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VOLKSWAGEN IN INDIA
In just 4 years since Volkswagen (VW) set up its India operations, it had captured a 3.6% market share – something the Detroit giants had not been able to do after more than a decade in the country (Exhibit 1). VW was the flagship brand of the Volkswagen group, which also owned Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, and Skoda. In India, the group was present with Skoda, Audi, and VW. 1 Maik Stephan, Managing Director, Volkswagen Group Sales India said: While three brands give us the collective power, we have to be careful to market them uniquely so that we are not chasing the same customer. i In 2011, the group’s worldwide revenues and net profit were Euro 159 billion and 15.8 billion, respectively. Headquartered in Wolfsburg, Germany, the group operated more than 60 plants around the world. It was the second largest automaker behind General Motors. It had a market share of 12.3% in 2011. Its core markets were Germany and China. It was the market leader in Europe with a 20% market share. It aimed to become the world’s largest automaker by 2018. With a growth of 30% in the Indian automobile industry, India was to play an important role in realizing the group’s global ambitions. ii VW targeted to increase the market share of its flagship brand in India from 3.6% to 5% by 2015. Neeraj Garg, Director, VW Group Sales India said: We have to transition from launch stage to growth stage of the life cycle. To meet our ambitious growth plans, we need to evolve our marketing strategy. Perhaps, we should review it. Are our segmentation, targeting, and positioning right? Is our product, distribution, and communication strategy appropriate to catapult us to the next level? Volkswagen has had a tradition of highly creative advertising globally. Its campaign ‘‘Force’’ for Passat was adjudged the best campaign of 2011 by Advertising Age. 2 The campaign featured a kid in Darth Vader costume (Darth Vader is the central character in the Star Wars saga) trying to use ‘‘force’’ (a metaphysical power in the fictional universe of the Star Wars galaxy) on everything from his dog to the washing machine to his sandwich all in vain. As he focuses all his energy on Passat, the car suddenly starts to the astonishment of the kid. A shot showed that the car was started by his father using a remote control. The campaigns connect with the popular culture of Star Wars resulted in 31 million views on YouTube. ‘‘Think small’’ and ‘‘Lemon’’ campaigns had become part of advertising textbooks. Lutz Kothe, Head of Marketing & PR, VW Group Sales India said: What inspiration can VW Indian advertising draw from its global advertising?

FROM GERMANY TO INDIA
The German auto industry in 1930s was largely composed of luxury cars. Since many Germans could not afford luxury cars, Adolf Hitler set up a state-owned factory ‘‘Volkswagen’’ (pronounced as folk’s wagon) in Wolfsburg in 1933 for producing the ‘‘people’s car.’’ Ferdinand Porsche, an engineer was chosen to steer the project. The first car that was rolled out was ‘‘Beetle.’’ With its distinctive round shape and low price, it stood out from the big cars and became a global cult. In the 1970s, Passat, Scirocco, Golf, and Polo were launched. The sedan version of Golf –

1 2

The remaining brands were imported by independent dealers. Advertising Age was the leading magazine in the domain of advertising.

Seema Gupta, Assistant Professor of Marketing prepared this case for class discussion. This case is not intended to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes. Copyright © 2013 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) – without the permission of Indian Institute of Management Bangalore.

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Jetta was launched in 1983 and Phaeton in 2002. Thereafter, New Beetle was launched to recreate the magic of the original Beetle. The group entered India in 2001 with Skoda. Its plant in Aurangabad assembled a few models of Audi and Volkswagen as well. Audi and Volkswagen were launched in India in 2004 and 2007, respectively. In 2010, a stateof-the-art production facility was set up at Chakan near Pune with an investment of Rs. 35 billion to manufacture Polo and Vento indigenously. The plant also manufactured Skoda Fabia and Skoda Rapid as they were built on the Polo platform. Despite sharing common product platforms, the three brands were distinctly positioned. Skoda was positioned as less premium than VW which was positioned as more premium than even Honda and Toyota. Audi was positioned at par with BMW and Mercedes in the luxury category (see Exhibit 2 for positioning of various players). While the group integrated the back-end of technology, human resource, and finance across the three brands, the front-end of dealers was scrupulously kept separate. Despite its careful planning, there existed an anomaly. Skoda was perceived to be a more up-market label than VW in India. This was owing to Skoda’s history in India. Skoda was launched in 2001 with the Octavia, a premium car. The only other choices in the segment at that time were Honda City, Hyundai Accent, and Maruti Baleno. Octavia immediately became a CEO’s car. Subsequent brands – Laura and Superb were even more premium and since they were diesel engines, they were more expensive than their Japanese petrol-engine counterparts. John Chacko, Group President and MD, VW Group Sales India said: Our priority is to get the core brand – Volkswagen sorted out and then the other brands will fall into place. For instance, after Polo was launched, the price of Skoda Fabia was revised downwards. iii VW believed in engineering excellence. It pioneered ‘‘turbocharged diesel injection’’ (TDI) which provided fuel economy and BlueMotion Technologies which enabled energy efficiency. 3 It had obsessive focus on quality. For instance, the bumpers had seven layers of paint (most carmakers had four); it welded all the points on the dashboard simultaneously to leave no room for misalignment (this required more machines; other carmakers welded the points sequentially). VW combined engineering excellence with local market insights to crack open the emerging markets.

CONSUMER INSIGHTS
Each year, the product planning team in VW engaged with 200 consumers in a freewheeling chat. Product Head – Product Planning & Training, VW Group Sales India said: When you sit in the consumer’s drawing room, you get a flavor of his life. You can see whether he prefers a Samsung or a Sony or an LG. You can gauge his tastes and lifestyle. Buying Motives VW research showed that a consumer bought a car for three motives. First was to signal to peers and parents that he had made it in life and was not a failure. Second was for utility – protection from rains, extreme weather, and weekend family outings. Third was for personal space, as people in metros lived in small houses with joint families – car was his little dungeon and hideout. VW incorporated these consumer insights in its marketing strategy. To tap into the first motive, it positioned itself as an aspirational brand. To build aspiration, it followed a top-down strategy – it entered the Indian market with higherend models such as Passat and Jetta and then introduced lower-end models such as Polo and Vento. Product Head said: Honda entered the Indian market with Honda City, whereas Hyundai with Santro. Both have a wide portfolio, but Hyundai is seen as an accessible brand, whereas Honda as an aspirational brand. It is because first impression is what remains with the consumer.

3

Blue was the corporate color and motion stood for mobility.

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VW tapped into the second motive of utility by having functionality at the core of technology. For instance, its BlueMotion Technologies had several utilitarian features such as ‘‘park assist’’ wherein the car could park itself. VW addressed the third motive of space by designing spacious cars. It provided light interiors and striped fabrics which gave the impression of open spaces. Product Head said: Indians are claustrophobic. They need lot of open spaces. For Indians, house is anyways a compromise as it is inherited or is constrained by budget. The consumer hence does not want to compromise on his car. Consumer Attitude The product planning team researched consumer attitude toward cars. The Product Head said: Consumer treated the car as his muse. There is a lot of boredom that sets into the life of a sober man. He marries the girl suggested by parents, lives in the same city, and works for the same family business. He brings change through two things – car and mobile. Those are his mistresses. He changes car every 3–4 years. The latest car would be his muse, his loved one. The product planning team at VW utilizes this insight to offer ‘‘wow’’ features which would make the car his most coveted muse. Consumer also likens the car to arranged marriage. He chooses car just as he chooses his wife – based on looks. Later he falls in love with his car just as he fell in love with his wife – for the way it treats him – space, comfort, controls, driving experience, and cooling. The product planners leverage this insight to put experience enhancing features in the cars. For instance, the New Passat had ‘‘auto start–stop’’ in which the engine automatically turned off when one took the foot off the clutch after halting in a traffic jam or a red light. When one depressed the clutch again, the engine started automatically.

PRODUCT PLANNING
VW leveraged these consumer insights to design cars suitable for Indian consumers. For instance, cars had flat space on the dashboard for placing Ganesh idols, had liberal sprinkling of chrome (Indians loved chrome) and a lever behind the co-driver’s seat so that the passenger could push the seat oneself (Indian cars were chauffeur-driven so the co-driver’s seat was often vacant). VW decided which features to incorporate in the car based on four filters. First, was the customer willing to pay for it and how much? Second, what would it cost the company? Third, how easily could it be implemented from an engineering point of view? Fourth, could it be translated into a nice communication story? Product planners identified consumers’ willingness to pay for innovative features through gut feel and by asking a few friends. For standard features, VW used quantitative market research. They were careful not to over-engineer the cars with specifications that consumers were not willing to pay for. Product Head said: For European markets, VW cars had strong roofs that could bear the weight of 18 inches of snow. But, in India you don’t need it. Since the lead time for new product development was 3–4 years, product planners anticipated trends by considering socio-economic factors. The Product Head said: The cost of chauffeur would become very high in future, but the commutes would get longer, the traffic would worsen and the jobs become more demanding. The consumer would thus be ready to pay more for automatic transmission. So, automatic transmission would become the norm in metros and hence VW has started planning for producing more of them. Music CDs would disappear and so VW is considering knocking off CD players and keeping only USB port.

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Product planning at VW followed the overarching philosophy of democratization of innovation which meant making innovations available to the masses. It brought innovative features in the high-end cars and gradually introduced them in lower-end cars. For instance, VW was committed to bringing BlueMotion Technologies in the lower models after introducing it with New Passat. Another principle that guided product planning in VW was to position the products at a premium over Toyota and Honda. VW thus priced its cars higher. However, to ensure that VW remained in the consideration set of consumers, it priced the lowest variant of the car lower by stripping the features intelligently (see Exhibit 3 for prices of various brands). Product Head said: I do not remove stuff that the consumer will miss. Even in lower variant, he will get power windows, central locking, nice interiors, and powerful engine. But, he will not get audio system or air bags. He can move the audio system from his old car. But, VW makes sure to give a visibly better quality car – the plastics, the paint work, the upholstery are all good quality. VW never has black bumpers or only center wheel caps; it would have full wheel caps.

SEGMENTING AND TARGETING THE MARKET
The Indian car market was divided into A, B, B+, Lower C, Upper C, Lower D, Upper D, E, multipurpose vehicle (MPV), and sports utility vehicle (SUV) segments (Exhibit 4). In 2011, VW had products in all segments except A and B, the lower-end segments. While A and B segments together constituted 44% of the total market, B+, and C segments were growing the fastest. VW hired market research agency to segment consumers. The agency arrived at nine segments based on social status (income) and value orientation (traditional–modern). VW decided to focus on five segments – new middle class, new business builders, the young progressives, modern urban elite, and metropolitan smart; which together constituted 46% of the total market (Exhibit 5). The typical target consumer was modern, educated, high-tech, and individualistic (see Exhibits 6 and 7 for profiles of segments and their buying preferences). VW entered the Indian market with the launch of Passat in Upper D segment in 2007 and Jetta in Lower D segment in 2008. The ads proclaimed universal trust; strong heritage, and German engineering (see Exhibit 8 for launch ads of VW in 2007). However, by 2009, VW had only 2,570 customers and the brand awareness was a mere 9%. Research revealed that consumers did not think that VW made cars suitable for Indian conditions, or offered value for money, or offered good customer services. On the other hand, Honda and Toyota were perceived positively. VW hired DDB Mudra to build its brand image and correct consumer perception.

DOYLE DANE BERNBACH
Doyle Dane Bernbach (DDB) was a leading global advertising network belonging to the Omnicom group. It won the Spikes Asia ‘‘Network of the year’’ award for 2011. DDB had a joint venture with Mudra group in India. DDB Mudra was one of the four agencies of the Mudra group. William Bernbach – one of the founders of DDB was a creative legend. His work was characterized by simplicity, irreverence, and humor. DDB produced the ‘‘Think small’’ campaign for Beetle in 1959, which was voted the No. 1 campaign of the century by Advertising Age in 1999. The ad had a small image of Beetle that emphasized its minimalism and the text at the bottom of the page listed the advantages of owning a small car – a contrarian approach when most cars of those times were big. The follow-up campaign ‘‘Lemon’’ with its memorable tagline ‘‘We pluck the lemons, you get the plums’’ left a lasting legacy in America; – the word ‘‘lemon’’ being used to describe poor quality cars (see Exhibit 9 for global campaigns). 4 DDB believed in the twin philosophies of ‘‘social creativity’’ and ‘‘behavioral planning.’’ It defined social creativity as approaches aimed at groups rather than individuals. It believed in harnessing the power of social networks by triggering word-of-mouth publicity. DDB believed in ‘‘behavioral planning’’ as opposed to traditional ‘‘account planning.’’ It aimed at changing behavior and not just attitudes. It believed in creating play-points and not
4 Research by Starch company showed that these ads had higher readership scores than editorial pieces in many publications. It also noted that VW ads were so distinct that they often did not even include a slogan or a logo.

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just touch-points. The ‘‘fun theory’’ campaign of VW in 2009 which aimed at increasing awareness of its environment-friendly ‘‘BlueMotion Technologies’’ transformed a subway staircase in Stockholm into a giant piano. As a result, 66% more people used the stairs. The videos on Youtube received more than 20 million hits and the campaign won Cannes Grand Prix for a digitally led integrated campaign. iv

POSITIONING VOLKSWAGEN
The global vision of VW was to be the world’s most innovative high-volume brand. The core values of the brand were Innovative, Valuable, and Responsible. VW provided outstanding quality and reliability such that the product retained its value in the long-term and it developed sustainable solutions for environment. The strategy for communication as well as product development in India was to have primary focus on ‘‘innovative’’ and secondary focus on the other two. The brand positioning was identified as ‘‘German engineering. Made for India’’ to emphasize on innovation for local market. The global tagline ‘‘Volkswagen. Das Auto’’ (which meant “The Car”) stood for the quintessence of the automobile! VW believed that it was the generic term for automobile because it democratized mobility. VW briefed DDB Mudra to communicate the brand values of VW and generate desirability for its products by grounding the arguments in technology. The agency was thus mandated to develop a campaign integrating corporate brand, product brands, and technology. The campaign had to highlight not just innovative features but also benefits and emotions. The VW brand personality had to be authentic, human, appealing, and transparent. Similar to VW’s historic advertising, the campaign had to be understated, witty, uncluttered, with attention to detail and clear layout. The objective of the campaign was to double the brand awareness from 9% to 18% within a year and fill the capacity in the new factory in Pune while increasing the sales of the imported models. Sandeep Vij, CEO DDB Mudra said: A major challenge was the clutter in car advertising – Rs. 10 billion was the ad-spend of the category per annum! Allocating even 10% of it would also be too much for VW. DDB Mudra needed an innovative idea that could break the clutter and create buzz. DDB Mudra believed that social creativity requires media-inventiveness and not media-neutrality. It required combining of channels and content. Volkswagen did a roadblock campaign in which VW was the only brand to be advertised in the Times of India (see Exhibit 10 for the campaigns of different brands of VW in India). Out of 28 pages of the newspaper, 13 were dedicated to VW, reaching out to 6.8 million readers. The campaign explained the brand claim of ‘‘People’s Car and The Car’’. It highlighted VW’s innovation in performance and fuel efficiency, comfort, and safety. It also showcased the various car models; the investments made in the Pune plant,5 and the extensive dealer network (Exhibit 11). To make it human, the campaign engaged people in how to pronounce Volkswagen. The campaign generated buzz – it made headlines in leading business channels; Volkswagen became the No. 1 searched term on Google hot trends, India.

LAUNCHING THE MODELS
VW then turned its attention to product brands. While it positioned Passat on comfort, it positioned Jetta on superior driving experience (see Exhibit 12 for positioning of competing brands). Positioning New Beetle was a challenge as it was priced very premium (Rs. 22 lakh as it was fully imported; 1 lakh = 0.1 million; 1$ = Rs. 54, in March 2013). Rajeev Sabnis, President, DDB Mudra said: It was an iconic brand, but Indian consumers were rational and style was not enough to persuade them to buy. We chose fashion-conscious women as the target audience and tapped into the counter-culture. The fashion industry echoed size zero, but celebrities such as Jennifer Lopez and Shakira had brought back the trend of voluptuous, curvy figures. Beetle joined the fight against size zero with its campaign ‘‘Curves are back’’. 6

5 Passat and Jetta were assembled from completely knocked-down units; The New Beetle, Touareg, and Phaeton were fully imported; and Polo and Vento were manufactured in the Pune plant. 6 The total ad-spend for the campaign for Beetle was about Rs. 150 million.

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Beetle became a style icon such that it was used in several Bollywood films to establish the fashion credentials of their actors. VW sold 270 New Beetles against the targeted 200. Alongside Beetle, VW launched Touareg, a highend SUV combining luxury and off-road ruggedness. The integrated campaign was targeted at men who loved the spirit of adventure. Mandeep Malhotra, Senior V.P. – Out-of-Home, Mudra Max 7 said: We attached a dummy Touareg outside a building as if it was climbing vertically whilst enlightening the VW logotype. This intrigued passersby and attracted media attention. Digitally, a rich media banner ad was developed which showed a Touareg descending at a 45° angle through the text of the page. Phaeton was positioned as a high-end car targeted at the modern Indian royalty. The value proposition was matchless handcrafted experience wherein everything was personalized to bear the unique signature of the owner’s personality. VW partnered with Hindustan Times such that the headlines in the Hindustan Times were printed using handwritten fonts. Entering the Volume Car Segment In March 2010, VW prepared to launch Polo in the compact car segment B+. While the B+ segment presented great opportunity, it was intensely competitive. Maruti Swift which had 28% market share was identified as the core competitor. VW set the target of achieving 9% market share in the segment by the end of 2010. The brief given to DDB Mudra was to create mass awareness of Polo and get people interested in knowing more about the car through the internet or dealers; achieve 15,000 test drives within the first 4 months with 10% converting to sales. VW leveraged the Auto Expo to create mass awareness. Ananya Handa, Head Press Communication, VW Group Sales India said: There is no bigger platform than auto expo as it attracts more than 400 media persons – both national as well as local. It is impossible to reach out to such a large number through any other event. VW also partnered with the Times of India to cut out a Polo-shaped hole in each page of the special Times of India supplement. The media innovation created much buzz. A challenge was the consumer perception of VW being a premium, sophisticated European car not suitable for Indian conditions. DDB Mudra chose to embrace the consumer arguments and answer them in a persuasive style. Ashish Marwah, Vice President, DDB Mudra said: The insight for the idea came from the book ‘‘The argumentative Indian’’ by Amartya Sen, which highlighted the Indian tradition of skepticism. A series of five ads put features such as road handling, ground clearance, and fuel efficiency to test, one at a time. 8 Rajeev Raja, National Creative Director, DDB Mudra said: How we say was as important as what we say. We chose the ‘‘narad-muni’’ style which was the light-hearted and playful approach to refuting rational arguments against Polo. The tagline ‘‘German engineering. Made in India’’ also highlighted suitability for India. A rich media pop-up ad took viewers on a digital journey to famous Indian landmarks to connect with Indianness. The campaign was targeted at the ‘‘young progressive’’ male, 30 years of age and well-informed. The campaign met with success. On the day of the cut-out innovation, there were 240,000 website visits.v In the 4 months until June 2010, there were 68,000 inquiries, 28,000 test drives, and 3,919 cars were sold (14% test drives converted into sales). In 2011, Polo was the first choice of 13% consumers (see Exhibit 13 for sales funnel of various brands).

Mudra Max was one of the agencies of the Mudra Group The campaign which ran from May 1–June 30, 2010 received 7,856 spots across 54 TV channels, 172 insertions across 31 newspapers, 39 insertions across various magazine genres, and 155 outdoor sites across India.
8

7

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In September 2010, VW planned the entry of Vento, its second volume car, in the Upper C segment. The segment constituted 6.4% of the market in 2011 and grew by 28% over 2010. While Honda City was the undisputed segment leader until some time back, it had started to trail behind Verna. The segment was under pressure from lower C models such as Maruti D’zire, Chevrolet Aveo, and Tata Indigo. VW targeted sales of 9,200 units of Vento and market share of 10% within 4 months of launch. The qualitative goal was to establish Vento as an aspirational and benchmark brand in entry sedans aptly reflected in the tagline ‘‘German engineering best in class’’. VW believed that the core competencies required in the segment were quality, comfort, and driving experience. Vento differentiated itself with superior technology, spacious interior layout, effective air conditioning, authentic European design, and better road handling. It was aggressively priced and targeted a different segment. Lutz Kothe said: The typical target customer for upper C segment cars was male, 35–40 years of age, businessman, and graduate with Rs. 1.5 million incomes per annum. Vento on the other hand targeted a younger (30–35 years), better educated, lower income, salaried, more value for money, and more demanding customer. It focused on the ‘‘young progressive’’ segment. DDB Mudra had successfully launched Polo using rational appeal. However, Vento was an entry-level sedan, a segment in which purchase was made not only for rational, but also for emotional reasons. Rajeev Raja said: While the Japanese and Korean brands had a strong footprint in India, they were perceived as geeky and mechanical. Hence, we saw an opportunity to build a strong emotional connect with the consumers. The strategy was to sell them not a car, but a piece of art. An artist was happy when his art was bought, but was emotionally ruffled as he watched it go away. This passion of the artist made the buyer appreciate the work of art. High-decibel advertising in the segment meant that DDB Mudra had to think out-of-the-box yet again.9 It conceived the idea of the talking newspaper. In Times of India, a chip was pasted which had a pre-recorded voice of a Vento engineer who spoke about Vento with great passion. The campaign brought the engineer in direct contact with the consumer. This was followed by a TV commercial ‘‘Crafted with so much passion, it’s hard to let it go’’; which showed the engineers manufacturing the Vento passionately and then bursting into tears after it was driven away by the buyer. By the end of 2010, Rs. 228 million in advertising resulted in sales of 7,002 units of Vento. In 2011, Vento gained further traction grabbing 22% market share in the segment (see Exhibit 14 for market share of various models). Relaunching Passat In March 2011, VW re-launched Passat globally after modernizing its design and upgrading its technology. Product Head said: Typically in the auto industry, product gets a facelift after every 5 years. The product is modernized, but the brand name is retained as consumers buy into the persona of the brand. The Indian market started the build-up for the launch of New Passat a year in advance. VW India handpicked a few auto media men and took them to Paris motor show where the new Passat was to be unveiled. Ananya Handa said: A motor show is more about the car than the company. It is not about business and profits. It is about the product and hence we chose media that is technologically savvy about cars. The media analyzed features available globally in the new Passat and wrote stories building anticipation of what could be expected in India. In the next round, VW handpicked a few journalists and took them for test drive as part of global test drive. The New Passat was being introduced with BlueMotion Technologies. VW invited the auto media and wires such as PR Newswire and Press Trust of India (PTI) for a media round table and engaged with them on the concept of

9

Rs. 1,600 million was the total ad-spend of all the players in 2009.

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BlueMotion Technologies. 10 VW then gave a fleet of Passat to select journalists to drive for 4 months. As a result of the PR campaign, VW had some or the other journalist writing articles about Passat in the newspapers and magazines for 4 months. The PR campaign was followed by advertising. The target audience for Passat was male, 35–45 years of age, postgraduate or professional, who had an income of Rs. 2 million per annum and owned at least two cars. He was mature, sophisticated, classic but confident, intelligent, well-traveled, well-informed, and a deep thinker. Toyota Camry and Honda Accord were identified as key competitors. Passat differentiated itself on ‘‘comfort.’’ The campaign showed a series of ads highlighting innovations that redefined comfort. The ‘‘Park assist’’ ad showed how the car was automatically guided into a parking space at the push of a button without the driver needing to steer and the ‘‘fatigue assist’’ ad showed how the car was automatically counter-steered as soon as it detected that Passat could leave its lane unintentionally. Another campaign highlighted BlueMotion Technologies – an efficient and ecofriendly way of life, in the New Passat. VW advertising was hailed for its creativity, effectiveness, and media innovation, which were exemplified in the numerous awards it won. Beetle and Vento won the Abby for creativity; Polo won the Effies for effectiveness. Polo’s dye-cut and VW’s brand roadblock campaigns won the Emvies for media innovation. VW won the “outdoor advertiser of the year” award; Beetle won the “outdoor campaign of the year award” and Think Blue won the “public service award” (Exhibit 15). VW attained a share of voice higher than its share of expenditure (Exhibit 16). The brand awareness increased from a mere 9% in 2009 to 37% in 2011 (Exhibit 17). Consumers perceived the brand communication as memorable and the brand as likeable (Exhibit 18). Its favorability scores exceeded those of Ford and Skoda which had entered the Indian market much earlier (Exhibit 19). It was perceived as innovative, technically advanced, and a good quality brand (Exhibit 20). Lutz Kothe said: DDB Mudra has understood the VW brand in a short period of time. They have adapted our global brand guidelines to India. They come up with multiple creative approaches and its working very well. Our awareness has increased, our sales have increased and our dealers are happy! DDB Mudra has laid a strong foundation of the VW brand in India. vi

FUTURE OUTLOOK
In 2012, there was an aura of contentment as well as optimism in the VW India office. The group’s India operations were likely to break even in 2012. vii The sales not only filled the capacity of the new plant, but would soon exceed it – the plant had the capacity of 130,000 vehicles annually; in 2009 VW sold 3,000 cars, which rose to around 30,000 cars by 2010 and 75,000 cars by the end of 2011. The products received critical acclaim with Polo being declared the “premium hatchback of the year 2010” by CNBC Overdrive; Vento, the “premium compact sedan of the year 2010” by ET Zigwheels and Passat “Green car of the year”. VW was the No. 8 player by sales volume. Neeraj Garg said: We want to be amongst the top 3 in India by 2018. Lutz Kothe said: As we endeavor to move to the next level, perhaps we need to take a step back and review our marketing and communication strategy. Are we differentiating ourselves enough in the competitive market place? Are we giving a strong reason to the consumer to buy our brands? How can we communicate better?

Wires flash the stories and journalists can pick up stories from them and file them in their newspapers after giving a credit line to the wire. While PTI and Reuters are free wire services, others such as UNI and Dow Jones are paid. Reuters, Dow Jones, and Bloomberg are international wires, whereas PTI and UNI are Indian wires.

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Exhibit 1 Market shares
Company Maruti Suzuki Hyundai Tata Motors General Motors Ford Honda Siel Fiat Toyota Volkswagen Nissan Renault No. of Brands 11 8 6 8 3 5 3 7 6 4 1 Installed Capacity p.a. in lakhs 17.5 6.0 5.5 2.2 2 1 1 2.1 1.3 2 Market Share 41.7 15.5 12.7 4.4 3.5 1.3 0.9 4.9 3.6 0.7 0.1 No. of Dealers 460 241 216 180 163 122 169 147 101 32 15 No. of Cities 253 167 146 141 104 67 125 92 83 31 15

Source: Economic Times, August 4, 2011; Company; www. carwale.com

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Exhibit 2 Brand Positioning
Segment Market Share Luxury Market Porsche, BMW, Bentley, Audi, Mercedes, Land 1 Rover, Jaguar, Ferrari, Ducati, Rolls Royce, Lamborghini, Aston Martin, Maserati European mindset of premium was perceived in India as luxury as access to these brands was still confined to a Premium 8 Volkswagen, Skoda, Toyota, Honda small percentage of population. Consequently usual top-end volume brands such as Volkswagen, Toyota and Honda were seen as premium. Lower Premium Budget Market
Source: Company

Brands

Description Volumes of super luxury brands were still negligible

As wealth grows and access to different 27 Hyundai, Ford, Fiat, Nissan, Chevrolet Maruti Suzuki, Force, Mahindra, Hindustan Motors, Tata Motors segments increases, brand perception would evolve accordingly. 64 Local brands including Maruti Suzuki were perceived as budget brands.

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Exhibit 3 Comparative prices
Company Volkswagen Honda Hyundai Maruti Fiat Ford Volkswagen Maruti Maruti Hyundai Skoda Fiat Honda Figo Micra Volkswagen BMW Honda Honda Hyundai Mercedes-Benz Skoda Toyota Audi Nissan Volkswagen Mercedes Benz Mercedes Benz BMW BMW Audi Volvo Vento Honda City Verna SX4 Linea Fiesta Polo Swift Ritz i20 Fabia Punto Jazz Ford Nissan Passat BMW 3 Series Accord 2.4 Accord 3.5V6 Sonata C Class Superb Camry A4 Teana Phaeton E Class S Class 5 Series 7 Series A6 S80 Brand Number of Variants Petrol 3 7 5 5 4 6 4 3 4 8 6 3 3 4 4 2 2 1 1 2 3 4 3 2 5 2 2 3 2 2 Diesel 3 5 3 3 4 3 3 3 5 5 3 4 2 2 2 2 1 1 2 1 4 1 3 1 2 3 Prices (Rs. lakhs)* Petrol 7.1–9.3 7.1–10.4 7.1–9.8 7.22–9.04 6.9–9.3 8.4–9.8 4.6–6.2 4.5–5.7 4.2–5.2 4.6–8.2 4.5–6.2 4.9–6.6 5.8–6.2 3.9–5.0 4.2–5.5 24.6–34.7 19.9–20.6 26.7 14.8 29.7–70.5 18.9–27.2 21.6–24.0 29.0–38.3 21.6–25.0 40.0–66.0 85.5–99.6 39.9–58.5 87.2–132.7 41.0–47.3 40.2–45.0 Diesel 8.4–10.1 9.8–11.1 8.23–9.5 7.9–9.3 9.4–10.6 5.7–7.2 5.5–6.8 5.2–5.7 5.8–7.5 5.6–7.0 5.6–6.8 4.9–6.0 5.8–6.3 24.1–25.2 25.1–32.1 16.3–17.3 33.0 23.2 30.9–38.8 77.1 40.7–50.6 85.7 38.0–48.0 84.2 38.8–47.2 31.6–38.5

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Exhibit 3 (Continued)
Volkswagen BMW Audi Mercedes Benz Toyota Volkswagen Chevrolet Toyota Honda Skoda Skoda Brio Etios Liva Liva Land Rover Evoque EON Rapid Beat Touareg X5 Q7 ML Class Land Cruiser 200 Jetta Optra Magnum Corolla Altis Civic Octavia Laura Honda Toyota Toyota Tata Motors Hyundai Skoda Chevrolet 1 2 5 5 3 4 5 5 1 5 5 4 1 1 2 1 2 4 2 3 4 5 2 4 3 3 4 72.1 7.5–8.5 10.8–15.1 12.4–14.7 12.7–15.8 4.0–5.2 4.3–6.2 5.2–6.7 59.9 2.8–3.8 7.0–9.4 3.7–4.4 52.3 55.3 55.5–65.8 55.5 87.0–88.6 14.3–18.1 8.6–9.5 11.9–15.0 11.0–13.6 14.2–18.6 5.7–6.0 6.6–8.1 47.1–57.7 8.2–9.6 4.5–5.7

Source: Author Research * Average Ex-showroom prices as of March 2012

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Exhibit 4 Product-wise segments and their market shares
Segment Engine Size (Liter) Length (mm) <1.0 <3690 Brands Price Range (Rs. lakhs) 2–4 Customer Profile No. of Cars Sold (000) Entry-level hatch for budgetconscious people. Upgraders from 2wheelers or 2nd car for ladies and teenagers Mass hatch for budget-conscious people. Upgraders from 2-wheelers or 2nd car for ladies and teenagers Premium hatch for image- & featureconscious people. Upgraders from 2wheelers or used as a 2nd car by ladies & teenagers Entry-level sedan for budgetconscious people. Upgraders from hatchback Mass sedan for image- & featureconscious people. Upgraders from hatchback or used as a 2nd car by D & E segment users Hatchback and C segment sedan upgraders 2010 Market Share No. of Cars Sold (000) 2011 Market Share

A

Maruti 800, Maruti Alto, Chevrolet Spark, Tata Nano

59

2.8

70

3.1

B

>1.0 <3690

B+

>1.0 >3690

Maruti Zen, Maruti Wagon R, Hyundai Santro, Hyundai i10, Tata Indica, Hyundai Eon Hyundai Getz, Skoda Fabia, Fiat Palio, Maruti Swift, Maruti Ritz, VW Polo Renault Logan, Ford Ikon, Tata Indigo, Hyundai Accent Maruti SX4, Hyundai Verna, Ford Fiesta, Honda City, Chevrolet Aveo, Mitsubishi Lancer, VW Vento Chevrolet Optra, Mitsubishi Lancer Cedia, Toyota Corolla, Honda Civic, Skoda Octavia, Skoda Laura, VW Jetta BMW 3, Honda Accord, Hyundai Sonata, Mercedes C Class, Skoda Superb, Toyota Camry, Audi A4, Nissan Teana, VW Passat

3–5

998

46.1

944

41.3

4–7

399

18.4

458

20.0

Lower C

<1.5 4000– 4300 1.5–1.8 4300– 4500

5–7

175

8.1

210

9.2

Upper C

6–9

114

5.3

146

6.4

Lower D

1.8–2.0 4500

8–15

47

2.2

40

1.8

Upper D

>2.0 4500– 4900

15–32

C and Lower D segment sedan upgraders 14 0.6 14 0.6

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Exhibit 4 (Continued)
E Segment 2.5–6.0 4800– 5200 SUV & MPV >2.0 4400– 4700 >2.0 4500– 5000 Mercedes E & S class, BMW 5 Series, Audi A6, Volvo S80, BMW 7 Series, VW Phaeton Mahindra Scorpio, Tata Safari, Toyota Innova, Chevrolet Tavera Ford Endeavor, Maruti Grand Vitara, Chevrolet Captiva, Mitsubishi Pajero, Nissan X Trail, Honda CRV, Hyundai Tucson BMW X3, BMW X5, Audi Q7, Mercedes M Class, Porsche Cayenne, VW Touareg, Volvo XC 90 36–125 Imagetechnologyconscious upgraders and sedan 7 0.3 8 0.3

6–12

Additional car. 7 or more seats for large families Additional car for quality- and featureconscious user

171 102

7.9 4.7

212 93

9.3 4.1

Premium SUV

14–25

16

0.8

17

0.8

Luxury SUV

2.5–5.0 45005000

40–100

Imagetechnologyconscious upgraders

and sedan 1 0.8 2 0.1

Source: Company

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Exhibit 5 Volkswagen consumer segments

Source: Company *Based on in-depth interviews with 50 car owners and survey research with 900 car owners

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Exhibit 6 Profile of consumer segments
Segment & Size Traditional merchants 24.6% In small & medium family business – mostly wholesale and retail; living in urban and semi-urban India; mostly males; age 40 years or more; low to medium levels of education; no experience abroad; highly traditional – paternalistic; follow religious rituals; thrifty; respect for elders; being recognized in one’s own community; gender-biased. Traditional young aspirers 14.8% New class 17.8% middle Urban; 25–40 years; first generation with modern affluence through education; higher secondary to graduates; clerical jobs; moderate knowledge of English; blend of traditional and modern values – diligence, self-discipline, nuclear family, moderate individualism, modern consumption. Young progressives 10.1% Executives in companies; engineers, creative professionals in knowledge sectors; below 30 years of age; superior knowledge of English; metros; many are females; nuclear family; individualistic; career-oriented; open-minded; enjoying life; spend money on leisure activities & high-tech products; watch cinema and cricket Supreme corporate India 5.3% Elite entrepreneurs, CEOs in Rajasthan, Gujarat, Punjab; 50 years or more; possess inherited wealth; highly educated; welltraveled, traditional values; extended family; luxury signifies family status; rational approach to money – waste is frowned upon, modest outward appearance; strong social significance of charities; go to clubs and concerts Growing interest in SUVs; buy super luxury cars; luxurious and personalized interiors; latest technology; guaranteed mobility Want leisure cars; interest in niche concepts; seek style and innovation; interest in hybrid technology Own cars up to Rs. 5 lakhs, want latest technology; car as a reflection of family status; seek low running costs Self-employed or employed in public sector in clerical roles; 25–35 years of age; male; modest rural/semi-urban background; highly traditional; higher secondary and not graduate; mostly married; traditional values Own cars below Rs. 4 lakhs, heavy usage of car mostly for business Own hatchbacks, but aspire for saloons; use car heavily for business purposes; prefer domestic makes owing to low price, want economical spare parts, service. Description Car purchase behavior

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Exhibit 6 (Continued)
New business builders 5.2% Funders of fast growing businesses; 30–40 years of age; welleducated; high income and considerable assets; self-made; aggressive ‘‘sky is the limit’’ attitude; enjoy consumption of luxury; go to sports events, art exhibitions, clubs, concerts and wellness centers Self-made milieu 9.5% Modern urban elite 6.5% Liberal western orientation; education from elite schools in the west or experience abroad; entrepreneurs & managers in IT, journalism, academics, media, film; above average incomes; 30–50 years; individualistic; sophisticated Metropolitan smart 6.2% In media, art, entertainment, IT industry; scientists, artists, doctors, solicitors; 25–30 years of age; high income; careeroriented; individualistic; modern; highly developed leisure culture – bars, restaurants, shopping; metros; many females Interest in saloon, coupe, SUV and convertible; personalized brand; go to interiors; renowned Small entrepreneurs; 30–50 years of age; modest education; moderate assets; traditional – live with extended family, gender-biased; go to shopping malls, cinema, amusement parks Prefer known brands, modern design and latest technology as signs of social status, fuel economy Urge for exclusivity, prestige, latest innovation; seek driving pleasure, strong affinity to saloons, roadsters, and SUVs.

environment-friendly; award shows, parties

Interest in coupe, SUV, diesel, hybrid; latest technology, styling; personalized interiors; off-road capability; charity; motor sports; art galleries

Source: Company

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Exhibit 7 Segment-wise purchase preference of brands
Segments Traditional merchants Traditional young aspirers New middle class Young progressives Supreme corporate India New business builders Self-made milieu Modern urban elite Metropolitan smart Ford 109* 44 61 193 200 99 57 111 115 Tata 126 114 98 66 149 48 133 92 0 Hyundai 125 91 113 79 116 43 88 55 121 Honda 96 118 106 96 94 113 108 102 51 Maruti 142 89 76 78 84 79 121 73 87 Toyota 94 76 102 90 191 128 47 125 112 Fiat 55 153 90 33 167 67 81 135 226 Skoda 99 65 141 109 72 125 104 99 67 VW 68 73 123 28 118 174 65 177 223

Source: Company *Are Index numbers (base of 100).

Exhibit 8 VW launch ads in 2007 and 2008

Source: Company

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Exhibit 8 (Continued)

Source: Company

Exhibit 9 Global campaigns of VW Force Campaign Fun Theory Campaign

Source: Company

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Exhibit 10 Campaigns of VW product brands: Roadblock campaign in Times of India

Campaign for Passat

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Exhibit 10 (Continued) Campaign for Jetta

Campaign for Beetle

Campaign for Touareg

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Exhibit 10 (Continued) Campaign for Polo

Campaign for Phaeton

Handcrafted campaign for Phaeton in Hindustan Times

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Exhibit 10 (Continued) Campaign for Vento

Campaign for “Think Blue” in Passat

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Exhibit 10 (Continued) Out of home advertising

VW used several media innovations such as cluster hoarding and heli-banner. A 10,000 sq ft banner flew over Mumbai during peak hours. Radio DJs pointed people to the skies.
Source: Company

Exhibit 11 Dealer network

Source: Company

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Exhibit 12 Positioning of brands
Positioning of Competitors of Passat While Audi A4 symbolized innovative features and prestige, BMW 3 series stood for sportiness and youthful joy. Honda Accord stood for perfection and excellence, Hyundai Sonata for driving experience and Mercedes C Class for exclusive status symbol. Nissan Teana was positioned as lounge comfort. In a category that facilitated mobility, it advertised stillness. Skoda Superb connoted exclusivity and surpassing of excellence using the metaphor of 7 star and Toyota Camry for perfection and rejuvenation. Most communication in the segment used western cues and did not portray Indianness. Human beings were rarely shown in ads. Positioning of Competitors of Jetta While Skoda Octavia was positioned as utility and status for family man, Skoda Laura was positioned as an object of desire for young achievers. As compared to Octavia, Laura’s target audience was more dynamic and younger. Honda Civic symbolized excitement and adventure, targeting a much younger segment. Toyota Corolla Altis symbolized corporate success through its tagline ‘‘Designed to inspire envy.’’ Chevrolet Optra Magnum was positioned as a powerful family car for utility. It balanced individual freedom and family needs. Chevrolet Cruze combined the elegance of a saloon with the thrill of an SUV. Positioning of Competitors of Touareg In a category defined by adventure, Volvo XC90 projected safety as being imperative for any adventure. It positioned itself for those in the corner office. Mercedes M Class connoted exclusive power and status. Since the brand had high patronage in India, the communication did not veer far into the SUV territory, rather depicted a poised journey on the outskirts of the city. BMW X5 aimed to create an icon of it. Unlike its competition, it did not talk of adventure or luxury, but the joy of owning a masterpiece. Audi Q5 stood for innovation and advanced technology, Toyota Landcruiser Prado for powerful performance in extreme conditions and Land Rover for luxury along with all terrain credentials. Positioning of Competitors of Polo Honda Jazz tried to break the hierarchy of car segments, by positioning itself as a car that was in a ‘‘league of its own.’’ The brand was positioned around other people’s perceptions of the car, rather than the engineering strength of Honda. Hyundai i20 targeted youth by promising sex appeal. Maruti Swift targeted youth who were passionate about driving, but could not afford an SUV. Similar to SUVs, Swift also did not show a driver in the ad. As compared to Swift, Ritz’s target audience was not as adventurous, though similarly young and ambitious. Ritz was positioned as the executive’s first car: the first step on the hill to success. The Punto was independent, but not a ‘‘rebellious’’ car. Punto was subtle and reserved. Skoda Fabia was targeted at a slightly older target audience. It was for someone who had moved ahead in life, but had not forgotten his values. The car helped impress a girlfriend rather than get a girlfriend. U-VA had a slightly older and more self-secure target audience. It poked fun at the driver (portrayed by Saif Ali Khan), or showed him as a gentleman, rather than conveying his sex appeal or his power. Positioning of Competitors of Vento Honda City, Hyundai Verna, Maruti SX4, Fiat Linea, and Ford Fiesta were identified as competitors. Honda City was positioned as an aspirational luxury car. Hyundai Verna portrayed performance without emphasis on design or looks. Maruti SX4 was positioned on sex appeal with the tagline ‘‘Men are back.’’ Fiat Linea was positioned on design and looks and not performance. Ford Fiesta was positioned as playfully stylish.
Source: DDB Mudra group

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Exhibit 13 Sales funnel for different brands – 2011
Aided Awareness Passat – Upper D Segment Mean Honda Accord Audi A4 Skoda Superb Toyota Camry Volkswagen Passat Mean Honda Civic Toyota Corolla Skoda Laura Chevrolet Cruze Volkswagen New Beetle Volkswagen Jetta Mean BMW X5 Audi Q7 Toyota Prado Volkswagen Touareg Mean Maruti Swift Hyundai i20 Ford Figo Chevrolet Aveo Honda Jazz Volkswagen Polo Nissan Micra Toyota Liva 95 100 97 96 95 89 95 99 97 96 94 92 90 95 97 95 95 92 94 100 99 97 97 96 96 94 74 70 83 73 65 68 62 59 78 74 58 58 45 42 57 64 64 53 48 Polo – B+ Segment 62 90 92 71 49 57 64 52 19 17 25 35 35 3 15 16 7 0 9 4 24 26 1 7 13 0 0 17 29 43 5 3 3 13 32 8 11 17 6 5 9 12 23 1 1 14 29 33 3 3 2 9 22 5 8 11 6 4 5 7 13 0 1 Familiarity Consideration First Choice

Jetta – Lower D Segment

Touareg – Luxury SUV Segment

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Exhibit 13 (Continued)
Vento – Upper C Segment Mean Honda City Ford Fiesta Maruti SX4 Hyundai Verna Fiat Linea Toyota Etios VW Vento
Source: Company All figures in percent

94 100 99 99 97 91 89 86

60 82 69 80 64 45 42 38

16 45 17 11 9 7 13 7

9 29 8 3 5 1 10 5

Exhibit 14 Units sold and market share of various brands in 2011
Segment Upper C SX4 Linea Rapid* Accent Verna New Fiesta Aveo City Vento B+ UVA Micra Fabia Punto Jazz Liva Swift Ritz Figo i-20 Polo Fiat Skoda Hyundai Hyundai Ford Chevrolet Honda Volkswagen Chevrolet Nissan Skoda Fiat Honda Toyota Maruti Suzuki Maruti Suzuki Ford Hyundai Volkswagen Model Brand Units Sold 21829 5477 2253 11107 40196 10636 1789 35932 35671 1357 18784 16966 11192 4386 20260 127915 65369 74281 80571 38633 2011 Market Share (%) 13.3 3.4 1.4 6.8 24.6 6.5 1.1 22.0 21.8 3.0 4.1 3.7 2.5 1.0 4.5 28.2 14.4 16.4 17.8 8.5

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Exhibit 14 (Continued)
Lower D Jetta Kizashi Corolla Optra Cruze Laura Civic Fluence** Upper D Sonata Passat Superb Camry Teana Accord Beetle Phaeton Volkswagen Suzuki Toyota Chevrolet Cruze Skoda Honda Renault Hyundai Volkswagen Skoda Toyota Nissan Honda Volkswagen Volkswagen 2770 488 9283 3036 8539 5873 3207 1023 165 1164 3470 222 132 1610 172 45 8.3 1.5 28.0 9.2 25.7 17.7 9.7 3.1 2.4 17.2 51.3 3.3 2.0 23.8 0.6

Source: Company *Sales figure available for November–December only ** Sales figure available for June–September and November–December only

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Exhibit 15 Awards
Media Awards Award Abby Abby Emvies Emvies Abbys Abbys Abbys Effies Effies OAC OAC OAC Network 2 media Network 2 media Award CNBC–Overdrive Bloomberg–UTV Bloomberg–UTV BBC Top Gear ET Zigwheels CNBC Overdrive ET Zigwheels
Source: Company ABBYs was the biggest national award for creative advertising in India. Instituted by the Ad Club of Bombay, it also recognized Campaign of the year, Advertiser of the year and Ad agency of the year. EFFIEs were founded by the American Marketing Association to award creative advertising that was effective in attaining business objectives. EMVIES organized by the Ad Club of Bombay was an annual event that recognized innovation in media. *VW collaborated with the National Geographic Channel to conceptualize a contest ‘‘Innovations for everyone’’ in which entries were invited for radical ideas that could make a difference to the society. Short films were created on the winning projects and aired on the channel and the winner was given Vento as the prize.

Type Gold Gold Gold Gold Silver Silver Bronze Silver Silver Gold Silver Silver Gold Gold

Category Media Innovation – Print Media Strategy Media Innovation – Print Best Integrated Campaign Creative Awards Print Direct Print Corporate Advertising Consumer Durables Outdoor Campaign of the Year Alternative media Best use of ambient media OOH advertiser of the year Public service Automobile Brand Innovation –

Creative Talking newspaper Polo dye-cut Talking newspaper 2010 activity Curves are back Talking newspaper TSI Technology Innovations Emotional engineer Beetle outdoor activities Innovations for all* Road block – Headlamps OOH campaigns Ugliest billboard Category Executive car of the year

Brand Vento Polo Vento Volkswagen Beetle Vento Volkswagen Volkswagen Vento Beetle Volkswagen Touareg Volkswagen Think Blue

Volkswagen Jetta Jetta TVC Passat BlueMotion Technologies Volkswagen Passat Volkswagen Passat Polo Vento

Best automobile ad of the year Green car of the year Best interiors of the year Premium sedan of the year Premium hatchback of the year Premium compact sedan of the year

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Exhibit 16 Advertising spends, share of expenditure (SOE) and share of voice (SOV)
Company 2009 Ad Spend (Rs. million) SOE (%) SOV (%) Ad Spend (Rs. million) Tata Maruti GM Hyundai M&M Toyota Ford Volkswagen Fiat Honda Nissan Skoda 2497 2834 1687 1485 1080 877 810 675 1012 810 0 270 17 19 11 10 7 6 5 4 7 5 0 2 14 22 10 15 10 3 3 5 8 5 0 1 4503 4016 2677 1947 1156 1278 1460 1460 1217 791 426 608 20 18 12 9 5 6 6 7 5 3 2 3 16 21 9 12 7 3 4 12 6 2 2 4 2010 SOE (%) SOV (%) Ad Spend (Rs. million) 11956 4874 4614 3314 2209 2144 1819 1104 1104 1040 975 715 32 13 12 9 6 6 5 3 3 3 3 2 31 16 10 12 5 4 3 5 3 3 3 2 2011 SOE (%) SOV (%)

Source: MAP 2009: January–December, 2010: January–November; Media: TV & Print, Target Group: Cable & Satellite, Males, 25–44, SEC AB; SOE is the percent share of the industry spend, SOV is the share of the industry gross rating points.

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Exhibit 17 Sales funnel for corporate brands – 2011
Unaided Awareness Mean Maruti Tata Hyundai Honda Ford Toyota Chevrolet Mahindra Volkswagen Fiat Skoda Audi
Source: Company

Aided Awareness 94 100 99 99 98 98 98 98 99 95 98 96 94

Familiarity 63 91 84 81 78 74 72 66 74 53 69 59 51

Consideration 19 27 17 31 40 29 20 36 15 15 12 13 17

First Choice 6 8 4 9 14 8 8 11 4 5 2 4 7

Brand Loyalty 12 12 10 11 20 4 30 20 low sample low sample low sample low sample low sample

42 84 66 65 61 51 50 47 44 42 35 31 29
All figures in percentage

Exhibit 18 Attitude toward corporate brands 2011
Iceberg Mean VW Toyota Audi Skoda Hy un dai Communication Memorability Brand Uniqueness Brand Likeability Brand Confidence Fun to Drive
Source: Company

Ho nda

M ar uti

Chev rolet

Ford

Tata

Mahin dra

Fiat

54 60 64 62 55

68 72 77 73 65

44 47 61 58 56

68 75 75 75 64

46 65 55 49 58

54 58 65 59 57

54 67 72 67 67

62 61 74 76 67

52 51 64 59 53

43 52 56 53 44

46 60 56 55 42

50 49 56 54 39

37 47 42 56 44

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Exhibit 19 Overall favorability of car brands – 2011
Brand Maruti Hyundai Honda Toyota Tata BMW Mercedes Volkswagen Skoda Audi
Source: Company

Mean Score* 2010 8.8 8.4 8.3 8.1 7.9 7.3 7.3 7.1 7.3 6.8 2011 9.0 8.6 8.5 8.4 8.0 7.9 7.7 7.7 7.6 7.4

Brand Mahindra Ford Chevrolet Suzuki Bentley Volvo Nissan Jaguar Land Rover Mitsubishi

Mean Score* 2010 7.4 7.2 7.0 7.1 6.4 6.4 6.2 6.3 6.3 6.4 2011 7.4 7.3 7.2 7.1 6.7 6.7 6.6 6.5 6.5 6.5

Brand Porche Fiat Lamborghini Renault Mini Force Peugot Opel Seat

Mean Score* 2010 6.4 6.2 5.9 6.2 6.2 5.7 5.9 5.5 5.7 2011 6.5 6.3 6.2 6.2 5.9 5.7 5.7 5.5 5.5

*Mean score is on a scale of 1–10, where 10 is the highest

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Exhibit 20 Corporate brand image – 2011
Image Innovative Valuable Responsible Exterior Design Fun to Drive Value for Money Low Running Costs Good Aftersales Service Good Quality High Resale Value Technically Advanced Focused On People Needs Safe Cars Cares About Environment
Source: Company

Mean 58 60 59 61 57 58 44 53 63 47 60 57 60 54

VW 68 66 64 71 63 64 45 59 74 54 72 61 69 64

Toy ota 58 64 58 54 55 57 43 56 64 48 64 53 59 60

Au di 68 75 66 77 75 55 32 56 71 55 72 61 75 70

Sko da 67 68 68 79 67 64 39 38 71 44 68 62 73 60

Hyun dai 64 65 66 67 67 61 47 60 66 52 62 62 61 53

Hon da 61 62 62 73 62 60 33 62 71 53 67 56 61 51

Mar uti 57 69 72 55 60 75 71 78 69 64 57 74 64 61

Chev rolet 51 53 51 54 55 50 38 58 58 37 54 57 54 50

Ford 50 58 48 45 53 57 31 41 59 48 46 53 59 38

Tata 42 56 65 44 44 61 63 51 54 32 46 67 46 37

Mahi ndra 40 56 46 48 53 56 36 48 48 46 37 61 51 32

Fiat 39 40 45 43 40 39 39 30 50 32 50 37 39 39

All figures in percentage

Endnotes Source: Economic Times, November 10, 2011 Source: The Volkswagen edge, Fortune, April 2011 iii Source: the Volkswagen edge, Fortune, April 2011. iv Source: mashable.com/2009/10/11/the-fun-theory/ - 181k v Source: Google Analytics vi Source: Campaign India, Mudra Supplement, March 25, 2010 vii Source: Asia Pulse, January 5, 2012. ii i

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