This paper requires you to obtain a marketing article from one of the business journals listed in the syllabus, summarize the content of the marketing article and apply the marketing management concepts from the lecture slides and readings in four typed pages, double-spaced 12 point Times New Roman. You will be graded on your ability to summarize the pertinent issues raised in the article and how well you articulate /apply marketing management concepts from class to the article critique. A copy of the article must be uploaded to Canvasalong with your summary paper. If you have questions as to the suitability of your chosen article, you can ask me to review it before you write your paper. The following is a list of magazines where you can find articles. You can also find marketing articles in the Wall Street Journal, Entrepreneur magazine, and online from your local newspaper or general news sources. This is not an exhaustive list, but you should be able to find an article. You can also check with the business library’s online magazine source as well. **Choose an article that interests you and relates to marketing management. ** Itis an individual assignment, not a group assignment. Ten points will be deducted each day the assignment is late.
Marketing MagazinesAdvertising AgeGlobal source of news, views and data for the ad, marketing and media industries.Adweek/Brand WeekHighlights the latest advertising trends, including those related to online and website advertising. It is also a magazine for branding professionals. Find tips on increasing brand loyalty, market analysis and news coverage of brands.Bloomberg Business WeekWeekly business magazine with insights and in-depth analysis of business events.Entrepreneur MagazineMonthly magazine that covers entrepreneurship and small business.Fast CompanyMonthly magazine that covers technology, business and design.ForbesBi-weekly magazine that publishes articles on finance, investing and marketing.
April 16th, 2019
Marketing Management Article Critique 2
Volkswagen In Crisis
In 2015 Volkswagen was cited for selling millions of cars worldwide with illegally deceptive standards for bypassing emissions regulations on its diesel vehicles. This was the culmination of an ethical failure at multiple levels of Volkswagen’s organization that created front page news across the world, led to billions in settlement charges, jail sentences for multiple executives, and a brand crisis at nearly unknown levels for a company its size (Atiyeh, 2015). The stock price lost over half its value in several months, and threatened the survival of the company known for its safety and reliability (La Monica, 2015).
Bill Coffin summarized the hiring of Hertrud Werner by Volkswagen in January 2017 as their head of Integrity and Legal Affairs. She was brought back into the company to repair Volkswagen’s image to the world after the diesel crisis. She knew the job would be challenging and would require deep internal changes to take root in the company and to maintain the emphasis over years and decades to fully recover (Coffin, 2018).
During the year prior to Werner’s hiring, Volkswagen settled three related allegations in January 2016 that they had installed “defeat devices” that intentionally deceived emissions testing. This crisis hit the Volkswagen brand with legal lawsuits, billions of damages in financial settlements, and a permanent stain on its reputation. The prolonged lawsuits would ensure the high profile fallout would last for the coming years, well into 2017 (Atiyeh, 2015). The financial damages tanked the stock price of the company causing it to lose at least half its value (La Monica, 2015). Finally, Volkswagen’s entire brand was built around being trustworthy and safe. It is hard to imagine a more damaging incident for them than intentionally deceiving regulators for years. How could their consumers trust in their safety testing and other claims if they were willing to cheat on those tests? It wasn’t a lapse in judgement, this had been an intentional effort that destroyed Volkswagen’s integrity at nearly every level. So how could they move forward?
Thankfully, Volkswagen understood that the first thing they had to do was deal with the crisis and resolve it, before even considering trying to come back. To address the millions of cars with the defect currently on the road, they created a “fix” for vehicles that could be installed free of charge to allow these vehicles to keep their registrations. Then, they agreed to settlements over $14 billion in fines, $10 billion to buy back vehicles and compensate owner’s for lost depreciation value, and invest in clean energy. In addition to this multiple executives were given prison sentences along with personal fines for their participation in the scandal (Atiyeh, 2015). The punishments were harsh, and gave the general public the perception that Volkswagen was adequately punished.
So, Volkswagen recognized and dealt with the crisis and made its mea culpa. By 2017 the company had begun to assess its own integrity, and take steps to rebuild it. Part of this process was to hire Hiltrud Werner. She toured the company and saw that it was already through two of her three steps to organizational change. There is shock, shame, and shaping. The scandal had shocked Volkswagen’s employees to their core that such an event could happen at their company. At Wolfsburg, the company headquarters in Germany, approximately half the population works at the Volkswagen facility. Many employees are third generation and defined by the company. These workers and up through management were deeply embarrassed the their company could have been capable of deceiving the public of such a scandal. So Werner saw they were already through shock by the time she got to the company and into a deep sense of shame. After holding multiple meetings and town halls, it was time for her to move into Shaping the company to permanently avoid such an incident again (Coffin, 2018). So how could she create such a large culture change so that it was implemented well enough to take root throughout the company, and to convince consumers it was a permanent change?
She created a companywide code of conduct and implemented a policy of Anstand which roughly translates to being a “stand-up guy” (Coffin, 2018). These efforts emphasized that Volkswagen has a moral and social responsibility to multiple external groups such as Germany as a country, because it is one of Germany’s largest companies. She also has been able to create buy in from key personnel across the company to let the ethical behavior take root and be part of daily life.
So going forward how can Volkswagen now regain the trust of consumers? There are several key factors at play that give a blueprint for how Volkswagen can move forward. They have brand equity across multiple different brands from decades of being known for safe and reliable German engineering.
Marketers should focus on repositioning the brand from “Das Auto” which literally translates as “The Car” to being the brand of safe family cars built by generations of dedicated families for other’s safety. Volkswagen can double down on their mandatory research into clean energy to become a torch bearer for clean energy and hybrid cars. The message would be our family is regretful for what happened, and we now have the best clean energy vehicles on the market. They are the safest, with the best MPG, and will stay with you for generations like we have.
The competition have carved out their own brands with “Built Ford Tough” focusing on being the strongest and Chevrolet’s focus group style campaign revealing public misperceptions about their rankings to illustrate their great value. Volkswagen can easily shift, while maintaining contact with their original position, to being the brand of reliability for the future.
Jack Trout believes that positioning a brand requires four key elements: target market, frame of reference, point of difference, and reason to believe. Volkswagen needs to reposition itself due to this crisis. It does not need to reposition because of the competition or because of change, but because they lost the trust of the consumer through their negligence. They need a strong brand statement that focuses on their target group, offers their new benefit, and gives a reason to believe. This could be along the lines of: To families, Volkswagen is the brand of high quality family vehicles that puts you and your family first, because our family cares about yours and will show you.
The campaign can focus on individual employees at the Wolfsburg plant that have three family generations working for Volkswagen. Have each of the workers talk about each of their families’ dedication to the company. Highlight their integrity and follow that up with social media communication on full transparency. Invite testing from independent agencies, child safety groups, MADD, and as many different organizations who want to be at the forefront of safe driving. This is an easy and logical step for a company known for high tech, value based, German engineered cars to now focus on safe driving as the basis of their value.
Werner can have a key role in this new campaign by showcasing the company’s new internal auditing process. Volkswagen is already celebrating the strides she and her team have made, and this should be emphasized in the repositioning campaign that they are making this move because of the deep ethical lessons learned from the scandal. It can be bragged about that they are strong enough to learn from their mistakes and use the care of their own workers for the company to communicate this change to the consumer.
CITATIONS
Atiyeh, C. (2015). Everything You Need to Know about the VW Diesel-Emissions Scandal.
Car and Driver. Retrieved from https://www.caranddriver.com/news/a15339250/everything-you-need-to-know-about-the-vw-diesel-emissions-scandal/
Coffin, B. (2018). Hiltrud Werner has a NEED for SPEED. Compliance Week, 15(168), 24-31. Retrieved from https://search-ebscohost.com.proxy.libraries.rutgers.edu/login.aspx?direct
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La Monica, P. (2015). Volkswagen has plunged 50%. Will it ever recover? CNN Business. https://money.cnn.com/2015/09/24/investing/volkswagen-vw-emissions-scandal-stock/
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