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Beetle Case

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INTRODUCTION

At a time when American¶ were skeptical about the purchase of imported cars, due to lack of availabilityof spare parts and costly repairs, heightening, Germany¶s existing image problem in the market,Volkswagen introduced the Beetle in 1949 which turned out to be a phenomenal success andenvisaged a cult- following by the 60s. However due to factors, such as Deutsche Markappreciation, declining hatchback popularity, new environmental legislations all led to a dramatic declinein the sales of the Volkswagen Beetle. The sales after peaking in 1968, died out completely by 1981.Subsequently with a renewed focus to leverage a no. of value propositions from the old beetle suchas strong heritage value, focus on unique driving experience and delivering German technology atan affordable value, the company decided to re-model the Beetle to incorporate design features such as ±honest, reliable, simple and original to design the New Beetle. After meeting with success throughits initial promotional campaigns, the company¶s marketing manager Vanzura had decided to target theBaby boomers with a proposition aimed at µindulging in nostalgia. While rival companies spent upwardsof 100 million dollars towards promotional budget, Vanzura would have to content with 25% of thetypical budget size, which would further shrink if Vanzura would have to allocate dollars towardspromotional expense of the New Passat which had debuted just 5 months ago. With this constraint on itsbudgetary resources, the company marketing manager set out to decide the marketing strategy to befollowed for the new Beetle. * To illustrate the development of target market segments * To link the processes of market segmentation, market targeting & product positioning

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