Marketing Mix of Volkswagen

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Volkswagen is among the largest auto manufacturers in the world with a strong global presence. The company has its headquarters in Wolfsburg, Germany. Its main production plant is also located there. The portfolio of Volkswagen includes 12 brands and more than 70 different models. It has brought products in every major segment and nearly all countries around the world. The two largest markets of Volkswagen are China and Europe. In 2019, the company experienced growth in total vehicle deliveries as well as net revenue. The brand portfolio of Volkswagen includes some leading premium models like Audi and Porsche. One of the key factors driving the growth of Volkswagen is its focus on innovation. In 2016, it embarked on an aggressive route to improve its market presence by introducing more new models every year. Simultaneously, the company is focusing on adapting its product mix to the growing demand for environment-friendly models.

Target Market & Positioning:

Each of the brands under the Volkswagen Group appeals to a distinct set of consumers. VW targets various groups of consumers from the middle class to the upper-middle class and upper class. The premium brands in the group appeal to the higher-end segment of the market, whereas the smaller cars by VW target the middle-class families. Audi is a brand under the Volkswagen group whose primary target market is the affluent urban consumer. The passenger cars made by VW are targeted at the middle-class consumers looking for sturdy and safe vehicles at affordable prices. Audi, Skoda, Bugatti, Lamborghini, Porsche, Bentley, and other premium brands in the Volkswagen Group target the higher-end market or the premium buyers looking for stylish, sturdy, and classy rides.

VW has positioned itself as the passenger-friendly mobility brand for the urban masses. The automobile brand offers cars for both the price-sensitive and premium consumers. Some of the most well-known premium car brands, like Lamborghini, Porsche, and Bugatti, belong to the VW group. Apart from premium luxury and luxury, the company offers cars in the affordable range. Its comprehensive product mix and focus on quality differentiates VW from rivals.

Read a marketing mix of Volkswagen including the four P’s- Product, Place, Price, and Promotion.

Product Mix:

Volkswagen is one of the largest auto manufacturers in the world. Its product range is also among the broadest in the industry with more than 70 different models ranging from family cars to SUVs, premium and luxury cars as well as trucks. There are 12 brands in the product portfolio of Volkswagen which include:

  • Volkswagen
  • Volkswagen Commercial
  • Audi
  • SEAT
  • Skoda
  • Bentley
  • Bugatti
  • Lamborghini
  • Porsche
  • Ducatti
  • Scania
  • Man

The Volkswagen Group has divided its business into two divisions including the automotive division and the financial services division. The Automotive division of Volkswagen includes passenger cars, commercial vehicles, and the power engineering business areas. This division is engaged in the development of vehicles and engines, production and sale of passenger cars, light commercial vehicles, trucks, buses, and motorcycles as well as genuine parts, large-bore diesel engines, turbomachinery, special gear units, propulsion components, and testing businesses. VW is also adding mobility solutions to its range of products. The financial division of Volkswagen is engaged in dealer and customer financing, vehicle leasing, direct banking & insurance activities, as well as fleet management and mobility offerings.

Place:

Volkswagen has its headquarters in Wolfsburg, Germany which is also its largest manufacturing location. The company has maintained a strong global presence through an industry-leading network of dealers and distributors. The company has its manufacturing locations spread worldwide. It has 124 manufacturing locations in 20 European countries and 11 other countries in the Americas, Asia, and Africa. Total group deliveries to customers rose to 10.97 million in 2019. China and Europe are the leading markets of Volkswagen. However, the company has also maintained a strong presence in North America.

Price:

One of the leading sources of Volkswagen’s competitive advantage is its large product portfolio that includes around 365 models. The Volkswagen group caters to nearly every major market segment. While on the one hand, it has brought a large range of competitively priced family cars, on the other, its product portfolio also includes industry-leading premium and luxury cars like Audi, Lamborghini and Bentley. So, with regard to pricing, the company follows a varied pricing strategy that allows it to cater to the needs of various segments of customers. Apart from selling to middle-class consumers that want innovative models at affordable prices, it also sells to the higher-end consumers.

Promotion:

Volkswagen is a well-established automobile brand that enjoys strong brand recognition in most corners of the world. Several of the brands in its product portfolio are highly recognized and market-leading brands like Audi and Porsche. However, the company also invests in advertising and promotions. According to Statista, the company spent around $5.7 billion on advertising and promotions in 2018 globally. The company uses mainly digital channels for marketing and promotions. Apart from its own website, Volkswagen uses social media for customer engagement and promotions. However, the company also promotes its brand and products through other channels like sponsorships, motorsports, and media events to grow brand awareness.