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Volkswagen's New Beetle: Problems and Solutions

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Volkswagen's New Beetle: Problems and Solutions
1- Problem Statement
a) Defining the Problem. Volkswagen's core problem is to decide whom to target and how to communicate the New Beetle's benefits and characteristics, utilizing a launching campaign with a limited budget, which implies deciding which aspects of the product to emphasize, media to use, price to determine, and positioning to use, consistent with the new brand message the company wants to transmit its customers.
b) Effects and Consequences. A research conducted showed mixed reviews and opinions about the car. The target market encompassed Volkswagen's core audience of 18 - 34 years olds and baby boomers. Buyer's characteristics were identified as confident, individualistic, and a desire to be the center of attention. In addition, Volkswagen felt it could leverage the nostalgia surrounding the car. However, appealing to young adventurous individuals and nostalgic baby boomers seems to be contradictory. If the company is not able to target the market appropriately, the brand will be inconsistent, misleading customers. Volkswagen is aiming to make its brand relevant. To achieve this, they have to align with market conditions and trends. An improper segmentation would result in an inadequate association of characteristics of the car, with the target market destroying brand equity. In addition, the company has to decide the media required to publicize the car. Utilizing TV campaigns they will certainly reach a broader customer base. Utilizing print advertising they will reach more specific and demographic segmented customers. The issue is to adequately balance the media channels to be used to target the right market. On the other hand, price will be one of the most important variables that will determine segmentation used. If the company overprices the New Beetle, the young segment of customers associated with the car would be discarded because they would not afford it, but if they underprice it, uniqueness characteristics would be deteriorated, and
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