Three V-Dubs Under Seventeen Thousand! – None Around Eighty.
Yet another example of how critical it is to really know your customer.
The Volkswagen Beetle hit the US in 1949 however it was not until the sixties that the bug-like rear engine car would make a social impact amongst soon to be avid VW followers.
Since the sixties the Volkswagen brand has become very “cult-like” with a following of loyal consumers that refuse to drive anything else. To the VW customer the brand stands for affordable non-conformity, hip and some may even say… cool.
VW commercials historically played to the type of customer that would take to the VW brand, the cool hip budget conscious non-conformist. They have had some amazing advertisements that really spoke to the target VW audience. Even the 1998 re-launch of the “New Beetle” created, well, Beetle Mania.
Volkswagen had done it again. Connecting with a new generation of loyal followers with the New Beetle. The target for this vehicle was clear. The children of the flower power generation. The New Beetle even came with a flower vase attached to the dashboard. VW had always counted on their loyal 1960’s followers to pass down their love of VW from generation to generation. Over the years they’ve introduced many vehicles that hit the mark with their clients. The Rabbit, Golf, Cabriolet and wildly successful Jetta. Volkswagen truly knew who their client was, at least I thought they did.
In 2004 VW came out with the $80,000.00 Phaeton. The thought process was that as the “make love not war” types grew up they would now want a luxury vehicle and who better to buy it from than their old friend VW. VW was counting on the loyal VW buyer and the power of the brand to convert from affordable non-conformity to incredibly expensive semi-conformity. Well surprise, surprise, It turns out that when you can afford to drop 80 large on a vehicle, non-conformity be dammed, you’re not driving a VW.
The fact is that no one will pay BMW prices to be treated like a VW customer. You want the total experience and everything that comes with it. Ask any Lexus dealer, their clients would not take kindly to plastic seats and styrofoam coffee cups in a Volkswagen “service lounge” while their friends and collogues ate gourmet wraps, drank espresso, played the front nine at Pebble Beach in a full sized virtual golf simulator then sat on the leather sofa and watched CNN on a 50 inch plasma TV at the local Lexus “service center”.
VW missed the mark big time and it cost them plenty. The Phaeton was a huge failure in the US only selling a few thousand nationwide. Volkswagen stopped thinking like a customer. They took a top down approach when in today’s world you have to build bottom up to understand your customer’s needs. Somewhere along the way VW lost touch with their customers and what a VW customer really wants – to be hip and cool - in an affordable non-conformist kinda way.
Take a cue from VW. Listen to your customers, never stop trying to understand and fill their needs. Volkswagen wanted to sell cars for $80,000 but they learned from their mistakes. The Phaeton is history and now they drive around screaming “3 V-Dubs under $17,000!” – Welcome back.
July 25th, 2007 at 8:22 pm
Larry,
I totally agree with you on the Phaeton. The thing is, it’s incredibly hard to change what customers think they know about a brand. If VW customers already think about VW in a certain light, then, for Heaven’s sake, don’t try to change that!
I think that you hit the nail on the head with Lexus. People already have an image of Toyota in their mind’s eye. And that image doesn’t include Luxury. So rather than trying to change the customers ideas about Toyota, they created a new brand. Bingo.
I’m not sure how much the Phaeton has in common with Audi’s A8, but I bet that even if they were astonishingly similar AND a few grand cheaper, the Audi would still outsell the VW by multiples.
Brands have power. Power that can be leveraged either for or against the companies who own them. Smart companies market in alignment with their brand.
July 26th, 2007 at 9:52 am
I agree with you about the Phaeton, absolutely, and your comments on Grokdotcom about the level of disconnect.
Three points I would make are these:
1/ if people have that kind of £ to spend, they want a higher prestige VAG model - would buy an Audi A8 instead of a VW Phaeton (…or a BMW or Mercedes). IMO, it was a really stupid idea to try to market the Phaeton - after all, it was only ever going to cannibalise their target mkt for other prestigious VAG models such as the Audi A8 and A6.
2/There is a BIG difference between perceived brand image of older (aircooled Beetle & Camper van) and modern VW models. I’m not so sure that modern VW owners would consider themselves as purveyors of “hip and cool - in an affordable non-conformist kinda way” - rather, purveyors of perceived affordable German quality and reliability.
Yes; there is still the hip unconformist aspect to VWs - but this only applies to the older aircooled models (Beetle, Camper Van) - which,interestingly, the franchised dealers don’t touch in terms of repairs/have limited parts supplies, mainly because (shock!horror!) the majority of people who own the older models don’t really have the kind of £ to spend (- ie, the older VWs are a relatively cheap entree into the world of classic cars)
What’s also interesting is that there has been a huge resurgance in recent years in the popularity of camper vans (*nb see massive prices they are going for on ebay - eg up to £30k), but again this has more to do with the perceived ‘cool’ lifestyle.
2/Re level of disconnect: IMO, part of the problem is that whilst there is a very strong level of branding and marketing coming from a centralised level (Volkswagen Audi Group) this does not filter down to the activities of franchised dealers whose actions towards their customers and even their marketing activities (ie, on a franchised,more local level) are nowhere near as strong or as compelling. You only have to read through all the different VW and Audi forums to see that there is a level of discontent and this applies not only to the level of service at franchised dealers but also with regards to perceived *less than desirable* aspects about the cars themselves. I really wonder if they ever read these forums……???
December 9th, 2007 at 1:02 am
vw beetle part…
Unfortunately, they will also have very little body….