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A VW marketing manager working for Skoda explained:
"We needed to move away from being a cheap brand to being a value-for-money brand. At the same time, we badly needed to find our own positioning within the group, rather than just trading on being part of the VW Group. Otherwise, we might just as well have re-branded ourselves as VW, with very little reason for existence."
Launch of the Octavia
Skoda's first VW-backed model was the Octavia. It was launched in the UK with a £10m promotional campaign- Skoda's highest-ever spend on a marketing campaign.
However, the Octavia launch was a failure. Just 6,154 Octavia cars were sold over the year following the car's launch, despite the fact that the car achieved almost unanimously good reviews. Market research at the time suggested that sixty per cent of people said they "would never buy a Skoda".
Only a fifth of early Octavia buyers were under the age of 45 and a third had previously owned Skoda cars. Skoda's image was old, unfashionable and out of sync with its products.
- Questions and Answers to Lincoln Electric Case Study by Harvard Business School
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