Case Analysis - Skoda Auto

Skoda’s brand image is quite negative in the market, particularly because people relate the brand to a cheap, old, unfashionable car. The root of the problem arose when the car was sold without the Skoda logo, attracting a poor segment and thus generating the image of a “poor man’s car”. Skoda lost control of its brand and its image and the public started recognizing the brand as having the worst image of any product or service (particularly in the UK). Skoda was competing in a market where consumers’ cars are a public statement of who they are, therefore potential buyers didn’t want to be associated with a cheap and crap brand (given that this was the message the Skoda brand had rooted in the public). The consumer was reacting this way because the brand had already established a negative mindset, making it difficult to communicate otherwise.

Because Skoda is competing in a crowded market it needs to target its customer with detail. I recommend to target consumers that are looking for a small, attractive, high-quality, stylish and functional car that fulfills their daily needs and reflect a straightforward lifestyle. This target audience is mainly young professionals between the ages of 25 – 45 who need a small yet stylish car to go to work and for short travels on the weekends. Skoda’s positioning should focus on its unique design, the car’s benefits and its points of difference from the other competitors. Because the negative mindset is already present in potential buyers, Skoda has to work in a positioning statement that will touch upon the emotional needs of customers. It should highlight its relationship with Volkswagen and how this reflects high quality standards and value, as well as the car’s “platform strategy.”

Marketing Tactics: (1) Promote the car’s improvements in production and product quality, particularly tied to manufacturing under VW standards. Separate the new models from the “old”