ACCOUNT PLANNING MANAGEMENT MCC2543

ASSIGNMENT 1

CONTENTS

Part 1: Research Background

1. Company/Product Background

2. Research Problem

3. Research Question

4. Research Objective

5. Methodology

Part 2: Finding and Recommendation Report

1. Problem Identification

2. Identification of Consumer Behavior

3. Demographics and Regional Subcultures

4. Consumer Expectations

5. Consumer Motivations

6. Brand Loyalty

7. Creative Recommendation

PART 1

1/ Company Background

History of VW

Volkswagen AG is a Germany-based automobile manufacturer. The Company develops vehicles and components, and also produces and sells vehicles, in particular Volkswagen brand passenger cars and commercial vehicles. The Company consists of two divisions: Automotive and Financial Services division. The Automotive division is responsible for the development of vehicles and engines, the production and sale of passenger cars, commercial vehicles, trucks and buses, and the genuine parts business. The Financial services division's portfolio of services includes dealer and customer services in the field of financing, leasing, direct bank, insurance and fleet business. The Company's brands include Volkswagen, 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 pick ups, busses and heavy trucks in the commercial vehicle sector.

History of VW in Malaysia
The establishment of VW Group Malaysia is the fourth time that the VW brand has had an official distributor, and this time it is VW itself. VWs first appeared here in the 1950s when Champion Motors began importing the Beetle and the first showroom was in Sungei Besi, Kuala Lumpur. In 1967, local assembly started at Assembly Services Sdn Bhd in Shah Alam, Selangor. The plant was then owned by the Inchcape Group, which Champion Motors was part of. Besides the Beetle (which was assembled between 1968 and 1977), the first generation of the Golf was assembled locally as well as the VW van. Champion Motors also had the Audi franchise and sold imported as well as locally assembled models.
In 1985, Inchcape decided to pull out of the motor business in Malaysia and Champion Motors thus ceased activities. Auto Dunia then acquired the franchises for both the German makes, a new company set up as a private business venture by the Tan Chong families. The Malaysian national car had just started and perhaps they felt that with the Nissan dominance ended, having a second line of business would be a good idea.
Under Auto Dunia, Audi volumes grew, in part due to increased refinement in the models as the brand went upmarket. VW models, however, were sold in fairly small numbers as pricing was tricky. Only the Caravelle van was assembled locally for a while during the 1980s and models such as the Bora and Vento were the only imported cars which could be priced competitively. At that time, VW did not place much importance on the Malaysian market and was therefore not particularly responsive to appeals for better ex-factory prices.
It is not known what caused VW to end its relationship with Auto Dunia but in late 2002, the German company decided to appoint EON as its new distributor for both VW and Audi, and EON established Euromobil for the purpose. Euromobil started off with Audi and had plans to proceed with VW activity (a plot of land next to the Audi Hangar in Glenmarie, Shah Alam, was already set aside for a new VW showroom). But when Proton came into the picture, Euromobil voluntarily gave up its VW franchise in January 2005. Volkswagen Group Malaysia, a subsidiary of Volkswagen AG, was officially established on 16 February 2006. Its corporate headquarters is situated at Wisma Volkswagen in Kuala Lumpur. In 2012, the company sold more than 13,000 units in the country, an increase of 77% over 2011. With this, the brand achieved a market share of 2.4% of the Total Industry Volume in Malaysia, making it the 6th top selling brand and the Number One European car brand. The company currently sells and markets over 20 Volkswagen products, representing almost all segments in the market. A team of over 130 people supports this.
In 2012, the company introduced its first locally assembled vehicle in Malaysia, the Passat that is being built at the DRB-HICOM factory in Pekan, Pahang. Volkswagen AG is the world’s 3rd largest car manufacturer in 2012, having sold 9.07 million vehicles worldwide. The brand portfolio includes Volkswagen Passenger Cars, Audi, Skoda, Seat, Bentley, Porsche, Lamborghini, Bugatti, Volkswagen Commercial Vehicles, MAN, Scania and Ducati.

VW advertisement in Malaysia in 1997

Product Background

Polo Sedan
The Volkswagen Polo is a super mini car produced by the German manufacturer Volkswagen since 1975. It is sold in Europe and other markets worldwide in hatchback, saloon, coupé and estate variants. The Polo was first introduced in 1975, and as of 2011 has been produced over five generations with intermittent facelifts. The Volkswagen Polo won the 2010 World Car of the Year.
Unlike other car manufacturers out there, Volkswagen Malaysia has found itself in a very unique situation. It now has a car for pretty much every segment of the market, with prices that start from a hair under RM100,000, right up to a few strands under RM400,000.
The car is also sold in Russia, South Africa, India and China. It comes at a price of RM95k onwards to make it a viable choice to those who want a starter Volkswagen, but need something bigger than the pocket-sized Polo.
Signifying Volkswagen’s continuous commitment in German technology and innovation for the local market, the launch of the 2014 Polo Sedan marks the company’s efforts to reach the Malaysian mass-market segment and to provide them with a more affordable German engineered car. It reflects Volkswagen’s concrete leap forward towards widening its product portfolio.
2/ Research Problems
As a new salon car in the current market with the previous models from VW being massive hits, there are a lot of expectations for the next model from the same company to keep up to this winning streak.

Problem #1
Salon cars are generally catered to the families thus making the targeted costumer as family households and also a marginal working class consumer that have loyalty towards the brand and will look at this model as a long-term vehicle. Thus the approach focused here must cater to both the family style audience, the housewives in particular and also young adults, specifically the newly married couples that need a bigger car for the future use and must look at this vehicle as a step forward.

Problem #2
The new model is now cheaper because it is manufactured locally in Malaysia, thus creating a sort of a bittersweet situation. When an international car is manufactured locally, what happens is that the price definitely becomes cheaper but the mindset of people is that the quality might be compromised due to the extent of the technology here. So the problem in hand is the fact that we need to sell this salon car reassuring the fact that even-though the price and production is reasonable and locally-made, the quality is still the same and even better.

3/ Research Question

Why choose 2014 VW Polo Sedan?

What are you looking for in a family car?

How do you feel about the new VW Polo Sedan?

How does the price play a role in the quality of your selection?

4/ Research Objectives

To find out the key selling elements consumers look out for in the new model.

To establish the needs one looks for in a car used for a household.

The emotions showcased in response to the new model.

To find out how much the financial element plays a role in decision-making.

5/ Methodology
The method used is a qualitative one; interviewing 2 working young adults that are in their late 20s, a housewife and her husband in their mid 30s, and a few VW owners.

PART 2

1/ Problem Identification

The problem in hand as mentioned above is the price variation and the effect it has on the quality of the product, meaning that consumers are paying a cheaper price for a high end product which isn’t necessarily a good thing as people that use a VW have a lot of brand loyalty and emotional connection. The other problem would be to have a clearer idea of who the intended target audience for the product would be. Also the fact that the previous models released by the company have become hits so there is this expectation that has to be met.

2/ Identification of Consumer Behavior

Consumers go through a decision-making process when they’re looking to buy products. To increase your chances of them purchasing from you, understanding how they decide what to buy and helping them through the steps is important. Here’s a quick summary of the process:
Phase 1: Recognition and Awareness of a Need. In this phase, it’s your job to position your product or service as a solution to a problem or need that a consumer may be encountering.
Phase 2: Search for Information. In this phase, you must make sure that your information is available to potential consumers. If they watch television, you need to produce a few commercials. If they often use the Internet, you want to make sure you have a Web site and are participating in search-engine marketing. Make yourself available where your potential customers go to find information about your products or services.
Phase 3: Evaluating the Alternatives. Provide information about your product in a way that’s easy to understand and that explains why you’re better than the competition. In other words, make sure it’s easy for consumers to understand why they should buy from you.
Phase 4: Purchase. Make your products available to consumers or they’ll go somewhere else to make a purchase. Also be sure to make the purchase process easy and enjoyable for the consumer.
Phase 5: Post-Purchase Evaluation. Service, Service, Service! Sure you need to provide your consumers with service before the purchase, but did you know that you also need to provide service after the purchase? Extraordinary customer care after the fact can help diminish feelings of buyer’s remorse or regret.

3/ Demographics and Regional Subcultures

Demographics, more so than many other tools, has proven to be a much less effective tool in the automotive space, particularly with regard to new-vehicle buyers. J.D. Power and Associates’ research suggests that there is very little variance from one demographic group of buyers to the next in terms of which new models appeal to them—the most popular models overall are typically the most popular regardless of the particular demographic. What does work for targeting new-vehicle buyers is to analyze previous buyer behavior and recent shopping activity, since the best proxy for future consumer behavior is to study what they have done in the recent past. This is especially true for media consumption, whether traditional or digital. One approach that has proven effective in the online space—to a much higher degree than demographics—is behavioral targeting, i.e., tracking what websites consumers are visiting, then targeting advertising assets based on that behavior. However, in the automotive space, where customers must purchase offline—and a large portion of online traffic is from window shoppers or used-vehicle buyers—even behavioral targeting cannot identify purchase behavior or purchase intent with certainty. In general though, the demographics of VW is mostly young adult females aged at 19-32 yrs, from college students to educated parents.

4/ Consumer Expectations

For the 2014 Polo Sedan, the a few of the main consumers expectations are listed below:-

Spacious
Safety
Smooth/Handling
Premium Brand

5/ Consumer Motivations

The visible elements that contribute to the decision of a consumer to get the new VW product are;

Brand Loyalty
Reasonably Priced
Comfortable & Spacious
Grown-up

6/ Brand Loyalty

For Volkswagen, brand loyalty is their main USP. Brand association and emotional connection is a key element that VW have over their counterparts. For the new 2014 Polo Sedan, the brand loyalty plays an important role, as the new car would be a second car purchase for current VW users.

7/ Creative Recommendations

As an overall conclusion from the report presented, the targeted audience has been established clear enough to proceed with the campaign.

A simple, straightforward and clean ad campaign would benefit the product and also reflect the brand personality. Basic visual graphics and emphasis of the brand identification and the product itself would work ideally. Also copywriting is key as playing with words to send the message will connect to the consumers better.