Skoda was established in Czechoslovakia in the year 1925. Overcoming the years of economic depression, war and political change Skoda is known today as one of the leading automobile manufacturers. Skoda is the largest car manufacturer in Europe selling approximately 5 million cars every year with a 12% world car market share. Key weakness that Skoda was able to identify
Before 1999 Skoda was seen as low-budget and low-quality car, but after, under the ownership of Volkswagen AG, Skoda’s image changed. The quality and status of the car changed positively. Hence the brand image was not poor anymore, but was neither strong. For a brand to be successful correct positioning in the market is required. It is important to know what the customers pursue about your brand and your product. To always be in a customer’s mind as a top priority, brand awareness and brand recall are very important things. Once the company does advertisements, endorsements, etc for its brand, the customers in the open market will know about the brand. After the brand is established there has to be constant brand endorsements so that the customer now keeps your brand as his first option. In the market there are many competitors. Threat from the competitors constantly keeps increasing. Especially in the Automobile market there is a lot of competition and customers have a lot of options to choose from in each segment of cars. Hence it is necessary for Skoda to position the new identity of the brand to the customers and make sure that they recall it. Brand awareness of Skoda was present but, Brand revitalization is a top priority to establish the brand in such a way that it is positioned in the customers mind as a great car to own and drive. The competition in the automobile industry is increasing day by as. As mentioned in the case, United Kingdom itself has 50 automobile manufacturers who are trying to sell their 200 models. In such a competitive market it is very necessary for Skoda to stand out and come out of the niche market that it is already successful in. Not many people own a Skoda car, the market is niche. Hence it is important to reach out the customers in more quantity. Skoda should introduce cars in every segment to compete against the competition. Every segment of the customers’ pool must be targeted with products specifically catering to their needs in terms of price and performance both. With the existence of the huge range of products ranging in terms of price and performance Skoda can capture more customers and stand out in the market as people’s car. In this way the sales of their cars will increase allowing it to gain a higher percentage of the market share in the industry. The main weakness discovered was that Skoda needed a new brand positioning in which the customers have a driving experience and are happy and proud to own a Skoda car. To summarize the main weaknesses of Skoda are as follows: No Brand revitalizing, not a poor image but neither strong
Needs Market expansion
Brand positioning – out dated perception of the brand
Low market share
Weak image in mid market range
Strength that Skoda used to turn its brand weakness into an opportunity After 1999 Skoda was considered as a value for money and a good quality brand. But the brand image of Skoda was neutral in the market. But Skoda was not put down by this. They knew where their weakness was and where they needed to improve, but now it was time to find out where their strengths lie. Skoda did extensive surveys and research with their current customers to find out what they feel about the brand. Through these surveys Skoda tried to understand the perception that the customers had about the brand. Hence after conducting customer surveys and based on other research Skoda found out that the customers are satisfied with the brand. Skoda won many awards and stood at the...
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