Cases in MarketingFinal Assignment For the 20th of September 2020 #dieselgate Professor Antonia Koumproglou Table of Contents Introduction to the company 3 The marketing problem 3 The research question and possible solution/s 4 Research 6 Outcome 10 Conclusion 11 References 12 Introduction to the company Volkswagen is a car manufacturer based in the city of Wolfsburg, Germany. They are the biggest brand of the Volkswagen Group, and one of the biggest vehicle manufacturers of the whole world, with almost 11 million cars produced last year, and revenues of 253 billion euros. (statista, 2019) In September 2015, a report was released on Volkswagen using illegal software’s and techniques to alter and cheat the emission control systems of the United States. The cars that were affected were the ones sold between the years 2009 and 2015. The fraud consisted of using defeat devices on their vehicles that were self-sufficient to cheat the Environmental Protection Agency (EPA) of the US, and would show fake readings on the emissions from the exhaust pipes of the VW vehicles. A report came up on September 2015, showing that the Volkswagen cars would actually emit forty times more Nitrogen Oxide to the air than the permitted in the United States by the EPA. (R. Hotten, 2015). This defeat device would only be implemented in the diesel models of the company, that were the ones recently integrated in the North American country. At the end of the scandal, it was calculated that the cars affected amounted to 11 million units, with losses of more than 28 billion euros for the company plus 9.2 billion euros for the shareholders affected by their actions. (J. Schwarz, 2018) After the several claims and discoveries of the effects on the natural environment by the actions of VW, Michael Horn, director of the American market for the company, admitted to literally “screwing” up, and admitted the breach of trust that happened between the company and its customers (R. Hotten, 2015). The scandal redirected the question to other carmakers such as MB or BMW, which after other studies was discovered that they were also implicated on cheating emission tests with their own defeat devices on their vehicles. This made the customers of all around the world to question themselves about the honesty of the carmakers and the emissions that those products really emit to the atmosphere (Mitroff, 2016). The marketing problem After one of the most serious scandals in the world, VW stock lost a 40% of its value, and lost the trust and brand loyalty of many customers towards them. This didn’t make the company have a dump of the revenues, while they were still growing years after, but made those customers doubt more of which car to choose after the scandal. Attention towards the company was deflected then and had a bad impact on individual consumers by believing that they were tricked. It must be noted that the company actually soared pretty well in revenues and sales years aft ...

1. Cases in MarketingFinal Assignment
For the 20th of September 2020
#dieselgate
Professor Antonia Koumproglou
Table of Contents
Introduction to the company 3
The marketing problem 3
The research question and possible solution/s 4
Research 6
Outcome 10
Conclusion 11
References 12
Introduction to the company
Volkswagen is a car manufacturer based in the city of
Wolfsburg, Germany. They are the biggest brand of the
Volkswagen Group, and one of the biggest vehicle
manufacturers of the whole world, with almost 11 million cars
produced last year, and revenues of 253 billion euros. (statista,
2019)
In September 2015, a report was released on Volkswagen using
illegal software’s and techniques to alter and cheat the emission
control systems of the United States. The cars that were
affected were the ones sold between the years 2009 and 2015.
The fraud consisted of using defeat devices on their vehicles
that were self-sufficient to cheat the Environmental Protection
Agency (EPA) of the US, and would show fake readings on the

2. emissions from the exhaust pipes of the VW vehicles. A report
came up on September 2015, showing that the Volkswagen cars
would actually emit forty times more Nitrogen Oxide to the air
than the permitted in the United States by the EPA. (R. Hotten,
2015). This defeat device would only be implemented in the
diesel models of the company, that were the ones recently
integrated in the North American country. At the end of the
scandal, it was calculated that the cars affected amounted to 11
million units, with losses of more than 28 billion euros for the
company plus 9.2 billion euros for the shareholders affected by
their actions. (J. Schwarz, 2018) After the several claims and
discoveries of the effects on the natural environment by the
actions of VW, Michael Horn, director of the American market
for the company, admitted to literally “screwing” up, and
admitted the breach of trust that happened between the company
and its customers (R. Hotten, 2015).
The scandal redirected the question to other carmakers such as
MB or BMW, which after other studies was discovered that they
were also implicated on cheating emission tests with their own
defeat devices on their vehicles. This made the customers of all
around the world to question themselves about the honesty of
the carmakers and the emissions that those products really emit
to the atmosphere (Mitroff, 2016). The marketing problem
After one of the most serious scandals in the world, VW stock
lost a 40% of its value, and lost the trust and brand loyal ty of
many customers towards them. This didn’t make the company
have a dump of the revenues, while they were still growing
years after, but made those customers doubt more of which car
to choose after the scandal. Attention towards the company was
deflected then and had a bad impact on individual consumers by
believing that they were tricked.
It must be noted that the company actually soared pretty well in
revenues and sales years after the scandal worldwide, with a
2.8% increase in sales for 2016 and 4.3% for 2017. (Boston,
2017; Reuters, 2018). These growths were mainly thanks to the
developing economies, but in the US, the sales fell by an 8% the

3. year after the drama, but recovered the year after for 5.2%.
After the scandal cooled down, the company mentioned that
there was a need within the company to transform and to make a
transition to a more honest and authentic brand. This is
obviously because after cheating emission tests and failing to
provide honesty to your customers. It is necessary for
Volkswagen to rebrand the company and create a new brand
without the scandal being seen in the past. Further, the company
should mark the start of a new era for the company and its
beloved customers. The company should become more human
and have more empathy for the environment than they had
before, and offer a non-filtered image of the company itself.
Till today, the company has an available spend of 1.5 billion
euros a year for marketing purposes. The research question and
possible solution/s
The research question of this paper relates on how the company
can get back the customer loyalty and brand recognition in the
industry, in order to have a better image in front of their
customers and be able to show affection and caring senses
towards the environment (M. Fleming, 2019).
The company may use the use social media channels and digital
channels to support they transformation to a new brand image,
and be able to have a more direct and personalised approach to
the target audiences, by the proper channels. Also, the company
should emphasize on knowing the concerns of the customers and
be able to have a direct relationship with them to be more
efficient when trying to target them and solve their concerns.
(E. Hammet, 2018).
It is so, that the expected solutions for this marketing problem,
and the possible outcome can be one such as implementing new
electric vehicles to compete with the actual EV industry of the
United States. Because of the large operating income of the
company, the company could put a large capital amount and
effort on the research and development of a new product like
the one mentioned, and use the advertisement capital to
merchandise it in the US market. Being the Volkswagen Golf

4. one of the most popular vehicles of their fleet
(carsalesbase.com, 20120) they could use the design of it and
use it as a cast for the electric version.
Moreover, the company could redesign its brand logo to give
the impression to the customers and potential customers that the
brand has been redesigned to be more honest and transparent as
the old customer base required at the time that the scandal
happened. Changing the logo and having a complete face lift on
the company may be a great way to get back the customer base
and increase brand loyalty, by giving a new and different
impression (M. Fleming, 2019)
Also, the company could use social media to start digitalising
themselves, and be able to get to the younger audience by
providing better content and keeping a certain media standard in
the car making industry. As an example, Mercedes Benz has
been performing better and better throughout the years by
answering messages of potential customers and being able to
keep a relationship with the fans of the brand, and owners of
their vehicles.
Moreover, another marketing strategy that the company could
apply, is the acknowledgement of the environmental crisis the
world is going through and support certain causes by donating
or reducing their emissions in certain parts of the world, and
having a greater interest for the topic than in the scandal times.
Strengths
Weaknesses
Reputation in the automotive industry
Big following towards the brand
Support from the government
Large amount of capital dedicated to marketing
Strong management position in the industry
Good third-party contracts
Strong legislative position in the industry of Germany
Great diversity of products to offer
Great infrastructure mounted for the logistics all around the
places the vehicles are sold.

5. Factories and installations
Respect tore down after the scandal
Control from institutions regarding the emissions
Large problem with some of the customers
Increased losses for the year due to the vehicle call back
No use of social media whatsoever
Very traditional marketing
Targeting an older generation
Too much competitiveness on the sector
Technology not yet developed to produce good EV’s at a proper
margin.
Opportunities
Threats
Opportunity to invest in marketing and re-brand the company
towards a more electric future
Development of new products that relate to new industries
Rebranding in order to target different new segments all over
the world
Changing management to transmit more transparency and
flexibility within the organisation’s operations.
Technology not very developed for EV’s
Large amount of competition in the industry
Bad reputation that can lead to hateness towards the brand
Legislations change that may reduce margin and marketing
techniques
Fines that can weaken the economical position of the company
Political
New legislations
Taxes for emissions
Restrictions because of the scandal
Corruption that can affect the development of the company
Economy
Retracement of the economy

6. Increase on exchange rates and trade fares
Increase of taxes over the emissions
Increase of unemployment and inflation that may affect the
whole economy
Stronger policies against vehicle manufacturers due to their
incomes
Increased control by institutions like the SEC
Social
People switching to electric vehicles
Age changing of tastes when it comes to cars
Health consciousness due to the emissions
Lifestyle change
Technological
Innovation levels
Automation in the supply chain
Technological change within the EV’s or regular ones
Technological awareness in the industry and diversified
progress within companies
R&D progress by adjusting budgets due to the losses.
Environmental
Climate change restrictions and production legislations
Emission legislations as well as constant checks in the cars
Pressure from NGO’s and institutions to keep a safer
environment
Legislative
Health laws regarding the emissions
Employment laws regarding the loss of operating income to use
for activities
Consumer protection laws
Medical taxes regarding the diesel gate scandalResearch
According to InsideEVs, since 2015 the growth on the sales of
Electric vehicles has been constant, specifically going from 116
thousand electric vehicles to 405 thousand for 2019. This
growth indicates a very large compounded annual growth of the
EV sector and the opportunities that different car makers may
take in order to develop new products for the US industry.

7. Figure 1: InsideEV's sales and year to year growth on EV's from
2011-19
As observed in figure 1, on the early 2010’s the growth was
maximum and started to decrease over time because of the large
number of different models and the increase of prices of the
automotive sector in the US. Furthermore, the likelihood of
prices that the US had last year 2019, has given Americans more
reasons to stick to normal cars and not electric ones.
Figure 2: CleanTechnica graph on the Vehicle model sales from
January to December for 2019.
As observed in Figure 2, the electric vehicles in the US is led
by Tesla, concretely its model 3 which has sold approximately
last year 154.836 vehicles to the US population. Further, they
also lead the second and fifth position of the chart, giving the
understanding that it may be the biggest competitor in this new
industry for Volkswagen, not only for the US, but worldwide.
It is so, that Volkswagen should consider deeply the opportunity
of Increasing their supply for their new Volkswagen e-Golf or
develop and manufacture a model that can beat the Tesla at a
lower price than it. Moreover, Volkswagen would be able to
enter to the EV industry being a very experienced brand and
directly with the project, showing a new brand image to the old
customers and potential buyers. The company would be able to
develop a new product due to its large working capital and free
cashflows status in their balance sheet of October 31st, 2019.
The company could really use a face wash or a brand identity
change in the eyes of the customers. This could enhance the way
the customers see the company, and could also make the
company be seen as more honest, transparent, and ready to give
a better perspective over environmental issues. Also, the change
on logo could help the company to show the resignation of old
managers and change in the management board of the company,
leaving aside all the problem-makers of 2015. According to
(Oberlo; Stackla, 2019) 89& of the customers demand and may

8. support brands if their show signs of authenticity, and will
support brands that are honest and carry the business in the best
way towards the customer, being transparent and keeping the
concept of the brand.
Volkswagen has been changing their main logo of the brand
almost every 10 to 12 years. In some cases, the logo suffered
minor changed but others some other changes adapted to the
technology of the moment and tried to show signs of
technological development and integration of the new
technologies in their brand image. We can see a drastic change
in the year 2000, where the logo adapted a 3d form supporting
the dotcom historical era and giving a much better reflection of
what the brand would until the year 2009. For the year 2019, as
a plan of recovery done by the first marketing campaign after
the dieselgate disaster, the logo turned to be a 2D one in order
to credit what they call the “electrified era”. (M. Moshin, 2020;
M. García, 2019)
Figure 3: MediaCommons logo history of VW
Nowadays one of the best tools in marketing is the use of social
media and the tools that those platforms also give to the
developers and marketers. This is why, many companies in the
car making industry have been empowering these media
channels in order to boost their growth and enhance
relationships with the customers and potential buyers.
According to a social media monitoring solution, Mercedes
Benz is and has been the company to use and invest the most
amount of money in social media, by having till today more
than 43.5 million interactions in their Facebook, Twitter,
Instagram, and YouTube. It is so, that the second place goes to
its competitor BMW, with 27 million interactions in the same
platforms. Volkswagen started using and interacting more with
the social media market after the dieselgate scandal. It was then
when the new marketing plan of 2016 designated a large amount
of money to the use of social media and digital channel
targeting.

9. (Story Clash Rankings, 2020; S. Vizard, 2016; E. Hammett,
2018)
Figure 4: unmetric.com on the statistics and performance of
MERCEDES BENZ in Facebook, Twitter, & Instagram dated in
August 2020.
As we can observe on figure 5, the company VW has just started
to give preference in the recent years to the social media
channels and is very much behind from Mercedes Benz Social
Media Management skills. (unmetric, 2020). It will need a lot of
relationship management with customers and social media
followers in order to increase their brand image and rebrand
themselves accordingly to the needs of the customers and get
their loyalty back. (E. Hammett, 2018)
Figure 5: unmetric.com on the statistics and performance of
VOLKSWAGEN in Facebook, Twitter, & Instagram dated in
August 2020
Aside from those possibilities that the company could undertake
to wash their brand image and rebrand it, they could as well
support environmental causes all around the world and be able
to support them making a change in the environment. It is
visible that the Latin American region is very concerned
together with the Asian Pacific one. It is so, that the company
may emphasize on those markets the development of strategies
such as investing in environmental institutions and the
promotion of sustainable acts in the societies.
Figure 6: CSR demanded by the different generations, for 2018
study by nielsen.com
Figure 7: Concerned population in the different regions about
the different environmental problems, by nielsen.com 2018
Using the Ansoff matrix, we can see that the company will
increase its market penetration strategy within the industries

10. and markets they are already included on, and also may develop
new products that can allow them to enter the environmental
footprint saving sector in the automotive industry. Also,
entering new markets with existing products can allow the
company to increase profits, and be able to increase their
“renovated” brand awareness within those. Also, introducing
EV’s or consumption efficient vehicles like the e-Golf may
allow them to increase their brand awareness as well as being
able to enter to those new industries all around the world.
Outcome
We can observe that the company has a lot of entries in order to
exit from the dieselgate scandal, and may be able to reflate its
image wisely. The company owns the enough amount of money
in their hand and operating cash to put those ideas to work and
make them in the right way with the new managers of the
diversity of new marketing departments that have been allocated
since the scandal, specially to overcome the loss of brand image
due to the defeat device.
Developing new environmentally sustainable vehicles will allow
the company to increase its reputation in the environmental
industry and also enhance the possibility of the company to give
a better impression after dieselgate.
Changing the brand logo and the brand image may allow the
company to start a new era in its history, and be bale to leave
things behind if done right, in fact, on 2019 the logo was
changed to a much more simplistic logo that media claimed to
represent “electricity” giving the start to the introduction of the
e-Golf worldwide.
Using social media may allow the company to increase its
awareness in the Gen X and Millennial generations in order to
recover that lost trust in the brand, and even be able to enhance
the relationships with future customers or already existent
customers of the company. Mercedes receives a great feedback
from using social media from the starting of the days that
Instagram got popular and now they lead the social media car
industry segment on the platform.

11. Furthermore, the company may also increase its involvement in
environmental issues and also the investments in institutions to
have a better perception in the eyes of the customers, to make
them understand and communicate them the new bran image that
the company wants to transmit. Conclusion
It must be noted that since the scandal, the company has been
growing more than the years before, and this is because of the
reliability of their cars, cheap repairs, easy to lease in certain
countries, and all the advantages that come with the vehicles
manufactured by the company. Furthermore, the high supply of
these cars make the aftermarket prices very low, especially for
occasion vehicles. (npr.org, 2018). Furthermore, the fact that
Volkswagen group owns some of the biggest supercar brands
and best vehicle makers in the worldwide industry, was a good
position for them to reinvest more money in the main brand
after the scandal’s losses.
This doesn’t mean that the company should be able to get away
with what they did, and hurt the environment so much during
more than 6 years’ time. People, especially from the Gen X and
Millennial generations will have in mind the effects of the
company in the environment and may be more careful before
buying a car from the organisation.
This, and for other reasons that involve Volkswagen and their
defeat device, should be addressed and rebranded in order to try
to make the history forget about this so called “mistake” and
should be used to rebrand the company to a more honest,
transparent, and non-filtered communicative car maker.

12. References
BBC News. 2020. Volkswagen: The Scandal Explained. [online]
Available at: <https://www.bbc.com/news/business-34324772>
[Accessed 20 September 2020].
carsalesbase.com. 2020. Volkswagen Golf European Sales
Figures. [online] Available at:
<https://carsalesbase.com/europe-volkswagen-golf/> [Accessed
20 September 2020].
Fleming, M., 2020. VW Overhauls Its Brand For A 'New Era' As
It Attempts To Put Emissions Scandal Behind It. [online]
Marketing Week. Available at:
<https://www.marketingweek.com/volkswagen-brand-redesign/>
[Accessed 20 September 2020].
Ft.com. 2020. What Went So Right With Volkswagen’S
Restructuring?. [online] Available at:
<https://www.ft.com/content/a12ec7e2-fa01-11e7-9b32-
d7d59aace167> [Accessed 20 September 2020].
Hammett, E., 2020. Volkswagen Should Be Focusing On
Marketing Effectiveness Not Efficiency. [online] Marketing
Week. Available at:
<https://www.marketingweek.com/volkswagen-marketing-
efficiency/> [Accessed 20 September 2020].
Npr.org. 2020. NPR Choice Page. [online] Available at:
<https://www.npr.org/sections/thetwo-
way/2018/03/29/597991227/why-300-000-volkswagens-are-
being-stored-in-these-massive-auto-boneyards> [Accessed 20
September 2020].
Npr.org. 2020. NPR Choice Page. [online] Available at:
<https://www.npr.org/2018/04/24/605014988/after-diesel-
scandal-vw-turns-to-new-leadership-and-electric-cars>

13. [Accessed 20 September 2020].
Pratap, A., 2020. Social Media Marketing Strategy Of
Volkswagen Motors. [online] notesmatic. Available at:
<https://notesmatic.com/2019/10/volkswagen-social-media-
marketing/#:~:text=A%20creative%20video%20marketing%20st
rategy,works%20to%20retain%20user%20interest.> [Accessed
20 September 2020].
Pratap, A., 2020. Social Media Marketing Strategy Of
Volkswagen Motors. [online] notesmatic. Available at:
<https://notesmatic.com/2019/10/volkswagen-social-media-
marketing/#:~:text=A%20creative%20video%20marketing%20st
rategy,works%20to%20retain%20user%20interest.> [Accessed
20 September 2020].
ResearchGate. 2020. (PDF) The Volkswagen Emissions Scandal
And Its Aftermath. [online] Available at:
<https://www.researchgate.net/publication/332327135_The_Vol
kswagen_emissions_scandal_and_its_aftermath> [Accessed 20
September 2020].
ResearchGate. 2020. (PDF) The Volkswagen Recovery: Leaving
Scandal In The Dust. [online] Available at:
<https://www.researchgate.net/publication/330527604_The_Vol
kswagen_recovery_leaving_scandal_in_the_dust> [Accessed 20
September 2020].
Schwartz, J., 2020. VW Investors Sue For Billions Of Dollars
Over Diesel Scandal. [online] U.S. Available at:
<https://www.reuters.com/article/us-volkswagen-emissions-
trial/vw-investors-sue-for-billions-of-dollars-over-diesel-
scandal-
idUSKCN1LQ0W4#:~:text=Shareholders%20representing%201
%2C670%20claims%20are,penalties%20and%20fines%20so%20
far.> [Accessed 20 September 2020].
Statista. 2020. Revenue Of Volkswagen 2006-2019 | Statista.
[online] Available at:
<https://www.statista.com/statistics/264349/sales-revenue-of-
volkswagen-ag-since-2006/> [Accessed 20 September 2020].
Vizard, S., 2020. Volkswagen Brand On Road To Recovery As

14. It Launches First Campaign Since Emissions Scandal –
Marketing Week. [online] Marketing Week. Available at:
<https://www.marketingweek.com/volkswagen-brand-on-road-
to-recovery-as-it-launches-first-campaign-since-emissions-
scandal/> [Accessed 20 September 2020].
Vizard, S., 2020. Volkswagen Overhauls Marketing As It
Ditches 'Das Auto' Slogan – Marketing Week. [online]
Marketing Week. Available at:
<https://www.marketingweek.com/vol kswagen-overhauls-
marketing-as-it-ditches-das-auto-slogan/> [Accessed 20
September 2020].
El portal en castellano sobre branding, marcas, identidad
corporativa, logotipos…. 2020. Volkswagen Cambia De Logo
En El Que Consideran Uno De Los Mayores Rebrandings Del
Mundo. [online] Available at:
<https://brandemia.org/volkswagen-cambia-de-logo-en-el-que-
consideran-uno-de-los-mayores-rebrandings-del-mundo>
[Accessed 20 September 2020].
Npr.org. 2020. NPR Choice Page. [online] Available at:
<https://www.npr.org/2018/04/24/605014988/after-diesel-
scandal-vw-turns-to-new-leadership-and-electric-cars>
[Accessed 20 September 2020].
Storyclash Social Media Monitoring Blog. 2020. Top 15
International Car Brands On Social Media (Updated: December
2019). [online] Available at:
<https://rankings.storyclash.com/top-15-international-car-
brands-on-social-media-2019/> [Accessed 20 September 2020].
Volkswagenag.com. 2020. [online] Available at:
<https://www.volkswagenag.com/presence/investorrelation/publ
ications/fixed-
income/rating/2019/Volkswagen%20AG%20RR%20October%20
2019%20-%204.pdf> [Accessed 20 September 2020].
11