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ADVERTISING AND COMMUNICATION PLAN

External Influences 

a) Economic Trends 

    • The economic growth in Canada was 3.1 in 2017, augmented by the increase in oil prices. Canada expects to have a 2.2% growth in 2018. 
    • Bank of Canada expects to increase its interest rate twice. It might reach 1.5%, the US interest rate is 2.25%, and this interest rate differential will lead to depreciation of the Canadian dollar relative to the US dollar. But it will result in increased exports to the US and more tourism in Canada. 
    • GDP per capita grew by 0.3% in Q1, 2018, and this growth is attributed to the increased governmental outlays. 
  • Imports increased in 2017, and this increase is led by cars importing, which increased by 5.9%. 

b) Social and Demographic Trends 

Ø The estimated population in Canada for 2018 is 39.95 million puts Canada the 38th ranking globally. The female median age is 43.3 years, and for males is 40.8 years. 

Alberta, Saskatchewan, and Manitoba have the fastest growth rate in the population in Canada. 

Conversely, population growth in the Atlantic provinces has still the lowest in recent years. For the first time, three out of four of these Atlantic provinces recorded death rates higher than the birth rate. (Laurent Martel, 2017)

c) Technology Trends 

  • Recently, Canada became a global hub for researches in artificial intelligence and had a remarkable interest grow among academic institutions, private companies, and governments.
  • Laser-based Lidar systems continue to grow; this system is designating for mapping development. Meanwhile, this technology is relatively expensive and pertinent to luxury cars. This cost is starting to get down by the advent of the microelectromechanical system technology.
  • Also, the development of Lane departure technology warning system that keeps the car in the designated lane and warn the driver if any deviations occur by using a specialized camera. 
  • The use of smartphones in connecting with cars, like streaming entertainments and vehicle management by recording driving metrics.
  • Market Analysis Market Size and Growth  
  • Canadian vehicle sales hit the two million cars for the first time in 2017. 
  • Sales for all of 2016 amounted to a record of 1.95 million.
  • Sales in 2017 increased significantly and reached 4.6% vs. 2016, and this growth is consistent for the eight years. 
  • Market Segments (Product Classifications) 
    • The light-truck segment—which encompasses SUVs, pickup trucks, and vans — has a 68.6% market share of cars in Canada increased by 8.7% in 2017. 
    • But, Passenger car sales fell by 3.4% and reached to the lowest level since 1964 with 639,823 units sold, light trucks sales amounted to 1.39 cars in 2017. 
  • Seasonal Analysis
  • From the chart above, it is clear that sales increases in the spring season, followed by summer and decreased in the winter season.
  • Car sales slow as temperature drops meaning significant seasonal discounts
  • The highest season ever for car sales is usually in May amounted to 220,436, which is 11% from the whole year.
  1. Competitor Analysis 
  • Share Trends 
    • The light-truck segment—which encompasses SUVs, pickup trucks, and vans — has a 68.6% market share of cars in Canada increased by 8.7% in 2017.
    • ‎b) 
  • Toyota RAV4 is the market leader in the SUV market by 50,894 cars sold in 2017 accounts for 4% from the light truck market (light truck sales were 1,39 million cars).
  • Followed by Honda CR-VFord Escape then by Nissan Rogue by recording 50,443, 47,880, and 43,418 consecutively.
  • Surprisingly, Jeep Cherokee ranked no eight in the light truck market in Canada by selling 24,446 in 2017. (Statistica, 2018)
  • Tiguan sales were 15,028 cars in 2017 accounts for 34% growth vs. 2016. 
  • Globally Toyota is the market leader in the light truck market by 1,944,413 cars in 2017 accounts for 30% growth vs. the previous year. Followed by Nissan, Honda, and Ford by sales of 1,850,045, 1,825,032, and 1,570,217 SUV cars successively. 
  • Volkswagen sold globally, sold 868,862 SUV cars in 2017, and ranked number eight. 
  1. Marketing Communications Strategy Assessment
    • Toyota uses both product differentiation positioning and low cost as generic strategies to gain a competitive advantage over its competitors in the automotive industry. The market scope is a broad market that encompasses nearly every type of customer. (Mohamed Islam, 2015)
      • Advertising: Toyota advertises RAV4 in social media like its Facebook page, YouTube channel, TV, newspapers, and outdoors. They are successful in their advertising strategy as their objective is to increase awareness of RAV4 features and increase their sales, making a remarkable growth.
      •  Sales promotion: Toyota believes in sales promotion to attract new customers to their models. RAV4 has two models promoted on their official website; the first one is the LE model, which is the basic version. It is promoted by lease or finance from 0.49%, and they offer cash incentives up to $1500. The second model, AWD, is also promoted by lease or finance from 0.49%.
      • Personal selling: Toyota uses personal selling through dealerships’ sales personnel, who personally promote products to potential buyers.
      • Public relation: Toyota RAV4 is in the focus of many news websites designated for the automotive industry in Canada, which indicated their success in that matter.
    • Honda CRV uses product differentiation strategy as it is clear from focusing on their competitive advantages on their ads like safety and technology of blind spot information system and multi-angle review camera. Also, they have four versions with optional features to increase their market penetrations to different segments, but generally speaking, they don’t promote CRV as an economical car.
      • Advertising:  Honda focuses their promotion of CRV on YouTube and their Facebook sponsored page. No outdoor billboard ads notified.
      • Public Relations: Honda CRV had many press conferences globally and in Canada. They also had a charitable contribution Habitat Huronia which is a local volunteer organization supporting families seeking affordable homes. 
    • Ford Escape has four models with optional features prices and penetrating lower class income. They adopt the product differentiation strategy as well as cost leadership. They promote themselves as cost-efficient cars in terms of affordable prices, low-cost maintenance, and low gasoline consumption. 
      • Sales promotion: there is always sales promotion in the ford and Escape model as well. One of those successful sales promotions is 0% finance interest and $1000 leadership bonus for the 2018 model.
      • Advertising: they promote the Escape model in social media like YouTube and Facebook and have ads outdoors as well. The company’s television advertisements and online advertisements are especially prominent.
      • Personal selling: agents/sales personnel use personal selling to persuade buyers at Ford dealerships and other venues. In some cases, the company applies direct selling, usually to corporate clients who lease vehicles from the firm. (Edward Ferguson, 2017)

V.        Target Market Analysis 

a) Consumer Data

  • The dependence on using cars for adults aged 18 years and more, either a driver or passenger increased significantly from 68% in 1992 to 74% in 2005. 
  • The percentage of adult Canadians who made at least one trip using a mean like walking or using a bicycle other than a car has declined by 19% between 1998 and 2005. In 2005, only 19% of people 18 and over walked or used a bicycle on their trips; this proportion was 25% in 1998. 

b) Consumer Behavior

  •  The car-purchase process takes, on average, 2.7 months. 
  •  Average time to make a car purchase within 18% of Canadians take between two weeks and a month. 
  • Only 16% of buyers complete their investment in less than two weeks. 
  • 47% of potential buyers buy used vehicles, and conversely, 53% are planning to buy a new one. But, 44% of them end up buying a pre-owned car, and 56% purchase in a new vehicle. 
  • Consumers find that crossovers resemble traditional SUVs in terms of style and ride height. 
  1. Product (Brand) Analysis 

a) Sales Volume Trends 

§ Volkswagen Tiguan sales increased consistently from 1,412 cars sold in 2008 to 15,028 in 2017.

  • Compounded annual growth rate (CAGR = (EV / BV)1 / n – 1) for the previous 10 years-from 2008 to 2017- is 27%.
  • Tiguan sales in 2016 were 11,229 cars
  • Volkswagen Tiguan recorded a remarkable growth in 2017 vs. 2017 by 34%.

b) Market Share Trends 

  • Volkswagen Touareg sales were 15,028 cars in 2017. (Timothy Cain, 2018)
  • As mentioned earlier, SUV sales in Canada are 1.37 cars in 2017.
  • The market share of Tiguan sales is only 1%.

c) Marketing / Marketing Communications Assessment 

§ Advertising: They advertise Tiguan in their official social media websites like Facebook, Twitter, YouTube, and Instagram. You can also subscribe to their newsletter for new offers and advertisements.

§ Sales promotion: Tiguan has sales promotion on the lease, finance, and cash. In lease and investment, they offer a $0 down payment with a 2.49% interest rate for 60 months. In money, they offer a $1000 cash discount. 

§ Public relation: Tiguan is extensively advertised in many car magazines in Canada, like Motortrend and Hard Wheels magazine. Plus, they held a press conference in Wolfsburg, Germany, to announce the launch of the 2018 model. 

§ Personal selling: Volkswagen adopts the personal selling tool to increase their sales and to attract new customers to their latest products, letting them know the benefits, features and offers of their latest models.  

VII. Image and Reputation 

Volkswagen’s four models of Tiguan four models are the best cost-efficient luxury SUV. 

§ Tiguan has high ranks in automotive websites. This high rank is based on Performance, interior design, value for money, and comfort. It scored, for example, 4.9% in cars.com website. 

Marketing Communications Plan

I. Target Market Profile

The demographic for our target market is mid-aged female and males around the age of 30-45. The household composition that our target market comes from is a family of two or more. The gender of our target market is both men and women, as there does not appear to be any gender diversity outside of those two in the advertisements. We have targeted a middle-class household income because the starting amount of a Tiguan is an affordable, mid-range sports utility vehicle that middle-class Canadian families can likely afford without having to make noticeable sacrifices to their current lifestyle. Middle-class household incomes in Canada range from approximately $62,000 to $88,000 as of 2013 (Brown, 2015). Adjusted for inflation, a middle-class household income in Canada ranges from roughly $67,000 to $95,000 in 2018. The target market includes all ethnic backgrounds, which Volkswagen Canada has communicated through casting racially diverse actors in their advertisements. The consumers in our target occupation are either supervisory staff, management, young professionals, and those in higher salary positions will generate the income necessary to afford this vehicle. It will likely appeal to white-collar workers instead of blue-collar workers, who may require the higher towing capacity and ride height available in a truck or larger sports utility vehicle. With this being said the education of our target market consists of white-collar workers, potential consumers would likely have completed

A college or a university program. 

The psychographic of our consumer that would be interesting in our product would consist of consumers who are licensed drivers who either drive out of necessity, for pleasure, or both. The target market is interested in receiving satisfactory value for their purchase. They’re interested in owning a vehicle with reasonable fuel economy and comparably higher horsepower than other cars in its segment. The target market values sleek, stylish products that offer potential buyers value in the form of luxury features for an affordable price. They hold safety in high regard and want to look fashionable in their vehicle. The lifestyle of consumers in the Tiguan’s target market is one that is active and adventurous as evidenced through Volkswagen depicting dog sliders and Beach-going consumers in their advertisements.

The geographic target market for the Canadian Tiguan is Canadians, both rural and urban, as Volkswagen Canada provides options for building a Tiguan to suit the consumer’s specific needs. An alternative that is particularly useful for Canadians in colder regions is Volkswagen’s 4MOTION all-wheel drive, which distributes power between both axles for added safety in inclement weather (2018 Tiguan, 2018). One recent advertisement for the Tiguan showed a consumer excitedly driving their Tiguan in what the viewer can infer is the cold, snowy winter of the Territories. This imagery is familiar with most Canadians and shows the viewer the Tiguan is capable of handling our harsh winters. This ad is also inclusive of a consumer that may not often be recognized – those in the Territories. The target consumer’s location may be suburban, or in small to large urban centers. As Canada’s population density is quite low when compared to other developed nations where the Tiguan is sold, the target location must be broad if Volkswagen desires to remain competitive in the Tiguan’s market segment, as consumers have many options when purchasing a sports utility vehicle. 

II. Positioning Strategy 

“Volkswagen Tiguan gives a versatile driving experience, arrive in style, and show up for any occasion. Arrive at any occasion and be the one to be noticed. It’s not just an SUV. It’s an SUVW”.

The current image of the Tiguan just shows that it is a standard SUV that can be purchased by anyone. The position statement that we have created is to try to draw our consumer target market and show them this vehicle can be used on a day to day base. Our market campaign is geared towards mid-age women and men around the age of 30-45 that have families. We want to show the product can be versatile and can meet any families need or want, as well as being known to be more stylish and practical SUV. The market objectives around the Tiguan have been re-designed to focus solely on how the SUV delivers what our target market is looking for in a package that stands out in a highly competitive category (Brunico Communications, 2018). We also want to market our product to show that the product has the quality and to have excellent service and delivery of the vehicle to your target market. 

Current Marketing Objectives and Performance:

  • is already known to be one of the biggest vehicle distributors. They want to produce fascinating vehicles and forward-looking, tailor-made mobility solutions that will continue to inspire their target market and meet their diverse needs with a portfolio of the reliable brand name. Volkswagen wants consumers to see the company as actively exercising their responsibilities concerning the environment, society, and safety, as well as show consumers that they have integrity, reliability, quality, and passion, form the basis for their work. Alongside these ideas, Volkswagen ideally wants to maintain a market share of 34% (Timothy Cain, 2018), and by remarketing their product to their new market segment, so they can keep growing their market share. While they have re-design their market campaign, there is keeping up with developing new products and adding innovative technology into their products to draw attention to their products. The other marketing objective for Volkswagen to increase its revenue is in their sales and have better customer service. With this, they want to increase customer satisfaction; this is listed as their number one top priority as a company. (Interactive Comparison, 2015) They have been putting an emphasis on customer and service provided, shaping the company to correspond with their customers. In the short run of all this, the company had overall marketing objects of awareness, variety of use, and promotional incentives. 
  1. Advertising Objectives
  • Volkswagen has already built a brand image for themselves; they are previously known as one of the largest automobile makers and distribution. But Volkswagen has started to re-design the campaign around the Tiguan; the newest Tiguan has advanced in leap and bounds. (Volkswagen, 2018) The product is marketed to be longer, roomier, techier, more stylish and more refined than ever. Tiguan is still known to be the most spirited, versatile, and downright lovable SUV in its class. This is the brand image that they have created for the Tiguan; the Performance of the Tiguan has also been re-design. Pure exhilaration makes the Tiguan as fun to drive as it is versatile (Volkswagen, 2018). With a powerful yet fuel-efficient turbocharged engine that runs on regular gas, along with uncompromising agility, handling, and control. This vehicle is brand to be the consumers’ everything you need to ramp up any adventure or any occasion (Volkswagen, 2018). With Volkswagen re-brand the Tiguan to be a versatile vehicle, it has changed the perspective of the consumer thought on the product. As a part of Volkswagen’s market objectives, they have also decided to do promotions, to promote the Tiguan and boost brand awareness. One of the promotions is “Join the family, $500 cash bonus when you switch to a Tiguan”. Another offer that they are promoting is a handful of lease optional and finance rates; these deals include low bi-weekly payments, and interest rates as zero percent for up to five years (Volkswagen, 2018). The Tiguan also differentiates itself but the innovative technology and the safety package it has (Volkswagen, 2018). Tiguan safety package includes a rock-solid lineup of advanced features like park distance control, adaptive cruise control, area view 360′ and lane assist, plus led headlighting with the adaptive front-light system. With the way the technology is advancing the Tiguan has profoundly new technology in it like app-connect; this allows the consumer to connect any of their smartphones to it. As well as it has voice commands allowing the consumer to the driver with little distraction. The vehicle, as so comes with a media touchscreen and a digital cockpit. All for these new feature draws consumer attention to the product. 

IV. Budget

Volkswagen’s budget for their marketing campaign is an estimate from the previous year of their spending. While Volkswagen is an already established brand, name meaning they already have some fixed cost for their media outlets. In 2017 Volkswagen fiscal spend figure can in at 13.1 billion euros. For the next fiscal year, they would estimate a percentage to allocate toward their marketing campaigns (Statista,2018) Volkswagen has decided to put forth billion of dollars to have a competitive campaign to survive in the market. Volkswagen is listed number 4th of the biggest spenders in advertising come in at a total of $6.6 billion in 2015 (Stephanie McGavin,2016). A large part of this money goes to research and development; this is because automobile makers are being changed to make faster, smarter, and more efficient vehicles (Henry Kallstrom, 2015). The company buys or rents media channels to advertise their product; this will be analyzed later in the budget summary. 

V. Creative Plan 

Volkswagen has had an increased sale of the Tiguan model because it has re-branded the product by improving brand image, product image, and awareness. This re-branding has created a position image for Volkswagen. They have done this by branding the product toward young professionals and those seeking a vehicle that complements their active lifestyle by offering versatile options. This is shown to be a lifestyle appeal create by Volkswagen so that it shows the consumer that this product is a need item in their life. Volkswagen has showcased the Tiguan in situations the target market finds relatable, and that suit their everyday need. They have communicated the appeal of new technology to the target market by building awareness and interest toward the re-design product. Their media platform has also attracted attention to it by its touches of the humor media channel. They have used a mix of informative television, digital, and print advertisements to reach potential consumers through several different forms of media, ensuring visibility.

  1. Media Plan 
  • Media Objectives 

Is to reach the mentioned targeted customers who are medium-size families of two or more members and middle class to provide the maximum impact in pursuit of generating sales and leveraging on the high Performance and durability image of Volkswagen at a cost-effective way. So, decisions about choosing the media plan should be prudent and reach as much as possible of the determined target market. The message will focus on luxury SUV car, suits medium-size family, fuel consumption efficiency, and offers a high level of safety at a convenient cost. The targeted location for the media plan should be highly focused on main cities like Toronto, Vancouver, Calgary, and the suburbia of such towns.

As mentioned before, the sales trend goes high in the spring season, so are media plan will be concentrated starting from the end of January as the planning process, as mentioned before, takes two months. And will be decreased gradually in the winter season. 

b) Media Strategy 

To reach the above objective in a cost-efficient way, we would ensure selectivity on targeting potential customers. So, it is not a good option to go for mass advertising like TV ads or highly distributed newspapers. The message will be a blend of factual and massage focusing on features and benefits of owning Tiguan emotionally so that it attracts families who are usually looking for safety and affected by emotions. 

Tiguan media strategy will be a profile-matching strategy as this strategy is a cost-efficient one and highly selective to the potential customers mentioned above. For example, we will go for radio ads, the time of such advertisements will be concentrated from 7-9 AM and 4-7 PM when our potential customers are going to and from work because the profile of the target market is white-collar workers and highly engaged to radio as a medium in these times. Reach of Radio ads will be targeting 10% out of the 36 million households in Canada –National coverage-which is 3.6 million, the frequency of the ad will be 5-8 times per week per each family. So, the impression going to be 3.6*5=18 million impressions. 

 Also, for these reasons, Radio ads will be minimal on weekends. They will be profoundly shifted towards interactive communications like sponsored Facebook ads devised to the predetermined target market as well as promoting our Facebook page with a high caliber social media executive to promote Tiguan and to respond to potential customers’ inquiries. 

We will base a high proportion of our media plan on personal selling because of the profile of the target market who are middle class and white-collar workers because such customers are making a rational decision to balance cost benefits to make such purchase decisions. Highly trained representatives will be assigned to cover Volkswagen dealers, agents promoting Tiguan, and clarifying its features and benefits.

We will go for selected events to sponsor; the games will be of a high focus of the media strategy. The events will be pertinent to business events to supervisory usually attend and social events as well because of the decision to buy Tiguan often affected by spouse opinions. 

c) Media Execution

o  Type selection: Newspapers, Television, Interactive, Outdoor, Radio, and magazine

o  Class Selection: Men’s interest and social interest and music radio

o  Particular media selection: CBC music, TSN Radio, and CKOI and Rythme FM for Quebec, and some provincial stations like soft rock 97 7.   

VIII. Calendar for Advertising and Other IMC Activities 

Integrated marketing strategies are cost-effective for Volkswagen to implement into their marketing campaign. Timing for advertising is a great marketing tool to have around when trying to create successful marketing campaigns. They assist the company is launching the marketing goals by having a structured and thought-out manner so that nothing is forgotten about. The marketing calendar serves as a guideline for Volkswagens campaigns. It allows the company to keep track of the advertisements that they have to market without lapsing in their efforts (Laura Lake, 2018). With these calendars, helping the company to rest assured that their planning, budget, and staffing is taken care of (Laura Lake, 2018). The key for Volkswagen to have a successful calendar is being able to adapt to the economic trends that regularly change and have market strategies that can fit within these changes. Volkswagen needs to take the advertising calendar and break it down week by week by quarter (Laura Lake, 2018). They need to use the calendar to specify individual promotions or events that show the Tiguan and add in the cost of each event so they can allocate the right amount of funds for each event. 

IX. Budget Summary 

Volkswagen needs to allocate enough money to market their new products like the Tiguan. The business will take a percentage of its projected revenue. Volkswagen’s revenue is so high that they have to allocate 15-20 portion of it to put it toward their marketing campaigns (Caron Beesley, 2013). It is critical that Volkswagen knows how much to spend on marketing and even more critical on what type of marketing to spend it on. This is why the company has set out an advertising plan and has an advertisement calendar so that they can allocate money for these events. These plans will outline the costs of how Volkswagen is going to achieve its marketing goals within a specific time frame. As this budget has been set, the company needs to remember that it is not a fixed cost and needs to look at as a variable cost because there could be an unplanned campaign or event. When it comes down to the budget, Volkswagen has to keep analyzing their tactics and their seasonal effectors to see if one quarter was more profitable for them or if they can assist in lower.   

 

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