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New Beetle

Case study: The New Beetle

Brief Statement of Problem

This case is about evaluating and designing the marketing strategy for a new product called “The New Beetle”. The product is kind of a new model for the classic car model - Beetle. Beetle remains the only car that has been constructed and sold for more than 60 years (the production in Mexico has been stopped in July 2003). Liz Vanzura(HBS ‘90), marketing director for Volkswagen, with her team would have to finalize the marketing plans that would position the Volkswagen’s New Beetle with one foot in the past and the other on the accelerator heading directly into the future. The challenge confronting her had been so aptly described in a recent Newsweek article as “Mission: Impossible.”
Although on January 5, 1998, Detroit’s Cobo Hall, Volkswagen(VW) had successfully unveiled a new model and throngs of journalist and visitors had crowded the lower level of the display to catch a glimpse of the show’s unexpected star, the New Beetle, the company knew that the success of the New Beetle was still far from guaranteed.
With the design work complete and initial positive reactions from the market, VM now faced the daunting task of turning the excitement surrounding the car into actual sales. There are many problem needed to be solved such as target audience and positioning, competition and pricing, dealers, etc.
It’s not easy to make the decision whom to target and how to communicate the car’s benefits. Although the baby boomers with a value proposition of “indulging in nostalgia” appeared to be the most appropriate strategy for the New Beetle, VM had shift its strategy, positioning the brand behind the “drivability of their cars” to target a younger generation of drivers. Let alone the limited advertising budget, less than 25% of a typical budget – a percentage that could be even smaller with requests to allocate any remaining dollars to supporting the New Passat, which had debuted just five month earlier. If...