pressure brought to bear within Mexico in turninfluenced the Mexican government and Volkswagens standards for thetreatment of workers.

North American Opportunities

While it was facing the difficulties presented by the NAFTA,Volkswagen also confronted opportunities for increased exports of itsvehicles from Mexico to the U.S. and Canada. The elimination of tariffsunder NAFTA did allow Volkswagen to increase its exports to the U.S.

and Canada. And in fact exports did increased since NAFTA wasimplemented. It is difficult to say, however, how much of this increase

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was due to NAFTA, and how much was due simply to the peso crisis andto the strength of the U.S. and Canadian economies.

It can also be argued that NAFTA has played a role in Volkswagens

recent decision to locate a new plant in North America. While there aremany factors involved in where to locate a new plant and the non-existence of tariffs make Mexico or certain parts of the U.S. look moreappealing as potential sites. It is not possible to say that this plant wouldnot have been proposed if it werent for NAFTA, but the fact remains that

NAFTA gave the U.S. and Mexico an additional edge in the search forpossible plant locations.

VOLKSWAGEN STRATEGY

Fluctuating Market Presence in North America

In the 1960s, Volkswagen captured the North American market for thesmall, inexpensive automobile with the original Beetle, and soonestablished a Beetle assembly plant in Westmorland, Pennsylvania.However, with the rise of Japanese and other Asian manufacturers in theentry-level market during the 1970s and 1980s, Volkswagen saw its

market share in North America fall precipitously. Also facing morestringent environmental and safety standards in the US and Canada in1986 Volkswagen decided to cease all assembly operations in the U.S.and Canada and rely entirely on imports to service the market. Not facingthe same constraints in Mexico, production of the Beetle continued at thePuebla plant.

Emphasis on Europe

From the mid-1980s Volkswagen's global strategy hinged on

(1) Continued growth in production and demand for the Beetle inemerging markets (especially Latin America) and

(2) a concentration on the European market as the motor of growth ininnovative product lines. Indeed, the European market dominatesVolkswagen's global sales. Not only has Volkswagen emerged as a leaderin Europe, but in the post-Soviet era, Volkswagen has made considerableinroads in expanding production and sales throughout Eastern Europe,

partly through its acquisition of Skoda

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Renewed North American Focus

During the 1980s and 1990s growth in VW's European market sharerequired that VW rely on Mexican capacity to meet demand in North

America. This renewed emphasis on Mexican production was also fuelledby recognition of VW's price sensitivity in the U.S. market due to thedepreciation in the dollar. (At current exchange rates, Mexican

production is cost-competitive with production in Germany.) However,the most important aspect of Volkswagen's new strategy centers on theneed for a strong presence in North America in the contest over globalautomobile markets. Part of this presence will take the form of importsfrom Europe (like the new Golf), but increased production in NorthAmerica is also essential. Accordingly, Volkswagen has raised its level of

production in North America by 34% in the past two years.

The establishment of a new assembly plant North America will be themost significant aspect of Volkswagen strategy in North America forsome time to come. Building this facility will allow Volkswagen to takefull advantage of North American free trade and to expand its market

presence in North America.

Parts Sourcing

Volkswagen has historically relied on a system of global sourcing tosupply parts to its assembly plants. In Mexico this has changed, however,as a direct result of the domestic content requirements of NAFTA. The

purchase of parts form within North America, and particularly from theU.S. has expanded in order to meet the requirements of the NAFTA.Continuing to develop a network of North American parts suppliers willremain an integral part of Volkswagens North American strategy,especially in light of the proposal to locate a new assembly plant in NorthAmerica.

Production Techniques

Volkswagen has kept up with industry wide trends towards increased useof new organizational orientations and methods of "just in time"

production. Volkswagen has focused resources on its labour trainingprograms, seeking to facilitate the rotation of work functions amongstemployees. This development has allowed increased flexibility in the

production of vehicles by ensuring that qualified personnel are availableto accomplish a variety of tasks within their respective production

segments. Volkswagen has also focused on reducing inventories through

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the use of "just in time" production, which has led to the creation of muchcloser ties between parts suppliers and assembly plants.

The New Beetle

A good sense of the Volkswagen's new marketing strategy can be derivedfrom the high-profile launch of the new Beetle in 1998. Seeking to stage a"convincing comeback based on the needs and wants of U.S. customers",and unlike the entry-level Beetle of the 1960's, the 1999 Beetle is amodern car that is marketed to more affluent consumers whose

preferences can be swayed on the basis of both performance andnostalgia. This is reflected in the new Beetle's sticker price of $15,700U.S. for the base model, which is priced above the Golf but below theJetta.

Fostering an Upscale Image

While the arrival of the new Beetle promises to bring increases in sales ofVolkswagens, the firm is emphasizing its desire to continue to improvesales of its upscale vehicles, like the Passat and the new W-12 sports car(Germany). Maintaining this focus on developing an image as a carmaker that is a rival to BMW and Mercedes is particularly important inthe U.S., where expanding into the upscale market will carry with it

substantial long-term gains. Accordingly, Volkswagen plans to ensure thehealth of its U.S. advertising budget for these vehicles, even as the adcampaign for the new Beetle is launched.

New Supplier Strategy

Purchasing costs represent approximately 60% of the cost of productionfor Volkswagen cars, with 60-65% of parts coming from outsidesuppliers. (Of these suppliers, 80% produce in Germany, and 15-18% inrest of Europe, with the remainder elsewhere in North America and Asia.)

Volkswagen has begun to include suppliers in the assembly process itself.By directly employing only engineers, managers and supervisors, andrequiring suppliers to employ their own workers in the assembly plant,Volkswagen hopes to facilitate the development of new components andmodels. According to this new supplier strategy, parts suppliers are alsoexpected to shoulder part of the financial burden of building the assembly

plant itself. As a result, Volkswagen expects unprecedented productivitygains. If it proves effective, Volkswagen will use the strategy in

production in North America and around the world.

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Porters five force model

Threat of new entrant:

1) Nissan, Renault, GM

2) New Technology

Bargaining power of buyers:

There will be an indirect relation between the bargaining power of buyersand various product segments. More options to choose from the segmentVolkswagen operates in. Honda, Toyota (Accord, Civic, Corolla) alreadycapturing bulk of the market due to its advanced petrol engines. Skodahas been successful mainly because of its diesel offerings (Octavia,Laura). The D segment Market has been growing consistently.

Bargaining power of suppliers

Bargaining power of suppliers would be high since VW does not deal inmass production unlike Maruti and Hyundai.

Substitutes

Volkswagen does not have substitutes in India currently for its dieselofferings except for the recently launched GM Optra and HyundaiSonata. But Volkswagen easily scores over these products due to the

brand recognition and loyalty it carries in the country. VW offers thewidest range of diesel cars in the D segment. Niche products likeLamborghini & Bentley do not have competitors in the Indian market.

Competitors

Honda, Toyota, GM, Hyundai are its direct competitors

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VOLKSWAGENS ADVERTISING STRATEGY

One of the most successful ad campaigns of all times happened to be anautomobile advertisement. The campaign was for the original

Volkswagen Beetle. Everyone recognized the Volkswagenadvertisements of the 1960s. The new magazine advertisements wererelief to the tired eyes of the average magazine onlooker. Most of the adstoday were full of clutter, vast amount of colours, and enough print onecould mistake the ads for an actual article; the Volkswagen ads have onlyone sentence, an occasional a small picture of a beetle, and a refreshingsolid white background.

In the November 2000 addition of George magazine, a Volkswagen adwas the centrefold. The advertisement appears to be two blank white

pages at first glance. Once one looks at the advertisement though, onenotices a sentence at the bottom right-hand page that says, Just thoughtwed give you a moment amid the political hoopla to think about thoseissues that matter to you. That one sentence can bring a smile onanyones face.

The advertisement in Style magazine slightly differs. The ad is still adouble page spread with a white background; however, this advertisementhas a small green beetle in the centre of the right page and a sentence

centred on the left page that says, Other cars are starting to look funny.The yellow-green colour of the bug has a significant effect on the ad. It isnot a surprise that the beetle is in a colour that symbolizes a resurrectionof the just (Brewer) considering the beetle itself was resurrected. Moreimportant then the symbol of the colour green is the physiological effectof the colour green. Green suggests stability, solidity, constancy,

persistence, resilience of the will; and, in regard to the sense of self, afeeling of self-worth. Does not that describe the ideal car?

The Volkswagen symbol is a blue circle with white letters that allow theV and W of Volkswagen to coexist. It is important to know Volkswagenis a German automobile and Germut is a word in German that cannot

be translated into any other language. The word describes thepsychological effect of the colour blue. The description of the wordGermut is the ideal of unity and harmony. It is the primal maternalattachment, loyalty, trust, love and devotion. Blue is symbolic of timelesseternity and of harmony in historical time, that is, tradition. With thatdefinition, it is obvious why Volkswagen would pick the colour blue to

be their symbol. The colour describes everything one looks for in friend,family, or lover. Blue was selected to suggest romance. The romantic

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ads tell us the car will make us feel sexy and safe and loved, that it willgive us passion and security in a world that is both humdrum anddangerous, and sometimes that it will substitute for human relationships.

Internet addresses printed on the corner of advertisements are now ascommon as copyright symbols. The masterminds of Volkswagenhowever use their internet addresses as a plug for even moreadvertisements. If one were to visit the web site not only can they buy thecar of their choice, but they can also download the commercials forVolkswagen just in case the print ad did not already sell the customer ona Volkswagen automobile. According to the press releases on theVolkswagen web site, the advertisements are working. This past yearVolkswagen sales are breaking records with percentage increase in sales

per month ranging from 5.8% up to 29.7%. The Volkswagen campaign isonce again a success.

In 2006 Volkswagen had unexpectedly decided to go back to the Rabbitname for the North American version of the car known to the rest ofthe world as Golf. In a surprise move, Volkswagen of America, Inc.announced that its all-new fifth generation Golf is going back to theoriginal Rabbit nameplate for the U.S. and Canadian markets. Thereintroduction of the Rabbit represents Volkswagens commitment to

this market and is a nod to the passionate North American enthusiastswho have an emotional connection with the Rabbit name.

Boston Consulting Groups Growth-Share Matrix

STAR

Bentley, Lamborghini

QUESTION MARK

????????

Bugatti

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CASH COWSVolkswagen Passenger cars,Audi, Skoda

DOGSVolkswagen CommercialVehicles, SEAT

VOLKSWAGEN STRATEGY IN INDIA

Launch of Skoda before VW brand

Volkswagen strategy of introduction of Skoda in India was the part ofVWs long standing strategy of gauging the price sensitive Indian market.The company wanted to understand which models in its vast stable would

appeal to Indians also the didnt want failures to tarnish the VW imagewhich would hamper its future prospects of entry in Indian auto market.The company also used the Indian experience to pitch its brands againstmajor auto companies like Honda and Hyundai.

VW to integrate Indian facilities

Volkswagen (VW), the German auto giant, has gone one step ahead of itsEuropean and Japanese rivals to save cost and make cars more affordablein India. The VW group will integrate all of its manufacturing facilities in

India to contain costs and check on uninterrupted supply of auto parts.This is perhaps the first strategy of its kind to be seen in the countryamong global car makers.

Manufacturing plants of Skoda, VW and the new proposed Audi plantwould be designed in such a way that it can produce cars of any of thegroup companies. The VW group owns the Skoda and Audi brands. Thecurrent models of Skoda Auto including the Fabia, Laura, Octavia,Superb and future launches such as the Roomster (MPV) and Yeti (SUV)

can be produced in VWs plant in Pune or at Audis facility.

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VW entry into commercial vehicle market

Volkswagen is gearing up to enter the Indian commercial vehicle market.The firm has decided to first target the light commercial vehicle and

armed forces market with its range of armoured vehicles, multi-vans andthe Caddy pick-up utility vehicles. The vehicles being imported includethe VWLT multivan as an 8-seater armoured vehicle, the VWLTmultivan built as an ambulance and the VW Caddy pick-up. In the next

phase, VW intends to roll out its range of minibuses here.Later, the firm is also contemplating introducing its range of sports utilityvehicles and passenger cars, including the popular Golf.The commercial vehicles would be available in both petrol and dieseloptions. The armoured vehicles provide safety according to stringentGerman armouring protection standards. These vehicles have beenspecifically developed to meet the requirements of police and bordercontrol forces, and will provide reliable and secure transportation for allthe security forces, the sources added. The ambulances also conform toEuropean standards and regulations. VW intends to enter into licensingagreement under which the advanced armouring and ambulancetechnologies will be transferred to India. VW, it may be recalled, hadinitially planned to enter India in a JV with the government. However, thelow sales volume forced it to back out of the venture. The governmentthen joined hands with Suzuki Motor Corp of Japan to form Maruti

Udyog Ltd.

VOLKSWAGEN G-LOCAL STRATEGY

The Group's passenger car business is divided into two Brand Groups.Under the leadership of the Group, the Audi and Volkswagen brands areresponsible for the results of their respective Brand Group worldwide.Audi's Brand Group is made up of the Audi, Seat and Lamborghini

brands and places an emphasis on sporty values. The Volkswagen BrandGroup is made up of the Volkswagen, koda Auto, Bentley and Bugattibrands and stands for more classic values. Each brand retains itsdifferentiated brand-image and operates as an independent entity on themarket. Together, the product ranges extend from the low-consumption 3litre vehicle to luxury class vehicles. The Groups commercial vehicle

products are the responsibility of the Volkswagen Commercial Vehiclesbrand. Across all its brands, the brand group responded to decliningmarkets with flexible adjustments of production.

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RISK MANAGEMENT SYSTEM.

The aim of all business activity is to identify and exploit opportunities toenhance the value of the business. In this, Volkswagen as a Group of

companies operating on a worldwide scale is also exposed to risk. Theresponsible handling of global uncertainty forms part of the riskmanagement system operated by Volkswagen. The object of this systemis to identify business risk in a timely manner and to limit it to such anextent that the economic benefit of the relevant business activitiesoutweighs the risk. Alongside the existing reporting and early warningsystem, the risk situation is routinely assessed on the basis of written andverbal surveys. The risk management system is an integral part of Groupmanagement practice, and has been assessed by the Companys externalauditors. Accordingly, it conforms to the requirements of the GermanLaw governing controls and transparency in business (KonTraG).

E-BUSINESS ACTIVITIES enhancing VWs relation with OEM

PartnersAndSuppliers

In close collaboration with its suppliers, Volkswagen has progressed its e-

Business activities begun in 2001 from a B2B marketplace to a B2Bsupplier platform. The portal at www.vwgroupsupply.com optimizes theinformation flow between the Volkswagen Group and its partners whileat the same time creating a stronger link between supplier and Group

processes.The core of the system is the new VWGroupSupply supplier database,which in future containing, as it does, all the suppliers to theVolkswagen Group will represent one of the largest component supplierlistings in the automotive industry. In it, all suppliers will be able to

record their individual calling cards that is, the range of products andservices they offer to the Volkswagen Group.

The virtual applications, including the "Electronic Supplier Link (ESL)"online inquiry facility online negotiating online catalogue purchasing"eCAP" capacity management online standard texts will save time, cutcosts and so boost the competitiveness of the Volkswagen Group. Thiscommunications platform now also integrates other processes, such astechnical modifications and invoice processing, online.

The Volkswagen Group already manages nearly its complete

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procurement volume of more than 50 billion via the Internet.

The internet platform started in early summer of 2000 is up and running.Under the domain "VW Group Supply.com" the most important

components Online Catalogs, Online Inquiries, Online Negotiations andCapacity Management have already been introduced to all brands andregions of the Volkswagen Group.

VOLKSWAGENS CRM INITIATIVE

The major business challenges that were address through mySAP CRMwere unresponsive customer service and slow reaction times. FAW-Volkswagen implemented mySAP CRM Customer Interaction Center(CIC) for sales, service, and marketing. Customers could now reach thecompany.s customer contact center via telephone, fax, e-mail, and theInternet on a real time basis and access information about new productsand services. mySAP CRM is tightly integrated with the core SAPenterprise solution at FAW-Volkswagen to enable communication andinformation sharing between customers, service representatives, and theentire enterprise

Corporate Social Responsibility at Volkswagen

The signals of the capital markets and stakeholders are clear: socialresponsibility and sustainability as keystones of a long-term corporatestrategy contribute to the differentiation of companies in product andcapital markets. A total of 40 projects and initiatives demonstrate howVolkswagen brings together wealth creation and value orientation for awin-win situation. For us, responsibility and income are two sides ofthe same coin, said CEO of Volkswagen, Dr Bernd Pischetsrieder in hisforeword. Volkswagen orients itself to its own standards as well as

international conventions and encourages the worldwide implementationof human rights and better environmental protection, e.g. by taking part inthe Global compact. On the occasion of the UN Earth Summit forSustainable Development in Johannesburg in 2002 Volkswagen accededto the Global Compact and published a brochure on how the Groupimplements the 10 principles on environmental protection and health andsafety at work, against corruption and for human rights. For example,

participation in the International Labour Organisation Safe Workprogramme will help to improve safety at work in the take-off countries

of Brazil, Mexico and South Africa. Volkswagen also involves itssuppliers in this, as it does in the Sustainability in the Supplier Chain

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project. Progress can also be seen in the fight against Aids. Support forpreventive measures and medical care means that the hospital stays ofaids patients in Brazil have been reduced by 95 per cent within 10 years.

To realise the guiding principle of sustainable mobility, Volkswagencooperates with governments, environmental associations, unions andacademic and research institutions as well as with other car and oilcorporations. Just recently, Volkswagen was a co-founder of the Alliancefor Synthetic Fuels in Europe in Brussels. In a detailed chapter of the

brochure Volkswagen actively deals with the effects of globalisation.Many examples clearly show that globalisation primarily offersdevelopment opportunities of mutual benefit. By strengthening themanagement functions for the integration of CSR and sustainability in the

business processes, Volkswagen will continue to advance its activities forsustainable and responsible company development.

Volkswagen responsibility for the environment and the climate

Model policy

Volkswagen will be launching a particularly efficient and low-emission

vehicle under the BlueMotion label for each model series It started withthe Polo and Passat, and will be continuing with the Golf. These modelsfeature particularly efficient engines, low-friction tires, longer gear ratios,etc. With their low fuel consumption they will represent the benchmark intheir class.

This strategy is already bearing fruit: With CO2 emissions of 102grammes per kilometer, the Polo BlueMotion is the best in its class.Volkswagen has proved that powerful engines can also be thrifty with the

Passat BlueMotion; equipped with a 105 hp engine and consuming 5.1liter diesel/100 km, this model emits a mere 136 grammes of CO2 perkilometer.Furthermore, Volkswagen is conducting intensive research intoalternative fuels and has for many years been investing billions inreducing consumption in direct-injection diesel and gasoline engines.

Volkswagen and bio ethanol initiative of Volkswagen

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Volkswagen has been pressing the case globally for the increasing use ofbio fuels such as biodiesel and bioethanol. As the developer of innovativeengine concepts such as TSI, FSI, and TDI, Volkswagen was quick to see

the need for continual development of modern fuels. The objectivethroughout is to reduce the use of fossil energy resources by replacingthem with regenerative fuels. This helps to preserve existing mineral oilreserves and actively contributes to CO2 reduction and protection of theclimate.

Volkswagen's innovative drive concepts are already capable of using anup to ten percent volume blend of bioethanol in petrol (E10) within thespecifications of a future fuel standard. Volkswagen is promoting the

increasing spread of biogenic fuels with its modern engine technologythat is prepared for the use of ethanol blend fuels. This is an importantelement in their future-oriented fuel strategy The Golf GT with its newlydeveloped TSI technology is the prime example of this. TSI combines thetwo forced induction concepts, supercharger and turbocharger, in a directinjection petrol engine. By developing this extremely powerful andeconomical unit, Volkswagen demonstrates that E10 blended fuel canalready be used in the most progressive direct injection petrol enginesglobally.

VOLKSWAGENS DESIGN AND MARKET RESEARCH

INITIATIVE

With the goal of detecting market tendencies that would allow it tocontinue being at the forefront of automobile design and production,Volkswagen group decided to open its design studio at Simi Valley inLos Angeles California. Set in the north, the studio was the base of

operations from which to study the market, mainly the North Americanone, and to make proposals regarding the satisfaction with the currenttendencies.

It was the result of intensive market research of Volkswagen the led tothe development of the NEW BEETLE which even in its concept phasewon many awards and accolades in various Auto Shows all over theworld.The production line in its Pubela,Mexico plant was modifiedwithin no time to start the production of Beetle within no time. After

nearly 7 years worth of research, studies, previous presentations and otheractivities, Volkswagens New Beetle is officially introduced as a car for

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serial production at Detroits Auto Show on January 1998. The publicswelcome forced the enterprise to revise and change its initial goals,which estimated 300 units per day during the first year, duplicating thisnumber to 600

SWOT ANALYSIS

Strengths

1) VW has boosted quality more than any other carmaker in the past fiveyears, cutting defects by 60%.2) Their "family culture", no leading brand.3) The VW group has the flagship of some of the biggest and mosttrustworthy brands in the automobile industry.4) Strong Procurement department with Sustainability in SupplierRelationships.5) Strong CSR activities bringing together wealth creation and valueorientation.

Weaknesses

1) VW still trails Toyota, Mercedes, Nissan, and Honda in overall quality.2) VW's cost of capital is relatively higher than Daimler's.3) VW bungled its communications with investors.4) It was late in inculcating the policies of Lean and JIT approach thatToyota was using for many years.5) Bad publicity due to being sued by GM.

Opportunities1) Growth potential in the American and Asian markets.

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2) Due to its very good results on the stock exchange, VW may expect toattract numerous new investors3) Potential decrease in Cost with their Production Strategy.

Threats1) A softening in auto sales in Europe and South America.2) Risk of self-cannibalization between VW's brands, like top of the lineVW's models and bottom of the line Audi's.3) Risk of brand dilution owing to confusion between the VW Passat andthe Audi A4.4) Ever increasing fuel costs.

Group Strategy in 2015

A clear, long-term orientation is essential for making decisions on short-and medium-term measures. In view of this, Volkswagen has geared itsoperating policies towards sustainable market success and incomegeneration as part of the Group Strategy 2015. Transparent and uniform

processes throughout the Group are designed to bring about shorterdevelopment, vehicle order and throughput times, to increase theefficiency of capacity utilization in the plants and to boost theeffectiveness of the distribution network. In future, the VolkswagenGroup will focus exclusively on its core areas of competence. In all otherareas, it will work together with external providers on the basis ofagreements governed by mutual trust, contracts or company law. Thefinancial targets of the Group Strategy 2015 for the Automotive Divisioninclude an ROI of at least 9% and an operating return on sales before taxof 6.9%. Further targets are:

1. The Volkswagen Group to be the world leader in terms ofcustomer satisfaction, quality and delivery performance.

2. The brands and their products to be clearly and separatelypositioned in the market.

3. Volkswagen wants to become employer of choice for extremelycompetent and highly motivated employees and the cooperation

partner of choice for high-performance suppliers and dealers.

NAFTA

Annex 300-A: Automobiles (one of the most sensitive areas in the

NAFTA negotiations, in spite of the fact that there is already considerableintegration between the three countries. Major concern the possibility that

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European and Japanese producers could use Mexico as an export platformto the United States and Canada)

Focused on the liberalization of Mexicos 1989 Auto Decree, because the

Canadian and U.S. auto industries were already liberalized and integrated.Gradually removes Mexican trade barriers and investment incentives aswell as other performance requirements (link imports to the use ofdomestic products and exports):

domestic content: 36% to 34% by 1998, 29% in five years, and 0 in10 years

trade balancing requirement from: $2 of car exports for everydollars worth of imports to 0.80, then to 0.55 in 2003, and

eliminate it by 2004 Eliminate quota on new-car imports, but manufacturers are

required to produce in Mexico in order to sell there, for ten years. Rules of origin, from 50 per cent in FTA to 62.5 percent (net cost

method and tracing test). Tracing test considers a foreignassembled automotive good 100 percent North American if it hasmore than a 50 percent domestic proportion of value added of one

partner country (this part could be 49 per cent of the final good)and if it is combined with an assembly that also has more than a 50

percent regional content. The rule is applied to the value of 69 partsengines and transmissionsand is subtracted when calculatingthe net cost of the vehicle.

North American investors may invest up to 100 percent in Mexicansuppliers of parts

Volkswagen scraps plans of sharing platform with Maruti Suzuki'sA-Star; to drive in UP! Next year

September 13, 2011 | Chanchal Pal Chauhan , ET BureauNEW DELHI: Volkswagen plans to drive in a specially developed variantof its UP! compact car in India next year after Suzuki Motors' decision toend its alliance with Europe's largest carmaker virtually spoiled its plansof sharing Maruti Suzuki's small car platform. According to sources inthe component industry, Volkswagen has scrapped plans to source cars

such as A-Star compact from Maruti Suzuki and will now launch UP! to

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consolidate its position in India's vast compact car market after thesuccess of Polo hatchback.

NEWS

Suzuki Motor cuts ties with Volkswagen over Fiat spat

September 13, 2011 | BloombergTOKYO: Suzuki Motor will seek to dissolve its 20-month-old alliancewith Volkswagen after the German carmaker's 222.5 billion yen ($2.9

billion) investment failed to yield a single project. The Japaneseautomaker, which owns 1.49% of Volkswagen, plans to sell its holdingsif Volkswagen agrees to end the tie-up, the company said in a statementto the Tokyo Stock Exchange. The Wolfsburg, Germany-based carmakerowns 19.9% of Suzuki, according to Bloomberg data. Suzuki will seek toend the pact with Volkswagen, even if the German automaker wants tomaintain it, Chairman Osamu Suzuki said on Monday in Tokyo.

NEWS

Diesel cars Chevrolet Beat, Maruti Swift, Volkswagen Polo, Ford

Fiesta, Hyundai Verna give petrol cars a run for money

September 12, 2011 | Malini Goyal , ET BureauNEW DELHI: They may be pricier, but cheaper fuel has resulted in salesof diesel cars steadily outstripping their petrol counterparts ever since the

price differential widened in May. With diesel cheaper by an average of53% across the major metros, buyers are making a beeline for cars

powered by these engines. Some 56% of all compacts sold in Augustwere diesel cars. The figure has steadily risen from 39% in July 2010 to45% in January to 51% in June. Compacts, which range from theChevrolet Beat to the Maruti Swift, Volkswagen Polo and Ford Figo,account for 70% of all cars sold.

NEWS

Public issues over operational factors threaten to unravel

Volkswagen-Suzuki Motor Corp alliance

September 7, 2011 | BloombergTOKYO/BERLIN: A tiff that started over Volkswagen AG's descriptionof Suzuki Motor Corp in its annual report has escalated into a spatthreatening to unravel the two automakers' planned alliance before the

partnership ever gets going. "Volkswagen is not talking to us," OsamuSuzuki, the Hamamatsu City, Japan-based company's chairman, said in

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an interview. "We have no plans to talk to them. " The downward spiralbegan in March when VW said in the report that it could "significantlyinfluence financial and operating policy decisions" at Suzuki, describingthe Japanese company as an "associate".

NEWSVolkswagen to introduce limited edition of Polo, Vento in the festive

season

September 7, 2011 | PTINEW DELHI: German carmaker Volkswagen today said it will introducelimited edition of two new variants of its compact car Polo and mid-sizedsedan Vento as it looks to cash in on the festive season. "From tomorrowwe will introduce 'Polo Breeze' and 'Vento Breeze' in petrol variants,which will have special value additions worth up to Rs 40,000, but will

be priced same as the existing models," Member of board and Director,Volkswagen Passenger Cars, Volkswagen Group Sales, India, NeerajGarg said at the sidelines of the Society of Indian AutomobileManufacturers (SIAM)

NEWS

Volkswagen India sales up by 72% in August

September 1, 2011 | PTINEW DELHI: Volkswagen India today reported a 72.50 per cent increasein its sales in August at 6,091 units against 3,531 units in the same monthlast year. Compact car Polo and sedan Vento continued to be the

backbone for the brand, with a total of 5,634 units sold in August 2011,the company said in a statement. "Despite the current market conditions,we are pleased to be able to maintain our overall sales," VolkswagenGroup Sales India Member of Board and Director, Volkswagen PassengerCars, Neeraj Garg said.

Maruti, Honda, Toyota, Hyundai, Nissan, Volkswagen go all out to

woo customers with attractive prices and discounts

August 22, 2011 | Chanchal Pal Chauhan , ET BureauThe rising interest rates and fuel prices may have forced you to postponeyour dream of buying a car, but if you are straining to glean a silverlining, look no further than the prices of the newly launched cars. Gone

are the days when a new paint job or nips and tucks were rechristened as'new models' and used as an excuse to raise prices. Maruti, the leading

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automaker, has launched its bestseller, the new Swift, with 140 changes,at Rs 4.22 lakh, just Rs 13,000 higher than the old car. Honda respondedalmost immediately, cutting the price of its globally acclaimed premiumhatchback, Jazz, by up to Rs 1.62 lakh.

NEWSVolkswagen Jetta relaunched at a starting price of Rs 14.12 lakh

August 17, 2011 | PTIMUMBAI: German auto major Volkswagen on Wednesday launched itsupgraded version all-New Jetta 2 litre in diesel variant starting at Rs14.12 lakh (ex-showroom New Delhi). The New Jetta will be available infour variants --trendline, comfortline and highline manual and DSGgearbox. It is equipped with four cylinder CRDi engine with a six speedgear box in both manual and automatic transmission. "With theintroduction of the New Jetta our entire carline from the Polo to thePassat now offers the latest and the best to our customers," Member ofBoard and Director, Volkswagen Passenger Cars, Volkswagen GroupSales India, Neeraj Garg told reporters here.

NEWS

Remembering Bill Bernbach: Legend who changed the history of

advertising

August 10, 2011Bill Bernbach had the nerve and the wit to hire me in 1959. Some yearslater, I had the nerve and the wit to hire Bob Kuperman. Neither eventmade any headlines. Typically, people made headlines when they leftDoyle Dane Bernbach, not when they got hired. What happened in theinterim was not magic. We breathed each other's air, celebrated eachother's triumphs and wept over each other's failures. (A triumph meantthat Bernbach had OK'd an ad, a failure meant that he hadn't.

Volkswagen to launch first TV ad in India news

Volkswagen India is targeting the Indian consumer with its first televisionad which will go on air tomorrow.

The German auto major is launching an integrated 360-degreecommunication campaign conceptualised by DDB Mudra.

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The ad shows a young boy in a Volkswagen showroom deciding on thecars that he wants to 'book in advance' at various stages of his life one forhis 18th birthday, one when he becomes the 'vice-president' of a company

and another when he eventually becomes the chief executive officer.The tagline at the end of the commercial says, 'German engineering. Madefor India'.

Besides television, the integrated communication campaign will involveprint, digital and out-of-home media for the first time in India. Thecampaign is aimed at heightening Volkswagen's brand equity in the Indianmarket.

Elaborating on the campaign, Lutz Kothe, chief general manager -marketing and PR, Volkswagen India, said, ''Based on a clear brandstrategy, Volkswagen is known for its cutting-edge advertising across theworld. Our powerful and creative campaigns continue to have a special

place in the consumer's mind through decades. With our first brandcampaign in India, we have strived to achieve the same for our consumershere and are confident that they will take to it.''

Volkswagen India Innovative Advertising Strategy

April 8th, 2012 on Advertisements,

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always an issue since they didnt have official dealers on the ground inIndia. In another sign that VW is here for the long haul, it opened amassive manufacturing facility in Chakan (near Pune) in 2009 and spent$500 million in the process. Towards the end of 2011, VW will add the

high-performance brand Lamborghini to the mix. They will most likelyunveil the first Lamborghini showrooms when they ship the highlyanticipated fire-breathing 691hp Aventador to India.

Breakout Hit

In the 4-door, mid-luxury segment, the market leader for years has beenthe Honda City. The breakout hit for VW has been the Vento which wasintroduced in 2010 and has already beaten the Honda City as the No. 1

selling car in that segment. The Ventos success is a combination ofHonda lagging and VW bringing the right product to the market, namelya diesel engine. With petrol prices constantly going up, VW was right totap into the Indian psyche of affordability. The Honda City has beenaround since 1998 and all the brand loyalty it built up went down thedrain once the Vento was launched and petrol prices started to rise.Honda hit back in early June, 2011, with price cuts, attributing it to cost-reduction efforts in the supply chain, which sounded more like publicrelations speak than reality. But it didnt matter. By then, the damage was

done and the Vento took the top spot.

Audis Rise

Around the world, Audi has always been No. 3 when compared to themore well-known German brands of Mercedes and BMW. However, thatis changing in India, partly because Audi was able to capitalise on thenew designs featuring the LED eyelids which are now copied by every

other car company. In addition, the Japanese strategy of not bringing theirluxury brands of Acura, Lexus and Infiniti to India was a missedopportunity that Audi used towards its advantage. Toyota, which has beenin India since 1997, has built a large distribution channel and could haveeasily used that existing network to seamlessly introduce the Lexus brand

but failed to do so. Lastly, Audi got some great mileage with their feel-good advertising campaign featuring cricketer Ravi Shastri. Ravi wasshown sitting on an Audi 100 on the cricket field when India won theWorld Championship of Cricket in 1985 where he was named the Man ofthe Match (most valuable player). Obviously, it was unplanned and Audicapitalised on the imagery.

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Market Segmentation

Possibly the only issue with the VW Groups arrival into India is themarket segmentation for their brands. When Skoda first came to India, itsreputation in the Western European countries was not very high and itwas considered a sub-standard product. However, under the VWumbrella, it slowly upgraded its perception and in India, its oftenconsidered a premium brand. Many consumers gravitate towards theSkoda Superb who want luxury but want to fly under the radar insteadof appearing flashy. With the arrival of Audi and VW, the lines of marketsegmentation have started to blur. The Audi A4, Skoda Superb and VWPassat are all very similar and, in fact, share the same chassis. But therelies the problem. If a consumer wants to spend Rs 30 lakh on a car, whichone should he choose A4, Superb or Passat?

Summing It up

Overall, the timing of VWs entry into India couldnt have been moreperfect as other competitors have been busy with their own problems. TheAmerican automotive giants are dealing with their domestic demand

issues. The Japanese automakers are taking a very slow approach to Indiawhen it comes to their luxury brands Acura, Lexus and Infiniti. Lastly,the German automakers Mercedes and BMW have been battling for thetop spot for the number of cars sold in India. BMW took the crown withover 6,200 cars sold in 2010, which is a very small piece of the overallIndian car market. Since the VW Group has many brands and able totarget a much wider audience, it will most likely lead overall sales in theyears to come.

TOIs Volkswagen ad: the new convergence?

On Tuesday morning, when readers of The Times of India opened thenewspaper, they were in for a surprise.

The supplement of the main paper carried a talking advertisement ofVolkswagen, which plays a recorded voice when a reader opens the page.

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It came as a surprise to many and soon Twitter and Facebook were full ofcomments, from awe at something so innovative to despair at a lameattempt.

While it reminded some of the musical greeting cards by Archies acraze in India in the early years of this decade, others felt the commercialridiculed the experience of reading a newspaper.

But, whatever feedback the advertisers and the newspaper get fromreaders, it surely signifies a new era in Indian advertising one in whichcompanies have realised Indias potential as a lucrative fast-growth story,leading them to innovate and lavishly spend on advertising.

The emerging Indian middle-class is fast turning into a bunch of brand-

conscious individuals, and having realised that, companies are opening uptheir wallets.

Now with the financial crisis mostly behind us, people can hope to seemore innovation in advertising, as companies look for newer ways to lureconsumers.

The question though is whether Indians will welcome such convergenceof media, especially in advertising.

As noted humorist Anand Ramachandran wrote on his Twitter account,Did TOI really think that their readers are so dumb, they cant read? A

print ad with a voice-over that wont shut up? Wheres my hammer?

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How to do Volkswagen ad

A while ago, I wrote a post on a new creative model, citing Bernbachsrevolutionary model back in the late 50s. It got me reminiscing aboutDDB, and how much I love the agency, the brand, the network, thework I was fortunate enough to work for DDB in Dublin, and whilstthe agency had its own unique Irish identity, it was also unmistakeably

part of that advertising behemoth whose reputation for creativity andvision permeated through every office around the globe.

Of the many innovations within the ad industry, DDB also providedammunition for a plethora of guides on how to ply our trade. Remember

those great Volkswagen ads was one. It contains, as the title implies, averitable smorgasbord of brilliant VW ads. One of my favourites is an ad

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with the headline: How to do a Volkswagen ad. (What must consumershave thought about VW ads that the brand was confident enough to runan ad about them?) The ad was a DPS. On the right hand page was aspace for a pic and some body copy. On the left hand page was the

aforementioned headline and 6 pointers:1. Look at the car.

2. Look harder. Youll find enough advantages to fill a lot of ads. Likeair-cooled engine, the economy, the design that never goes out of date.

3. Dont exaggerate. For instance, some people have gotten 50 m.p.g. andmore from a VW. But others have only managed 28. Average:32. Dont

promise more.

4. Call a spade a spade. And a suspension a suspension. Not somethinglike orbital cushioning.

5. Speak to the reader. Dont shout. He can hear you. Especially if youtalk sense.

6. Pencil sharp? Youre on your own.

And my point?

It is, of course, a great ad. Its also great advice on how to do a great VWad. But, more importantly, its great advice about how to approach any adyou do.

Its how I approach briefs and its how I encourage others to approachthem, especially younglings. The answer, the truth, the idea, call it whatyou will, is always in what you are trying to sell. If you cant find it, youhavent looked hard enough.

Car MarketingVolkswagen Picks New Ad Agency To Woo A New Audience

Helen Coster, 10.23.09, 04:57 PM EDT

Deutsch in L.A. is charged with broadening VW's appeal.

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Volkswagen of America today chose Interpublic Group's Deutsch, LosAngeles as its new creative agency in a much-watched, emotional pitchthat pitted Deutsch against co-finalist Goodby Silverstein & Partners, aunit ofOmnicom Group. Both agencies wanted the account: Goodbylost Hyundai Motor America after a two-year run earlier this year, when

the Korean car maker shifted its creative work to the World MarketingGroup. Deutsch has been without a car client for the past 28 days, afterGeneral Motors canceled its Saturn contract.

Volkswagen ( VLKAF.PK- news -people ) hired Deutsch to help itachieve the lofty goal of capitalizing on the new "value economy" andgrowing U.S. sales from 200,000 this year to 800,000 in 2010. To do so,Deutsch needs to expand Volkswagen from a youth-focused affinity

brand to a vehicle with a broader appeal. (Omnicom's DDB handlesVolkswagen outside of the U.S.) "It's more of a mindset," says Deutsch,Los Angeles Co-Chief Executive Mike Sheldon. "Today's VW ads skewa little male and a little young. We want to reflect a spirit of youthfulnessto a broader audience."

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"VW has a huge opportunity," says Liz Vanzura, a former CMO ofVolkswagen who now heads marketing innovation and strategy at adagency Hill Holliday in Boston. "At the core of the VW brand isaffordable German engineering. Affordable and value are in fashion asopulent luxury goes out of style."

The carmaker's decision marks the end of a two-month account review,

which included Deutsch, Goodby, Omnicom's DDB, and Wieden +

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Kennedy. First, Volkswagen brought the agencies to Herndon, Va., fortwo days of briefing. From there, the agencies traveled to Wolfsburg,Germany, for a plant tour, meetings with designers and a glimpse offuture projects. They then had a strategic work session and a creative

work session. On Wednesday, Volkswagen revealed that Goodby andDeutsch were the co-finalists.

The account will be handled out of Deutsch's Los Angeles office, run byEric Hirshberg (also the office's creative director) and Mike Sheldon.Both executives have personal ties to the automotive industry: They grewup 10 years apart in the Detroit suburb of Bloomfield Hills. Sheldon'sfather was the director of purchasing and production scheduling for GMWorldwide; Sheldon worked on a GMC assembly line during college.

Hirshberg's father, Jerry Hirshberg, was the chief designer at Pontiac,where he designed the GTO. He later became the founding director andpresident of Nissan Design International and was once featured in aNissan ad.

The announcements capped off a busy month for Deutsch. Its parentcompany, Interpublic ( IPG - news -people ), this month confirmed thatit's combining Deutsch with Lowe Worldwide, so that Deutsch is now the

North American hub of Lowe. The merger will give Deutsch a globalfootprint and firm up Lowe's U.S presence.

As a result of the deal, the agencies will share management and profit andloss responsibilities, and Lowe's New York staffers will move toDeutsch's Chelsea headquarters. Deutsch also rehired Greg DiNoto, whowas the firm's creative director in the 1990s to lead the new, combinedcreative department in New York. DiNoto had been at his own shop, mostrecently called DiNoto, since leaving Deutsch in 1997.

For Deutsch, the Volkswagen account is about redemption. In 1995,Deutsch spent more than 95 days and nearly $400,000 (an entire year's

new business budget at the time) to compete for the VW account, which itlost to Arnold Fortuna Lawna & Cabot in Boston. At the time, Deutschhoped to position the car maker's Jetta, Passat and Golf models as the carof choice for outdoorsy, unpretentious drivers. DiNoto was Deutsch'screative director at the time of its 1995 pitch, where he suggested "Go"for the ad campaign tag line.

As part of its earlier pitch, Deutsch shelled out $20,000 for a new blackJetta. After losing the account, a disappointed Donny Deutsch, who ran

the agency at the time, infamously told USA Today that he'd "slam it intoa wall." Today, Deutsch's leaders are singing a different tune. "Deutsch

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has had its eyes on VW for a very long time, and it's great to have it onour roster," says Hirshberg. Adds Sheldon: "I'm going to hug aVolkswagen right now."

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RESEARCH METHODOLOGY

TITLE OF STUDY:

ADVERTISING STRATEGY OF VOLKSWAGEN

OBJECTIVE OF THE STUDY:THE MAIN OBJECTIVE OF THE STUDY IS TO UNDERSTANDTHE ADVERTISING STRATEGY.

TYPES OF RESEARCH:

THIER ARE TWO TYPES OF DATA COLLECTION METHOD

AVILABLE:

1. PRIMARY DATA COLLECTION2. SECONDARY DATA COLLECTION

1. PRIMARY DATA COLLECTION METHOD:

THE PRIMARY DATA IS THAT DATA WHICH IS COLLECTEDFRESH OR FIRST HAND, AND FOR FIRST TIME WHICH IS

ORIGINAL IN NATURE.

2. SECONDARY DATA COLLECTION METHOD:

THE SECONDARY DATA ARE THOSE WHICH HAVE ALREADYCOLLECTED AND STORED. SECONDARY DATA EASILY GETTHOSE SECONDARY DATA FROM RECORDS JOURNALS,ANNUAL REPORT OF THE COMPANY.

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CONCLUSION

Product Automobiles, commercial vehicle, engines Production output

6,054,829 units for sale in 153countries (2009) Services financial services

Volkswagen was founded on 28 May 1937as the Gesellschaftzur

Vorbereitung des Deutschen Volkswagens mbH. In 2006, Volkswagen

sold 5,192,576 vehicles worldwide, and sales in 2006 amounted to

5,192,576 million Euro. Volkswagen is headquartered in Germany, and

the European Community (EC) represents by far the largest market for

Volkswagens, with sales to EC countries comprising nearly 60% of

Volkswagens global sales. Sales in Germany (27%) and Brazil (14%)

account for the most significant segments of Volkswagens total sales.

Implementation of the North American Free Trade Agreement (NAFTA).

Has had a dramatic impact on the automobile industry in North America.

Volkswagen plans to drive in a specially developed variant of its UP!

compact car in India next year after Suzuki Motors' decision to end its

alliance with Europe's largest carmaker virtually spoiled its plans of

sharing Maruti Suzuki's small car platform. Volkswagen of America

today chose Interpublic Group's Deutsch, Los Angeles as its new

creative agency in a much-watched, emotional pitch that pitted Deutsch

against co-finalist Goodby Silverstein & Partners, a unit of Omnicom

Group

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BIBLIOGRAPHY

WEB LINKS:

WWW. WIKIPEDIA.COM

ANSWER.COM

GOOGLE

WEBSITE OF VOLKSWAGEN ORGANISATION

JOURNALS:

TIMES OF INDIA

DNA

HINDUSTAN TIMES

DECCAN CRONICAL THE HINDU

INDIAN EXPRESS

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