The dramatic turnaround of Skoda in the UK is a marketing success story, made more interesting given that only a year before the brand was the butt of jokes. To understand the challenges Skoda faced in the UK, it is necessary to look first to the past, including the ill-fated launch of the Octavia in 1998. This is the Skoda story…
A Brief History
Considered “the Rolls Royce of Eastern Europe” in the 1920’s and 30’s and having featured in Nazi Germany’s war effort, Skoda was nationalised by Czechoslovakia’s new communist regime in 1946 and given the dubious honour of a monopoly on passenger car production. There followed 40 years where the company struggled to produce quality cars in a low-tech command economy. Their triumphs were recognised in Eastern Europe where Skodas were in great demand but in the west they were a laughing stock. In the UK, contempt for Skodas was so great that an entire category of humour developed around the brand and for generations of British teenagers, there was no greater humiliation than the thought that their parents might buy a Skoda. In 1991 soon after the arrival of democracy in Czechoslovakia, Volkswagen bought a stake in Skoda, a relationship recently cemented when VW became sole owners of the company. The results of this partnership began to be seen in 1994 with the launch of the Skoda Felicia which won 6 consecutive UK “Budget Car of the Year” awards.
False Dawn: The Octavia Launch
The sense Skoda was truly undergoing a transformation was reinforced with the launch of the Octavia in 1998. The product of a new factory and shared platform strategy with VW, the Octavia was unmatched in its class. A budget of £10m (Skoda’s largest ever) was allocated to launch the brand and, as befitted a car Skoda could rightly be proud of, the advertising took a confident and positive stance. But results were disappointing. Far from revolutionising consumer perception as Skoda hoped, and which the Octavia deserved, awareness and image improvements were nominal, as were the number of cars sold.
It had become axiomatic at Skoda that there should be no acknowledgement that people thought Skodas were terrible and no attempt to tackle prejudice against the brand head on. Instead, a cautious approach of targeting non-rejectors was pursued. As a result, the majority of consumers had no reason to believe the cars were any different. A key lesson had been learned – product reinvention alone is not enough to change the fortunes and image of the brand. Marketing needed to play a far more central role in Skoda’s plans moving forward.
A Fresh Start was signalled by the arrival of a new Head of Marketing at Skoda UK. He believed the brand’s image problems needed to be addressed head on and recognized that at the most basic level, people had to feel confident they could buy a Skoda without being laughed at by friends and colleagues. Skoda UK was also withdrawn from the brand’s European agency arrangements and the new agency, Fallon, was immediately set to work on a radical new solution.
It was decided to use the launch of a new model, the Fabia, as the platform for the image-changing campaign. As with the Octavia, publicity in motoring press about the Fabia was extremely positive with the car also winning “Car of the Year”, but from experience it was clear that this alone was not enough. The brief was therefore to not only create a programme to launch the Fabia, but above all set in motion a massive change of perception.
Setting The Challenge
Within the context of a reduced budget (less than half the Octavia’s), no strong price-point advantage (the brand had always relied on budget pricing) and the UK car market experiencing its biggest sales crisis in decades (a government investigation into inflated car prices causing consumers to delay purchases in the hope of major price reductions), three key objectives were set for the campaign;
(1) Successfully launch the new Fabia and increase Skoda sales
(2) Drive more people to consider buying a Skoda
(3) Improve the image of the Skoda brand
All these dimensions required robust measurement. Image changes and purchase intention were to be tracked in a continuous quantitative tracking study with sales performance tracked through official SMMT market data.
The Strategic Solution started by identifying the target audience as the whole of the British public. Buying a Skoda had to become socially acceptable in order to overcome emotional barriers to purchase. Hypotheses were developed as to how this could be achieved which were tested and validated in a two-pronged strategy:
(1) Denial was not an option. The brand could not pretend, as it had in the past, that the problem did not exist. Skoda could only get consumers to sit up and take notice by acknowledging what they really thought about the brand, and;
(2) Acknowledging existing prejudice was only part of the solution. The brand also had to confront consumers with the Fabia in such a way that they could not help but be surprised and impressed by it, enabling them to form their own opinions of how Skoda had changed.
With these insights the task became clear: to confront a truly cynical consumer with a truly great car.
The Creative Solution revolved around a simple central thought; “The Fabia is so good that you won’t believe it’s a Skoda”. TV executions presented people being literally fooled into thinking that because the Fabia looked so good it couldn’t possibly be a Skoda. Being a provocative approach, success relied on getting the execution just right. Employing subtle, rewarding humour was key. The intention was to make consumers feel they were in on the joke, subtly moving them to Skoda’s side.
Budget limitations required an inventive media solution. To achieve broad acceptance the brand needed to reach a broad audience. Budget was allocated to a high profile burst of TV, posters and a ‘landmark’ press schedule supported by a ground-breaking integrated PR programme. The aim was to extend the campaign to the core of British public opinion making, the mass media. The PR approach encouraged media to champion the brand and evangelise its rebirth, and continued long after the brand could no longer afford to be on air. In particular, journalists known for their independent-mindedness were targeted. PR was also used to make claims about the brand that advertising could not yet credibly do – cultivate an impression of success. This proved highly effective as several prominent opinion-leaders in British society began driving the cars.
Results were seen in four key dimensions consistent with campaign objectives:
(1) Dramatic Sales Increase
Demand for Fabias was astonishing. By year-end, all sales targets had been comfortably exceeded with more than 4 times the number of Fabias sold as Octavias in its first year. Overall Skoda sales grew by 34%, topping 30,000 for the first time and giving the brand its first ever waiting list (1500 cars)! The brand also achieved an important 1.3% share of the total UK car market and Skoda registered the biggest sales growth of any marque that year, in a depressed market.
(2) Massive Increase in Consideration
Tracking showed the number of people who would not consider buying a Skoda had decreased from 60% to a best-ever 42%*, equating to over one million extra potential drivers.
(3) Image Breakthrough
Despite usually being slow moving, impact on image dimensions was dramatic and immediate. Unprecedented positive leaps were seen in key indicators immediately following the advertising.
(4) Internal Inspiration
Less measurable but equally tangible and important was the impact the campaign had on Skoda’s staff. It provided a major morale boost to all at Skoda UK and enabled dealers to take a far more ‘front-foot’ approach to selling.
The dramatic success of the campaign contains several important learnings. First, it is an unusually powerful demonstration of some established principles many would subscribe to:
• Great marketing first requires a great product, though that alone is not enough – Marketing is about delivering true value, not selling a glossy or superficial image;
• The value of integration at a strategic level (in this case, advertising and PR), and perhaps more controversially;
• The enduring power of mass communication in an age when fragmentation and micro-marketing are the fashion.
Overall however, success lay in recognising that negativity towards the brand could be turned into a strong positive force. By viewing a perceived weakness as a strength, Skoda was able to turn a powerful negative force to its advantage.
Too often, in the desire to break with the past, marketers relaunch and reposition without properly leveraging existing forces at their disposal. The sophistication of consumers today is such that only by working with them, and respecting and acknowledging their existing attitudes can marketing goals be achieved. This is a lesson that all marketers in Asia would do well to learn and embrace.
* Source: Millward Brown