This document provides a summary of a business report analyzing the Audi brand. It begins with statistics on Audi's market share and financial performance showing increasing sales revenue and profit from 2011-2015. It then examines Audi's consumer segments, brand personality and positioning, and reputation for quality. The document proposes a potential brand extension of Audi laptops, arguing that Audi's focus on technology aligns with consumers' perceptions of the brand.

1. ASSIGNMENT 1
AUDI BRAND RESEARCH
WORD COUNT (2,657)
CALLUM ROGERS | BRAND MANAGEMENT | 30/11/16

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EXECUTIVESUMMARY
This business report is compiled with in depth data and analysis on the German car
manufacturing brand, Audi. The report begins with statistics on the brands U.K market
share, as well as their financial performance. In the year of 2015, Audi recorded a sales
revenue of 58.42B, an increase of 14.32B from their revenue in 2011. Audi’s consecutive
increase in sales has aided in the overall growth of the brand, producing a net profit of
4.2B in 2015.
The report then moves on to analyzing consumer segmentation, as well as the
personality of the brand and perceptions consumers have obtained. A Mintel report
from 2011 helps to identify the key consumer segments for car ownership, recognising
five personality types that can be applied to both men and women.
Following from consumer segmentation, the term brand personality is examined.
Jennifer Aaker developed a theoretical framework of the brand personality construct by
determining the number and nature of dimensions of brand personality (Sincerity,
Excitement, Competence, Sophistication and Ruggedness).
Research published in the International Journal of Service Industry Management
showed that organizations with a better reputation for service excellence boasted an
average turnover roughly 45 percent higher than those with a poor reputation. The last
third of the report scrutinises the idea of brand positioning and brand values, using
established academics such as De Chernatony.
Extensive research into brand extension theory leads to a potential extension of
the brand, Audi laptops. This extension aligns with the brands core values and
could produce successful sales and revenue. The main connection Audi have with
the I.T industry is their slogan which translates to ‘Advancement through
Technology’. The reason this is so effective for the brand extension is that
consumers place trust in the brand as they are aware that advanced technology is
the brands main focus.

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TABLE OF CONTENTS
Introduction page 3
Market Share, Financial Performance and Evaluation page 3
Consumer Segmentation page 4
Brand Personality page 4,5
Brand Functionality and Consumer Perceptions page 5,6
Reputation and Values page 6,7
Marketing Communications page 7
Brand Status and Positioning page 7,8,9
Intangible Brand Values page 9,10
Brand Extension page 10,11
Conclusion/Recommendations page 11
Reference List page 12,13

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INTRODUCTION
This report will provide an in depth analysis of the brand and automotive industry,
focusing explicitly on Audi. Throughout the course of this report, the importance of
brand personality and positioning will be assessed using established frameworks and
academic literature. Audi’s marketing communication approach will be evaluated and a
summary of key trends in the industry will be inspected, as well as a short rationale for a
potential brand extension.
MARKET SHARE, FINANCIAL PERFORMANCEAND EVALUATION
Audi’s manufacturer shares of new car registrations in the last six years has grown
consistently, increasing by 1.7% from 4.6% in 2009 to 6.3% in 2015 (Mintel, 2015). In the
year of 2015, Audi recorded a sales revenue of 58.42B, an increase of 14.32B from their
revenue in 2011. Audi’s consecutive increase in sales has aided in the overall growth of
the brand, producing a net profit of 4.2B in 2015. Across the last 5 years (2011-2015)
Audi have developed an overall net profit of 21B (Marketwatch.com, 2016). Although
seeing small net losses in comparison to the last few years, Audi have proven that they
can produce overwhelming profit each year consecutively. The German brand has
effortlessly positioned itself as one of the leading car manufacturers in the world in the
premium and supercar segments. The company's strong brand portfolio gives it
significant competitive advantage by registering higher sales growth in domestic, as well
as in international markets (AUDI AG SWOT Analysis, 2016). Audi can set more premium
prices than its competitors and thus register relatively higher margins of revenue.
However, intense competition in the industry could adversely impact the company's
business growth and may pressurize its revenue performance and profit growth (AUDI AG
SWOT Analysis, 2016).

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CONSUMERSEGMENTATION
A Mintel report (2011) on consumer segmentation in car ownership recognises five
personality types that can be applied to both men and women e.g. Mr Cultured. High-
end brands peak amongst ‘Mr Exuberant’ and ‘Mr Accomplished’, with Audi and BMW
being ‘Mr Exuberant’s’ brand of choice (7% and 9%). Only 11% of all men are prepared
to spend more than £20,000 on their next car, of which 9% of all men surveyed would
upgrade their car from a budget or mid-range brand to upmarket brands. This research
identifies how Audi benefit from male consumers upgrading their cars. Vauxhall loses
slightly from current car ownership to future preferences (from 13% down to 9%),
while Audi gains significantly (from4% to 10%). Mintel’s (2015) research identifies that
Mr and Ms Exuberant are Audi’s main consumer segments in relation to spending habits
and personality traits, the evidence suggests that men are significantly higher in
purchasing high end car brands such as Audi.
Although women are more positive about their experience with most brands, with
only Audi, BMW and Ford having a similar level of satisfaction across genders. The
under-45s also tend to be more positive than the over-45s, with only Audi showing a
greater proportion of satisfaction among the older group (Mintel, 2015). This is
important to note as it suggests Audi breaks away from other brands in relation to
customer satisfaction.
BRAND PERSONALITY
Keller (1993) argues that a distinctive brand personality can create a set of unique and
favourable associations in consumer memory. Aaker (1997) defines brand personality as
human characteristics or traits that can be attributed to a brand. The way that
consumers perceive brands are based on personal interactions, whether it be positive or
negative. Jennifer Aaker developed a theoretical framework of the brand personality

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construct by determining the number and nature of dimensions of brand personality
(Sincerity, Excitement, Competence, Sophistication and Ruggedness). Disputably, Audi
could be seen as falling under two dimensions of the framework, Competence and
Sophistication. The Competence dimension includes personality traits such as
intelligence, reliability and success (Aaker, 1997).
Audi are one of the most successful brands in the world today, increasing their shares
of the market consistently over the last six years. The overall intelligence of the brand
cannot be questioned. Although it could be argued that Audi fall more primarily under
the sophistication dimension, being associated with upper class consumers given the
premium prices the brand sets. The brand delivers a high level of class for its consumers,
exuding quality and superiority in the industry, leading to higher sales.
Figure 1: Aaker (1997)
BRAND FUNCTIONALITYAND CONSUMERPERCEPTIONS
Elliot and Percy (2007) established a framework that can be applied to brand
functionality and the emotional and symbolic link that the consumer has with the brand.
The Matrix that Elliot and Percy developed is designed to place brands on a scale based
on high or low involvement, as well as the rational or emotional connection the

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consumers have with the brand. The low involvement brands are merely commodities,
products such as sweeteners or milk, they have no emotional connection to the product
or brand. In comparison, the high involvement brands are those that have an
emblematic quality about them, they have a deeper meaning to the consumer (Elliot
and Percy, 2007). Mintel’s research (2015) on brand perception notes that Audi
and BMW stand out from the other major players as being the most exclusive. Both
brands project an image of quality and reputation with the result that they are viewed
as expensive and exclusive. The reasons these brands stand out is because of their
positioning towards reputation, quality and premium price, strongly linking them with
wealthier adults and those in the AB socio-economic group (Mintel). Whereas brands
such as Skoda, Kia and Renault are seen as having no differentiation from any of the
brands surrounding them, both have strong patronage of older car owners who are
looking for the assurance of a reliable vehicle at an affordable price. Mintel’s research
illustrates how brands such as Audi, BMW and Volkswagen have more premium
connotations, while Ford relies on the trust it has generated through its long presence in
the UK (Mintel, 2015).
REPUTATIONAND VALUES
Research published in the International Journal of Service Industry Management
showed that organizations with a better reputation for service excellence boasted an
average turnover roughly 45 percent higher than those with a poor reputation (Strategic
Direction, 2002). This supports the idea of how vital building a respectable brand
reputation is in generating a profitable turnover. De Chernatony and McDonald’s
research (2003) on consumer brand choice aids in the understanding of why consumers
select certain brands, they explain this through several values consumers have. For
instance, the emotional value is the brands ability to arouse particular feelings with the
consumer, such as excitement and comfort. Whereas the social values that consumers
use to influence brand choice are the values that associate themselves with a particular
group. Audi, being a high end car brand, project the idea of upper class and
sophistication for the consumer. This influences brand choice because of the way
consumers want to be seen by others in society.

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MARKETING COMMUNICATIONS
Audi has campaigned integrated, consistent, innovative and creatively ground-breaking
marketing for over 25 years with the iconic strapline ‘Vorsprung durch Technik’
(Marketing Society, 2016). Audi has developed an architecture of customer
communications with a focus of fostering much tighter relationships with the brand.
Audi’s distinctive approach has continued to challenge the boundaries of convention in
marketing and the car industry alike. It has become synonymous with one of the most
memorable straplines in advertising (Marketing Society, 2016).
Audi’s innovative marketing techniques allows the brand to mature and differentiate
itself from its surrounding competitors. Audi was the first car brand to move online,
winning awards for its creativity as early as 1996 (Audi UK, 2016). Innovative content
creation steered the brand in the right direction, in 1994 Audi became a magazine
publisher, producing a high-quality monthly magazine. In 2003, Audi created an edition
of GQ magazine. The ‘Power Edition’ featured modern icons of power, including the
Audi RS6 (Marketing Society, 2016). The significance of producing a high-quality
magazine cannot be understated in Audi’s overall market communications plan. These
type of magazines are associated with the more sophisticated consumer, who can afford
to pay more.
BRAND STATUS AND POSITIONING
Mintel’s brand research (2012) in the report ‘Car Purchasing Process’ revealed
Mercedes-Benz, Audi and BMW to be status brands which are considered to justifiably
charge a premium price thanks to the perception of quality which surrounds them.
These brands also receive a significant amount of attention online, suggesting a
correlation between status and online mentions within the automotive market. While
these comments are not strictly limited to status car brands, they inspire a more
emotive reaction in social media users. Including a desire or dream to one day own a
particular make or model of car and can be triggered by either a marketing campaign or

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seeing the car in passing (Mintel, 2012). This is important to note as car manufacturers
can turn to social media for an insight into what consumers think of their brand. It could
be possible to either challenge these stereotypical views of consumers or else reinforce
their opinions in a humorous manner.
Mintel’s (2012) research reveals that Audi received the least amount of negative
stereotype based mentions, while acquiring the highest levels of positive sentiment
overall. As well as having a more vibrant feel, Audi’s investment in the sports car market
has also given the brand a more cutting edge feel, while BMW and Mercedes-Benz are
viewed as sophisticated and prestigious. This distinction, away from the label of
prestigious, has resulted in Audi drivers avoiding the stereotyped labels which both
BMW and Mercedes receive online (Mintel, 2012). The significance of this distinction
cannot be understated, Audi have been able to successfully break away from the
Figure 2: De Chernatony (2006): 39
surrounding competitors by having a more cutting edge feel for their consumers,
resulting in positive associations with the brand. De Chernatony (2006) describes brand
positioning as “Ensuring customers instantly associate a brand with a particular
functional benefit or a very low number of benefits”. De Chernatony (2006) developed a
scale to evaluate the effectiveness of brand positioning (Figure 2), based on high or low
relevance to the consumer and to the extent at which the organisation emphasises the
Socially
Responsible
Innovative
Worth
paying
more
for
Cares for the
environment
Reliable
Affordable
Untrustworthy

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benefit. Audi are positioned with the other premium car brands such as BMW and
Mercedes-Benz as ‘worth paying more for’. Consumers are willing to spend money on
these brands because of their strong associations with quality and status.
INTANGIBLEBRAND VALUES
Audi’s intangible brand values can be examined using Kapferer’s brand identity prism,
which describes brands through six different facets or perimeters. The first facet is
physique: this is the prototype of the brand, the product that represents the brands
qualities (Kapferer, 2012). In 2007 Audi released their flagship product, the Audi R8. The
model represents the sophistication, excitement and status of the brand. The next facet
is personality, as mentioned earlier in the report a smart brand personality is key for a
successful brand. The characteristics that are associated with Audi fall under two
dimensions of Aaker’s brand personality framework (Competence and Sophistication).
The next perimeter Kapferer identified is relationship; the consumer to brand
relationship can help gain loyal and satisfied customers, or completely lose customers all
together. As referred to earlier in the report, Mintel’s research on customer satisfaction
shows that Audi is only one of a handful of brands that have high level of satisfaction
across all of their consumers. Although women are typically more satisfied with brands,
Audi has equal levels of satisfaction across both genders (Mintel, 2015).
The next segment on the brand identity prism is culture: the culture of the company is
reflected by the values the brand is communicating, these can be linked for example to
the origin of the company and their heritage (Kapferer, 2004). Audi's slogan is
“Vorsprung durch Technik”, meaning "Advancement through Technology". However,
since 2007 Audi USA has used the slogan "Truth in Engineering" (Audi, 2016). The
German manufacturer is clearly attempting to portray the idea of high level technology,
which is what the brand stands for. The final perimeter of the prism is self-image: This is
the way customers see themselves when using the brand and how this makes them feel

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(Kapferer, 2012). Audi is one of the most prestigious brands in the automotive industry,
consumers gain a sense of sophistication and intelligence through being associated with
the brand. It could be argued that Audi makes their customers feel a sense of
accomplishment, earning status through mere consumption of the brand.
BRAND EXTENSION
Aaker and Keller (1990) define brand extensions as “the use of the name of a (parent)
brand on a different product category.” Ries and Trout (2000) explain that the brand
extension decision is strategically critical to an organization, the wrong extension could
create damaging associations that may be expensive, or even impossible, to change
(Ries and Trout 1981). This suggests that the success of a brand extension often
depends on certain assumptions about consumer behavior, consumers hold positive
beliefs and favorable attitudes toward the original brand in memory (Aaker, Keller,
1990).
This is significant as brands with a good reputation and a large customer base can
exploit their new extension successfully. Audi can take advantage of brand name
recognition and image to enter new markets faster and producing profitable sales
(Aaker and Keller, 1990). Many brand extensions are unsuccessful, backfiring on the
image of the parent brand (Martinez, Pina, 2003), but with high quality brands such as
Audi it suggests this wouldn’t be the case. The literature proposes that the extended
brand name must first possess high awareness and associations that are strong and
salient (Barta, Lenk, Wedel, 2010).
It is Audi’s core principles that led to the suitable brand extension of Audi laptops. The
brand is able to bring its established brand values over from the automotive industry to
the I.T industry, focusing on the idea of advancement through technology. Audi are a
reputable company, they are recognized as being innovative, sophisticated, intelligent
and prestigious. Therefore, designing laptops using the parent brands name and
reputation could be profitable for the overall image and turnover of the company. Brand

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extensions can however be inconsistent (i.e. a low fit between the core and extended
brand or even a contradictory image) and might lead to a negative brand image and
create damaging associations which may be very difficult for a company to overcome
(Hennigs, Wiedmann, Behrens, Klarmann, Carduck, 2013).
This industry is clearly difficult to successfully break into, with it being near enough
impossible for unestablished brands to be successful. In 2015 HP recorded 22% of the
estimated shares of the UK desktop and laptop market by volume, followed by Lenovo
(18%), Acer (12%), Dell (12%), and Apple (9%). However, Audi’s strong brand image is a
huge factor in aiding their success with potential brand extensions. Their favorable
associations enable the brand to be strategically differentiated and positioned in the
consumer’s mind (Völckner and Sattler, 2006).
It is this research that suggests that Audi is strategically benefitted by this potential
brand extension, or any (if correctly aligned with the parent brands values). Although in
a different industry, the reputable name of Audi continues, re-assuring consumers that
their quality is consistent. Research shows that successful extensions have a match at a
level of concrete attributes, or in Audi’s case abstract imagery e.g. prestige and exciting
style (Barta, Lenk, Wedel, 2010).
CONCLUSION/RECOMMENDATIONS
To conclude, Audi are one of the market leaders in the automotive industry, with
continued growth in sales revenue and manufacturing output. The brand is significantly
well positioned, in relation to market share and consumer perceptions of the brand.
Audi’s connotations of prestige and class aid their development in this highly
competitive industry, resulting in continued increases in sales revenue and the overall
status of the brand. It is essential that the brand continues its associations with a
prestigious and upper class lifestyle, as this is the vital selling point to the consumers.

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REFERENCE LIST
AAKER, J. (1997) ‘Dimensions of Brand Personality’, Journal of Marketing Research Vol. 34, No. 3, August,
pp. 347-356
AAKER, D.A, Keller,K.L. (1990),“Consumer evaluations of brand extensions”, Journal of Marketing, Vol.54
No. 1, pp. 27‐41
AUDI AG SWOT Analysis.(2016).1sted. [eBook] Market Line. Availableat:
http://web.a.ebscohost.com.ezproxy.mmu.ac.uk/ehost/pdfviewer/pdfviewer?vid=3&sid=c51fe65c-fe8c-
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AUDI UK. (2016). Audi UK - Vorsprung durch Technik. [online] Availableat:http://www.audi.co.uk
[Accessed 1 Nov. 2016].
BATRA, R., LENK, P., WEDEL, M., (2010) ‘Brand Extension Strategy Planning: Empirical Estimation of
Brand—Category Personality Fit and Atypicality’ Journal of Marketing Research, Vol. 47,No. 2, pp. 335-
347
DE CHERNATONY, L., MCDONALD, M., (2003),‘Creating Powerful Brands’, 3rd Edition Oxford, Butterworth-
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HENNIGS, N., WIEDMANN, K-P., BEHRENS, S., KLARMANN, C., CARDUCK, C., (2013) "Brand extensions:A
successful strategy in luxury fashion branding? Assessingconsumers’implicitassociations",Journal of
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LEE, M., (2014), ‘The 'Type A' Car Driver, Cadillac Style and Audi Style.’, Forbes, February 18th
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MARKETING SOCIETY. (2010). ‘2010: Audi,Sustaining the Brand Promise’. [online] Availableat:
http://2010: Audi, SustainingtheBrand Promise[Accessed 10 Nov. 2016].

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MARTINEZ, E., Pina,M., (2003),"The Negative Impact of Brand Extensions on Parent Brand Image,"
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Marketing, Vol. 57, No. 1, Jan pp. 1-22
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