Building brand equity
A Skoda case study

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Page 3: Brand values

The key to changing consumers’ perceptions involved emphasising that Skoda cars represent exceptional value for money - the best Volkswagen technology at a very competitive price. Skoda’s brand values (i.e. what the brand stands for) are:

  • value for money
  • reliability
  • fitness for function
  • quality
  • integrity.

Skoda drivers tend to be people who are unpretentious, down to earth and honest.

Elements of a brand

Skoda 3 Image 3Although it can be argued that a product is simply something you use, the real picture is more complex. For example, you may buy a coat to keep you warm, or a newspaper to read – but what coat do you choose or what newspaper do you buy? Products are not purchased to meet a single need; a whole range of factors make up the product concept. In order to communicate these factors to customers, organisations use branding to help consumers identify the products they want. When consumers view a brand, it is important that they associate it with a range of features, benefits and services that meet their requirements. These elements are at the heart of the branding process.

When a customer buys a new Skoda, he or she will be concerned with its performance, looks, modernity, colour choice, design, engine and specification. The sale will be influenced by the brand's name and image, as well as the quality of the car and its various product features, such as twin airbags, electric windows front and rear, electric sunroof etc. The potential buyer will expect the option of a credit deal, a warranty, high levels of customer service and good after-sales services. In a recent independent customer satisfaction survey, Skoda was the highest placed European manufacturer, ahead of BMW and Jaguar.

Brands consist of three levels.

Skoda 3 Image 2The core product is the tangible product which provides the benefits that customers seek when they use the product. Skoda’s core benefits include how well the cars function and meet user requirements. All modern Skodas have a high specification and compete with Western, Japanese and South East Asian rivals. Skoda has invested heavily in research and development, resulting in many key product improvements. In fact, since its launch in 1995, Skoda’s Felicia has shone in both World and British Rally Championships and, in the 1996 RAC rally, was placed third overall, driven by former world champion Stig Blomqvist, as well as winning numerous industry awards from What Car?, Auto Express and Diesel Car.

The actual product consists of the features designed to support the core product. For a car, safety, reliability and quality are all key elements of the actual product. Skoda vehicles are manufactured to international industry standards and comply with current and future safety and emission legislation. Components are supplied by top manufacturers such as Siemens, Bosch and Rockwell and specifications have been improved. For example, research into the Felicia showed that consumers see it as being an attractive, comfortable car with a spacious interior and high quality upholstery.

These factors have added to the actual product, so that the Felicia is viewed positively by customers, in terms of styling and looks. A number of associated issues are important for customers. The augmented product involves the quality of after-sales service, extended warranty conditions and credit. Skoda uses these elements to create new and repeat purchases. In fact, Skoda’s customer loyalty, i.e. repeat purchases, is second only to Mercedes. Skoda aims to become more successful through a process of continuous improvement. The process began in 1991, with key events including:

  • April 1995 - UK Launch of the Felicia
  • June 1995 - UK Introduction of Exposure Marketing Programme
  • January 1996 - UK Introduction of Felicia Estate
  • February-June 1996 -UK TV advertising
  • May 1998 - UK Launch of the Octavia.

The launch of the Skoda Felicia helped to strengthen the Skoda image with existing customers and challenged the entrenched perceptions of the public. Since then, the process has continued, backed by advertising, awareness building and new product launches. The new Skoda Octavia represents an even greater quantum leap forward for Skoda.

Skoda | Building brand equity