Skoda's Promotion Strategy

Skoda, a company that had a humble beginning as a bicycle manufacturer in 1895 and which for most of its
existence thrived in the then communist Czechoslovakia, mostly deprived of the new technological innovations that were taking place in the western world and often faced with economic or political turmoil, has today emerged as one of the leading car makers in the world with total global sales for the year 2012 being 939,200.

Some major components of Skoda’s marketing strategy are:

•              Marketing strategy involved focus on happy and content customers instead of the car itself (which most car makers were doing at that time).

Skoda focussed on making cars that customers would enjoy, rather than just increasing sales. As a result Skoda enjoys the highest loyalty rate (buying again) of 84% against 48% of industry average.

Ø  Skoda knows that 98% of its drivers would recommend Skoda to a friend.

Ø  Skoda UK has responded with a new marketing strategy based on the confident slogan, 'the manufacturer of happy drivers' The key messages for the campaign focus on the 'happy' customer experience and appeal at an emotional rather than a practical level.

Ø  Customers are able to book test drives and order brochures online. The result is that potential customers will feel a Skoda is not only a reliable and sensible car to own, it is also 'lovely' to own.

Ø  Analysing the external opportunities and threats allows Skoda UK to pinpoint precisely how it should target its marketing messages.

Ø  No other market player has 'driver happiness' as its USP.

•       Changing popular negative perception of the brand-

                                Although Skoda enjoyed a premium brand image in central Europe (where the company originated), the situation in the UK has been very different. This weakness was partly due to out-dated perceptions of the brand. These related to Skoda's eastern European origins. In the past the cars had an image of poor vehicle quality, design, assembly and materials. Crucially, this poor perception also affected Skoda owners. For many people, car ownership is all about image. If you are a Skoda driver, what do other people think?

•        Building the brand through aggressive public relations strategy-

                               Branding helps consumers to identify closely with products which satisfy their needs and provides them with a deeper understanding of the qualities associated with the product. Skoda is an example of a brand whose popularity has gone up and down like a roller-coaster in its 100 year history. From the heady days of the 1920s, when it produced the Hispano-Suiza - the Rolls-Royce of cars in those days - to its lowest point of communist domination, and in the UK where the brand suffered the darker side of British humour. Today, however, this is no longer the case; the brand is enjoying a renaissance.

§  Moving from negative perception to neutral perception.

               This involved showing the public that the 'new Skoda' had replaced the 'old Skoda'. An integrated press and public relations programme was planned and implemented to communicate the new face of Skoda. This involved on-going media communications which incorporated:

Ø  Factory visits to see the new state-of-the-art manufacturing plant in the Czech Republic

Ø  One-to-one interviews with designers, engineers and R&D personnel.

Ø  Press product launches, motor shows, sponsorship opportunities and exposure marketing.

§  Moving from neutral to positive perception-

                Creating positive perceptions and encouraging people to buy cars cannot simply be achieved by                  product marketing. The process is far more complicated and involves communicating to the public the values                      represented by the brand.  Skoda’s brand values are reflected in:

Ø  Skoda’s commitment to producing cars that provides potential customers with practicality, functionality, robustness and reliability.

Ø  Skoda’s commitment to quality and giving customers what they want at reasonable prices.

Ø  The Skoda Network of dealers, most of whom are small, family-owned businesses, have good relationships with their customers and provide high levels of personal attention.

§  For example , when marketing the Octavia Skoda had many communication objectives:

Ø  The Octavia is a completely new and modern car to appeal to different car segment customers

Ø  Skoda customers get much more for their money compared to competitor models

Ø  The Octavia is designed with the same quality standards as any Volkswagen Group product
Ø  The Octavia experience is a Skoda experience.

•  Collaboration with Volkswagen-

                  By 1990 the Czech management of Skoda was looking for a strong foreign partner. Volkswagen AG (VAG) was chosen because of its reputation for strength, quality and reliability. It is the largest car manufacturer in Europe providing an average of more than five million cars a year giving it a 12% share of the world car market.

From the late 1940s through to 1989, Skoda manufactured in a communist-dominated market. This climate allowed little outside intervention in terms of modern technology and new ideas, and suppressed innovative and creative methods of working. In those days, its cars were cheap to buy but Skoda could not hope to compete on an equal footing with cars manufactured in the West and in such a competitive market-place.

 Volkswagen AG, Germany, bought Skoda Automobile, the state-owned Czech car manufacturer, in 1991. Volkswagen investment enabled Skoda to develop new products on a par with western competition and since then, increased its strength as a brand all over the world.

•        Using reliable independent surveys that test customers' feelings-

 For example, the annual JD Power customer satisfaction survey asks owners what they feel about cars they have owned for at least six months. JD Power surveys almost 20,000 car owners using detailed questionnaires. Skoda has been in the top five manufacturers in this survey for the past 13 years.

In Top Gear's 2007 customer satisfaction survey, 56,000 viewers gave their opinions on 152 models and voted Skoda the 'number 1 car maker'.  Skoda's Octavia model has also won the 2008 Auto ExpressDriver Power 'Best Car'.