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A Lesson in Brand Strategy From Volkswagen Group

By Kyle Rees | August 30, 2021 | 0 Comments

MarketingBranding and Value PropositionDigital Performance BenchmarksMarketing Strategy and InnovationSocial Marketing

For auto brands, Instagram remains an efficient vehicle to deliver brand messages and content that drive audience discovery and engagement. The sector consistently offers new technology and innovation, as well as images that feed user self-perception of status and differentiation. These are all useful tools in the race to win attention online and execute brand strategy. Given this, the performance of Volkswagen Group brands on Instagram stands out (see Figure 1).

Figure 1. Auto Brand Instagram Posts and Engagement

A bubble chart shows auto brand instagram posts and engagement
A bubble chart shows auto brand instagram posts and engagement between April 2020 and March 2021

At first glance, the data confirm that luxury and ultra-luxury brands, like Porsche and Lamborghini, are built for the social media spotlight. Luxury shoppers and brand evangelists covet them for their performance and prestige. They are status symbols that catch wandering eyes and likes, which leads to above-average per post engagement and reach. 

Diving a little deeper, we also see that Volkwagen Group’s collective Instagram performance illustrates how even companies with broad brand portfolios can achieve collectively high engagement. The impressive performance of widely varying brands, like Audi, Lamborghini, Bugatti, Bentley, and Porsche is fairly precise. I don’t believe that this is a chance occurrence, but something that happens by design. 

Volkswagen Group’s Brand Strategy “Playbook”

Volkswagen Group’s global brand strategy, which was outlined in a company meeting in December 2020, helps us connect the dots between social media performance and systematic brand management. According to Dr. Christian Dahlheim, Volkswagen Group’s Director of Group Sales, this “playbook” serves as a common language that teams across the business use to amplify awareness and drive desired brand-product associations. It also provides a framework for agency partners and other third parties to reference as they write creative briefs and develop advertising campaigns. Here are the main points:

  1. The definition of brand vision, mission, and values is the “homework of good marketing.” The idea here is simple: Investments in brand creation and awareness are wasted when brand messages and value propositions are inconsistently used. This puts brand positioning on a shaky foundation. A lack of clarity on what a brand stands for at a global level creates noticeable disconnects across markets and messaging channels. While Volkswagen Group brands drive this forward, the company’s global brand governance framework keeps people and teams aligned. This ensures that brands speak with a consistent tone of voice across digital channels and campaigns.
  2. Clear brand positioning guides customer-centered product design. This is something marketing leaders can’t afford to get wrong. For example, ensuring alignment of brand-to-product messaging can help shorten sales cycles. When customers understand what it is they’re going to buy they can more quickly say, “yes” or “no.” Similarly, consistent brand-to-product messaging can also improve conversion on cross- and up-sell opportunities. When customers understand how a brand’s products work with or differently from one another the buying decision is simpler. 

Volkswagen Group Also Connects Brands to Customer Segments and Profit Pools

One critical concept sits atop the company’s brand strategy pyramid: customer segments and profit pool potential. This has less to do with messaging strategy and more with business strategy. Volkswagen Group assesses brands for their potential to drive profitability, not just revenue. Profitability-centered brand assessments help business leaders see where their brands should go next as industry, competitive and customer landscapes evolve. 

Today we anticipate most auto brands will soon apply this concept to strengthen unique selling propositions around electric vehicle technology. This is because EVs have incredible potential to shift brand positioning to capture premium prices and shopper segments. In the future this concept may explain some of the Automotive-Aerospace and Defense industry crossover activity we’re observing, like – 

  1. Virgin Galactic’s partnership with Land Rover
  2. Blue Origin’s Rivian “Rocket Taxi,”
  3. Tech and software sharing between Tesla and SpaceX, and, most recently,
  4. Porsche SE’s (Volkswagen Group’s owner) $75 million investment in German rocket startup, Isar Aerospace.

These undeniably attention-grabbing partnerships are, however, largely siloed from the day-to-day brand building and marketing messaging focused on selling more cars right this minute. The rest is a de facto afterthought. Ultimately, many of the marketing teams we speak with are so focused on what their brand produces or means today that they often forget to think about what it could mean in the future as their product portfolio evolves. As transportation industry leaders work to effectively build strategic marketing plans Volkswagen Group’s brand strategy “playbook” should serve as inspiration. It points toward a path for future profit sources and the understanding that growth today isn’t a guarantee of growth tomorrow.

Aerial view of road bridge across river with heavy traffic jam in one direction. Rush hour with mash and overloading of road infrastructure. Resolving of car traffic jam
What’s driving your brand strategy forward?

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