Volvo Analysis RAJ2 2013© 2 Contents Page Number

“Life Goes On”

Volvo Analysis

2 Agency: RAJ 20/12/2013© To:

The Marketing Manager, Volvo Cars UK, Scandinavia House, Norreys Drive, Maidenhead, Berkshire, SL6 4FL.

Contact Details: Alisha Attarwala Account Manager [email protected] Mob: 07544747677

Volvo Analysis RAJ2 2013© 2 Contents Page Number

1. Process Map 4

2. Executive Summary 5

3. Company History 6

4. The Problem 7

5. Client’s Agenda 8

6. Target Audience 9

7. Competition 10

8. Primary Research 11

9. Other Research and Evidence 12

10.Content Marketing Matrix 13

11.Creative Brief 14

12.Strategy 15

13.Customer Journey 18

14.Media and Budget 19

15.Conclusion 21

16.Research and Resources 22

Volvo Analysis RAJ2 2013© 3 Process Map Research: - Autocar votes it as one of the top 5 compact SUVs - Top Gear gives it 7/10

Creative Brief

Target Audience: Ideas: - Life Goes On Men and women, 25 to 44 years - Vikings: tough car old with an annual income of - Ambient ad: car vs snow - Weather report over £50,00 - Steps turning to tyre tracks

Final Idea: Media: Life Goes On - Television - Radio - Print

Pitch

Volvo Analysis RAJ2 2013© 4 Executive Summary

This is an analysis for Volvo Cars UK, with the main focus on the Volvo XC60. According to Mintel, ‘the UK new car market surpassed 2 million in 2012 with sales at 2.05 million units. Yet despite increasing against 2011, volumes were similar to those achieved in 2010 and remain well down on sales in 2007 (2.41 million units). New car sales increased by 110,000 units (between 2011 and 2012) to 2.05 million. Yet compared with 2007, sales are currently well down on recent levels, standing at 15% off their 2007 peak. Yet despite such a fall in overall sales in 2007, there is some room for optimism. Current 2012 sales are ahead of their recent low point of 1.99 million units in 2009, although variability in annual sales since 2009 does remain an issue.’ (Fig. 1) (Mintel, 2013)

Fig. 1: UK new registrations of motor vehicles, 2007-17 Source: Mintel, 2013.

Volvo Analysis RAJ2 2013© 5 Company History

Volvo was born on April 14, 1927, when the first car, ÖV4 (nicknamed Jakob) left the factory in Gothenburg. (Swedecar, 2013)

Volvo was incorporated in 1915 as a subsidiary of AB SKF, the Swedish ball bearing manufacturer. In 1924, Assar Gabrielsson and Gustaf Larson, the two founders, decided to start construction of a Swedish car. The original production models were designed to withstand the rigors of Sweden's rough roads and cold temperatures. This emphasis on durability has been a feature of Volvo products ever since. (Volvo Group Global, 2013)

What makes Volvo Cars unique in the automotive world is its focus on human values in life. Caring about yourself and others; the safety concept encompasses not only the passengers of the car, but also passengers in other cars, and pedestrians. Environmental care goes beyond legislation-and consideration for customers shall imbue the entire company. (Facebook, 2013)

Volvo Analysis RAJ2 2013© 6 The Problem

According to the Financial Times, Volvo has struggled in recent years, as sales at the Swedish group famous for its safety standards are seen as too low to enjoy big economies of scale, while its brand has a lesser image than larger rivals such as BMW and Audi. Volvo had an operating loss of SKr (Swedish Krona) 577m, compared with a profit of SKr 349m in the first half of 2012. Revenues fell by 14% to SKr 56.4bn. (Milne, 2013)

Volvo Analysis RAJ2 2013© 7 Client’s Agenda

The client’s agenda is to promote the Volvo XC60 as a tough, all wheel-drive SUV that is able to manage anything the winter has to throw at it. The car is solid and reliable, and will keep your family and you safe and comfortable in even the harshest of weathers. This message has to be delivered to the target audience. (Client brief, 2013)

Volvo Analysis RAJ2 2013© 8 Target Audience

According to the client, the campaign should be aimed at people who are in- market already i.e. looking to purchase a car. They are open to purchasing Volvo although, it may not be on the top of their list. (Client brief)

According to Mintel, ‘males (15%) more than females (9%) are more likely to have a car bought from new that is under two years old. Differences are also evident by age with young adults in particular appearing to be more likely to have changed their cars in the last two years. Such an interest in cars spans both those who have purchased new and those buying used with this especially evident for used buyers aged 25-44. In contrast, older adults are less likely to have changed their cars within this two-year period. This is particularly true for over-65s. Some 26% of this group have purchased a car from new more than two years ago and still own the vehicle, as compared to only 8% of those aged 16-24 who have a car purchased from new over two years ago. Income is a very important factor in determining if an individual owns a car less than three years old. Mintel’s research, for example, shows that whereas 16% of households with an income of less than £15,500 own a car less than three years old, this rises to 40% for households with incomes of £50,000 or greater. Even with cars aged three to six years old, there is still influence of household income on ownership.’ (Mintel, 2012)

Since Volvo is an upmarket brand, the target audience for this campaign would be men and women between the ages of 25 and 44, with an annual income of over £50,000.

Volvo Analysis RAJ2 2013© 9 Competition

According to the client brief, the Land Rover Free 2 would be a competitor for the Volvo XC60. Land Rover Free 2’s “Brie” commercial promotes the car as the one to protect you from the cold and wet quite well. (Client Brief, 2013)

According to Mintel, Ford and Vauxhall dominate the UK car market, followed by Volkswagen, BMW and Audi. These are thus, the biggest competition for Volvo. (Fig. 2) (Mintel, 2013)

Fig 2: Manufacturer shares of new car registrations, 2010-12 Source: Mintel, 2013.

Volvo Analysis RAJ2 2013© 10 Primary Research

• Top Gear gives the Volvo XC60 a 7/10 verdict. According to Top Gear, the Volvo XC60 is “a safe way to move a family around.” Top Gear also mentions that the Volvo XC60 is easily a rival for the Land Rover Freelander. Top Gear also says that the Volvo XC60 is good in snowstorms, but doesn’t make it any more fun to drive. Vast amounts of safety kit might be great for piece of mind, but the warning bongs can be intrusive: anti-collision warning lights, blind spot monitors, lane departure buzzer, pedestrian detection. It’s all there. Shouting at you. Loudly. (Top Gear, 2010)

• Autocar’s Jim Holder says that Volvo is justifiably proud of its different approach, and the usable, attractive XC60 is good enough to stand out in a very able compact SUV crowd. It ranks number 3 on Autocar’s list of Top 5 compact SUVs. (Holder, 2008)

• According to Go Compare’s Covered magazine, the latest XC60 is freshly facelifted with a more rugged front end, a tweaked interior and a whole new set of safety related acronyms. It’s certainly more rapid than it feels; such is the isolation from the road at speed. You’ll barely feel the road as the suspension is set up perfectly for cruising, soaking up every bump and imperfection. (Huff, 2013)

Volvo Analysis RAJ2 2013© 11 Other Research and Evidence

• The Society of Motor Manufacturers and Traders, UK states that automotive is a vital part of the UK economy and typically generates more than £55 billion in annual turnover, delivering around £12 billion in net value-added to the economy. (SMMT, 2013)

• According to the Automotive Council UK, the automotive industry is the UK’s largest sector in terms of exports and generated £27 billion of export revenue for the UK in 2011. In a typical year, the sector exports to over 100 markets worldwide and accounts for around 11% of total UK exports. (Automotive Council UK, 2013)

• Wall Street Journal reports that in 2012, there was a 6% drop in sales of Volvo Cars. However, in the UK, new car registrations rose 5.3% in 2012 on the year to 2.04 million units, the highest annual volume since the recession struck in 2008. (Molin, 2013)

• Forbes’ Dale Buss quotes Volvo’s Vice President of marketing and production planning. Volvo owners’ “interpretation of luxury is different but very real. They’re more into life’s experiences, and more into a Scandinavian simple design [of vehicles] versus a lot of clutter. They are very much luxury customers and love luxury products, but they don’t feel a need to impress others.” (Buss, 2013)

• Reuters states that Volvo’s sales rise in September 2013, with China being the top market, followed by Europe. In Europe, sales shot up by 24%. (Reuters, 2013)

Volvo Analysis RAJ2 2013© 12 Content Marketing Matrix

The Content Marketing Matrix is a strategic way of depicting how to market and advertise to the target audience. The content marketing matrix is divided into four parts:

Entertain: This is how the consumers will be entertained. In this campaign, it will be done with the help of the TV Commercial (TVC), the radio ad, videos about the Volvo XC60, and the print ad (to an extent).

Inspire: To inspire the target audience refers to influencing the target audience to visit the website and learn more about the Volvo XC60. This would also be via the print ad, forums and reviews about the SUV.

Educate: This would be the next stage. Educating the consumers would be through press releases, trend reports, articles, info graphics and by booking a test-drive.

Convince: The final stage of the campaign, convincing the target audience to purchase the Volvo XC60, would be through the features of the car, ratings given to it, case studies and the price guide.

Volvo Analysis RAJ2 2013© 13 Creative Brief

Client: Volvo

Account Manager: Alisha Attarwala

Creative Team: Rebecca Armitage, Josefin Lundahl and Jessica Gastaud.

Overview: Volvo is a Swedish manufacturer of cars, trucks, buses and construction equipment.

Objective: To promote the Volvo XC60 as a tough, all-wheel drive SUV, that can keep you safe even in the harshest winters.

Target Audience: Men and women between the ages of 25 and 44 with an annual income over £50,000.

Media: Create a campaign using the following media: • TV Commercial • Radio Ad • Print Ad

Budget: £300,000.

Due date: 20th December 2013.

Volvo Analysis RAJ2 2013© 14 Strategy

“Life goes on” is the strategy and the strapline of our campaign.

“Life goes on” is the core thought that we wish to convey to the target audience. The idea is that people that own or drive a Volvo XC60 do not have anything to worry about. They do not need to stress out about the harsh winters or bad weather forecasts. The Volvo XC60 is tough and reliable and will keep your family and you safe and comfortable, even in situations and places where other car owners may be stranded.

Through this campaign, we wish to encourage people to test drive and purchase the Volvo XC60, to keep their families and themselves safe and secure during the winters. It has been forecasted that the winters would be extremely harsh in the years to come and getting a Volvo XC60 would be a good investment for the target audience.

The campaign has been divided into three media: • TV Commercial • Radio Ad • Print Ad

The TV Commercials tie in with the radio and the print ads.

In the first ad, the first shot is of one of the backlights lighting up. The second shot is both backlights on. At this point you can only see the lights, not the car. The lights then set off to move through the mountains and harsh weather leaving a red glow wherever they go. We then see the two front lights, then the whole car. At this point the song “L.I.F.E.G.O.E.S.O.N” by Noah and the Whale starts. This is a recurring song during all the ads. We then see the Volvo logo and the strapline “Life Goes On”. The aim of this ad is to show that the XC60 is the only car that can get through these bad weather conditions. The roads are so empty that the lights of the XC60 leave their trace.

In the second TVC, we see a side shot of the face of a sad little boy looking out the window at the snow storm. In the background, we hear the mother saying that the weather is too bad for them to go out. We then see a shot from the back of a girl who is also looking out the window. The camera then changes angles and shows her sad face as she can not go outside and play. We then see another little boy looking out the window with a big smile on his face. The camera then changes angle and zooms out, filming from the

Volvo Analysis RAJ2 2013© 15 outside. We can see that he is in a Volvo XC60. The theme tune then starts followed by the Volvo logo and “Life Goes On”. This ad illustrates the fact the you are just as safe inside the Volvo XC60 as in your own home. You can therefore travel without too much of a worry, thus “life goes on”.

The first radio ad is under a minute long. It starts off with a weather forecast, warning people of the harsh weather that awaits them and advises them to not step outside their houses…unless they owned a Volvo XC60. This aims directly at the target audience and tells them that it is advisable to either stay at home, or own a Volvo XC60, to lead your life without absolutely any disruptions. Along with the theme tune starting, the ad then tells the audience about Volvo’s limited period offer of a winter pack that is from £397 per month and includes 3 years of servicing, maintenance and Volvo Roadside Assistance. The ad ends with the terms and conditions and the campaign’s strapline “Life goes on.”

The second radio ad is much related to the second TV commercial. It depicts a boy and his father talking about having to cancel their plans because of the bad weather. The boy goes on to ask why the neighbours are getting in their car. The father explains that because the neighbours have an XC60, they are just as safe in their car as at home. The theme tune then starts, at which point the same female voice over as in the first radio ad explains all the benefits of the Volvo XC60. The aim of this ad is to show that this is a safe and reliable car. Parents needn’t worry, their children will be just as safe inside the car as inside the home. This shows, once again, that “life goes on”.

The final media is a print ad. The first print ad consists of a double-page spread, that relates much to the first radio ad. It depicts the image of a snowy landscape, where it is not advisable to drive, and lights that are travelling through the roads. These are the backlights of the Volvo XC60. This, like the first TV commercial, shows that the Volvo XC60 is the one car that will cruise through a snowy terrain and will be the best option and investment for you, in terms of car purchasing, this winter.

The second print ad shows a family having fun and seeming completely undisturbed by the snowy weather. There is also a picture of the XC60 so we

Volvo Analysis RAJ2 2013© 16 understand that this is why they seem unaffected by what others would call bad weather. With the XC60, you needn’t worry as “Life Goes On”.

Volvo Analysis RAJ2 2013© 17 CUSTOMER JOURNEY

Television Commercial

Print Advert Radio Advert (Magazine)

Increase in enquiries

Additional sales

Volvo Analysis RAJ2 2013© 18 Media and Budget

As mentioned earlier, the media that have been chosen are:

• TV Commercial • Radio Ad • Print Ad

TV Commercial - £150,000 Forbes’ Alan McGlade states that TV commercials are the best way for big brands to reach a mass audience and influence consumer behaviour. Yes, people are using DVRs and fast-forwarding through commercials and yes, people are streaming shows on their phones and tablets. But TV viewing is strong and many critics claim that the diversity and quality of television programs is at a high point. (McGlade, 2013)

The cost for producing a high quality TV commercial for Volvo, would be between £50,000 - £100,000, according to film producer Mehdi Benali. (Benali, 2013)

Guerilla Scope states that cost-per-spot is calculated by dividing the total impacts by 1000 and multiplying the number by the purchased cost per thousand (CPT). For example, if a TV spot reached 80,000 viewers, and the CPT was £2.80, then the cost per spot would be £224. Based on that, the cost for airtime would be about £50,000.

Radio Ad - £35000 According to the Radio Advertising Bureau (RAB), record audiences of almost 47 million (90%) of adults listen to radio every week for an average of 22 hours, with 33 million tuning in to the commercial sector alone. No surprise also that the IPA’s Touchpoints 3 study demonstrates that radio is still the nation’s second most-consumed medium after TV, accounting for over a quarter of the average adult’s time spent with media across the day. (RAB, 2013)

According to Pam Myers of Rorschach radio, the production costs of a radio ad with voiceovers and sound/special effects would cost approximately £5000. (Myers, 2013)

Media UK states that the Capital FM ranks number 4 in the list of UK’s top ten radio stations with the most listeners, followed by Heart FM on number 5 and Kiss FM on number 8. (Media UK, 2013)

National Radio Advertising costs would be around £10,000 per station for a period of one to two weeks, thus making the total airtime cost £30,000. (Radio Advertising, 2013)

Volvo Analysis RAJ2 2013© 19 Print Ad - £68,964 The reason to choose print advertising is because print ads are non intrusive i.e. they do not interrupt normal magazine reading pattern. They also give an unlimited exposure. They can be viewed at any time and do not have a fixed spot. They also allow targeting a very specific audience and there’s flexibility with regards to choosing the placement of the ads. (Joseph, 2013)

Immediate Media Company ranks number 3 at Mintel’s list of top 20 publishers by average net circulation/distribution per issue, 2011 and 2012, followed by Condé Nast Publications at number 9 and Dennis Publishing Ltd. at number 14. (Mintel, 2013) The ads would be placed in various magazines such as Top Gear (owned by Immediate Media Company), which is UK’s number 1 motoring magazine. The cost for a double-page advertising in Top Gear would be £11,332 per page x 2, which makes it a total of £22,664. (Top Gear, 2013)

Tatler would be another magazine chosen for advertising Volvo. Tatler belongs to Condé Nast Publications. It is a niche and upmarket magazine that targets the upper middle class and the rich people of Britain, which fits the target audience criteria. A double page spread in Tatler would cost £32,000. (Condé Nast, 2013)

Dennis Publishing owns Auto Express, a car news weekly. Its advertising rates per page are £7,150. Thus, the cost for advertising 2 pages would be £14,300. (Dennis, 2013)

The above rates can be negotiated and reduced. The remaining amount includes Agency Fees and any other costs that may come up during the production or execution of the campaign. Thus, the total Budget spend i £300,000.

Volvo AdvertisingAgency Fees Budget 3%

Radio Ad 12%

Others 12% TV Commercial 50%

Print Ad 23%

Conclusion

To conclude this analysis, an ideal time to start working on this campaign would be as soon as possible, since it is a winter campaign. This would also give us sufficient time to produce a high quality TV commercial, print ad and radio ad. This would thus result in an increase in enquiries and additional sales of the Volvo XC60. The timeline to run the campaign would be as follows:

January At the beginning of January, the TV commercial would be released. This would play on leading TV channels, thus getting the attention of the people.

February In the month of February, the radio ad and the print ad go live, which will thereby drive sales and encourage people to test drive the Volvo XC60 and perhaps purchase it.

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