Case Study: Changing Customer Perceptions - Skoda Cars in the UK

(1) Introduction:
In 1895 in Czechoslovakia, two keen cyclists, Vaclav Laurin and Vaclav Klement, designed and produced their own bicycle. Their business became Škoda in 1925. Škoda went on to manufacture cycles, cars, farm ploughs and airplanes in Eastern Europe. Today, Škoda UK sells Škoda cars through its network of independent franchised dealers.

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The new Skoda Rapid for 2012

To improve its performance in the competitive car market, Škoda UK’s management needed to assess its brand positioning. Brand positioning means establishing a distinctive image for the brand compared to competing brands, so that the psychology of consumers is positively influenced towards …show more content…

It enables Škoda to differentiate the Škoda brand to make it stand out from the competition. This is Škoda’s unique selling proposition (USP) in the car industry.

(5 ) Threats
The UK car market includes 50 different car makers selling 200 models. Within these there are over 2,000 model derivatives. Škoda UK needed to ensure that its messages were powerful enough for customers to hear within such a crowded and competitive environment. If not, potential buyers would overlook Škoda. This posed the threat of a further loss of market share. Škoda needed a strong product range to compete in the UK and globally. In the UK the Škoda brand is represented by seven different cars. Each one is designed to appeal to different market segments. For example:
• the Škoda Fabia is sold as a basic but quality ‘city car’
• the Škoda Superb offers a more luxurious, ‘up-market’ appeal
• the Škoda Octavia Estate provides a family with a fun drive but also a great big boot.

Pricing reflects the competitive nature of Škoda’s market. Each model range is priced to appeal to different customer groups within the mainstream car market. The combination of a clear range with competitive pricing has overcome the threat of the crowded market.

(6) Environmental friendliness and positive perceptions
The following example illustrates how Škoda responded to another of its threats, namely, the need to respond to EU legal and environmental regulations. Škoda responded by designing products that are