Brand Health Check: Skoda

The car marque's quirky style seems to have been lost in a wave of generic ads.

The bakers from Skoda's 2007 Fabia 'cake' ad will need all the sugar they can get to sweeten the pill facing the brand's owner, Volkswagen Group.

Sales for the marque are down 12.8% year on year in 2009 to date, according to the Society of Motor Manufacturers and Traders. Meanwhile, its marketing strategy seems to be in disarray after its head of marketing, Mary Newcombe, moved into a non-marketing role. She will now be responsible for training across the Volkswagen Group's dealership network.

Newcombe's reassignment follows the launch of a pan-European TV ad created by Leagas Delaney Prague, backing the launch of Skoda's Yeti SUV. It is understood that this ran instead of one created by Fallon, which was also responsible for the 'Cake' ad that featured the saccharine sound of Julie Andrews warbling her way through Rodgers and Hammerstein's My Favourite Things.

Skoda was once a byword for cheap and cheerless motoring. However, it has managed to rid itself of its former Eastern Bloc reputation through advertising that emphasised its new-found technical prowess.

It is a shame that this focus seems to be drifting, a trend that is apparently having an impact on the marque's sales.

So how can Skoda get back up there with raindrops on roses? We asked Dan Hagen, managing partner at MPG, who has worked with Hyundai Kia, and Mike Welsh, chief executive at Publicis Dialog, which handles Renault's below-the-line work, for their advice.

Dan Hagen managing partner, MPG

Skoda hasn't had a great year, but nor has the automotive sector overall. The latter is down about 15% year on year, so Skoda is toeing the line - and doing better than many.

Only a few brands, notably Kia and Hyundai, are showing positive signs in a tough market, and the demise of the government's scrappage scheme in February spells a tough incoming year.

Skoda's focus on the Yeti has put it into competition with the big-spending and highly successful Nissan Qashqai.  The sector is likely to become cluttered in the New Year, with launches and revamps from many manufacturers.

The consumer view is still relatively bleak, as unemployment and inflation are likely to rise in 2010, putting a further squeeze on household spending power. It's probable that the 50%-plus of us who commute by car will seek another year out of our existing motors.

Lastly, what influence will social marketing, fuel efficiency and green requirements have on the industry?

Remedy

  • It's tough to be fleet of foot when models are decided and laid down years in advance, but it's vital to find that perfect storm of the right vehicle for the right audience in the current market, and then get behind it with an integrated campaign.
  • Don't be tempted down a purely rational route. We want to feel and look good in our cars, so it's vital to deliver to the emotional requirements of the consumer as well.
  • Yes, it is everyone's hot topic, but consumers have changed, and that must be acted upon. Find a way to make social media work for both brand engagement and feeding test-drives.

Mike Welsh chief executive, Publicis Dialog

The automotive sector has struggled this year, and it's easy to forget that Skoda's long-term strategy has delivered both for the brand and the business.

It has neutralised the impact of old gags by being honest about the product and creating goodwill among Skoda drivers, and over the past decade, its market share has more than doubled.

Sales to date in 2009 are down, but this decline is on a par with the decline in total UK car sales. In fact, Skoda's brand share for October was up significantly year on year.

One issue the brand will have to wrestle with is the rocketing market share of Korean value marques Hyundai and Kia. As Volkswagen's value brand, Skoda cannot be complacent about its competitors, either in the UK or emerging markets. 

The loss of its marketing director, as well as its decision to run a TV ad that was created as part of a pan-European campaign here in the UK, are a worry.

'Cake' was brilliant. Its current positioning is not. The UK market is too individual, and Skoda too quirky, for such generic campaigns to truly resonate with consumers.

Remedy

  • Stick with the successful, long-term strategy that has consistently grown brand equity and market share.
  • Be clear about where Skoda fits into the value category and monitor rival Korean value brands.
  • Appeal to the unique characteristics of each market rather than scrimping on marketing budgets.
  • Build on the success of past campaigns by increasing creative innovation.
  • Be bold. Bravery got Skoda where it is, and fortune favours the brave.

 

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