Volkswagen_Strategic_Situatuon_Patryk_Borkowski_144008 by xuyuzhu

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									       Marketing Plan for the
         Volkswagen AG
            Strategic situation of the company



Author: Patryk Borkowski 144008




                                       30th May 2012
Patryk Borkowski 144008




                             AP Degree in Marketing Management




 Author: Patryk Borkowski 144008

 Assignment: Final Project

 Supervisor: Erik Løvgren Brejner

 Characters: 94 568

 Submitted: 30th of May 2012




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Contents
1. Introduction .............................................................................................................................................. 3
   1.1 Purpose of the project ........................................................................................................................ 3
   1.2 Problem formulation........................................................................................................................... 3
   1.3 Delimitation ........................................................................................................................................ 3
   1.4 Methodology....................................................................................................................................... 4
       1.4.1 Quality assessment and source criticisms ................................................................................... 4
2. Situational analysis.................................................................................................................................... 4
   2.1 Internal marketing audit ..................................................................................................................... 5
       2.1.1 Marketing Mix 4P ......................................................................................................................... 5
       2.1.2 Porter’s Generic Strategies .......................................................................................................... 9
       2.1.3 Product Life Cycle ....................................................................................................................... 10
       2.1.4 Boston Consulting Group Growth – Share Matrix ..................................................................... 11
       2.1.5 Value Chain ................................................................................................................................ 13
       2.1.6 Ansoff Growth Strategies ........................................................................................................... 20
   2.2 External situation of the company .................................................................................................... 20
       2.2.1 PEEST analysis ............................................................................................................................ 20
       2.2.2 Porter’s Five Forces .................................................................................................................... 25
   2.3 SWOT analysis ................................................................................................................................... 27
3. Cultural analysis of Poland ...................................................................................................................... 28
4. Market Research ..................................................................................................................................... 32
5. Consumer buying behavior ..................................................................................................................... 38
6. Conclusion ............................................................................................................................................... 41
Bibliography ................................................................................................................................................ 41



Figure 1: Product Life Cycle of the Volkswagen Beetle .......................................................................... 11
Figure 2 Sales of automobile brands in Poland:...................................................................................... 22
SWOT analysis of the Volkswagen .............................................................................................................. 27



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1. Introduction
The Volkswagen Group is one of the world’s leading automobile manufacturers and the largest
carmakers in Europe. Company owns ten car brands from seven European countries :
Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Volkswagen Commercial
Vehicles, Scania and MAN. Besides automotive industry, company operates also in financial
sector.

Every car brand operates as independent unit with unique portfolio. Products are differentiated
from low-consumption small cars to luxury one. Commercial vehicle sector offers ranges from
pick-ups to buses made by Volkswagen and heavy trucks made by MAN and Scania.

Firm has 94 production plants around entire Europe and 8 in the Americas, Africa and Asia.
Labour power is estimated to 501,956 workers worldwide and production to 34,500 vehicles
every single day. The Volkswagen Group exists in 153 countries so far.

Project describes company strategic situation and includes marketing plan of the Volkswagen.
(The Group)

1.1 Purpose of the project
The purpose of the final project is to analyze the Volkswagen brand situation and overall
performance on Polish market. Materials supplied by The Group allow making detailed research
on European market including products descriptions and sales. In order to evaluate, marketing
plan should be made.

1.2 Problem formulation
The main problem of the project is:
‘What is Volkswagen strategic situation on Polish market?

To answer the main problem more additional problems have to be formulated:
- What is company current internal and external situation?
- What is the buyer behavior for specified products?
- How other brands from The Volkswagen Group influence Volkswagen?
- Which media shall Volkswagen use to promote their products?

1.3 Delimitation
A materials obtained from the Volkswagen Group contain products available in Polish, therefore
products from other markets are not considered. Country in which Volkswagen will be analyzed
is Poland. Economic figures and ratios only from 2010 and 2011 are considered in this project.
Law issues like TORT, trademarks are not considered in this project. Capital investment is also
not conducted in this project. Targeting, segmenting and positioning is also not consider.


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1.4 Methodology
To find out company current internal and external situation it was decided to use various
marketing models. Current internal situation was examined using desk research method basing
on secondary data obtained from The Group. Annual Report, Sustainability Report, Interim
Report, The Group website, Volkswagen Poland website and Volkswagen International website
were used as a verified secondary data. To analyze current internal situation of the company
models like 4P marketing mix, internal marketing audit, value chain, Porter’s generic strategies,
Product life cycle and Boston matrix were used to compare competition among The Volkswagen
Group.

In order to analyze current external situation of the company, Porter’s 5 forces and PEEST
analysis were conducted. After analyzing marketing audit, SWOT analysis was carried out
including strength, weaknesses, opportunities and threats which gave feedback about firm
competences and future focus.

For cultural part, Hofstede dimension and Edwart T. Hall theory were used. Furthermore primary
market research was made to find areas in which company has to advertise and to construct
buying behavior model. Market research allowed to obtain quantitate and qualitative through
online survey.

1.4.1 Quality assessment and source criticisms
Most of the information in this project is based on original documents delivered by the
Volkswagen Group like. Annual Report, Sustainability Report, Interim Report. Therefore it is
considered as verified sources of files. In case of lack of information in above reports, it was
necessary to use Volkswagen Poland and Volkswagen International websites, which are also
considered as a highly accurate source of information. Model and theories project contains are
learnt throughout AP Degree in Marketing Management programme. Principles and Practice of
Marketing by David Jobber was a basic tool to work on models included in methodology. Market
research bases on data collected, personal observations and beliefs, thus it cannot be considered
as 100 % accurate and trustworthy.


2. Situational analysis
Situational analysis allows examining current situation of the company. It is a plan that answers
questions:

   Where are we now?
   How did we get here?
   Where are we heading?



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Above analysis take into consideration two audits. Internal marketing audit and external
marketing audit.

2.1 Internal marketing audit
This part takes into consideration all activities that influences company from inside. By using
various models and theories it will be able to find company strengths and weaknesses and put it
into SWOT analysis.

2.1.1 Marketing Mix 4P
Source of the Marketing Mix 4P: (Jobber, Competition and Marketing, 2007)

Product: Volkswagen offers broad range of cars on Polish market. Nowadays, customer can
choose between 14 basic models.

Volkswagen up! – Introduced in 2011, up! is the smallest city car from entire portfolio of the
Volkswagen. Has only 1.0L engine, which makes it very economical and convenient in big
cities. Besides small size, up! offers safety performance as it was proven during crash tests and
up! got 5 points out of 5. Car is mainly aimed for women’s and youngsters. There are 4 version
of this model: take up!, move up!, high up!, black & white up!. Main competitors are: Skoda
Citigo, Seat Mii, MINI Cooper, Citroen C-Zero, Peugeot 107. (Volkswagen models )

Volkswagen Polo – Another car made by engineers from Wolfsburg. Polo has 5 different
version: Trendline, Comfortline, Highline, CrossPolo and GTI. Trendline, Comfortline and
Highline differentiate only by interior and still maintain Polo as a compact car. Customer can
choose between various range of engines for instance petrol, diesel and diesel Blue Technology.
GTI is a sport version with aggressive look and CrossPolo is considered as a small SUV.
Moreover, Polo was granted a World Car Of The Year in 2010 due to quality, safety and
ecology. Main competitors: Audi A1, SEAT Ibiza, Ford Figo, Nissan Micra. (Volkswagen
models )

Volkswagen Golf –First Golf was introduced in 1974, since that time company carry on to
produce this successful model. Basic Golf is a compact car with timeless design, excellent
driving properties and functionality. Moreover, Golf was chosen safest car in 2009. Golf has also
estate version called Variant, Cabriolet which is a convertible version and mini SUV version
called Plus. It is possible to acquire Golf Variant and Plus in Trendline, Comfortline and
Highline interior versions, but compact Golf has also GTD (sport diesel version), GTI (sport
petrol version), GTI Edition 35 (anniversary edition), Golf R (racing version).
It is possible to get with petrol and diesel engines. Main competitors: Skoda Fabia, Audi A3,
Ford Fiesta, Peugeot 307. (Volkswagen models )



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Volkswagen Beetle – The Beetle appeared in 1998 and is the resurrection of the legendary Beetle
produced since 1938. Design and stylistics relate to old version. The biggest advantages of the
Beetle are unique modern design which remind about legendary Beetle, comfortable and
innovative due to 1.6 TDI Blue Technology engine that burns only 4.3L of diesel per 100 km.
The Beetle is offered in 3 versions: Beetle, Design (different interior and lamps) and Sport
(different tires, interior, exhaust, spoiler and engine). (Volkswagen models )



Volkswagen Tiguan – SUV made by Volkswagen in 2008. Company promotes Tiguan as
universal car. Potential owner has a possibility to choose between six versions: Trend & Fun,
Track & Field, Sport & Style, Track & Style and two special cities editions : CityLine and
CityStyle. Every version set up car either for road and off-road environment. Broad variety of
engines gives a chance to take supercharged TDI diesel engines and TSI petrol engines and also
Hybrid. Main competitors: Skoda Yeti, Audi Q5, BMW X3, BMW X5, Seat Tribu.
(Volkswagen models )



Volkswagen Scirocco – The third generation of Scirocco was introduced in 2008. It is classified
as sport coupe. Besides basic standard version, customer can obtain Scirocco R with stronger
engine, different lamps and new interior. Volkswagen offers Scirocco only with turbocharged
engines, TDI diesel one and TSI petrol. (Volkswagen models )



Volkswagen Jetta – 5 doors car from sedan segment made by Volkswagen Available in standard
version or Optimum version. Firm describes Jetta as dynamic and modern limousine which
provides comfort and versatility. All versions are available with turbocharged diesel and petrol
engines. Furthermore, Jetta scored 5 out of 5 points in Euro NCAP test. Main competitors:
Toyota Corolla, Opel Astra H, Honda Civic, Skoda Octavia, Audi A4. (Volkswagen models )



Volkswagen Touran – Volkswagen Touran is a minivan. Touran is available in three versions:
Trendline, Comfortline and Highline. Car is mainly aimed for families due to safety, ecology,
comfort and practice solutions for instance it can take up to 7 persons. Another advantage is that
it is the most ecological car in the world which has space for 7 persons. 1.6 TDI Diesel engine

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burns only 4,6L per 100 km. Main competitors: Citroen C4 Picasso, Ford C-Max, Renault
Scenic, Opel Zafira. (Volkswagen models )




Volkswagen Eos – It is a 2 doors coupe – cabrio car. Stylistics is very similar to other products
from German manufacturer. Car offer sport performance due to turbocharged engines, but in the
same time big ecology if it comes to fuel consumption. Moreover, it can take 4 persons, relative
high amount of space for passengers comparing coupe-segment. Eos needs only 25 seconds to
attach roof. Furthermore, roof is strengthened which provide better protection for passengers
during overturns. (Volkswagen models )



Volkswagen Passat – Car is offered in 3 versions: Passat Limousine, Passat Variant and Passat
Alltrack. Limousine is a standard 5 doors sedan. Company describes car as innovative and
comfortable limousine equipped with ecological BlueMotion engines. Variant is a universal
estate based on Limousine floor plate. Version is mainly aimed for families, due to fact that
Variant offers spacious interior. Passat Alltrack is very similar to Variant, the only difference is
made for off-road, so can be compared as border between SUV and sedan. Besides, Alltrack has
4MOTION four-wheel drive. All versions are equipped with various assistance options for
instance: active cruise control or light assistant that turns within lighting beams. (Volkswagen
models )



Volkswagen CC – It is a sport fastback limousine introduced in 2008. Firm describes as a
comfortable and spacious limousine with extraordinary design aimed for the richest customers.
Customer can choose between two diesel engines 2.0 TDI providing 140 horsepower or 170
horsepower. If it comes to petrol CC has two TSI turbocharged engines providing 160
horsepower and 210 horsepower. Another advantage of CC are unique assistance systems like
Side Assist and Lane Assist. Car also monitors situation of driver and if it is necessary informs
about need for rest. More about assistance is in technology section. Main competitors: Mercedes
CLS, Audi A7. (Volkswagen models )



Volkswagen Sharan – Depending on customer preference Sharan can be for 5 persons or 7
persons. It is available in 3 versions: Trendline, Comfortline and Highline. This van has 2430
liters boot and spacious interior that gives comfort to passengers. Volkswagen believes in details

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that is why Sharan has leather finishing on steering wheel and knob gearbox, while seats are
made from the most comfortable materials available on the market. Airbags located in front,
sides and in curtains has to secure all passengers in the car. Customer can choose between petrol
and diesel economical BlueMotion Technology engines. Main competitors: Ford Galaxy,
Renault Espace, SEAT Alhambra. (Volkswagen models )



Volkswagen Touareg – The exclusive SUV available only with the strongest engines produced
by Volkswagen: 3.6 V6 FSI turbocharged petrol engine. 3.0 V6 TDI and 4.2 V8 TDI are
turbocharged diesel engines. Even though engines are powerful and have huge capacity, Touareg
still remains economical in SUV class. 3.6 V6 FSI burns only 9.9 liters of petrol per 100 km
emitting only 236g CO2. This luxury SUV gives customer diversity, due to fact that can be used
on normal roads and in the same time also off-road. Traction control and ability to overcome the
steep driveway make Touareg the universal car for everyday use. Main competitors: Audi Q7,
Porsche Cayenne, Mercedes Benz M, Jeep Grand Cherokee. (Volkswagen models )

Price:

Volkswagen products price is very varied. Main factors that decide about prices are: product,
engine, interior version and least extra accessories. In this field potential customer has a broad
choice within plenty of opportunities.

From my primary research it seems to that Volkswagen products are very competitive on Polish
market, due to comparison company products to the products offered by producers from the
Volkswagen Group like Skoda, SEAT and Audi. Tendency within the Group makes Skoda as
cost leader. Then, SEAT almost on the same place as Volkswagen due to very similar price of
product. In the end there is Audi, which becomes more and more prestigious brand. Skoda takes
advantage of it, as it is number one on Polish market if it comes to sales.

Company applies different strategies to bring new customer for instance seasonal promotion or
giving possibility to take a car on a credit, leasing or providing insurance.
Volkswagen by pricing strategy tries to give a view of a stable, reliable car that everybody can
afford. (Prices)

Promotion:

Company uses different media to promote themselves. Main tool are company sites on Internet,
where customer can find out direct information about company, existing products, prices, local
dealers, services. Local representatives take care to keep sites updated. Besides, Volkswagen
instantly works on various commercial and posts it on social services like YouTube, so every

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customer can find about innovation and new models. Furthermore, brand has an account on other
social services like Facebook and Twitter where users can share photos or writes stories about
their experiences with brand. In addition company releases e-reports and magazines so
everybody can stay tuned up.

Firm possess funds to launch a high advertising campaign through television. In Poland usually
this spots takes around 30 second aiming to bring attention and promote special offers. During
such spot company do not try to focus on brand in general, but on promotion of specific product.
Local dealers use other media for instance radio and newspapers. Another way is the
international motor car shows. It is a good tool for a specific products premiere.

Volkswagen is also an international well known company operating on many markets. Even
German translation word Volkswagen means peoples-car which basically describes company
approach to the customer. Moreover Volkswagen has a long history and since time it started
producing car and many cool products appeared and still are associated with Volkswagen for
instance: The Beetle or Transported called ‘Bulik’ and cucumber. Company uses this advantage
and reverts to it by introducing new versions of the Beetle. More about the Beetle in Product Life
Cycle section. (AG, 2011)

Place:

Volkswagen has factories all over the world including Poland. Some of them are producing parts,
while other factories are responsible for assembly. Location is variable and depends on model
which is produced in specific factory.

Products made by the Volkswagen Group are available in outlets. Company sales their product
under own name through dealers network in entire country. In Poland there are 74 Volkswagen
dealers settled up in bigger towns covering all voivodeships of the country. (Dealers )

2.1.2 Porter’s Generic Strategies
Source of the Porter’s Generic Strategies: (Jobber, Competition and Marketing, 2007)



Volkswagen – as it German translation says peoples-car, continue to make cars affordable for
everybody. Even though competition in automotive sector is relative high and tough, company
put efforts to maintain the idea and keep product in affordable and competitive price.

But in the same time Volkswagen keeps improving actual products and applies process of instant
innovation. New technologies, more efficient engines and completely unique assistance systems
are only significant examples of implementing differentiation leader approach. Another thing


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that needs to be taken to the consideration is existence in many markets. Volkswagen as an
international company focuses to keep their products available everywhere in the world by
overcoming many cultural barriers. Therefore company uses broad market scope.

Due to broad portfolio German car manufacturer can meet demand of all customers. Potential
customer has variety of choice between many product and options offered by Volkswagen for
instance interior version, capacity and type of engine and extra equipment.

Moreover, Volkswagen differentiates from other competitors by having long developed value
chain including after sales services and financial consultancy due to Volkswagen Bank and
Volkswagen Financial Services AG. It also has an impact on automotive market, because there
are many other car companies that can provide car from same sectors. High rivalry in the
industries keeps all mayor players under pressure. In order to maintain on the market firm
became a differentiation leader and should continue this strategy on every market, not only
Poland. (Jobber, Principles and Practice of Marketing , 2010)



2.1.3 Product Life Cycle
Source of the Product Life Cycle: (Jobber, Competition and Marketing, 2007)



First of all Volkswagen has many products in portfolio to target different customers and meet
their demands and needs. Every product has a specific and unique life cycle. In general, Product
Life Cycle within car industry takes from few years to event half century for specific models.
Every single product starts from introduction phase, where product is being developed and
introduced to the market, prize is settled up high and sales are restricted to only few customers
which want to get product as fast as possible. Profit is relative low due to introduction costs.
Growth phase can be definite as putting strong resources on advertising and building awareness.
Prices are more like to fall down. Maturity phase occurs where product range is going to be
extended for instance special versions or anniversary versions of cars. More promotions and
discounts appear and company counts for bigger profits. Saturation phase base already on brand
image, company put efforts to reduce cost so prices can be more flexible, but in the same time
profits should be same as in Maturity phase. Decline phase is a time when company tries to




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harvest old model, and slowly prepares to substitute it with new one.




Figure 1: Product Life Cycle of the Volkswagen Beetle
Picture above shows Volkswagen Beetle – Product Life Cycle. This model was developed in
middle of the XX century and still is produced. During this time car went through various
modifications and face-liftings. Moreover, it is a longest Product Life Cycle within automotive
industry with most sales and still is carrying on.

2.1.4 Boston Consulting Group Growth – Share Matrix
Source of the Boston matrix: (Jobber, Competition and Marketing, 2007)



The model was developed to help companies to categorize their product portfolios to be placed
in a two-by-two matrix. These are - market growth rate which shows the attractiveness of the
market and second is relative market share which is an indicator of competitive strength. The
Boston Matrix is used to measure the performance and categorize this performance in to market
share and growth rates.

The Volkswagen Group as a whole is to divide its top-selling different product-lines in to four
ways accordingly. Each car brand will fall under a different category, depending on the
performance and potential of a particular product for the specific and intended market. As
“stars”, “problem children”, “cash cows” and “dogs”. (AG, 2011)

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Dogs: low market share/low market growth

SEAT- Although sales have been poorer compared to other of Volkswagen’s brands, sales by
vehicle have grown only be a mere 7 within the period from 2010 to 2011.

These products are now weak and are competing in low-growth markets. Market share is not
changing or getting lower because of other companies’ activities and the growth is low because
autumn collections are taking over the place of the main source of income. Now company has to
make a decision what to do with these products.

One of the possibilities is to harvest or divest. In this situation they could be combined. Divesting
would mean that company is getting rid of the some SEAT product-lines and using the resources
and managerial time to focus on other products which are more relevant for a specific market.
Harvesting would mean that SEAT collection is in the end of its life cycle therefore they are
being discounted, while extracting the maximum profit of its sales. (AG, 2011)

Problem children: low market share/high market growth

This programme has the lowest profitability and management at Volkswagen spends a lot of
resources to maintain market growth. Management should think of where to invest and what is
really a problem children. It would not be a good idea to invest in Skoda collections because
some of their product-lines their life cycle is short, relative to the other brands. So the best way is
to think which product-lines are applicable for each market.

The current operating market for Skoda is starting to grow however, company is not investing
(building) to increase market share because it would cause consumption of resources but little
return since Skoda is not the main focus of the customers, it is assumed because the market
might have opted for more high-end brands such as Audi. However the Skoda collection would
be more lucrative to invest due to the return of the product.

Also there is an option of harvesting. In this situation Volkswagen can raise the prices for Skoda
product-lines, while minimizing the marketing expenditures therefore counting on the natural
growth of the demand. Harvesting seems to be the most appropriate because this would avoid
elimination of products which may turn in to stars in other season. (AG, 2011)

Stars: high market share/high market growth

The Volkswagen Group is aiming to achieve high market share in many emerging growing
markets for Volkswagen –passenger cars. The Golf versions, Passat and Sharan van are the stars
in the Volkswagen –passenger cars selection.




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The decision what to do with these products has to be made. Build sales and market share. To
build market share, company should think of offering customized model ranges for products such
as the Passat and Sharan van, offer a Sport, Cruise and City versions and use more effective
promotional techniques within some markets such as Poland in order to attract and win
competitors’ customers. This again would lead to higher sales.

Company has to remember that the life cycle will not last forever and eventually Volkswagen -
passenger collection will be replaced, so company has to think of increasing the leadership
position in the market. When the life cycle of current Volkswagen – passenger cars collection
will end, the marketing should be ready for the launching of new line of products. That will be
more advanced technological. This will help to maintain and secure the position in the market
and repel the competition. (AG, 2011)

Cash cows: high market share/low market growth

These are the future stars. From the Boston Matrix we can see that Audi collects the most
revenue and are market leaders and prospects for further growth appears good. Resources can be
invested to build sales, maintain and increase the leadership position; competition should be
resisted because this is the cash cow of the future. This would help to maintain the market share
and possibly the supplementing role for its stars – Volkswagen –passenger cars.

Also the possibility is to use excess money to fund research and development for new products
and invest in problem children that would be Skoda.

This customized matrix for each of Volkswagen- Group’s car brands can be used as a tool for
developing effective marketing mix for each marketplace. (Jobber, Principles and practises of
Marketing; Boston Consultng Group Growth-share Matrix, 2010) (smartdriver-pl) (International)

2.1.5 Value Chain
Source of the Value Chain: (Jobber, Competition and Marketing, 2007)



This model allows defining company core competences by analyzing primary activates for
instance: Inbound logistics, Operations, Outbound logistics, Marketing and Sales. Moreover
model takes into consideration also Support activities like Procurement, Technology
development, Human Resource Management and Firm infrastructure. It is a helpful tool to find
company strength and weakness on internal level. (Jobber, Principles and Practice of Marketing ,
2010)




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Inbound logistics:

In general automotive industry right now is mainly using materials like steel, plastic, copper etc .
By time going and constant innovation process and ecology care make this materials gets slowly
substitute by other materials like aluminum, lithium and even cobalt. Volkswagen do not owe
any mining subsidiaries therefore is addicted to suppliers. To secure production continuity
company has to secure process of getting raw materials. That is why German manufacturer come
up with raw materials strategy. This includes IT system called Central Procurement and Treasury
System.

Central Procurement and Treasury System was developed in 2007. It base on calculating raw
materials risk which help to define and evaluate a long-term strategy for raw materials and
production. System includes supply risk and cost relevance leading to concrete orders being
issued by Research & Development department for the development of alternative ways to
acquire resources or to find substitutes. Purpose is to secure a safeguard of raw materials delivery
and in long-term production as it has huge impact on it. System was expanded in 2011 and used
for instance for calculating a long-term raw materials risk forecast related to electro mobility.
Raw materials risk analysis is a key tool in enabling more secure and economic supplies of raw
materials to be assured for as long as possible. System won an in-house award in 2011. This
shows that Volkswagen gather information from early beginning of production process.
Implementing control, monitoring and risk management activities is a must be in this industry
because if any problem occurs on line of value chain it has an effect on final product for instance
time of making parts from raw materials to assembly of final product. Personally, I believe that
apply this system into company structure is very helpful and definitely necessary in such big
company like Volkswagen is. (Aktiengesellschaft, 2011 )

Operations:

An operation is the process of putting raw materials together and producing the final product. In
this case Volkswagen operations process takes place in factories that company possesses. There
are 94 production facilities in different locations. Company believes in systematic localization so
productions plants can handle themselves the value added process. This process of international
outsourcing allows reducing currency risks, transport and duties.

Different productions facilities focus on producing various car parts or separated models for
example factory in Poznan, Poland produce Volkswagen commercial vehicle called Transporter.
It creates clarity and avoids misunderstanding in production process because factories know
exactly what to do and focus on one task. Another advantage is long-term possibility to change

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as global economy demands for instance in BRIC countries. If production of specific model will
be cheaper in Brazil than in Germany it will be wiser to increase production in boosting
economy. The only thing that Volkswagen can do on this field is to monitor actual situation,
increase or decrease productions and employment depending on situation and finally invest in
technology, improve methods of production and build up new facilities. (Aktiengesellschaft,
2011 )

Outbound logistics:

This section focuses on delivering product to the retailers, outlets, stores or DTC. Firstly it is
important to state that company has own logistics department called Volkswagen Logistics
which deliver products to Volkswagen outlets. As it was stated before different productions
facilities produces various parts and models. From those facilities cars are ready to be
transported into outlets. Volkswagen Logistics uses mainly road transport and big trucks to
transport ready to use products.

Outlets are franchised and in this project are considered as dealer’s network, as we can see every
Volkswagen car dealer is called differently. Franchisers have to buy a car from factory, afterward
it is only up to him how he can promote it locally to create brand awareness about actual
products and promotions. There are 74 Volkswagen saloons in Poland settled up in biggest cities
around entire Poland. Thus potential customer knows where to find a product and it is accessible
for everybody. Dealers network is also a huge advantage for Volkswagen because private
persons cars about image of the brand and their own salary. It helps company due to it is a local
persons which possess knowledge about specific region where saloon is located, therefore they
already know demographics, competitors, age structure in specific location. (Aktiengesellschaft,
2011 )

Marketing and Sales:

This section describes pricing, promotion and selling the final product within value chain.
Volkswagen makes adverts spots independently. Usually spots describe specific product or new
technology invented to the car. They are played on TV stations, Internet websites, YouTube.
Social services where Volkswagen exists like Facebook and Twitter allow users to share
experiences with Volkswagen brand. It is a great tool to create a relationship or brand loyalty
with actual customers and acquire new one.

Local dealers promote actual products informing about prices by using other media. Catalogs
describe products, configuration, engines, innovation and assistance systems. The other media
used by dealers is radio. In big shortcut listeners get information about actual promotion for
specific products, prices, leasing and localization of the dealer. Finally, local dealers use local

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newspapers for same reasons as local radio.

If it comes to marketing and sales cooperation and proper communication within departments
plays a key role. It extremely important to keep information flow, so everybody know what to
do, which advertising strategy prepare etc.

Service:

This section describes aftersales services and hotline. To start with Volkswagen produce original
spare parts for own cars. Customer can order it through website or local dealer. It is a great
advantage because no misunderstanding appears comparing to ordering car parts by customer
who do not know so much about cars. Another thing is that original Volkswagen services are
located in most cases next to local dealers network. Basically after ordering a spare part it can be
mounted into the car directly afterwards by specialist crew. Garages are located next to saloons,
it is easy way for customers to find a best place to service a car due to staff that knows models.
In the other hand it brings additional funds for the company and it is also a best way to collect
primary data as staff can also make survey among users of Volkswagen. Products offered by
company have also a guarantee period, when can be serviced under Volkswagen garages.




Procurement:

Purchasing function is dealt by purchasing department. As it was stated in Inbound logistics
section Volkswagen has to secure continuity of whole production and entire value chain model.
To do so it is necessary to keep strict control and monitoring process of getting raw materials
like steel, plastic, rubber, lithium and aluminum. To do so company invented Central
Procurement and Treasury System in 2007 to ensure if all resources are actually available to
acquire to make sure that none of the factories suddenly will stop production process. System
also looks for alternative sources where resources can be obtained. Moreover, location of factors
makes an impact on procurement. There are three examples of successful production facilities
that also have a huge impact on suppliers. For instance: Puna in India, Kaluga in Russia,
Chattanooga, Tennessee in United States of America. Puna besides creating 12,000 new
workplaces also allowed creating an agreement between Volkswagen and 58 new local and
regional suppliers. Kaluga production facility gave 4,370 new workplaces created indirectly
through secondary employment effect and allowed to create business relationship with 12 new
local suppliers. Finally Chattanooga, Tennessee made an agreement with new 17 suppliers.
Volkswagen uses innovative IT systems and localization factor to make sure that there will be
enough raw materials to carry on with production. (Aktiengesellschaft, 2011 )


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Technology development:

This section describes processes within Research & Development and strategies with it. As it
was stated earlier, Volkswagen focuses on constant improvement. Company believes that
through innovation process it is possible to make cars safer, more reliable and efficient. That is
why Martin Winterkorn, said that company is aiming for the leader position within automotive
industry. ‘Till 2016 we would like to invest 62,4 mld Euro for Research & Development to
become number one.’ Volkswagen continue to develop new technologies, as an example could
be downsizing all turbocharged TDI diesel and TSI petrol engines, but still remaining
performance and improving ecology and economic of products offered. BlueMotion
Technologies engines still are being improved, so we can expect more efficient power units in
future. Another example could be assistance services like Park Assist which makes car
automatically seeking for the space to park and park afterwards. Lane Assist keep car on the
same lane on highway. Coming/leaving home will keep a light around the car after leaving it or
before entering. Above examples are only significant examples and burden of proof that
company really bet on technology and keep it as a key factor to overcome competitors and bring
new customers. Appendix shows all places where configuration of Research & Development
takes place. (Stefan Schmid, 2008) Appendix 1



Human resource management:

This section describes Volkswagen approach to employees, motivation, expectations and what
company can offer. To start with Volkswagen is aware that people create big companies. They
are vital part of it and fundamental basis. Company has 513,000 employees around whole world,
but almost half of them work in Germany. Firm seek for a people who can give best performance
out of them, but still maintain demand and ability called ‘flow-channel’ as it gives best results
and performance to allow company boost up. Cooperation and leading by example is another
aspect of Human resources department in Volkswagen. Principle says: ‘Lead, Demand and
Promote’ which means in order to achieve success company need to have stable cooperation
between different departments for instance management and workforce. (Volkswagen Human
Resources )

Volkswagen introduced tool called ‘mood barometer’. It is a kind of anonymous survey among
all employees within company, so everybody has a possibility to give a feedback about current
situation, tasks and assignments etc. Furthermore, actively get involved into company top
management due to sharing own experiences and help in building company bigger and stronger.
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In such big company as Volkswagen is, where people are vital power of the company, top
management has to respect them and come up with sort of solutions if any problems occur in
order to keep motivation and satisfaction level among entire workforce. Monitoring satisfaction
level is first step to improve communication between workforce and top management as
company is international and has facilities all over the world and people working together come
from different countries, cultures, have different background and speak different languages.

Another aspect is corporate social responsibility. Volkswagen respects law and social security on
at least minimum basis, as a result could be a ‘Declaration on Social Rights and Industrial
Relations’ which provides friendly work condition environment to the employees of
Volkswagen. Company tries to solve any problems on this flattener by active dialog between
management and Works Council. Moreover, dialog gives an opportunity to realize future goals
and prepare everybody for different strategies, processes and approaches for instance innovation,
training, development. (Volkswagen Human Resources )

Firm tries to provide best working condition and that is why ‘Volkswagen as Top Employer’
strategy was invented among structures of human resource department. It means:

      Attractive employment
      Job security
      Good working climate through leadership and communication
      Remuneration in line with performance
      Personal development opportunities
      Product and company image



Volkswagen sees that employees have an effect on production and final product. In long-term
question arise what about working-life environment. Regarding to Volkswagen website and
Human Resource subsection, it seems that company believe that work is just one part of the life,
the other part is private life. It is extremely important to find a proper balance between private
life and working environment as it provides both advantages, for staff and company. Another
flattener we will be looking at is health and safety at work. In this point company put efforts to
make sure that workers have safe place to work. Moreover, management take look on employee
to ensure that everybody stay fresh, fit and healthy. All employees have an access to information
about what every individual can do to maintain good shape. Detailed information includes also
risks and potential hazard accidents in workplace. Main purpose of all this activities is to avoid
any accidents and create a workplace as friendly, safety place to work in. Moreover, workforce
gets more motivated while they know that somebody within workplace is taking care of them.


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Another aspect we will be looking to is respect, culture and career woman. Firm gives equal
opportunities to everybody as long as represents have mutual respect, because it forms a basis for
productive climate where all employees enjoy the same opportunities. It does not matter from
which country people come from or which traditions, culture people carry on. Volkswagen is
sure that this mix in very beneficial and can bring astonishing results. Since 1980 firm has been
encouraging equity to males and females due to fact that cooperation can be crucial for both.
Furthermore, company promotes a fair workplace for both genders, so contrary part of masculine
culture is being promoted. (Volkswagen Human Resources )

Finally, development paths for current workforce and opening for students and graduates allow
persons growth to be applied. Volkswagen is opened for students by offering internships, where
students can gain practical knowledge and use models learnt throughout study programme in real
life company. During internship students got possibility to work on project and have an impact
on company life as they are next generation taking top jobs. Volkswagen has a talent programme
which seeks for the most ambitious students on universities. Moreover, company offers also a
postgraduate programmes for those who are about to finish their studies. During such programme
person is being enrolled to different departments to get a fundamental basis to work in
Volkswagen in future. Another flattener is development workforce through current position.
People who seek for vocational training can travel abroad to different departments of the
company to try themselves in different culture. It is a great challenge to learn how to overcome
cultural problems when working in group, but in the same time also get to know how to work
with people representing different backgrounds. (Volkswagen Human Resources )

To sum up, Volkswagen put resource and efforts to create best environment to work their
employees. Firm believe that must be a work-life balance and only motivated and encouraged
people are able to boost up atmosphere and performance of the company. Volkswagen also takes
care about working conditions and tries to make place to work as safest as possible. Through
vocational training and good working environment, no discrimination company wants to gather
best experts from the industry. I perceive that Human resources management play a big role and
it is a one of the answers why company is so successful on international arena. (Volkswagen
Human Resources )

Firm infrastructure:

Volkswagen AG is managed by Board of Management which is issued by the Supervisory Board
which consists of 20 people including chairman, top managers and shareholders. Top managers
are elected by workforce. Their role is to secure Volkswagen business areas and make sure that
company is on track. Besides company has all possible departments including Procurement,



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Logistics, Production facilities, Research & Development, Human resource management,
Marketing, Sales, Advertising, After sales services. (AG, 2011)

Taking everything to the consideration, Volkswagen controls almost all sections within value
chain, starting from gathering raw materials then production and finishing on sales & advertising
of ready-to-use products. Company focuses on instant improvement and wants to make the
newest technology available for customers. After sales garages help to maintain car in good
shape and provides original parts. Finally, broad Human resources department counts on people
in the entire process.

2.1.6 Ansoff Growth Strategies
Source of the Ansoff Growth Strategies: (Jobber, Competition and Marketing, 2007)



Volkswagen already exists on Polish market and has ready portfolio. Therefore, it is strongly
advised to carry on Market Penetration strategy. It means to restructure current position on
Polish market by for instance increase market share by wise pricing strategy, aggressive
advertising and sales promotion. (Jobber, Principles and Practice of Marketing , 2010)

2.2 External situation of the company
This audit gives a feedback about how company is doing in environment outside the company
and what are the external factors influencing Volkswagen.

2.2.1 PEEST analysis
Source of the PEEST anylysis: (Jobber, Competition and Marketing, 2007)



One of the first models the project will look into is called PEEST analysis. Using this technique
it will be possible to scan the external environment on the macro level. Source of PEEST
analysis: Invalid source specified.

Political factors:

Volkswagen outsources a great deal of their manufacturing outside the Europe in continents such
as Asia, Africa and South America. Due to these countries being considered as “booming
economies”, government may encourage local residents to try minimizing purchasing products
from abroad, but instead use locally produced products in order to maintain the situation of the
home market and make a higher value of the GDP. Invalid source specified.

However, these or any other legal or political constraints should not be a significant barricade to
continue outsourcing and/or sales in foreign markets.

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In certain countries such as Denmark and Norway car insurance and registration alone can
amount to the price of the car itself. These rules and regulations are becoming ever-increasingly
popular and pose a threat to sales of cars in other Scandinavian markets and places which seek to
follow such a trend. Almost all of the regulations come from consumers increasing concerns for
the environment and the concern for safer automobiles. (Highfill, Copus, & Smith, 2004)

The automobile manufacturing of Volkswagen has a huge impact on the economies where
production takes place. This industry is the major user of computer chips, aluminum, copper,
steel, plastics, vinyl, and rubber. For every autoworker, there are approximately seven other jobs
created in other industries. These industries include anything from the aluminums to lead to
vinyl. To reveal how much of an impact this can have on an economy we focus now on the
automotive industry in the Czech Republic. This is one of the key sectors in the economy,
accounting for approximately 7.43 percent of GDP and direct employment of 126,223 people in
the workforce. The Czech Republic is emerging as one of the major markets in the region in
terms of both sales and production. Skoda is the Czech Republic’s largest company by sales,
with revenue equivalent to 5% of the country’s GDP, so its performance is an indicator for the
country’s overall economy, which hinges on the export of cars, car parts and electronics. Foreign
countries that seek to increase its GDP and employment, which offer cheaper labor and resources
will therefore encourage the foreign direct investment from Volkswagen. Invalid source
specified. Invalid source specified.

Economic factors:

As an advantage to Volkswagen few markets which proved to show a decline in sales mainly in
Spain, which proved to show a decline of 16.8 %.

Taken as a whole, sales of VW however, were on the increase- despite overall motor industry
taking a dive. VW sales increased in W. Europe by 8.6 % improved sales figures. The main
brands which contributed to the sales were Audi, Skoda, Bentley and the VW commercial
vehicles. Invalid source specified.Invalid source specified.. Sales of the VW passenger cars,
such as the VW Sharan van grow tremendously in regions/ markets such as Central and Eastern
Europe, Asia Pacific and North America. The percentage growth of the following markets is as
follows:

      Asia Pacific with 17.4 %
      North America had a significant growth of 21.4 %
      Central and Eastern Europe with a larger 29.7 %

This Graph represents the sales of automobile vehicles from manufacturer to consumer,
excluding the sales to car dealers, business related sales and other forms of representatives.
Invalid source specified.

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                 4
                3.5
Sales in 1000
                 3
                2.5
                                                                                             2011
                  2
                                                                                             2010
                1.5
                  1                                                                          2009
                0.5                                                                 2009
                  0                                                             2010
                         Skoda                                               2011
                                       Ford
                                                  Opel
                                                             Volkswagen



                                               Source: samar.pl

                                 Figure 2 Sales of automobile brands in Poland:



      Although the most part of the growth came from the Central and Eastern European markets,
      there proved a decline within the Polish market. As the following figures will indicate, the Polish
      appear to have opted for the more cost-focused car brand, from the Volkswagen Group- the
      Skoda. This goes to prove that the Polish customers are evidently beginning to become more
      cost-focused. This is the strategy the Volkswagen Group use, to aim cost-focused clients with the
      Skoda, and for those seeking more luxury at an affordable cost - it offers the clients the range
      from the Volkswagen product portfolio.

      This graph proves that amongst some of Volkswagen’s top competitors the Polish market is
      leaning toward becoming more cost focused, meaning the Volkswagen brand need to strengthen
      its relationship with the market seeking more luxury and are willing to pay a little extra for it, in
      order to offer products which will suite their demands in the short to long-term demands, leading
      to winning competitors clients. However the Volkswagen groups as a whole are doing a superior
      job to respond to its toughest competition within this respective market through offering the
      Skoda to cost-focused customers. Invalid source specified.

      Ecological:

      Volkswagen has several different initiatives in operation and in prospect, with strong regard to
      the environment. Amongst the most recent and effective are:

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Climate protection & energy efficiency:

This initiative promotes the construction and design of the most energy efficient and
environmentally compatible cars. Through dealing with energy and the earth’s natural resources
efficiently and consciously, at the core of the organizations operations and strategy it achieves
does it provide eco-friendly solutions and offers.

In order to make sure this is done efficiently and effective the company takes account of
environmental impacts throughout its entire product life cycle. This takes place within the
company’s activities, from its extensive experience of environmental management and through
to its strategic environmental protection strategy which provides the foundation for the company.

Efficient power trains and fuel sources:

Volkswagen has a basic principle, which is to minimize the use of carbon energy and further
improve the efficiency of the entire power-train of its production of motor vehicles. With the
new” Volkswagen AG Fuel and Power-train Strategy” it focuses on two technologies that are to
be still in the making, in parallel and will coexist: electro-mobility and advanced internal
combustion engines. These technologies still face a challenge of switching successfully in the
long-term to sustainable carbon-neutral energy sources.

What this means for electro-mobility is there will be a shift to hydro-power, wind energy and
solar power. For the internal combustion engine, energy sources based on sustainable biomass
and biogenic fuels are becoming increasingly important.

In order to lead the future in the correct path, the Volkswagen Group is also working to diversify
its energy structure. The following measures are currently being implemented or are at the
detailed planning stage:

      Changeover from coal to natural gas: construction of two gas-and-steam turbine power
       stations, each with an output of 70 MW, at plants in Germany.

      Use of hybrid engines, the Blue motion technology – which makes the consumption of
       fuel highly efficient and top of the world’s leading technologies. For example The Polo
       Blue-Motion has a fuel consumption of 3.3 liters per 100 km and releases 87 grams of
       CO2 emissions during that distance, this makes it the most economical, fuel efficient 5-
       seater in the automotive industry.

      Participation in offshore wind farms




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Social / Cultural:

Poland is doing fine during economic crisis compare to other European countries. There are few
reasons for this situation. Firstly, it is a big country with huge and cheap labor power. There are
almost 40 million of habitants in Poland, so it is attractive market for foreign companies.
Secondly, taxation rate is relative low comparing it to for instance Denmark. Finally, location of
Poland makes this country competitive. Poland is settled up between Germany and Russia, two
powerful markets but in the same time close to Scandinavia due to sea connection.

Car in Polish culture is not only considered as vehicle that helps to commute from point A to
point B. In Poland it is a proof of independence because you are no longer have to take other
means of transport, and belong under schedule for instance be few minutes before bus arrives
cause you do not know when exactly it will come. Another thing is show-off. It is completely
naturally that differences in salary range occurs, consequently people are situated on different
social levels where money and status are factors that decides about belonging to social group.
Car is also a thing that distinguishes people from different social groups, so the poorest
representative drives older and cheaper cars when the richest possess best and more expensive
cars. To sum up car is a fair tool to judge in this case.

Poles perceive Volkswagen brand as a car maker which produces stable, affordable and reliable
cars. It is based on German hard-working spirit and precision, that is why Volkswagen cars are
very popular nowadays also in aftermarket. Another advantage of having car from German
manufacturer is the slowest ratio of value loss among other automotive companies. (Business in
Poland – Law, tax and banking”, 2006)

Technological:

Volkswagen has 94 production plants worldwide and additional 8 in Americas, Asia and South
Africa. There are two production facilities in Poland. One is responsible for making parts for
various models, while the other one makes commercial vehicle called Transporter. Main
materials that company uses to produce cars are …

Company intensively focuses on developing new technologies and innovation to become the
most economical and ecological car producer in the world. Directly quoting words of board
chairman, Martin Winterkorn it seems that company is aiming for the leader position within
automotive industry. ‘Till 2016 we would like to invest 62,4 mld Euro for Research &
Development to become number one.’

Burdens of proof of Volkswagen steps could be developing completely new BlueMotion
Technologies engines. Volkswagen put resources and effort to create TDI and TSI engines. Both

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are supercharged and by downsize strategy, main capacity was reduced by in the same time
performance remains constant. In addition it is compulsory to state that company already offers
cars with hybrid engines, which are running on electricity and allow reducing petrol consumption
and CO2 emission to environment in further. Moreover, company aim also for renewable energy
sources like water, wind and sun. German car manufacturer brings practical assistance service
for example Park Lane, which make car seeking for space and park afterwards. Another example
could be a Temporary Auto Pilot which control car under 130 km per hour. Together with Lane
Assist car stays on same lane, so driver can do something else in same time. Above sentences
proof that Volkswagen is consequently developing new technologies to make cars better, more
ecological, more economical, more technology advanced and remaining affordable to every
customer. Without doubts firm is one of the most leading if it comes to innovation in industry.
(Volkswagen Technology)

2.2.2 Porter’s Five Forces
Porter’s five forces is a structure which consists of 5 factors, which together form a degree of
competition and stability in the market.

Source of the Porter’s 5 forces: (Jobber, Competition and Marketing, 2007)

The threat of new entrants:

The threat of new entrants is considered low in the automobile industry. The industry has been in
operation for a relatively long period of time and in several companies, such as Volkswagen and
Ford have successfully reached economies of scale. In order to compete in this industry a
manufacture must be able to achieve economies of scale at a pace which does not lag behind
competitors, but can keep up, and set the standard at times. For this to occur, manufacturers like
Volkswagen mass-produce the automobiles so that they are affordable to the consumer. However
some brands under the Volkswagen group such as the Lamborghini and Bugatti are slightly more
tailored and customized, but also cost more in relation to the value of the car.

 Another barrier to entry is that it takes an incredible amount of capital to manufacture the
automobiles, and of course the more tailored the vehicle, the more in manufacturing it will cost.
It takes a large amount of capital to be able to manufacture the products and to keep up with the
research and development that is necessary for the innovation requirements. Access to
distribution channels is another high barrier to entry, one which Volkswagen has dealt with very
well with. Volkswagen have an array of motor dealers, distributors and partners across the globe
selling its vehicles to further dealers and personal customers, because a company must find a
dealership to sell their automobiles or have their own dealership, Volkswagen enjoy the benefit
of both in this case. (Jobber, Principles and Practice of Marketing , 2010) (Aktiengesellschaft,
2011 )


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Bargaining Power of Suppliers:

In the automobile industry, the bargaining power of suppliers is rather low. There are so many
parts and technologies that are used to produce an automobile, that it takes several suppliers to
accomplish this. According to Porter’s rules about the Bargaining Power of Suppliers - when
there are many suppliers in an industry, they do not have much power. There are so many
suppliers to the automotive industry that manufactures can easily switch to another supplier if it
is necessary. (Aktiengesellschaft, 2011 )

Bargaining Power of Buyers:

The bargaining power of the buyers relates to the options available the buyers have amongst its
manufacturers and within this industry - it is moderately high. The buyers being consumers and
car dealers purchase almost all of the industry’s output. The manufacturers such as Volkswagen,
Toyota and Ford depend on them to stay in business. The buyers make up for a significant share
of the industry’s income. If the automobile manufacturers cannot keep the buyers happy, they
risk losing them to competitors, and therefore Volkswagen can benefit from this, and seek to
target competitors’ clientele. The buyers have low switching cost if they are not happy, which
means buyers can easily sell the car they own and purchase a new one. The reason why the
power is not completely high is that the buyers are not many, counted as individuals- no groups
and are few in number. The buyers do not have the ability to seek for alternatives and different
solutions into the industry. If the buyers would like a motor vehicle, they are forced to purchase
it from a dealer.

Threat of Substitute Products:

Within the automobile industry there are not many substitute products. Some of the substitutes
are walking, riding bike or taking a train. Substitute products all depend on the geographic
location of the consumer. In Poland it is still popular to commute with motor vehicle, mainly
because of the large distances between cities and a large majority of the working- class has far
distances to travel in order to get to work. However in some cities such as Copenhagen and
Amsterdam, it is very popular to ride bicycle and a large part of its city residents believe a car is
not as necessary. In cities such as those, the bicycle, subway and trains are the most effective
means of transportation. However, in most places a person must have access to an automobile in
order to get around. Therefore the conclusion would be to say, in Poland the threat of substitutes
is not so great - and would rank as a 2/5 threat level.

Intensity of Rivalry among Competitors:

Rivalry among the competitors is very strong is this industry. The main players in the industry

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are also very close toward each other- regarding performance, sales and relative market share. In
order to gain market share in the automobile industry, Volkswagen must gain market share by
winning over customers from their competitors. There is a lack of great differentiation within
this industry and this leads to a high rivalry amongst the industry’s competitors. Michael Porter
states that when products or services are less differentiated, purchase decisions are based on
price and service considerations, resulting in greater competition.

All the companies manufacture almost the same products, such as urban cars, SUV’s and energy-
efficient models. The competitors are evaluated up against each other all the time when a
consumer would like to make a purchase. The price, quality, durability, and many other aspects
of different manufacturers are greatly taken into consideration when deciding what type of
vehicle to purchase. When the different manufacturers advertise they even compare their
products to their competitors. Volkswagen uses the commercials to focus on areas where the
company outperforms its competitors such as its unique design, durability and status.
(International) (Highfill, Copus, & Smith, 2004) (Jobber, Competition and Marketing, 2007)

2.3 SWOT analysis
Source of the SWOT analysis: (Jobber, Competition and Marketing, 2007)




                   Strenghts                          Weaknesses
                 Brand name
   Controls almost entire value chain
           Differentiation leader
               Broad portfolio
                                       SWOT
              Opportunities                             Threats
               Innovation                    Future effect on brand due to
         Entering new markets              competiton among the Volkswagen
      Market penetration on existing                     Group
                markets

                                                                                Figure 3 SWOT
analysis of the Volkswagen

SWOT analysis is a model tool which evaluates position of the company by identifying four
factors: strengths and weaknesses which base on internal marketing audit, opportunities and
threats which base on external situation of the company. SWOT gives an overview about
company strong and weak sides, but also seeks for opportunities and threats in the future.


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Strengths:

One of the biggest advantages of Volkswagen is brand name. Company exists on many markets
since II World War. Moreover, company has a long history and successful products like The
Beetle which Product Life Cycle stands for almost half of century.

Company has a broad portfolio. Products offered can demand almost every customer. Price of
cars is also very affordable which make it available for most of potential customers. Volkswagen
is also a differentiation leader and future oriented. German manufacturer forecast need and
demand by implementing new technology and making cars more economical and ecological.

Volkswagen control almost entire value chain thus has production facilities, research &
development department and dealers network. Firm control entire process from creating a
product, to production and in the end sales to customer and advertising.

Weaknesses:

During research conducted it is really hard to find out any weaknesses of the company on
internal level.

Opportunities:

Innovation and increasing resources in research & development definitely help company in
future and pay off. New technology, more efficient engines and new assistance services will not
make cars better, but also bring new customers. Volkswagen does not exist on all available
markets yet. Thus it is a great opportunity for company to enter new markets with actual
products.

On markets that Volkswagen exists it is advised to use market penetration strategy. It means to
take active actions to increase market share on current market by for instance by wise pricing
strategy, aggressive advertising and sales promotion.

Threats:

High level of rivalry among the Volkswagen Group can affect Volkswagen brand in future quite
badly. For instance Skoda brad which is perceived as cost leader and number one if it comes to
sales in Poland can slowly push out Volkswagen brand by reducing market share and substituting
products with cheaper alternative.


3. Cultural analysis of Poland
Without doubts Poland is an unique place with extraordinary culture. It is a mix tradition, norms,
values that were carried out through ages, but also changed due to various factors. This section

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especially focuses on describing Polish culture. By using tools, theories which I learned
throughout AP Degree in Marketing Management programme I am able to distinguish culture
factors that have crucial impact on the company.

To get deep with topic it is compulsory to apply theories from my study programme. During the
project C it was proven that there are two theories that help to understand foreign culture. That is
why I decided to base on Edward T. Hall theories on culture and Geert Hofstede Cultural
Dimensions.

Edward T. Hall says that world of communication can be divided into 3 parts: words, material
things and behavior where words are the medium between business, politics and diplomacy.
Material things are main indicator of status and power and finally behavior that provides
feedback on how other people feel and react in different situation. Behavior also tries to avoid
direct confrontation and argues that may occur. (Hofstede)



High/Low Context Culture

Considering two World Wars that Poland was involved and also transformation of political
system in 1989 it is obviously to state that Poles represents low context culture. This
hardworking nation gives clear instructions. Main reason why is to avoid misunderstandings.
Knowledge is learned through analytical reasoning. Poles also do not hide emotions and if they
are unhappy about anything, it will be directly announced. Moreover, they talk about facts and
actual situation in the country cause it affects them mostly. Poles also use fast messages, as an
example of the fast messages could be headlines, propaganda, TV commercials and headlines.

Volkswagen can apply theory somehow to the advertising strategy by creating a straight to the
point spots for instance describing product, the biggest advantage and price as regarding to
T.Hall they like fast messages.

Geert Hofstede Cultural Dimension introduced in 1980 considers few important factors: Power
Distance, Uncertainty Avoidance Index, Masculinity- Femininity and Individualism-
Collectivism and Long Term Orientation. Hofstede proved that dimension have strong impact on
political, economic and business life. All above dimensions will be described singly towards
Poland. Basing on Hofstede website we can acquire data regarding countries where research was
conducted and compare between them.




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Power Distance:

Dimension describes the extent to which less powerful members of institutions or organizations
expect and accept that power is distributed unequally. Poland has 68 and base on it makes culture
with high power distance. If we would like to relate into real life we can compare to the
employee-employer relation where there are bigger distance and differences between them and
employee is already prepared that boss can approach him and tell him what to do. Differences in
salary range are also visible to that point the people automatically feels levels among them.

In this case Volkswagen which is having factories in Poland can benefit from it. Firstly, every
employee knows exactly where his place is. Secondly, task, orders and assignment expectation
from day one in company. Finally, they will understand the hierarchy of salary range and
differences with it. (Hofstede)



Individualism-Collectivism:

The Hofstede Index on official websites give Poland 60 points out of 100 where numbers closer
to one are representing collectivism culture and contrary countries closer to 100 are representing
individualism culture. Basing on this Index, researchers gave Poland 60 points which mean that
Poland is an Individualistic culture. This shows how people in the culture are able to make
decision independent, take bigger responsibility for their life, seek for a personal freedom, be
independent, make decision on their own etc.

To start with still it means and democracy is well respected but people rather work alone or on
their own than rather using a teamwork strategy. Work is also directed to specific person, so
everybody is trying to focus on single task than work in group as people do here in Denmark.
This leads to the statement there is no similar persons and they can distinguish from each other.
Combination of High Power Distance and Individualism culture creates a special tension
between employee and employer. Regarding Hofstede tips it is advised to create a second level
of communication within organization.

Volkswagen has to watch out on this factor, as many young people are considered as a
Generation Y. Mainly and proudly described as carriers of new technology that are able start up
their own business, basing on experience gained in big organizations. To sum up I recommended
to the company to come up with new motivational ideas or special bonuses for employees.
(Hofstede)




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Masculinity- Femininity:

A masculine culture with high score in Index tends to be a society driven by goals, success,
achievements, personal growth and motivation. In shortcut they consider themselves as winners.
While Femininity cultures are contrary to above statement thus discrimination is less. Man are
perceived positively to take woman’s occupation as example could be a group of males working
in public sector, hospitals, school as teachers. Moreover quality of life is being considered as a
sign of success. Key question will be what motivates society? In femininity culture it will be
enjoying the moment and things you are doing right now, but on the other hand feeling of
becoming the number one and best for you in masculine culture.

Poland is rated 64 in this dimension basing on Index. It means that it is more masculine than
feminine. Could be many reason why country is rated like that for instance in last century Poland
took part in World Wars, it also belonged to the Socialistic camp. The point is that country was a
very militaristic society as it was involved into getting independence processes in last century.
Even during fear of II World War Poland did give lands to Nazist as it was demanded in 1939. It
shows the spirit of culture, braveness and courage and they are able to defend lands. Women are
not treated equally in society. This obviously means that male take a higher level in Polish
society. Top managers are being expected to be more assertive, decisive, keep distance between
workers and act down-to-earth.

For the company it could be advantage as long as people on top positions do job properly. Labor
power already will be expecting hierarchy and won’t protest. Volkswagen has to prepare sort of
special adverts and promote each product individually. For instance up! can be aimed for female
while CC model targets richer male customers. Eventually nobody can blame company for such
stuff due to hierarchical order based on gender and status. (Hofstede)

Uncertainty Avoidance Index:

This Index says about extent to which representatives of the society feel uncertain about future or
current situation and created beliefs to avoid this. High score for Poland which is 92 makes
people avoid the uncertainty. Poles are unsure about if it comes to changes. As it was stated
before, it is a culture of symbolism, traditions and that is why there is a big need for emotions
and warm. Among people occurs statement that time is a money and people try to do everything
fast for instance finish job as fast as possible, get home, eat, sleep and next day has to come
again and again, over and over. From history it is possible to assume that Poles seek for safe,
stable place in the world after interference by Russian USSR and Nazis Germany. Effect would
be massive migration of Poles abroad in last century and huge amount of people living abroad as
habitants in Poland right now. Main destinations became USA, Canada, Germany and UK due to
stability and better level of live in those countries. (Hofstede)

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What Volkswagen can take from it? Advertising has to be strict to the topic. Avoid plenty of
information in the same time because it makes confusion. Moreover selection of the information
in this culture is also quite poor, so consequently it is strongly advised to make a delimitation of
the information that will be forwarded through social media to potential customers. Another
important point is to create adverts with emotions, since it is a culture based on traditions.
(Hofstede)




Long Term Orientation:

It is a dimension that shows how culture is oriented, how future programmatic is, and what the
framework of it. Long Term Orientation means that people focus on future project, try to secure
children in future and similar. While Short Term Orientation means that people rather focus on
actual situation. They do not make plans ahead, but enjoy moment and current situation. Basing
on Hofstede researchers most countries in Easter Europe are Short Term Oriented. Same goes
with Poland which got a score of 32 and is considered as culture with Short Term Orientation.
This theory and statement perfectly works in practice. Poles focus on every day task like fulfill
your basic needs, get money and pay a monthly rent than rather begin to think where they will be
in few years. It leads to statement that it is tough to make a long term plans.

The important conclusion can be made from this model. Main headquarters of the company
should remain in Wolfsburg. Without doubts Poles lack of creativity as Western culture
possesses. There are many reasons why this specific culture with huge labor and market
opportunities cannot set up big international company with unique values like Danes do.
Education system play a key role in this structure, probably this is one of the most important
factor that decided if culture is Long Term Oriented or Short Term Oriented. In Poland lack of
practice approach, learn by heart outdated theories create people without ideas for future life.
Later result is easy to catch up. If we compare Denmark and Poland on above dimension it
makes situation very clarified. Denmark support education and business, consequently
innovative companies like LEGO, Vestas or Siemens Wind Power exist and growth up by time
being. (Hofstede)


4. Market Research
In order to answer problem formulated in project description part regarding advertising and
customer behavior it was decided to carry out primary market research. Based on experience
from Project C where our task was to conduct on a market research for Danish lighting company


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called Frandsen Lighting I have chosen survey as a fastest method to gather data. Moreover, to
increase amount of quantitative and qualitative data online survey was made. Deciding factors
were: cost, time efficient, amount of data collected and easy to share.

Survey was made through Google Docs, as it is easy and very efficient tool for survey, due to
fact it connect with your e-mail account also on Google. Another advantage is friendly interface
in creation phase and share phase. Furthermore, it is to operate data afterwards for instance
makes it as a PDF file or Excel file. Collected data not only can be transformed into different file
types but also can be presented in percentages or pie chart. Another advantage is unlimited
number of answers. Those factors made me sure about choosing Google Docs as tool to conduct
primary market research. After creating question I did a pretest to find out if the survey is
working fine, is visible for everybody and if it collects any data.



There are 16 questions in the survey that cover gender, age structure, advertising section, specific
question about Volkswagen brand and place to share thoughts regarding company products.
After analyzing collected data I got to the point that survey could be considered as long length.

Survey was shared among Poles mainly through Polish social service called nasza-klasa. It is
located on www.nasza-klasa.pl and focus on network from different educations like primary
school, secondary school, high school or even university or college. Of course, user can add
family members or friends to network. As project aims for advertising in Poland, and above
service gather Poles it is a great advantage to use this service. Another social service I used was
Facebook where I dedicated survey for Poles and also counted to acquire some data.

Survey was shared between 23.05.2012 and 27.05.2012. In total of 4 days survey was able to
gather 86 respondents. Even though it is not so much but still gives a data work on. During time
going I gathered thoughts about using online survey.

First of all, it is easy tool and also the fastest comparing it to normal gathering data on street or
personal interviews which takes preparation and are more time consuming. People who take part
in online survey do it fast and in front of their PC, which makes this tool more convenient and
comfortable. Time of Project C showed that it is relative hard to give questionnaires to the
people on walking street while they are busy or in rush. Paper data is also not convenient to
calculate and in time going it is very easy to mislay. Anonymity is also another aspect of the
survey, people feel more comfortable when they do not have write their name, therefore can give
an honest opinion on certain topic or question.




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Analyze of the online survey

Question 1: What is your gender? Possible answers: Male / Female

Gender question is relative important due to fact it gives a feedback about specific gender
preferences regarding products offered by company, various mean of media for instance up!
model which is aimed more for females. There are only two genders on the Earth, male and
female. Therefore there are only two answers possible.

Data collected based on this question seems that there were 68 % male correspondents and 32 %
female correspondents.

Question 2: What is your age? Possible answers: 18 – 22, 23 – 27, 28 – 32, 33 – 37, 38 – 42, 43
– 47, 50 and more.

In Poland you can obtain driving license for cars when you become 18 years old, therefore it was
decided to put this age as a starting line and make interval between them 4 years, so that is why
there is 18 – 22, 23 – 27 etc.



Results are 18 – 22 21 %, 23 – 27 29 %, 28 – 32 14 %, 33 – 37 4 % , 38 – 42 8 %, 43 – 47 1 %,
50 and more 23 %.

The biggest number of respondents is group of age between 23 -27. It time when people
graduates and already posses first job, which means that it is a perfect time to get a car and
independent mean of transport. Financial income could be a challenge for this group, but credit
options offered by Volkswagen Financial Services make it possible to obtain a brand new car.
Another group respondent is 50 and more 23 %. Usually it is a group age when families are
already set up, so there is a need for sedan or family car. 18 – 22 21 % represents youngster
group. It is also a good way to obtain feedback about Volkswagen from the potential customers
in future as there is 21 %. Last significant group is 28 – 32 14 %, it is a transition age and time to
set up family, therefore sedan car is appropriate.

Question 3: What is your status? Possible answers: Single, Married, Married with one kid,
Married with more than one kid.

Purpose of this question is to find out people current status. As we know family that consists of 4
members rather take family car for instance Volkswagen Sharan or Passat than single. I assume
that families have more income to dispose, due to fact that probably more members are having
active employment and they share earnings. But, if it comes to single, hatchback model are more
popular due to price and enough space for one person.


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Survey shows that 42 % are single, 16 % are married, 14 % married with one kid, 28 % married
with more than one kid. Without doubts results are various due to fact it was directed to different
social groups, but in works in favor because gives people overall view about brand and products.

Question 4: How much time do you spend daily watching TV? (in hours) Possible answers:
0 – 1, 1 – 2, 3 – 4, 4+.

Reason why I put question about media to the survey is quite obvious. To find best mean of
media among all possible to conduct an advertising campaign for the Volkswagen. As it was
researched before that different age groups and status group took part personally I was expecting
different results: 0 - 1 71 %, 1 – 2 20 %, 3 – 4 7 %, 4+ 2 %. From results it seems that most of
the respondents spent only between 0 – 1 hour watching TV every day while only 20 % of them
spent from 1 to 2 hours on TV.

There are many reasons while people nowadays spend less time in the front of TV. Firstly, time
issue is nowadays a huge problem. People either focus on work, school, family which of course
is time consuming, therefore not everybody has a time to star entire day in the front of the TV
especially in Poland due to lack of work – life balance and a lot of responsibilities even person
leave workplace. Secondly, basic TV channels are outdated and Poles have problems with broad
selection of information and get confused, because simply there are too many of them. Boring
TV channels bring less popularity to the front of TV screen. Finally, in order to obtain an access
to better TV channels, normal user has to pay relative high monthly commission. This could be a
possible reason why people do not spend so much time watching TV. Volkswagen can benefit
from it by reducing amount of adverts or play during for instance big sport events.

Question 5: How much time do you spend on listening to radio daily? (in hours) Possible
answers: 0 – 1, 1 – 2, 3 – 4, 4+.

Results are: 0 – 1 67 %, 1 – 2 14 %, 3 – 4 8 %, 4+ 9 %. Correspondents more likely spend
between 0 – 1 hour daily on listening to radio. Nowadays, people listen to radio usually when
driving a car. In most workplaces like offices it is forbidden to listen radio as it disturb other
employees. But, for instance on construction site it is quite common to listen to local radio
station. Mostly local dealers can benefit from it by promoting current products, promotions and
garages where customers can check out their cars.

Question 6: How much time do you spend on reading newspaper daily (in hours)? Possible
answers: 0 – 1, 1 – 2, 3 – 4, 4+.

Data collected through online survey is: 0 – 1 80 %, 1 – 2 14 %, 3 – 4 0 %, 4+ 5 %. In my view
Volkswagen should put resources to create own brochures and make adverts in automotive



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magazines due to fact that people will seek for information in newspapers / magazines only if
there is need of recognition or personal interest.

Question 7: How much time do you spend on the Internet daily ? (in hours) Possible
answers: 0 – 1, 1 – 2, 3 – 4, 4+.

Internet since it was developed, expand in very fast tempo. Therefore no one supposed to be
surprised about results in this question: 0 – 1 2%, 1 – 2 13 %, 3 – 4 34 %, 4+ 51 %. As data
presents half of the respondents spend more than 4 hours daily on the Internet. For company it is
a sign that not only it is a media that advertising focus is required, but also take a look on instant
improvement on website, include newest information about models, improvement, career and
innovation. Moreover, social media like Facebook and Twitter are necessary to maintain
relationship with actual customers and potential one. YouTube service allows reducing
advertising cost due to price and almost unlimited time of display. Portal has also a huge amount
of daily users, which makes more convenient to use this tool. To sum Internet become attractive
tool that Volkswagen definitely has to focus.

Question 8: How important for you is style and design of the car? (1 - not important / 5 -
important) Result: 1 – 4 %, 2 – 2 %, 3 – 5 %, 4 – 42 %, 5 – 46 %.

This question aims to get a feedback if design is a factor that company should improve. Based on
results it is possible to assume that design of the car is very important issue. Volkswagen can
benefit from this information by recruiting professional staff in order to provide modern and
stylish design of cars offered.

Question 9: How important for you is style and price of the car? (1 - not important / 5 -
important) Result: 1 – 2 %, 2 – 2 %, 3 – 13 %, 4 – 34 %, 5 – 48 %.

Purpose of this question is to find out what is approach to price of the brand new cars. Results
show that price issue is important especially if it comes to the brand new cars. Analyze of Ansoff
Growth Strategies showed that company should use market development strategy on Polish
market and that includes aggressive pricing strategy.

Question 10: How important for you is after purchase service? (1 - not important / 5 -
important) Result: 1 – 5 %, 2 – 9 %, 3 – 19 %, 4 – 28 %, 5 – 38 %.

Volkswagen has own garages where after-sales services are conducted for instance oil and filters
replacement. Services are located next to dealers network. Purpose was to find out if customers
are interested in such services, why and what company can do to bring customers to such
garages. Results show that Poles rather care about after-sales service. Volkswagen can also
promote this kind of services for instance promotion on period controls or spare parts change.


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Question 11: How important for you is the ecology of the car? (1 - not important / 5 -
important) Result: 1 – 21 %, 2 – 24 %, 3 – 19 %, 4 – 22 %, 5 – 14 %.

Various results are affected by Poles approach to ecology. Some of them do not think that it is an
important matter, some of them treat it more serious. It is issues connected with current law rules
which are not tough toward CO2 emission. Company already prepares cars to be more ecology to
the environment, because European Union makes rules more restricted.

Question 12: From which kind of segment you would like to have a car? Possible answers:
Hatchback, Sedan, Combi / Estate, SUV, Cabrio.

Results: Hatchback – 31 %, Sedan – 32 %, Combi / Estate – 6 %, SUV – 14 %, Cabrio – 18 %.
Sedan and Hatchback are the most popular car segments basing on correspondents answers. If
we take a look at Boston Matrix, sedan models like Passat or Jetta are the most popular on Polish
market from this segment. While from Hatchback, Golf and Polo remains kings among their
class. SUV and Cabrio seems to be prospective, therefore Volkswagen should focus on
improving cars from this segment.

Question 13: How often do you change a car? Possible answers: twice per year, once per year,
once per two years, once per three years, once per four years.

Question has to give a feedback regarding time period between next purchase. Results: twice per
year – 5 %, once per year – 6 %, once per two years – 11 %, once per three years – 10 %, once
per four years 71 %. Data is not very surprising due to popularity of used cars and also expenses
that has to be carried out with new car.

Question 14: How would you rate your experience with driving a Volkswagen? Possible
answers: Significtly better, much better, moderately better, poorer, pathetic.

Related directly to the Volkswagen brand, collected data from this question will give overview
of the respondents about company products related to the Group brands like Audi SEAT and
Skoda. Results are: significtly better 16 %, much better 19 %, moderately better 51 %, poorer 6
%, pathetic 8 %.

Question 15: How would you rate Volkswagen cars? (1 - Very bad / 5 - Awesome )

Result: 1 – 4 %, 2 – 5 %, 3 – 25 %, 4 – 48 %, 5 – 19 %.

Respondents rated Volkswagen as a relative good brand. More information is included in
question 16.




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Question 16: What do you think about Volkswagen cars? Open question.

This open question gives a possibility to share your thoughts about products made by
Volkswagen. Based on question 16 where most of the respondents rated it as a good brand it has
also affect in answers in direct translation to English: ‘Cheap enough to be reachable for most of
people; really comfortable, durable; they have diverse offer for all segments, a few supercars, a
few city/economy.’ ‘they're in group of best selling cars. the quality of the products is satisfying.
th availibility of parts is better than others. the design is unique - fits people who like sports cars
and modern ones. Volkswagen gave birth to one of my favourite models - Golf IV.’ ‘Normal cars
for normal prices. Not as luxurious as an audi or bmw. But hey, its german, what else to say?’




5. Consumer buying behavior
This section is dedicated to describe consumer buying behavior. This tool allows finding out
what are the motives to buy specific products and what influence potential customers to choose
Volkswagen. Analyzing this model gives a feedback about how people buy, when do they buy
and what are the choice criteria. Furthermore, leads a direction for the company in which areas to
focus. (Jobber, Principles and Practice of Marketing , 2010)



Who buys?

Initiator: In this case that could be anybody who is in the need to search for alternative way to
commute. There are plenty of initiators when it comes to buying a car for instance: person who
does not posses a car, person who has a car but it become too old or are not satisfied with current
one, youngster who has just received driving license or simply actual car was crashed or it is
completely broken.

Influencer: It is a person who attempt to persuade about purchase. In this case it could be
considered as an adviser. Most likely it will be a friend/family member already having a
Volkswagen or person who are interested into cars and have certain knowledge about
automotive.

Decider: Person/s who can make a choice about buying the product. As buying a car is carried on
with relative high amount of money involved. Therefore, decider could be a person who has
financial resources, which allow buying a car or at least high position for instance head of
family. If car will be aimed to use by entire family, than all family member could be a decider
unit.


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Buyer: It is a person who buys a certain product and finishes the transaction. As it was stated
before this person need to have a money capacity due to high costs to conduct a transaction or at
least status within family.

User: Person/s who actually use bought product. Depends on situation and case it could a one
person or entire family. Person involved into buying process usually become a user afterwards.

How do they buy?

Need recognition / problem awareness: Time period or event that decides about putting steps to
get a new car. It was stated before that possible action could be: not having a car and need for
independence if comes to transport, car becoming too old and car break down or crashed. Some
of the customers will feel unhappy about their car and feel that it is a right moment to change.
Some other will hate public transport that can come late, so it will be wiser to get own mean of
transport.

Information search: When decision about buying new car has been set up, there is a need for
gathering primary information. Poles use recommendation from closet friends and around their
network. First step will be asking about brands and models people among personal network or
people who possesses certain knowledge about automotive for instance mechanics. Another step
will be process of searching information on own through company websites, dealers network,
automotive magazines and social services like Facebook, Twitter and YouTube.

Evaluation of alternatives: After gather primary data, alternatives phase comes. It means that
person who obtained information about specific models from Volkswagen, begin comparison
with another products offered by competitors on basis of price, specifics, performance, economy,
comfort, design and efficiency.

Purchase: Buying a brand new car takes time and requires long preparation. In case of buying
here come also financial situation because not only the price of the car allow it drive afterwards.
Insurance, registration cost and fuel in additions. That makes this purchase considered as high
involvement product. There are many flatteners on which people decide to buy a car. Previously
it was stated that main factors are: price, specifics, performance, economy, comfort, design and
efficiency.



Post purchase evaluation of the purchase: Car buyers of the Volkswagen products may seek for
reassurance due to fact it is a high envelopment choice. Shortly after purchase customers are
more likely to create more emotion with brand by for instance looking at Volkswagen adverts



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than Renault or Volvo. Car dealers after obtaining data of product owners can contact afterwards
to find out if they are happy about purchase.

Choice criteria

Technical: Volkswagen delivers newest technology with their products by offering unique
assistance systems, efficient BlueMotion downsize supercharged engines petrol and diesel one.
Even tough, capacity are smaller comparing to previous generation but performance, economy
increase, but in the same time emission of CO2 reduced. Company also put efforts and resources
to make cars not only more innovative and everyday useful but also safer. The other thing is
comfort. Firm wish to deliver comfort in all cars by materials which are used for production. The
peoples-cars are also perceived as very durable and reliable, and it work in favor of German
manufacturer. Moreover, modern design tries differentiating Volkswagen products among
competitors from the Group like Skoda and Seat. Poles also believes in German technic
precision, this could be the reason of popularity of the brand in Poland.

Economic: Great advantage of Volkswagen cars are economic values. First of all, cars offered by
firm are in very affordable prices. Many possibilities of crediting make it available for mass.
Spare parts are also cheaper comparing it to Japanese or American cars, which means that
running cost is also lower. Furthermore, more innovative TDI engines burn around 4,8 liter of
diesel per 100 kilometers, this number is relative small amount comparing to cars offered by
competition. To sum up Volkswagen cars are very attractive if it comes to economic factors.

Social: Volkswagen as German translation say is people-car. It means they are mainly aimed for
the mass. Thus we cannot say that having car with Volkswagen mark it something very special
and rare, but we can treat kind of this person as belonging to the middle class.

Personal: Having a car could be treated as something personal, because it usually associated with
independence of commuting. But, having a Volkswagen is not a big show off. It is basically
reliable, safe and economic car for everyday use.

Where do they buy?

Brand new cars are offered only in saloons operated by dealers network. Company posses own
outlets under Volkswagen name. There are 74 dealers located in Poland. They are settled up in
bigger cities and it covers entire Poland. Furthermore, original garages of Volkswagen are
usually located next to saloon.




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When do they buy?

Potential customers decide to conduct a purchase of car when there is a need of recognition.


6. Conclusion
After going through theories and models and also carrying out analysis thoughts and conclusion
can be made. First of all, Volkswagen is a successful company with long history and well-known
brand name. Firm tries to continue tradition from decade as a people car with putting innovation
to it.

Such successful company like Volkswagen is can aim for the bigger goals. With power and
support of the Volkswagen Group firm has a chance to dominate automotive sector. Carried
internal marketing and external marketing audit proofed that it is really hard to find a weakness
within company structure.

To remain successful on the market company have to use winning strategy. No matter what are
the circumstances Volkswagen still have to put additional resources for research and
development of the newest technology and maintain current labor power and structures within
Human Resource Management. Make their products better and better in order to compete with
other automotive companies. And finally deal with long term issues like how to substitute
petrol.


Bibliography
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(2006). Business in Poland – Law, tax and banking”. Danske Bank.

AG, V. (2011). Annual report . Germany .

Aktiengesellschaft, V. (2011 ). Sustainability 2011 . Wolfsburg : Volkswagen .

Dealers . (n.d.). Retrieved May 22, 2012, from http://www.volkswagen.pl/partnerzy/dealerzy_i_serwis/

Highfill, D., Copus, S., & Smith, S. (2004, November). Academic Mind. Retrieved from
          http://academicmind.com/unpublishedpapers/business/management/2004-11-000aaa-
          automotive-industry-analysis.html

Hofstede, G. (n.d.). Retrieved May 24, 2012, from http://geert-hofstede.com/poland.html

International, V. (n.d.). Volkswagen International. Retrieved from www.volkswagen.com



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Jobber, D. (2007). Competition and Marketing. In D. Jobber, Principles and Practice of Marketing (pp.
        774-777). Mc Graw-Hill.

Jobber, D. (2010). Principles and Practice of Marketing .

Jobber, D. (2010). Principles and practises of Marketing; Boston Consultng Group Growth-share Matrix.
        McGraw Hill.

Prices. (n.d.). Retrieved May 22, 2012, from http://www.volkswagen.pl/cenniki/

smartdriver-pl. (n.d.). smartdriver.pl. Retrieved from www.smartdriver.pl

Stefan Schmid, P. G. (2008). Managing the International Value Chain in the Automotive Industry.
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The Group. (n.d.). Retrieved 05 30, 2012, from
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Volkswagen Human Resources . (n.d.). Retrieved May 27, 2012, from
       http://www.volkswagenag.com/content/vwcorp/content/en/human_resources.html

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Appendix 1




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