Building Brand Equity

A Skoda

Case Study

Some Points

How do you double the value of a Skoda?

*Fill the gas tank

What do you call a Skoda convertible?

*A dumpster

What do you call a Skoda with twin exhaust pipes?

*A wheelbarrow

Why does a Skoda have a double rear window heater?

*To keep your hands warm, while you push it

A guy goes into his local garage and asks "Do you have a windshield wiper for my Skoda???”

*"Sounds like a fair swap" replied the man in the garage.

Overview

• A Brief Story Of Skoda

• Existing Mission and Vision

• External Analysis

• Strategic Selection

• Strength /Weakness

• Conclusion

History

1895 Vaclav Laurin and Vaclav Klemnet form bicycle company1891 laurin and Kelemnt start making motorcycles

1905 The first car, called the “Voiturette A”, leaves the factory gates and thanks to its quality and attractive appearance soon gains a stable position in the emerging international automobile markets.

1907 Laurin & Klement set up a joint-stock company that goes on to export cars to markets the world over.

1989 Czech republic formed 1991 April 16 marks the beginning of a new chapter in

the Company’s history, when it is acquired by the strategic partner Volkswagen. Škoda becomes the Volkswagen Group’s fourth brand.

1996 Production commences of another milestone car model for the Company – the Škoda Octavia.

Skoda History

Skoda Mission Statement

Three basic values of the Skoda brand

Intelligence We continuously seek technical solutions and new ways in which to care for and approach the customers that are the most important for us. Our conduct towards the customers is aboveboard, and we respect their desires and needs

Attractivesness We develop automobiles that are aesthetically and technically of high standard and always constitute and attractive offer for our customers not only in terms of design or technical parameters but also the wide range of offered services

Dedication We are following the steps of the founders of our company; Messrs. Laurin and Klement. We are enthusiastically working on the further development of our vehicles; we identify ourselves with out product

Strategic Selection

Strengths

• 100-year history as a vehicle manufacturer.

• Capital infusions from Volkswagen.

• Strength of Volkswagen’s reputation.

• Highly-skilled work force available in the Czech Republic.

• Relatively low wages in Czech Republic.

• Largest employer in the Czech Republic.

• Synergy with other Volkswagen products.

Weaknesses

• Location in a country that must deal with outdated infrastructure.

• Perception from the past that Skoda produces a low-quality product.

• Growing unrest of Skoda’s employees in seeking higher wages which decrease profit margins.

Recommendations

• Next 3 years ▫ Move Manufacturing to low-cost labor countries with

high demand for value priced automobiles (China and India)

• Next 5 to 7 years ▫ Develop an alterative fuel car for global marketplace

• Continuing ▫ Leverage Volkswagen Auto Groups brand to create a

global market for Skoda Cars

Annual Objectives

• Year one▫ Get plants up and running in China and India

• Year two ▫ Increase Production& Sales

~ 100,000 units in China, 25% export

~ 30,000 units in India, 0% export

• Year three▫ Increase Production& Sales

> 150,000 units in China, 35% export

~ 45,000 units in India, 10% export

Conclusion

• In today's modern motor industry, a car’s brand is vitally important. It is more than just a marque - it represents product features, image, customer service and servicing. Today’s customers want authentic, individual products with integrity. Skoda has seized a unique opportunity - emphasising its values and creating a strong identity which has become the brand story of the decade.