VW's 3 marketing messages: Engineering, humor, price
Volkswagen of America has set ambitious U.S. growth goals and is marketing itself as a German brand people can afford, stressing German engineering and sprinkling in a bit of humor, says head marketer Tim Mahoney.
Mahoney is chief marketing officer of Volkswagen of America and vice president of the Volkswagen brand. He has been in the job since May 2011.
Mahoney, 56, previously was chief marketing officer for Subaru of America, a job he held for five years as the small Japanese brand skyrocketed in sales and popularity. Prior to that he was general manager of marketing for Porsche Cars North America from 1999 to 2006 and helped launch the Cayenne, the brand's first SUV. He got his start in automotive marketing in 1984 at Subaru as a marketing research analyst.
Mahoney was interviewed by Staff Reporter Diana T. Kurylko.
Q: As Volkswagen strives to sell 800,000 vehicles a year by 2018, how will marketing change?
A: The brand perception and awareness is pretty rock-solid with models like Beetle and Jetta. We have a tremendous growth opportunity.
Just two years ago, during calendar-year 2010, we sold about 10,000 Passats. When I came here last year they said, "We will sell 10,000 a month," and so far we are. We have had several months in excess of 10,000, and through July we are in excess of 64,000 units. It's a big segment, and we're participating. Tiguan is an opportunity for us to penetrate the market even further.
It is less about changing who we are. You could argue from a marketing perspective that the work we are developing now is under the banner "The Power of German Engineering," and how we make pretty impressive cars that are well priced for the American consumer.
Why did VW get involved as a sponsor of Shark Week on the Discovery Channel last month?
When we do integrations, we are truly looking for integrations into the programming. We had a truly successful one during the Super Bowl with the show "The Middle." When we looked at the summer months, we looked at Shark Week. This year is slightly different, with the Olympics going on, but it is one of the most watched programs of the summer. And when we look against our Beetle target, it was three times more likely to be watched by the target.
"The Power of German Engineering" has been your tag line for how long? Is it working?
About a year. One of our strengths is our German heritage, our German engineering. When you look at the market, there are plenty of Asian alternatives, there are five or six Japanese and the Koreans, but at the price point where we compete, there isn't an alternative of European products. People have a generally positive perception of German products and German cars in particular. We decided to lean into our strengths rather than lean into our competitors. It is working.
How do you market the value story without cheapening the product?
When we stress value, we deal with it in a way that is intelligent in our above-the-line advertising. We sign the ad off either with the monthly payment or lease payment.
It is a combination of an emotional hook that could include humor, a rational reason -- being a top safety pick or Motor Trend's car of the year -- and that third equation: "Can I afford it?" So we are really answering three questions: "Do I want to associate with this brand? Does it make sense and can I justify it?" And the third is: "Can I afford it?"
What are you doing on the Internet?
We have everything that you may expect -- vw.com, our Web site; we participate in the social channels with Facebook and Twitter feeds. On the innovation side, we launched Golf R this year, and it is the pinnacle of the Golf line, the performance model. We did that primarily through digital and developed an entire app where we told the heritage of the GTI and the performance story of VW. That is an interesting way to communicate and to push it out to the owner. A fairly high percentage of people who downloaded the app bought the car -- the number was in the teens rather than the 2 percent that we get with direct marketing.
Do you advertise on Facebook?
We do. Again, as marketers we sometimes become totally preoccupied with the shiny new object. You have to be aware of all of the ways to reach your target consumer, and that is one way to reach them. It gets more and more complex every year.
How important is event marketing, and what are you doing?
Event marketing is incredibly important. We call it "experiential." It is about experiencing the car firsthand, not through the television set or the iPad tablet but physically touching and having the opportunity to sit in the car. We include our auto show programs in that space and certain activities that align well with our target audience and the VW buyer.
We did an exercise where we said, "Let's profile a wide variety of activities and interests that we could sponsor or underwrite," and looked at how they performed on our target market. Activities that did well not only for our target but the VW brand are music and active sports -- soccer, cycling and running.
Will you be in next year's Super Bowl?
We'll leave it open. That is like asking a political candidate if they are going to run again.
What has been your biggest innovation in marketing at VW?
This answer is true but not sexy: putting a solid planning base in place that allows VW to continue to enjoy sustainable, profitable growth. We plan far in advance. A lot of companies plan for the next model launch. We are planning in the next 24- to 36-month horizon, and not just product, but also marketing. Taking that long view and having the right people and the right team can be magic.
You've been at Porsche and Subaru. What did you bring from those two companies to VW?
From Subaru I bring a competitive setting that VW bumps up against. I know the segments where we compete, I know how to compete. What I learned at Porsche was branding and consistency. The beauty of that brand is a little bit like Starbucks -- you can walk into a Porsche dealership in the U.S., in Japan and in Germany, and it is the same experience.
You can reach Diana T. Kurylko at email@example.com. -- Follow Diana on