Alexi Orlov says campaign with 'referral' message lifted carmaker's 'best-loved brand' ranking from 126 to 75
Volkswagen has admitted it lost its way in China, where it sells a third of its cars, saying it suffered a "terrible wake-up call" after discovering its brand reputation had plummeted in the eyes of the Chinese.
The admission was made by the German carmaker's chief marketing officer Alexi Orlov, who was speaking at the Cannes Lions International Festival of Creativity on Tuesday, alongside the PepsiCo chief marketing officer Richard Lee, discussing what it takes to crack the Chinese market.
Orlov said: "Thirty years Volkswagen has spent in China. In 2012, we had to spend $1bn on marketing just on the VW brand just to stay in that market. Despite the fact that we had a record breaking 2011 we still had to spend that amount of money.
"We had an over-reliance on short-term spend and we had relied on awareness but it was not awareness we should have been worried about but effectiveness. We had a terrible wake-up call in 2010 when we discovered much to our surprise and horror that we were only the 126th best ranked in China as best-loved brands."
Volkswagen had been hit by competition both from Chinese companies and international rivals.
To reverse the decline, Volkswagen ran a campaign, called "The People's Car Project" with the central message of a "referral" which is important in Chinese culture.
Orlov said that 73% of all sales in automotive in China come from referral, compared to 24% in the US.
Central to the campaign was that it included the Chinese people in creating and sharing ideas about creating cars. Orlov said the Volkswagen brand had climbed from 126 to 75 in brand rankings, in light of the campaign.
PepsiCo's Lee said one of the problems facing marketers was that there was too much choice for customers in the market and those campaigns which told a story about humanity would be the winning campaigns. Reported by guardian.co.uk 2 hours ago.
Volkswagen has admitted it lost its way in China, where it sells a third of its cars, saying it suffered a "terrible wake-up call" after discovering its brand reputation had plummeted in the eyes of the Chinese.
The admission was made by the German carmaker's chief marketing officer Alexi Orlov, who was speaking at the Cannes Lions International Festival of Creativity on Tuesday, alongside the PepsiCo chief marketing officer Richard Lee, discussing what it takes to crack the Chinese market.
Orlov said: "Thirty years Volkswagen has spent in China. In 2012, we had to spend $1bn on marketing just on the VW brand just to stay in that market. Despite the fact that we had a record breaking 2011 we still had to spend that amount of money.
"We had an over-reliance on short-term spend and we had relied on awareness but it was not awareness we should have been worried about but effectiveness. We had a terrible wake-up call in 2010 when we discovered much to our surprise and horror that we were only the 126th best ranked in China as best-loved brands."
Volkswagen had been hit by competition both from Chinese companies and international rivals.
To reverse the decline, Volkswagen ran a campaign, called "The People's Car Project" with the central message of a "referral" which is important in Chinese culture.
Orlov said that 73% of all sales in automotive in China come from referral, compared to 24% in the US.
Central to the campaign was that it included the Chinese people in creating and sharing ideas about creating cars. Orlov said the Volkswagen brand had climbed from 126 to 75 in brand rankings, in light of the campaign.
PepsiCo's Lee said one of the problems facing marketers was that there was too much choice for customers in the market and those campaigns which told a story about humanity would be the winning campaigns. Reported by guardian.co.uk 2 hours ago.