Special Report: Marketing to the Chinese Community: Volkswagen: from zero to awareness in 14 months

In This Report-Crown Life Insurance emphasizes stability anddependability, in an image-building campaign 19-Use of Chinese media is on the rise, says DJC Research 21-Tele-Direct and Ming Paojoin forces to publish a Chinese Yellow Pages 22-English-language Asian magazine Typhoon goes to press...

In This Report

-Crown Life Insurance

emphasizes stability and

dependability, in an image-

building campaign 19

-Use of Chinese media is on

the rise, says DJC Research 21

-Tele-Direct and Ming Pao

join forces to publish a

Chinese Yellow Pages 22

-English-language Asian

magazine Typhoon goes to

press for the first time 23

-Volkswagen Canada increases

sales and awareness with an

integrated approach 24

To say that Volkswagen cars were not exactly top-of-mind among the Chinese in Canada just 14 months ago is an understatement.

In a survey of 40 Chinese consumers conducted in December 1993, not a single respondent mentioned the Volkswagen brand when asked to specify their choice of new cars over $35,000.

Instead, respondents most often named German-engineered competitors Mercedes and bmw, with Lexus, Toyota’s luxury model, in third place.

Further, in the under-$35,000 category, respondents tended to name Japanese brands -Toyota, Honda and Nissan, and so on.

(While several respondents did mention Audi and Porsche – both are Volkswagen products, but distinct from the Volkswagen brand – overall brand visibility was low.)

To add insult to injury, when asked to describe the vw brand, most respondents could think of nothing but the Volkswagen Beetle, the ubiquitous ‘bug’ that defined the automaker in the 1960s.

They knew practically nothing about Volkswagen’s newer, sportier sub-brands: the Corrado, the Jetta, the Golf Cabrio and the Passat.

So it was with these things in mind that Scarborough, Ont.-based Volkswagen Canada decided to embark upon an integrated marketing campaign targeted to the Chinese community, in an effort to get the vw name in front of consumers and to introduce the car maker’s newer models.

The multi-faceted initiative, spearheaded by Ron Lee, the company’s Vancouver-based director of Asian market development, encompassed everything from traditional media advertising, to sponsorship of an event to raise money for a Chinese nursing home, to driving classes for Hong Kong immigrants unfamiliar with Canadian driving conditions.

As Lee says, marketers who want to sell their products to Chinese consumers must do more than just advertise if they expect to be taken seriously; they must develop a relationship.

‘When you look at media, everybody advertises, right?’ he asks. ‘So why should consumers believe in what you say?

‘Everybody is going to say that they are the best. So besides media [advertising], there must be a more personalized relationship between the manufacturer and the community – particularly because a lot of promotion [within the Chinese community] is done on a word-of-mouth basis.’

‘The way we look at it, as a business, we cannot just take from the community, we have to give as well.’

The first volley in the launch was a four-page insert last February in Ming Pao, a Chinese-language daily newspaper and official Chinese journal of the Toronto International Auto Show.

In an effort to leverage the sense of renewal associated with the Chinese New Year, the insert opens with the headline: ‘A family with an impeccable pedigree celebrates a new generation.’

The copy inside, under the headline ‘The New Generation: more powerful, smarter and safer,’ explains that Volkswagen shares its heritage and German engineering with Audi and Porsche, other members of the Volkswagen family.

It then goes on to introduce the four new vw models.

The visual on the front of the insert consists of three brightly-colored red eggs.

Helena Fong O’Connor, director of Chinese marketing at Terry O Communications, the Toronto-based agency responsible for Volkswagen’s ethnic marketing efforts, says red eggs were used because they symbolize birth in Chinese culture.

When a baby is born, Fong O’Connor says a red egg is rubbed on its forehead to bring it good luck. The tradition is repeated on the child’s birthday.

Three eggs were used to represent the vw, Audi and Porsche lines.

Fong O’Connor says subsequent print advertising was brand-specific, in an attempt to more closely target three groups within the larger Chinese community: new immigrants with a high discretionary income; more established Chinese professionals who favor Mercedes and bmw, and foreign students whose parents plan to buy them a car.

Other elements of the mix included reversioning of mainstream television commercials advertising Audi and the Corrado, and cosponsorship with Ming Pao of a draw for one week’s free use of a Jetta GLX.

The draw, used as an incentive to encourage people to visit vw’s booth at last year’s autoshow, allowed vw face-to-face contact with Chinese consumers, another element Lee considers vital in establishing that all-important relationship.

‘It may not be the most efficient way to reach Chinese consumers, but I think it is well worth it,’ he says.

As well, Lee says, vw is now providing its dealerships Chinese-language sales materials, in an effort to support their recruitment of Chinese-speaking sales and service representatives.

As a result of its integrated marketing efforts, Lee says Volkswagen Canada has witnessed a significant increase in the sale of its cars to Chinese-Canadian consumers – in the region of 25% in Vancouver Centre and 20% in Toronto.

While final quarter sales figures were unavailable at press-time, Lee says, based on projections, he expects Volkswagen will have sold between 1,000 and 1,200 cars to Chinese consumers in 1994.

And given the fact that the population of Chinese in Canada is expected to increase from 500,000 to 1.3 million by 2001, Lee says he is optimistic sales to Chinese consumers will continue to improve.