Fine-tuning fits VW as it seeks mainstream appeal

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Better ad placement, localized ad efforts and a bit of turbo boost are designed to give Volkswagen of America an edge in 2002.

The automaker has set an auto sales target of 360,000, which would be a 1.4% increase from the 355,648 units VW sold last year.

"We just need to be smarter about where we place our advertising and when we buy our advertising," says Karen Marderosian, director of marketing at Volkswagen of America. "Ad spending is going to be up a little bit, we'll be up in some areas, we'll be down in others, but overall we'll be around where we were last year."

Volkswagen spent $371 million on measured media last year, according to Taylor Nelson Sofres' CMR. And though Ms. Marderosian says ad spending will be about the same this year, VW's message has evolved into a brand campaign that's being placed in narrowly focused media. "You'll see us do a lot of advertising that talks about Volkswagen overall," she says. "We're going to talk about a lot things that are going on at Volkswagen. And you'll see us talk about individual models' systems and enhancements."

A TV commercial about Turbo technology and another spot about Volkswagen's DNA, launched during the Winter Olympics, are the beginning of its brand campaign.

Ms. Marderosian says Volkswagen doesn't have any new products for 2002 so it will focus individual model advertising on enhancements like the New Beetle Turbo S and the eight-cylinder Passat, which goes on sale later this year.

VW will continue to advertise on offbeat network shows that grow and develop their own following, such as Fox's "Boston Public," which has a 7.4 rating according to Nielsen Media Research through March 10, and ABC's "Alias," which has a 6.1 rating for the same time period.

"They are shows that really started small and we took a chance with them, and they've really grown into their own," Ms. Marderosian says. "We like to get in on the ground floor."

On cable TV, VW also will continue to advertise on Viacom's MTV and Rainbow Media Holdings' Bravo. "You'll see us on those because we do go after a younger market," Ms. Marderosian says, "but we also go after a younger mind-set as well."

The median age of Volkswagen owners is 37. For individual models the median age is 44 for the New Beetle, 38 for the Passat, 36 for the Golf, 35 for the Cabrio, 31 for the Jetta and 31 for the GTI.

Regional advertising and print are where VW will fine-tune its ad spending. Rather than make blanket regional buys, VW will target turfs that it must defend, such as New York, where its market share is 7% in contrast with 4% nationally. VW also will look to grow its market share in such Southern locales as Atlanta and Florida.

"Now we're looking at individual markets, what our needs are in those markets, and you might see a specific plan for a specific market based on whether it's a growing market or it's already an established market that we need to defend," Ms. Marderosian says.

In addition to such magazines as Conde Nast Publications' Gourmet, this year the carmaker is advertising in titles that it has never been in before, like Black Book Publishing's Black Book city guide and one. a magazine, the trade magazine for the One Club for Art & Copy.

Ms. Marderosian says these publications cater to very targeted groups, including agency art directors, many of whom she says have shown interest in the Beetle design.

"We like environments that really reflect our brand personality," she says.

diversity mix

VW's marketing to African-Americans remains unchanged this year; the automaker will continue to place ads in publications like Black Enterprise and Vanguarde Media's Savoy. But Ms. Marderosian says VW is exploring the idea of adding an African-American agency to its diversity marketing mix.

A new agency is in the wings for VW's Hispanic advertising as the automaker plans to up the ante in that segment. "We've always bought Hispanic broadcast [media] on a spot basis," says Ms. Marderosian.

VW will stop translating its general-market advertising, created by Havas Advertising's Arnold Worldwide, Boston, into Spanish for the Hispanic market, and hire its first agency for dedicated Latino advertising. The previous tactic worked in a lot of cases because VW ads didn't have that much dialogue in its ads. Ms. Marderosian says that "based on research, we discovered that the current Hispanic advertising does not resonate as well as it could if we had original creative."

VW is finalizing a deal for CreativeOnDemand, Coral Gables, Fla., to handle creative for the Hispanic market on a project basis (AA, March 4). VW says its top Hispanic markets are Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Antonio and San Francisco.

Jim Hall, an AutoPacific Group analyst, says VW can hit its sales target this year.

"They're an aspirational brand, and there's no price penalty of any consequence by getting a Volkswagen instead of getting a more mainstream vehicle," Mr. Hall says. "A 5,000-unit increase is within the realm of possibility." Still, through February, Volkswagen says its sales were down 2.1% from the same time period in 2001.

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