Sunday, January 23, 2011

positioning audi in the german luxury car market

German cars have a lock on luxury cars. And, within that class, Mercedes and BMW are the market leaders. This presents a problem for Audi, who in recent years has done a tremendous job in "classing" up their cars to compete with the luxury offerings of its rivals.

However, hitting the number-two spot is still a long, long time down the road.

Going toe-to-toe with Mercedes and BMW is a fool's errand if Audi doesn't find a position for itself that sets its brand apart from being just another shiny, black German luxury car. Fortunately, I think they've found out how.

(Agency: Venables Bell & Partners)

In 1963, Pepsi launched its "Pepsi Generation" ad strategy that positioned its cola as the choice of a younger generation. In doing so, it positioned Coca-Cola--the market leader--as the "older" cola. For homogenous products like cola, this strategy was a good way to give Pepsi a unique identity in the cola market, while trying to dominate the younger market niche.

If Audi wants to increase its market share, it needs to do something similar. At least Venables Bell seems to get it.

"The 60-second spot takes the viewer on a fantastical journey through a mansion laden with trite symbols of antiquated, stuffy opulence, and says goodnight to the age of gluttony and old luxury, culminating in a Mercedes-Benz S-Class parked in the driveway," says Venables Bell's website.

There is a huge market for luxury cars among the young and wealthy. If Audi can position itself as the "not your grandfather's luxury car" brand, it can swiftly overtake this niche.

I hope Audi stays on this current track.

The "youthful" juxtaposition to the older brands is also much more effective than Venables Bell's last try during the 2010 Super Bowl. It was here that Venables Bell aired a 60-second spot called "Green Police," where it tried to position Audi as a luxury car with a green conscience.

It was a good attempt, but I don't believe most people shopping for a higher-end luxury car are thinking too much of the environment; at least not enough to move the needle on overall sales. So, for being one of the most entertaining commercials of that year, I doubt it did much to further Audi's market share.

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