Summary & Conclusion

Having conducted brand audit of Renault and Volkswagen, we’ve gather substantial amount of information. The best way to structure that information with regards to brand auditing is thoroughly building Kevin Keller’s CBBE pyramid for both brands. Below is the the final breakdown of the pyramid with highlights of essential notions in each type of brand attribute:

Renault has a strong degree of brand awareness. Although it is not one of the top brands that pop-up, when talking about cars in general. However, awareness becomes stronger within specific categories of cars. Company has presence in several car categories starting from entry-level vehicles and up to upper middle class, also having very strong presence in electric vehicles sector. There are two categories, where Renault is out of reach for most competitors or car manufacturers: entry-level vehicles and electric cars. The company enjoys a dominating position of the market in both categories, hence, very strong awareness within those sectors and extended breadth of awareness.

Volkswagen has very strong brand awareness. It tends to be one of the first brands to be associated with automotive sector. Although the general consumer is unaware that the brand portfolio includes brands like Skoda , Bugatti,and Lamborghini, the company ranks very high in the mind of consumers thanks to the cognitive associations prompted by brand. However, there is an interesting trend in volkswagen’s brand awareness dynamics — it tends to go upwards in segment associations: VW is increasingly viewed as expensive car, rather than “Volk’s”. It’s a vector company took in late 90s and still continues to follow.

 

Renault has pretty high manufacturing standards. In fact , it is the reason why they conquered entry-level segment — they managed to maintain quality in spite of drastic cost-cutting measures. Their gasoline engines are one of the most durable on the market, although, occasional flaws still happen. These “occasional flaws”  setback the company to it’s 1990s reputation. An era when the company products suffered chronic malfunctions on the average.

Volkswagen managed to establish one of the most effective cross-platform systems in the world. You can find the same components in Skoda, Volkswagen, Audi and Porsche. It means that luxury-segment quality standards are applied to those components, which contributes to overall quality of vehicles throughout all classes.

 

Renault has more passionate image. Throughout it’s advertisement campaign, the central focus of them were emotions, French style and passion. Thus Renault targets more emotional consumers.

Volkswagen tends to build it’s marketing campaigns around technical features of vehicles. Even the slogan of company states so: Das Auto — The Car. So, VW targets those consumers that appreciate mostly technology, precision and quality.

 

Renault vehicles are appreciated for their design, aesthetics and utility. However, quality still appears to be a weak point here. Despite integrating quality logo to Renault’s own logo, this attribute fails to change. Recently, Renault tried a new strategy for quality reinforcement — they are focusing on their success in car racing, hoping to translate that into inevitable consequence results of high quality.

Volkswagen vehicles are prided for their quality. Recently VW discovered that they have problems with their vision of a car and that of a consumer. To put it in another way, they started to have problems with aesthetics, utility and design aspects of their vehicles. However, problem was resolved by implementing more consumer-based approach in designing new vehicles.

 

Throughout various marketing incentives and supporting events, Renault products tend to provoke mostly Fun feelings and Excitement. Motorsports, crazy advertising campaigns all contribute to it. The EV products of the company obviously dramatically contribute to Social Approval kind of feelings. Electric vehicles became the symbols of fight against pollution (which it is not the case  — they merely push pollution farther away from cities, but that’s OK), which is one of the main pillars of modern social responsibility. Recently probe new kind of feeling association — through luxury

Volkswagen products are strongly associated with such feelings as security and self Respect. Quality and upper-mid price targeting significantly contribute to those feelings. But certain products of Volkswagen, especially those deep in middle-class segment tend to be associated with Fun. Various ads for Polo, Golf and Up are built around that feeling.

 

Strong competition in automotive industry prevents general cases of behavioural Loyalty, as purchases happen rarely and each time product is challenged by rivals. However, certain electric models of Renault, like Traffic z.e. stay mostly unchallenged and recurring purchases occur within fleet sales. Attitudinal: According to our surveys Renault is perceived much like commodity rather than something greater. It failed to become a Love mark. However, certain sub-brands of Renault has developed thriving communities around them. EVs and sport cars seem to be somewhat different from how the brand is perceived in general. They have loyal consumers, that do not want to change the brand because the successfully blinded together.

Volkswagen mostly faces the same issues as Renault. It’s hard to hook consumers for long. However, being positioned higher in budget segmentation, volkswagen cars are more than just commodity. Some owners of certain models, such as Golf seem to be loyal to the brand and invest in updated versions and facelifts of the same model from year to year. In the sports division of Volkswagen situation is much the same, as in Renault. Sport models of company has become a centre of gravity for various communities of owners. But Volkswagen has one more thing, that adds significantly to it’s perception as a Lovemark; generating resonance — powerful heritage of models, that had very strong cultural impact on various societies throughout the world.

 All in all, both brands are very strong in terms of awareness and have incredible potential.
Volkswagen has serious problems with positioning and sometimes confuses consumers with regards to what segment certain subtends occupy. The second serious problem for Volkswagen is absence in entry-level market.
Renault has problems in establishing reputation of quality brand and is often perceived as producer of commodities. This may be backfired expansive strategy on entry-level market. But company has serious potential in future. It has successfully invested in electric vehicles and firmly established itself as producer of such goods. Having excessively strong positions on this market, Renault only has to keep pace.

The Lovemark

According to Kevin Roberts “LoveMark” concept, companies can transcend to something much more advanced, then commodity. They can influence consumers in a way, that creates emotional binds with them. We’ve conducted a study to define, whether Renault or Volkswagen correspond to such terms. Here goes the data:

The overall average result of the Lovemarker for Renault after surveying people is: 39,57. Hence, according to the evaluation criteria, proposed by Kevin Roberts, Renault is a brand. These results appear to be very surprising. Renault definitely has potential to be considered as a Lovemark.

The lowest result received was 33. The highest result received was 54. Hence, while for some Renault is a commodity, for others it can be regarded at as a lovemark. Renault loses points in the categories “mystery” and “intimacy”.

For the Volkswagen the overall average result of the Lovemarker for Volkswagen after surveying people is: 50,45

Hence, according to the following diagram, Volkswagen is a lovemark.

The Brand Experience Model – Renault and Volkswagen

From the moment of our birth, we all feel and experience  a product, a service or a mere commodity through our senses. No one is immune to this phenomenon and as such, marketers take advantage of it in order to plan their strategies. These experiences take place while we investigate, search, shop and utilize the product or service. As we go through the different phases (examination, manipulation and the subsequent evaluation) of the item, we gather all the relevant information that will aid us to make the right choice. These experiences can be indirect ( by oral narration, printed materials, ads) or direct ( by touching, feeling, sensing, tasting). As consumers, we tend to rely on each of these types of information in order to make a sound and rational decision.

Another important aspects that contributes to this experience is the atmosphere ( i.e. retail store) in which the consumer comes into contact with the specific brand. The received information contributes to either reinforce the choices made or pushes up to take action. It help by responding to the important questions that may arise about a particular brand. Further, the way in which a consumer senses the experience fluctuates greatly in intensity levels. It all depend of the individual and the cognitive association made by the perception and props, unique ideas or images regarding the targeted brand. In the case or Renault and Volkswagen, these two brands do their most to influence their intended target market by utilizing the four  aspects of the brand. By catering to their desires, wants and need, these two big car makers, do their out most to answer consumers questions. By using all the senses, the consume formulates different questions, experiencing different sensations, acts in a particular way or increase his/her brain functions when confronted by the two brands.

Each companies brand portfolio foment these feelings on their consumers. According to the car model or brand, consumers goes through all the emotional stages of experiencing each brand. From the sensory level to the intellectual aspects, they are reacting in a varying degree to the messages created by these two brands. For some, the power and beauty of a Lamborghini brings to the surface an array of emotions only understood by those belonging to the same community. The same feelings can be describe by F1 spectators or anyone passionate about motor sport  activities. The personification of their vehicle creates trust and loyalty, which in turn, increase the equity of the brand. In fact, by engaging the consumer in every level of the human emotions, they learn the particular preferences of the consumer and are able to adjust their marketing strategy accordingly.

Lovers, perhaps feels a deeper affinity with a Clio or a Polo, or a family man to a Renault Scenic or a VW Touareg. Either way, this feelings or preferences are do to most probably to their past experiences, friends influences or marketing arguments created by each brand.

For example, in the sensory aspects, the brand Renault created strong feelings in their loyal consumers by unveiling the latest models last auto show event in Paris

These event created a chain reaction into the affective, behavioral and intellectual levels of the consumer which in turn, translates into an effective brand experience. The credibility and shifting attitude created by such announcement is correlated to the growth of the brand in terms o equity compare to close competitor. Exceeding consumers expectations is one of the main goals of companies looking to build brand equity. By doing the right thing, consumer experiences with the brand move into another level of reference.

The picture below shows the intricate aspects of brand experience and the concept and how might, every brand, including Renault and Volkswagen, go to created the perfect message for the general consumer.

The Brandthropologist ™
The Brand Science Blog by Greg Ellevsen

In all, the individual experiences gained by interacting with any aspect of brand, contributes to the tangible and intangible growth of Renault and Volkswagen.

 

PoDs & PoPs

Points-of-Difference

Points-of-difference (POD’s) are “attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand “.

Volkswagen

• German quality: Results of our survey clearly show that for consumers Volkswagen cars are strongly associated with very good quality. They trust German production and associate it with performance and innovation. It is clearly a point of difference between Volkswagen and Renault because consumers think the opposite for the quality of French cars.

• Major home production: Volkswagen successfully uses Germany’s reputation in technological precision and general quality of goods. Therefore, Volkswagen tends to produce significant amount of vehicle in motherland. In spite of ever-increasing labor cost in Germany, Volkswagen still finds that additional gain from “Made in Germany” label on their cars is worth more than domestic production expenditures.

• Presence in USA: The brand is one of the few Europeans to have established in North America. Every day, 2,500 cars out of the Volkswagen plant production lines located two kilometers from Puebla in central Mexico. This is the factory that produced more vehicles in North America in 2012. But still, Volkswagen vehicles are far from reaching the same saturation of market, as in Europe.

• Premium and luxury cars: Volkswagen is known for its top of the range products. Although, general awareness of the fact that Volkswagen owns multiple luxury brands is weak, It still bears additional marketing impulse to core brand.

Renault

• Cheap price: According to our survey, Renault is strongly associated with low price. Indeed, consumers are more inclined to buy brand’s cars than their competitors because they place a very strong importance on the price.

• Electric Vehicles: Although both brands have electric vehicles in their model ranges, it was Renault, who started very aggressive expansion on electric market several years ago. Now company sells 4 fully-electric cars. With 200,000 EVs sold, Renault(as RN alliance) owns 58% of electric vehicle market worldwide. Renault also build the whole fleet for new Formula E Championship, one that hold around electric vehicles. That builds up strong association of Renault(and fellow Nissan) as an innovative company.

• Environmental protection: With its advances in electric cars, Renault enjoys a good reputation in contrast to its competitors. In addition, Renault is the only European manufacturer to have made commitments in the recycling of vehicles.

• Made in France: For many patriotic French, Renault represents the French car par excellence. The brand uses this advantage in its commercials on TV.

Points of Parity

According to K.L Keller‘s definitions, a point-of-parity (POP) is “associations that are not necessarily unique to the brand but in fact may be shared with other brands”. Companies focus in POPs because they are an efficient way to annul the points-of-difference (POD) created by the competitors.

• Motorsport history: Both companies have huge success in Motorsports. Renault for instance is strongly present in Formula 1 with huge success (world champion engine) and Volkswagen with his pilot, Sebastien Ogier, became World Rally champion for the second time.

• Worldwide presence: Renault is present in 128 countries, Volkswagen in 153 countries. Both brands have both chosen an international expansion strategy by uniting with other groups to conquer other international markets.

• Huge communication budget: Renault is the first company in France in terms of advertising investment with a budget of € 412 million in 2013. Volkswagen appears in 11th place with 216 million. It is interesting to observe that both marks are not acting on the same channels: in fact, the most widely used media for Renault is radio while Volkswagen uses more press.

Survey Analysis

First of all, we are going to determine the profile of our audience. Respondents appear to have near equal gender distribution. They are mostly students aged of 15 to 25 years, and of French nationality.

 

 

 

100% of people who responded to our questionnaire recognised the logo Volkswagen. 20% of people didn’t recognise Renault’s logo at all with 16% of respondents stating, that Renault doesn’t mean anything for them as a brand.

Here are keywords, that respondents associated with the two brands:

 

We can observe that the two brands are clearly different in consumer perception. They don’t use the same  key words to describe it and even use opposite words (Expensive/Cheap)

Volkswagen seems to be precepts in more positive way than Renault.

65% of our audience have a car, 16% have a Renault car and 2% — a Volkswagen one. These numbers are surprising compared to the answers to the question “If you were to buy a car, what brand it will be?”.  Indeed, the majority of people would be more inclined to buy a Volkswagen car rather than a Renault one. As we can see, respondents describe Volkswagen as an expensive and Renault as a good deal, therefore we can derive, that the most significant factor in buying decision in this case is price, where Renault outperforms Volkswagen.

 

We can observe that people attribute more qualities to the Volkswagen brand. That is explaining why the majority will be more inclined to buy a Volkswagen car.

However Renault outperforms Volkswagen in environmental responsibility criteria. This shift is a direct result of Renault’s Zero Emission campaign and its expansive marketing policy in electric vehicles. It has indeed the broadest range of electric vehicles on European Market and ranks as n1 in sales of those kinds of vehicles.

The brand awareness is composed of brand recognition and brand recall.

In the cases of Volkswagen and Renault, we can observe that Renault’s most significant association is that of it’s origin — “made in France” product.

In addition, the German brand is more recalled, it is the first cited brand, the top of mind.  However people still are able to cite the majority of the products of Renault. In the survey, lots of persons recalled Twingo and Clio…

In case of Volkswagen, it is different because the group owns 13 brands and people are not aware of this fact.

In both cases, the brands try to establish brand awareness by increasing the familiarity through repeated exposure: TV advertising, big numbers of selling points for example.

Marques have to create favourable, strong and unique brand association.

In respect of our results, we can see that for clients, Volkswagen is clearly associated to Power, Quality, Performance and Innovation. For Renault, the brand image is less positive: French, Cheap, Security and Ugly.

Volkswagen should continue his communication strategy but Renault should quickly change its way of communicate in order to change the association of the brand in consumer’s mind.

Renault & Volkswagen: Brand Associations

Every consumer segment has an unique way of perceiving the messages send by a particular brand vis-a-vis others. The messages can be either explicit or implicit.  It aims to reinforce existing information and identify or promotes new ones in the mind of consumers. Depending of the nature of the product or service, the perceive message can have a positive and negative effect on the brand. However, brands are essentially looking to conveying a positive image by creating a durable and desirable product. By extension of items such as Color, Shape, Slogan , Symbols, etc. the brand seeks to grow their equity potential by doing their utmost to bring the message thorough to end users. These adjectives or attributes promotes cognitive association in consumers mind which leads to a quick recognition of the brand. Quick mental decisions are formulated by consumers everyday seeking to get a reward/satisfaction from what the brand has to offer. By responding to basic consumer needs at the beginning, brands can create or promote communities that shares the same values or passion. This is the main reason why brands seeks to gain a strong position inside the consumer mind. Renault and Volkswagen are not exception to this. Each of them strive to send a positive message, in their own way, to reach the market.

In order to accelerate the process and aid the consumers, both of these companies utilize every mean of marketing mix  to reach their intended target. From printing ads, TV commercials, Celebrity Endorsement, Customer Service, Point of Sales, Word of Mouth, etc. these brands are creating “noise” and “buzz”, to seduce every potential consumer into becoming a loyal one.  All these ideas and tools are helping each brand to build ‘equity’ and generate profits.

Renault

There are arrays of ideas, concepts, words and symbols that comes to mind when we talk about Renault. For some, the car manufacturer is synonym with F1 races and rally around the world. Perception like this  is mainly due to the historical background and current commitment of the company in motor sport activities. In fact, Renault is looking to capture consumers attention and loyalty by tapping into their unique ‘personal traits. By “personalizing” the brand, Renault is looking to make that emotional connection in order to appeal to the average consumer. Moreover, the car maker hardly use celebrities to endorse their vehicles. This approach is more evident when the vehicle belongs to price point category.

This is the reason why every Renault model coming out of the has its own set of attributes that conveys power, comfort, elegance, prestige, affordable price, practicality, etc. These attributes helps to make the connection with the consumer by promoting differentiation or integration of the brand, from a social standpoint. Further, by responding to the need of each consumer segment, the company increases its “equity” regarding the competition.

Volkswagen

Volkswagen also follows a similar marketing mix, however; with a slightly different approach regarding consumers. Although, they do tap into human emotions, their main attributes are mainly linked to primordial emotions and basic human needs( safety, survival, protection, trust,etc.) Thanks to their simple slogan “Das Auto” the company is able to to connect with their customer instantly. Although it is in German, consumers associate the language, in this particular context, as a symbol of quality,reliance,  craftsmanship,great engineering and strength. Further segmentation of the market led to other words associate with the brand as can be observed on the below picture. The car manufacturers brand also come to mind in terms of luxury and prestige when we look into Porsche, Lamborghini and the Bentley line. These brands helps the company to further extend their brand ‘equity’ around the world.

 

What really lies behind this brand “EQUITY”, resulting from humans perception, is the overall exposure and spread knowledge of the brand. Build on human emotions, either physical or mental manifestations, brands capitalized on the associations made by the consumers once exposed to the messages or ideas conveyed by then. The are the reason why cars like Renault and Volkswagen are constantly searching to stir strong emotions on consumer like you and I. So, we see communities that are very passionate about the VW beetle, the VW bus, the Renault 4L “quatrelle” , the Porsche 1956 Speedster for example. These models, provides the consumer, a sense of “belonging”. It also helps into luring others, while promoting social and cultural “separation” form the masses.

As consumers, we seek to get answers and somehow, a connection with the brand. We do identify with their culture and readily create an association with a particular model or message emanating from the brand. It also reflects the right approach that the brand are doing regarding the target market and the solutions or answers provided. By differentiating themselves from the competitions ( via jingle, slogan, symbols,physical shapes, etc.) their are able to hammer and convey the right information in a short,sweet and concrete way.

The picture below (Keller’s Pyramid) summarize the brand EQUITY in terms of consumer perceptions. It goes from  “Salience” (awareness) to “Resonance” ( the coveted or ideal relationships) that the brand seeks from the consumer.

Every stage accentuate the brand notoriety or Equity. The results can be a positive one, but only if the sequence or steps are being observed or followed. The results leads to strong relationship with the consumer.

 

 

 

Brand Positioning analysis

We can segment car buyers needs similar to Maslow’s ‘hierarchy of needs’ pyramid. Thus, while advertising vehicles, certain levels of needs can be addressed, depending on segment.

Entry-level segment products satisfy basically first two levels of needs: ability to transport something safely + some exclusively utilitarian features(e.g. large trunk,). Mid-price vehicles have to add emotional component to the mix: comfort, performance, excitement of driving. And premium segment products should possess certain status-markers, that’ll establish buyers within desired social groups. So, advertising campaign, promoting different car segments should focus on addressing specific features, that’ll satisfy respective need levels.

Positioning your car brand may appear somewhat tricky. There are a lot of factors to take into account, such as desired margin, potential volume and your own capabilities to support that volume. Recent study[LINK McKinsey 2020] reveals the following structure of car market.

     Thus, Premium segment secures (to some extent) revenues even for lower sales volumes. In order to successfully operate in mid-price segment you have to be pretty confident in your capabilities to support large volumes of car sales. And entry level implies some really harsh limitations — you have to be extremely efficient in order to break even in production of low-cost vehicles.

     Such limitations stimulate upward shift in car brand positioning, because it may seem a bit easier to operate in premium segment, than in mid-price, not to mention harsh environment of entry-level segment. Recently, French car manufacturers have followed exactly the path. They began to reposition themselves, shifting upwards in direction of premium segment, settling just below Audi, BMW and Mercedes. However, Renault is not one of them. This car manufacturer suppressed the urge to follow the trend, focusing instead on concentrating it’s effort on further expansion in mid-price and entry level segments. However, Renault keeps probing premium class with it’s niche initiatives like Alpine and Initiale Paris. But still, core brand positioning of Renault is “People’s car”.

Positioning itself in mid-price and entry level has its own draw-backs. The brand faces the problem of contradictory perception of itself in minds of consumers. Entry-level and affordable vehicles tend to be not associated with quality. Thus, if positioned in both segments, entry-level implications seriously impact sales of mid range vehicles. That’s why car manufacturers try to establish separate brands for different segments — they try to avoid mis-match in associations and targeting. Renault established it’s low-cost entry-segment Dacia brand with a specific purpose to operate on entry-level market and diminish influence of such operation on core brand. However, on some markets, where entry-level segment was worth much more than mid-price (developing markets), Renault didn’t use at all Dacia brand, instead using it’s own badge. The strategy appeared to be successful, as it basically associated mid-price attributes with entry-level price, seriously increasing sales in entry-level segment. But at the same time increasing popularity of entry-level cars, shifted brand perception towards entry-level attributes, thus diminishing sales in mid-price segment.

     In order to overcome this situation, Renault came up with a marketing initiative, targeted to reinforce company’s image as quality car manufacturer. They designed double-logo system, where traditional Renault logo was supported by Quality made Renault logo.

     The two logos appeared (and continue to do so on some markets) simultaneously on any kind of media used for advertising. At some moment in time company finally realised that they win manufacturers title of F1 for 10 years in a row, where 3 teams use their engines and that that could be used as support for establishing Renault as “Quality brand”. So, they came up with third logo, that joined the duo and aimed to support and prove the “quality made” one.

     On some markets(e.g. UK) the three logos follow each other in the final part of every TV advertising. Renault even launched additional supportive campaign to reinforce the statement even further, trying to fix a stable association of a brand as a champion of F1:

     These efforts aim to establish Renault as “People’s champion brand”, implying that both quality and affordability can be attributes of the same vehicle. They support the statement by success in most sophisticated car championship in the world. Renault also supports 3 other major championships: Formula Renault, World Series by Renault and Formula E.

     All these initiatives lead us to Renault’s positioning as “People’s Champion” — car brand that integrates affordability and “champion” quality in the same bottle vehicle.

     Volkswagen has much more trouble with positioning, then one can think of… To begin with, it’s hard to justify almost premium price for a car, that has “People’s car” (almost “Folk’s car”) in it’s name. However, that doesn’t appear to be an issue outside Germany (and I’m not sure about “Folk’s car” part). The main problem in VW positioning is with it’s family, where all the bunch(VW, Skoda, Seat) tends to occupy the same segment and even has the same upward shift trend.

     Initially, as was mentioned before, VW destined Skoda to become entry-level brand, however, rebellious Czech brand wanted higher margins and found ways to outperform it’s Spanish brother, Seat, in conquering European markets as a mid-price brand, and even stepping on toes of VW.  Eventually, Skoda’s CEO was fired, but the brand was already firmly established in mid-range segment. Seat, on the other hand, under-performs constantly and faces never-ending troubles in gaining at least some profits, having trouble with it’s mid-price positioning.

     But what’s the positioning of core brand, Volkswagen? In the late 1990s VW implemented strategy of upward shift from people’s car perception towards premium segment. It used AUDI’s premium technologies in VW models, which were marketed as premium features for affordable price. The tagline later transformed in “The power of German Engineering”, which implied the overall state-of-the-art quality of VW cars and justified higher prices. The tradition continues, as VW advertises it’s vehicles, focusing mostly on their specific features and technical qualities.

     

     In majority of cases these appear to be cross-platform features, that are simultaneously implemented in various VW brands in different segments. Having little trouble with quality, company succeeds with that strategy as is strongly associated with quality and performance.

     In spite of having a bunch of brands in premium and luxury segments, VW itself constantly probes premium segment with various efforts. VW Phaeton is one example, where company failed to extend it’s perception to premium segment. Right now company plans to extend both to entry level and premium segments. Volkswagen apparently is amazed by how much cash Audi generates and wants to share the pie.

Perceptual maps

Consumer perception by Price and Quality

Consumer perception by Type of Cars

SWOT analysis

Renault

Strengths 

Wide range of models offered: Renault has a very wide range of models for every type of consumer taste and budget. Customers can choose among 17 models of cars.

Global presence: The group is available in 128 countries with a workforce of over 120,000 employees.

Actively involved in auto racing championship worldwide via team sponsorship: In 2014, Formula 1 enters a new era. After three years of research and development, the most significant technological disruption in twenty years has occurred with the introduction of the new-generation Power Unit engines by Renault ; the ENERFY F1- 2014

Alliance and brand associations with Nissan and the joint venture with Mahindra helped in global reach: Created in 1999, the Renault-Nissan Alliance is today the longest running transnational partnership between two major carmakers in the automotive industry. This strong collaboration helped these two companies to reach new markets and increase brand awareness and revenues for shareholders.

Weaknesses

Cases of recall of cars slightly affected brand image: In 2014, Renault announced the recall of nearly half a million vehicles for brake problems. Clio, Kangoo and Mercedes Citan are concerned. Nearly 155,000 copies in France recalled more than 400,000 in the world for the Clio 4. Mechanical problems were mostly behind these recalls.

Opportunities

Investment in hybrid and electric cars: The Renault Zoe is the electric car sold in France. Presented in its final version at the Geneva show in 2012, she plays the electric car available to the greatest number, with an affordable price with a battery rental.

Demand from emerging countries where automotive market continues to grow in a steady pace: The BRIC (Brazil, Russia, India and China) would account for 50% of global automotive demand by in 2018, according to a KPMG study. Renault is on the right track. Indeed, their second and third biggest markets are Brazil and Russia.

Threats 

In a context of increased competition, the rise in commodity prices and raw materials has a severe repercussion which is reflected on the MSRP to the end consumer. This variable drives the full mechanism of innovation in the automaker industry. By constantly innovating their product, automakers are seeking to introduce engineered raw material in order to reduce the end price of their vehicles.

Volkswagen

Strengths

Global presence: The group operates in 153 countries worldwide and was the third biggest auto manufacturer in 2012. In France, nearly 1,000 points of sales are available. The group sells 60% of its vehicles outside Europe

Strong brand portfolio: Volkswagen Group owns and sells 13 automotive brands: Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda, Volkswagen, MAN, Scania and other commercial vehicles. With such wide range of vehicle models the company satisfies nearly all consumer needs and have an access to an immense consumer market. Volkswagen has the largest of all global output range, the tiny Volkswagen Up to hyper luxurious Bentley Mulsanne limousine, through small Volkswagen Polo and Seat Ibiza, Volkswagen Golf and Audi A3 compact family Volkswagen Passat a whole host of 4×4, the Skoda Yeti to the Audi Q7 and Porsche Cayenne, convertibles, vans, pick-up …

Strong presence in China: While the automotive industry in France and Germany are going through a crisis due to shrinking sales, China is offering an exit to European car manufacturers by becoming the world’s largest auto market. China saw its passenger car sales jump 15.7% in 2013. In total, 21.98 million vehicles were sold in the country last year, a high record. It is the biggest market for Volkswagen vehicles. Indeed, the company captures nearly 20% of the market mainly with its Audi and Volkswagen brands.

Well performing brands: The company possesses very successful brands: Audi and Porsche. Audi brand is valued at $7 billion, while Porsche is valued at $5 billion. Audi is even the second biggest brand in the firm’s portfolio.

Weaknesses

Weak position in the US passenger car market: Last year, the German group has seen its sales increase by only 2.6% in 2013 (to 611,700 units). Its market share has shrunk to 2.6%. The percentage is dismal as the US is the second largest automotive market in the world, after China. The weak Volkswagen’s position in North America reflects the current sales results of the brand.

Some of the brands are not environment friendly: The Volkswagen family is comprised of three sport car brands: Porsche, Lamborghini and Bugatti. These luxurious brands are known to emit high amount of CO2 and fuel inefficient. Besides, the company is strongly opposing to legislation requiring tighter regulations on CO2 emissions and energy efficiency due to the aforementioned reasons.

Opportunities

Positive attitude towards “green” vehicles: Vehicles with higher CO2 emission and inefficient fuel/km ration have a negative image for many environmentally conscious consumers. Thanks to international summits of environmental and climate changes issues are creating great awareness for the average consumer. The results are a positive impact and more receptive to the ‘green’ movement that has been spreading rapidly across the globe. Hence why most of the industry is embracing the development of green and fuel efficient vehicles for quiet sometimes now.

Growth through acquisitions: Volkswagen Group is very successful in acquiring other auto manufactures and getting access to larger consumer markets. That is why, to continue grow and to success in US market, Volkswagen should continue with this strategy.

Threats

New emission standards: Volkswagen strongly opposes stricter regulations for lower emission standards. If such legislation would be passed the business would have to make huge investments to engineer newer engines that emit less CO2.

Rising raw material prices: The availability or lack of certain raw material (edit. precious metals) is turning out to be one of the main problems that car manufacturing is facing nowadays. Depending of the need of particular brand, supply managers are seeing these issues as highly strategic and needs to be addressed without hesitation. For example, the industry is the main consumer of lead, with 60% of world production. However, according to some studies, the reserves will be exhausted by 2030. The precarity of the situation results in higher prices and shortages of supply. All this translates to several billion Euros in extra expenses for the automotive industry.

 

Elements and current marketing program of VW and Renault

In a very competitive market such as the automaker industry, Renault and Volkswagen relies on elements unique to each of then such as logos,slogans,innovation and quality to hammer on their current marketing programs. These elements can be observed in their TVC or advertisement campaign around the world.  Although their marketing mix are pretty much the same, these two automaker have chosen different attributes that are the core of their campaign.

For example, Volkswagen, primarily promotes the mechanical/engineering and power aspects of their vehicle. The reputation associated with German workmanship and precision, are the main ideas in which almost the entire campaign relies on. On a lesser extend, the emotional and environmental part comes into play.

Renault, on the other hand, plays the opposite side of things and highlights the emotional aspects associated with their cars.  By showing the relationship that each owner has with his/her vehicle, Renault is hoping to lure customers by showing the soft, elegance and comfort side of their vehicles. Below are some elements involved in the current marketing strategies used by the two automakers.

The Volkswagen side of things

According to Vinay Shahani, the new VP-marketing at Volkswagen of America, “it is difficult for U.S. consumer to grasp the idea of the premium price tags pegged into their vehicle. Especially when they are trying to become the number one player in the mass production market”.

This is quite true for many as they do not see VW as a luxury brand. Nevertheless, Volkswagen exhibit higher price tags because of their reliance on craftsmanship and generally reputation of their cars.  The company chief argues that this is due to the prestige associated with German technology.

VW

Here are some elements involved in VW commercials in a way to conveying their message to the consumers.

Slogan: A very important medium for companies to create brand awareness by creating catching phrases or ideas. By constant exposure to these messages, the average consumers, identify themselves and instantly recognized the brand. Advertisement campaign such …”The power of German engineering” in the USA and ‘Das auto‘ in France, ” Why drive anything else” in Australia, emphasizes the engineering reputation for which is well known for.

Quality & reliability: Once again the German car maker is putting forward the quality of their vehicle at the forefront of their campaign. With the following TVC, the conveyed message highlight the fuel efficiency and design of the car.

Redesign company website: In a fast pace consumer world, especially the internet, the company revamped their website to keep up with the latest technology and marketing strategies. However, this can backfire, at times, when the site is streamlined to the minimalistic category. Nevertheless, VW updated the its website hoping to help consumers

Drive the new TDI technology: Volkswagen is trying to tap into those ‘environmentally conscious’ consumer. The Turbocharged Direct Injection , a technology that is widely used by the company, calls into the diffusion of diesel engines in the US.

Its a confidence thing – Australia-    This particular TVC tries to convey the ” Confidence” message to the consumer.

http://adage.com/article/cmo-strategy/vw-s-marketing-chief-stick-brand-voice-shops/291064/

Features speak for itself – India-

http://c.brightcove.com/services/viewer/federated_f9?isVid=1&isUI=1

Renault

Renault on the other hand, is pursuing a more aggressive campaign geotargeting the  Mobile consumers . By launching of ZOE for the electric car enthusiasts via their app (mainly in the UK for now) the company is seeking to increase their brand awareness and lower customers resistance and hesitancy regarding the electric vehicle.

But what the french automaker do the best in order to differentiate itself from the competition, is playing into the human emotions to convey their messages. according to the main advertisement strategy of the brand, humans are a complex and emotional being,  and to address it , there’s a Renault for every occasion and every important moment of our lives.

The main motto for the car company is ” drive the Change”

Here are a few samples of  tvc involving “Emotions”

The company’s, ” the Diamond” had subtle changes since 1925. It plays a crucial role in creating cognitive association in the mind of consumers helping the company to be well positioned amongst competitors.  The chosen colors of yellow ( joy, optimism and prosperity) and silver (innovation, creativity and sophistication) were in an effort to represent and associate the brand with main human emotions. These two elements (colors and emotions) helps Renault  to further accelerate one of their marketing strategic business target: portray their cars as a crucial element for ‘state of mind and emotional wellbeing’.

banking into environmentally conscious consumers:http://www.mobilemarketer.com/cms/news/advertising/17870.html

Cross screen brand awareness for the Clio

http://exponential.com/2013/07/17/renault-selects-exponential-to-launch-a-cross-screen-brand-awareness-campaign-to-promote-new-clio/