Ch. 7: Business Marketing

When it comes to business marketing, Audi, a company which already possesses a high amount of success and much prestige, doesn't always necessarily seek to increase sales, but instead they simply want to maintain and/or enhance their image as a respectful, quality-driven, and philanthropic entity. Examples of these can be found all over the world, from Audi's involvement in many German music and arts Festivals, the sponsorship of skiing, soccer, and our sports teams. Audi partenered up with FC Barcelona, arguably one of the most successful soccer teams of all time, and allowed each of the players to choose an Audi that they would like to drive. One of Audi's biggest endeavors is their Le Mans racing team, which has constantly been one of the most succesful race teams. All of these examples show Audi's commitment to quality and respect, and they are able to do it without seeming like their only goal is increased profits, not to say that they aren't extremely good at that too.

Ch. 8: Segmenting and Targeting Markets

When it comes to segmenting markets, Audi doesn't really make too many changes to their vehicles, as their standard for quality is extremely high. Of course when they market cars overseas, they have to change the side the steering wheel is on and what not. When they make any car for Europe, the engines must meet the very strict emissions regulations set by the EU. The cars they send over to less developed but still growing countries are usually smaller hatchbacks, or sometimes the same size, but the engines are smaller, as people in places like India don't drive fast, but instead are constantly stopping and starting, which would ruin a bigger, more complex engine over time. Their market, however, remains the same all over the world, as one must pay a certain amount of money for a certain degree of quality. Therefore it is hard for a luxury company like Audi to try and segment, and therefore expand, their target market, because only a certain type of person will want to buy an Audi. Trying to force this kind of product down someone throat is simply arrogant and is an act in futility; if they can't afford it, they won't buy it, and Audi isn't willing to sacrifice an ounce of style and quality. 

Ch. 11: Developing and Managing Products

Audi, having been successful for such a long time, rarely comes out with a "new product" since they have almost always sold their cars at a high rate. Such success would make one think, "Why fix something if it isn't broken?" They have had huge success with their basic A line, and they later introduced the sportier S line. Then later as their target market began to grow, they incorporated station wagons and SUVs for bigger families. Their latest models have been created in response to other luxury car companies making a "supercar", as they have introduced the new R8 line, which comes as a Coupe or a Convertible. As far as I can remember, I have seen the same Audi models on the street since I was a child, they just change the look of them. Now one could say that the exterior of the car is the real, initial product, as that is the only thing you really see. But honestly, anyone could make a fancy body for a car. The real car, and Audi believes this too, is under the hood and within all the wires and driveshafts that make the car actually work. So when it comes to making new products, Audi is all about enhancing the performance of the car. The visual aspect comes second. That's why in all of Audi commercials, they are advertising some new type of technology, be it performance-enhacing or purely for safety purposes. They do always show the car in all its glory, maybe speeding through a dusty desert, or taking on intense curves on a mountainside. This is simply to catch your attention with something beautiful and mystifying. The real information comes after that, when they tell you why the car is able to make such turns, or when they explain to you the new all terrain suspension system that allows the car to grip on the gritty sand of a desert. The chances of Audi making a new "product" anytime soon is highly unlikely, as the success their original cars have brought them would lead anyone to just keep doing the same thing. The real change comes in the product enhancement, because hey, who wouldn't want something that's already good to be even better?

Ch. 16: Integrated Marketing Communications

When it comes to Audi, everything is about personal selling. Yes they create advertisements on TV, on billboards, on almost everything they can. But once you get past the advertisements, and you actually go into a dealership, everything becomes about you. They want to sell you a car, obviously, but they understand how big of an investment a $100,000 car is, so they take the time and the care to make sure you are buying exactly the right car to fit your needs. As I said in the post for Ch. 4, the ads they put out have no real purpose other than to amuse the viewer as well as inform them about some new aspect of their cars. For example, they have a commercial where a snow plow driver describes the new 4 wheel drive Audi as an elusive beast, as he has never had the chance to plow a path for an Audi, since the car can handle almost any terrain. Someone seeing this would be interested in the new Quattro system, but once he goes into the dealership, the sales rep will try to find out what else the consumer wants, and will help him find the perfect size and style car, while making sure he still gets his Quattro system. This is the norm with a lot of car companies. They advertise a new feature so you come in to a dealership to ask about it, and then the sales rep do all the rest. So all the "noise", that is the other billboards and radio ads and brochures they hand out, really doesn't serve any other purpose than to remind the consumer to go to a dealership, because once you are there, they almost make you want to buy a car.

Ch. 10: Product Concepts

Audi's product mix consists of 33 automobiles. Within these 33, there are 5 different categories (The A line, S line, Q line, TT line, and R line), which we call the product mix width. Even within that, there is the product line depth, which are the different models under each line. With such a variety of cars, it seems impossible that someone wouldn't be able to find something that fit their needs and desires

Audi's A line is their basic car, ranging from the A4, which is a small 4 door luxury sedan, to the A8, which is the majestic, long, highest end luxury sedan. The S line is a little more sporty, and has 2 doors instead of 4. They also range from 4 to 8. Within both the A and S lines are the station wagons, which also come with All Road Capabilities. The Q line is the SUV line, which ranges from the smaller, sportier Q3, to the goliath 7-seater Q7. Their original sports car line is called the TT line, which are smally, zippy 2 door sports car, with the convertible option. Finally, their newest line is the R line, which only has one model (the R8) but the product line depth offers a coupe, or a convertible. 

When it comes to packaging, cars are an interesting topic, as the packaging for the car is, in fact, the car itself. Therefore, the car serves as both the product and the package, making the design of the car so much more important. Audi has perfected a new sleek, kind of mean looking car, as the headlights now resemble the eyes of a predator, and coupled with the growl of the engine, Audi's seem like some sort of majestic beast. 

Ch. 18: Sales Promotion and Personal Selling

In terms of sales promotion, Audi itself doesn't do much, as the sales promotions and deals offered only happen at the dealership level, and Audi dealerships are franchises. Therefore, it is up to each individual retailer to create sweepstakes, discounts, and other incentives for people to come by the dealership and hopefully buy a car. These kinds of deals vary from dealership to dealership. However, cars like Audi, BMW, and Mercedes, usually don't rely on these kinds of promotions, as they have already made a name for themselves in the world of automobiles, and are held in such high regard that people are willing to forego a deal or a coupon to have a car that is also a status symbol. Therefore, Audi's main focus is on personal selling. The whole experience of going into a dealership and talking to a sales person is the definition of personal selling. Usually, the minute you walk into dealership, someone approaches you, tells you their name, and begins asking you questions about who you are, what you are looking for, and what car fits you and your personality the best. In most cases, this person will be your liaison with the Audi dealership forever, assuming you by a car. That person therefore grows to know you, and is the ideal person to work with if you have any problems or complaints, as that person is almost a friend to you, based on the relationship they have established through professionalism, courtesy, and understanding of their customer. This is essentially the definition of relationship selling. The salesperson will always be "your salesperson", and you will very rarely have to deal with anyone else (unless they get fired) on any issue regarding your car. This is a relationship rarely found in the world of consumers and sellers, but when it comes to such a large investment as a car, this kind of service is expected and demanded by everyone. 

Ch. 17 - Advertising and Public Relations

Audi, like most other luxury car brands, is in a weird place when it comes to who they advertise to. Their target market is clearly set as people in the upper middle class who can afford a car that runs between $60,000-$150,000. Therefore, they can't really advertise to anyone else BUT that one group, because no matter how much someone might want an Audi, if they can't afford it, they can't have it (unless of course you buy a used one, but Audi wouldn't be trying to advertise an older, out of date model). This makes their lives a little bit easier, and allows them to focus more on the style and execution of their advertising and less on who they're focusing on. Recently, Audi has employed a funnier, more satirical feel in their commercials, like the commercial where a snow plow driver talks about the new Audi A8 Quattro (with 4 wheel drive) is like a wild beast that constantly evades the plow driver, much to his chagrin. Audi and BMW have long been in an advertising war that pitches each company's new car against the others, mainly their sportier cars. Below is a billboard they made in response to BMW saying they had just won World Car of the Year.

In terms of public relations, Audi is very active in positive promotion for their brand while also showing their belief in social responsibility. Audi has been a strong supporter of the  Elton John AIDS Foundation, and they recently put up two Chrome Audi R8's (the R8 is their most expensive car, and one of the best super cars on the market) which brought in almost £650,000. Last year they teamed up with Tom Brady, quarterback of the New England Patriots, and the Best Buddies foundation. They managed to raise about $350,000, a sizable contribution to the $36 million the pairing has amassed in the last 4 years.  

Ch. 15: Retailing

So I went with my father to the Audi dealership on W 54th street. He was going to test drive a few cars, as he is looking to lease a new car. I had mentioned earlier how pleasurable our experience at the Audi service center was: they treated us extremely well, they knew everything important about us and our car, they served us drinks while we waited, etc. The experience at the dealership was a little bit different. Like most luxury car dealerships, the salesperson will only become really invested in you once they know you can actually afford the car and that you're serious about purchasing one. So initially they weren't swarming on us, one came and said hi, how are you, the basics. Once we got talking however, and my dad mentioned he used to own an Audi but had just got it at another dealership, the salespersons demeanor changed completely. He immediately looked up my father's info, began calling him Mr. Mumtaz, and began to guide my father in the correct direction for the car he wanted. We didn't get the car that day, but the xperience was extremely positive, but only after they knew we were "of value".

Ch. 6: Consumer Decision Making

When it comes to buying a car, the consumer's decision making process might be the most intense and detail-oriented process out of any other product (other than maybe a house). When it comes to spending that much money on something ($60,000-$150,000), the consumer's decision making process must be almost surgical, going through every pro and con that the car has to offer. Audi, thankfully, makes this process quite easy for the consumer, assuming the consumer knows what he is looking for. In the initial stages of the process, the consumer will see that Audi's cars are among the most stylish and beautiful, which would help him overcome the stigma of having an unstylish or out of date car. After seeing the car, the consumer will want to test drive it. Audi's new Quattro system allows the driver to have an almost velcro-like grip on the ground, while they're new emission-reducing engines still create the same amount of raw power that a normal, environmentally harmful engine would. Social class obviously has something to do with the process, as someone who makes a six figure salary probably wouldn't want a Hyundai or a Kia, as they are not appropriate signs of ones status and position in the world (if that's what you want your car to do).  When it comes to post purchase behavior, the consumer will be extremely pleased with Audi's top of the line customer service (I for one can attest to that, whenever my father would go in for a repair or a check up, the service was impeccable. If a charge was disputed or something didn't look right, the service agents would immediately fix it or remove the charge, and while we were waiting they would treat us to coffee and snacks). Also, to match up with their competitors, Audi has begun to give their cars a better resale value, as many people want new cars after a few years, but a lot of technically advanced cars become obsolete once a newer form of that technology comes out. Audi's focus on the consumer has become one of the most important priorities to them, and it is certainly starting to show.

Ch. 5 - Developing a Global Vision

Almost every country in the world has a group of people that are successful, and are know as the "upper class". Wherever there is an upper class, there is always a demand for high quality products and services. That's why Audi, much like other luxury car companies, can be found almost anywhere in the world. Having a wide range of cars, Audis appeal to many different types of people. For example, a large upper class family might want to buy the Audi Q7, a 7-seat luxury SUV that competes with the Mercedes M Class and the BMW X5. On the other hand, a successful single man or woman might want something a little more flashy, like the Audi R8 supercar or the TT Quattro. In smaller and less wealthy countries, Audi is making strides in money saving methods, like making lightweight cars that consume less gas. They also produces diesel engines for people who are more dependent on diesel than gas. Culturally, Audi doesn't have to make many changes. There aren't many things that a car can do to offend a certain culture or religion. The main cultural difference Audi has to work with the only really which side the steering wheel goes on, as the side on which on drives is different in many countries. In Europe, the European Union dictates how some things must work in the countries that are part of the union. There are restrictions on the amount of CO2 emissions a car can create, which is why Audi's smaller models (A1-A4) thrive in those countries, as they maintain their zippy, sporty feel while being environmentally conscious. 

In terms of how they distribute their products, Audi uses the idea of Contract Manufacturing. Audi constructs in 7 different countries, one of which is Germany, where they have 2 production plants. These are where the cars are put together, but Audi also has the separate components of the car being built all around the world, which would be a form of licensing. In terms of marketing in different countries, Audi has maintained the marketing campaign it has used in America and other European markets, as the confident and stylish air of their commercials goes hand in hand with their sleek design and aggressive power. 

Audi's "second home" according to them is, not surprisingly, China. In a country where finance and business are at the forefront, and people are making more and more money because of their economy, Audi has found a massive market in China. Some of it lends itself to Audi's design, and how it appeals to the modern business man: someone who wants luxury and style but is also conscious of practicality, environmental effects, and manageable prices. Audi has one of the most extensive range of models of any luxury car company, which allows them to be successful pretty much anywhere, as long as there are people who can afford them. 

Ch. 4: The Marketing Environment

The marketing environment for car companies is an extremely competitive one. Being that the people who can afford these kinds of cars (BMW, Mercedes, Lexus) are not a dime a dozen, car companies like Audi must find new, innovative ways to grab a customer's attention and draw him away from the competition. But first, they have to look at the kind of people they are trying to attract and what values those people possess and live their lives by. People who want an Audi want certain things: they want a car that shows their wealth, their style, their sensibility (both in their personal lives as well as professional), and above all, something that satisfies them. Now when Audi advertises, lets say in a TV commercial, they don't direct their ads towards only the upper middle class. Their commercials are more on the satirical, jokey side, so as to not alienate anyone and make them think, "Oh, I can't/shouldn't get an Audi, as they're made for people who look better than me, dress better than me, or make more money than me." For example, the ad they debuted at the Super Bowl had nothing to do with social status or where you are in life. They simply took a popular subject (vampires) and used that to advertise a new feature on their cars, the new extremely bright LED headlights. In doing so, they made people laugh, they got their point across, all without making it seem like a normal, run of the mill person couldn't buy their cars, but instead they created a welcoming, almost friendly atmosphere into which almost anyone could buy into (as long as you have the money when you get to the dealership).

Ch. 3 - Ethics & Social Responsibility

Like most car companies in the modern world, Audi has been confronted by a major issue in the automobile industry: how does one make a car that is both safe for the environment while still maintaining performance and style? This seems to the the main problem for car companies like Audi. One could say they could lower the price range of their cars so more people could buy them, therefore allowing everyone to enjoy the class and style of an Audi, but then the cars would just become like every other car, and would lose the value and prestige of its name. Therefore, the best way for a company like Audi to exhibit their understanding and value of "social responsibility" is to reduce their carbon footprint on the world. Audi even goes to the lengths of releasing what they call an "Environmental Report," which can be downloaded annually off of their website. In these reports, they state their main goals in relation to the environment and keeping it safe and healthy:

Principles

1. AUDI AG supplies high-quality cars that satisfy its customers’ requirements in terms of environmental friendliness, economy, safety, quality and comfort in equal measures.
   
2. Research and development are crucial elements in Audi’s environmental policy. AUDI AG develops ecologically efficient processes and concepts for its products and so increases its own international competitiveness.
   
3. It is the declared aim of AUDI AG to avoid detrimental influences on the environment in all its activities by looking ahead. Compliance with all environmental regulations is taken as a matter of course.
   
4. Environmental management at AUDI AG—together with supplier companies, service providers, trade partners and recycling companies—ensures that the environmental friendliness of the cars and the production sites are continuously being improved.
   
5. The Board of AUDI AG is responsible for compliance with the environmental policy and the functioning of the environ- mental management system. The environmental policy is reviewed regularly to ensure that it is suitable and functional; if necessary, it is updated.
   
6. Open and clear communication with customers, dealers and the public is taken as a matter of course by AUDI AG. Co-operation with the government and authorities is based on trust. It includes emergency precautions and maintenance at the individual production sites.
   
7. All employees at AUDI AG are informed, qualified and motivated on the subject of environmental protection in accordance with their individual function, so that their sense of responsibility for the environment is encouraged. They are obliged to follow these principles.
   
8. This environmental policy is binding for all sites within AUDI AG and is supplemented and/or made more specific by site-related main action fields. 

Audi seeks to meet these principles in many different ways, from making a steering system that creates less friction and energy output, which in turn reduces the amount of fuel used and fumes created. They also have begun to create aluminum frames that are lighter, which means less gas is needed to propel the car. They are also focusing heavily on the reduction of CO2 that is created by cars, as CO2 reduction has been at the forefront of the climate protection argument (global warming, etc). CO2 levels can be directly traced to fuel consumption and the resulting fumes that come out of the exhaust, therefore Audi's main goal is to reduce the amount their engines need to work in order to propel cars of such size and speed. They seek the harmony between aesthetics and environmental consciousness, a combination that could prove lethal in a market such as the one Audi is fighting to control. 

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Mission Statement

The mission statement “We delight customers worldwide” is at the very core of the Company’s drive to become the number one in the premium segment. This means in practice that the Audi brand offers its customers emotional, technologically advanced products that are particularly noted for their sophistication and reliability. The brand with the four rings furthermore intends to delight its customers with the best brand experience available – hard evidence of the Audi brand values “sophisticated,” “progressive” and “sporty” is provided at every point of contact with the customer.

A Brief History of Audi

Audi was started in November of 1899 by a man named August Horch, a German engineer and automobile enthusiast. The original name of the company was A. Horch & Cie, but after being ousted by the board, he made multiple attempts to start another car company, but was unable to open anything in his name because of copyright infringement (he couldn't use his name for his new companies because his original company was named after him). His son, however, found an interesting title for his new company. He suggested that the company be called "Audi": the latin word for "to listen", as "Horch" mean "hear" in German. This was a clever way for Horch to legally create a new company while still maintaining the integrity of his name and his business. Audi's main goal was to create sporty, aggressive cars but with a touch of artistry and style. Their slogan, "Vorsprung durch Technik", means "progression through technology", and this can clearly be seen throughout all of Audi's automobiles. They were the first car company to create a production car with left-handed drive, a huge innovation because it allowed the driver see oncoming traffic more clearly, and therefore made overtaking cars easier. Audi has always maintained a certain style of elegance and beauty while also making their cars extremely aggressive and sporty, as can be seen in their greatest achievement to date, the Audi R8.