Marketing Strategy Putting a Volkswagen Electronic Vehicle into Japan Assignment 2023

Running Head: MARKETING STRATEGY - PUTTING A VOLKSWAGEN ELECTRONIC VEHICLE INTO
THE JAPAN MARKET.
Marketing Strategy - Putting a Volkswagen Electronic Vehicle into the Japan Market.
Student’s Name
University Name
Author’s Note

MARKETING STRATEGY - PUTTING A VOLKSWAGEN ELECTRONIC VEHICLE INTO THE JAPAN
MARKET. 2
Executive Summary
This study focuses developing a marketing strategy for the E-golf electric vehicle of
Volkswagen which it can use to enter the market in Japan. The PESTLE analysis shows that the
market condition including the market demand for the future is in compliance with the sales
targets of the organization after making a market entry in Japan. Factors like strong impact of
globalization as well as a strong and stable economy will facilitate the business development of
Volkswagen in Japan based on the definite electric vehicle models. The Hofstede’s analysis
shows that the factors like masculinity and individualism will greatly impact the production
and sales of the cars in Japan. The CAGE analysis shows that there is strong economic advantage
of developing the production and sales line of the Volkswagen EV in Japan, rather than
Germany. The application of the Hofstede and CAGE models demonstrate the eccentric
advantages of developing the business unit and deploy the market of the EV in Japan, rather than
the headquarters of Volkswagen, which is in Germany. The level of market saturation an market
competition in Japan over the category of EVs. That is why, it can be speculated that
Volkswagen would be able to satisfy their target of expanding the market share of Volkswagen
EV by 1 to 2% within 1 year of the launch of the RVs in Japan and thereby develop the gross
margins by 1.5% in an year also.

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Table of Contents
Company and Customer analysis.....................................................................................................3
Situation Analysis:...........................................................................................................................3
PESTLE Analysis:.......................................................................................................................4
Analysis of the Macro Environmental Factors........................................................................4
Hofstede Model Analysis........................................................................................................8
Comparison between Japan and Germany...............................................................................8
Hofstede score for Japan and Germany.................................................................................12
CAGE Model.........................................................................................................................12
Objectives:.....................................................................................................................................14
Strategies for Market entry and sustenance...................................................................................15
Demographic segmentation:......................................................................................................16
Population Distribution in Japan...........................................................................................17
Targeting Strategy.....................................................................................................................17
Benefit segmentation:................................................................................................................18
Geographic Segmentation:.........................................................................................................18
Positioning:............................................................................................................................19
Marketing Mix:..............................................................................................................................19
Actions:......................................................................................................................................25
Control:......................................................................................................................................26

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MARKETING STRATEGY - PUTTING A VOLKSWAGEN ELECTRONIC VEHICLE INTO THE JAPAN
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Company and Customer analysis
Volkswagen is the leading car manufacturer in the world with headquarters in Wolfsburg,
Germany. The annual unit production of Volkswagen is over 10 million (Frue 2016). This is the
reason why the organization has the highest brand as well as product portfolio. In Europe, the
organization is reputed as the biggest car manufacturer. Again, Volkswagen has their biggest
market in China. Hence, from a strategic point of view, the market entry in to the Japanese
market is very important (Frue 2016). The factors that would be facilitating the market entry of
the organization in the Japanese market with EV cars have been detailed in the later parts of the
report. Nevertheless, after the dieselgate scandal, the company has experienced serious damage
over their brand reputation and lost major proportion of sales (Frue 2016). This is why they need
an alternative product line that can be introduced in a new market with an absolutely clean
market reputation.
The brand reputation of Volkswagen over the sales of EVs depends mostly on the
increase in deliveries to the customers and the quality of customer service that they would be
able to provide to the customers of Japan. Although, the customers of cars in Japan have been
identified to be fascinated over lifestyle products, which include cars, the introduction of the EVs
in Japan would be highly profitable if they introduce the car models on a moderate budget line
(Frue 2016).
Situation Analysis:
In situation analysis, the researcher has got most widely used tactics and tools such as PESLE
analysis, CAGE Model along with Hofstede model with some focus on competitors for
Volkswagen new Electric car e-Golf.

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PESTLE Analysis:
In order to understand the Japanese business market macro environment factors PESTLE
analysis is widely used tool, which stand for Political, Economic, Social, Technological, Legal
and Environment factors.
Analysis of the Macro Environmental Factors
Factors Macro Environmental Factors Impact of the market entry of
Volkswagen EVs
Political Conditions The political conditions are
stable for the expansion of
sales of EVs in Japan. The
government of the country has
the target of selling all new
EVs by the year 2050 (Bekker
2017).
This supportive political
environment can help the
organization to successfully
establish their product line of
EVs in the demanding market
of Japan. Upto 2013, the
major car manufacturing
brands like Nissan and
Mitsubishi had entered the
market of Japan with EVs
((Bekker 2017). However, up
to 2016, they were able to
achieve a total sales figure of

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22,100 only (Bekker 2017).
That is why, the activities of
car manufacturing brands to
produce and market EVs in
Japan has reduced. This,
however, gives a market
opportunity to Volkswagen to
capture the Japanese market.
Economic Factors Japan is the third largest
economy in the world with
$5167.05 GDP growth.
Besides, the massive
advancement in automobile
technology and production of
other machine tools that have
been achieved by the country,
gives the company an
opportunity to achieve
excellence over production
and sales of EVs in Japan.
The production line of the
organization needs to establish
powers recharge stations along
with production of cars. The
large assets resulting out of
stable financial growth will
also empower Volkswagen in
Japan to make large
investments. The standard
GDP growth also symbolizes
high purchasing parity, which
will help in quick sales of the
EV units (BORDEN 2017).
Social Factors The social factors like fair
employment opportunities and
Analyzing the supportive
social factors it can be

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easy availability of car loans
are factors that entice a large
proportion of people to
purchase cars. There is also a
basic awareness among the
people of Japan to conserve
non-renewable resourced and
as an account of that, their
propensity for purchase of
EVs would likely be high.
Globalization and its impacts
have made the people aware
of the basic information
regarding EVs and the brand
awareness of Volkswagen is
also high (Chand 2017).
analyzed that the propensity of
buying cars that would run on
alternative energy is going to
be very high.
Technological Factors The technical efficiency of the
local manufacturing and
executive staff available is
very high and as an account of
that the production cost and
production efficiency is also
expected to rise. Besides, the
The major advantage that
Volkswagen would be
enjoying because of the
supportive technical factors
would allow them to become
entrepreneurs in EV industry
in the entire South East Asia,

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Japan has invented various
innovative technologies for
the production of full cell
vehicles (Frue November
2016). That is why it would be
easy to upgrade the EV
models while retaining the
original features of the
vehicle.
with their production line
based in Japan.
Legal Factors The Japanese government has
strongly emphasized the car
manufacturing companies to
reserve certain proportion of
their production capacity for
the production of cars running
on the alternative fuels. They
also have the target of driving
100% EV cars by 2050
(Japanese Manufacturers of
Electric Vehicles 2018).
As an outcome of these legal
compatibilities, it is expected
that in the future, other major
car manufacturing brands
would also be exploring the
market of Japan and as an
account of that the market
competition would also
enhance, that is why it is
expected that after the market
entry of Volkswagen in the
sector of EVs in Japan, they
would need to come up with
innovative technology in

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regular intervals so that they
are able to stay ahead in the
competition.
Environmental Factors The manufacturing industries
are centered mostly on Tokyo
in Japan, which is very much
prone to industrial disasters
( Marsh December 2018).
Any accidental damage caused
to the production units
(chances are always high and
prevailing) will cause great
financial losses for the
organization.
Table 1: PESTLE Analysis
(Source: Developed by the researcher)
Hofstede Model Analysis
In order to clearly understand the cultural differences and values which ultimately shape
Japanese behavior and affect their lifestyle, for to introduce new EV car this model helps
Volkswagen to target Japanese market accordingly. The production leader with up to 13 million
cars per year manufactured and exported (Japanese Manufacturers of Electric Vehicles, 2018).
Electric vehicle business is not that much advanced and expanded so that new entrepreneurs feel
hesitation in entering in this competitive market.
In order to fully understand Japanese Lifestyle let’s compare Japanese cultural dimensions with
Germany through this model.

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Comparison between Japan and Germany
Factors Japan Germany
Power Distance The aspect of power sharing
among the individuals in
Japan is narrow and that is
why the upper middle class
and middle class would
definitely attempt to make
eccentric display of their
lifestyle, which makes them
potent customers for the e-
Golf car that Volkswagen is
trying to introduce in the
Japanese market (Portal 2018).
The high PDI index is
therefore favoring the sales of
e-Golf cars in the market.
Power sharing Index is
respectively lower in the
German market and that is
why, it is evident that the
people would prefer to
purchase mainstream cars,
rather than EVs which
symbolize sophistication and
lifestyle (Portal 2018). Most
of the high budget cars of
Volkswagen are therefore not
endorsed in Germany, by the
organization.
Individualism Individualism in more evident
in Japanese culture than in
Germany. That is why; the e-
Golf car is promoted as a
family car in Japan. The
aspect of cost saving is also
Individual accomplishment are
greatly prioritized in Germany
and that is why the middle and
young aged customers
(comprising of the largest
section of car purchasers) are

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important for product
endorsement in Japan. Again,
cost savings is an eminent
feature of the Japanese
household, whereby the full
cell e-cars would gain large
customer attention (Portal
2018).
mostly enticed to purchase the
traditional stylish and reputed
models of cars (Portal 2018).
Their interest over EV cars
would be supposedly lesser.
Masculinity Masculinity index is also
much higher in Japan
compared to Germany (Portal
2018). That is why the roles
and assets of men and women
in Japan, overrides less. This
provides the company with an
opportunity of promoting
different models of e-Golf cars
as token of self pride for
customer bases of different
sexes (Marsh, 2018).
Comparatively lower
masculinity index discourages
the individuals to have extra
interest regarding the purchase
of cars like the e-Golf model.
Uncertainty avoidance Uncertainty avoidance is
ensured in Japan by aligning
with the national demand for
However, in Germany,
uncertainty risk is much
higher compared to the other

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production of 100% EV cars
in Japan within 2050 (Marsh,
2018).
market.
Long term Orientation Long term orientation is also
higher among the purchasers
of Japan. They prefer to run
their cars for considerable
period and that is why, they
would prefer the e-Golf model
of cars. The lower servicing
cost and lower fuel recharge
cost along with large mileage
and other positive factors
makes this car ideal for the
Japanese market (Frue, 2016).
Because of the individualistic
culture of Germany, the young
and energetic car purchasers in
Germany generally prefer to
change their cars in 5 to 10
years.
Indulgence People of Japan are strict in
following rules and
regulations so e-Golf should
be manufactured and
promoted by keeping in mind
the local laws otherwise it can
get huge loss (Frue, 2016)
The level of indulgence is also
comparatively much lesser in
Germany.
Table 2: Hofstede Analysis

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(Source: Developed by the researcher)
These above all factors suggest that this country has got very good potential to not only attract
new businesses but also to bring improvement in existing businesses through technology.
Hofstede score for Japan and Germany
Graph 1: Hofstede score of Japan
(Source: Research 2018)
Graph 2: Hofstede score of Germany
(Source: Research 2018)

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CAGE Model
This frame work enables us to think differently about the location, opportunities and other
economic factors of country which can be best explained by comparing with other country.
Comparison between Japan and Germany
Country Japan Germany
Culture Japanese people prefer
businesses to demonstrate a
good understanding and
followership of their own
language, Japanese and their
inherent faiths (ZHANG
2016). That is why,
demonstration, marketing and
promoting of the e-Golf car is
supposed to be done in
Japanese only. Besides, in
Japan, the organizations
always demonstrate the
culture of shared decision
making.
In Germany, the multilingual
culture is promoted and hence
in terms of business, England
and German are given equal
importance.
Administrative The administrative target of
100% e-vehicle production
would entice Volkswagen to
The democratic leadership and
lack of any specific preference
towards cars run by alternative

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strive for maximum market
share of the EV market by
2050 (Research 2018).
fuel, in Germany makes Japan
a more suitable country for
launch of the e-Golf car.
Geographic The natural disaster prone
country is always under the
threat of calamities. Disasters
greatly hamper sales as the
production facilities with
costly and innovative
machineries for EV
production would be
destroyed, if a natural disaster
hits the land (ZHANG 2016).
Germany is not much prone to
natural disasters.
Economic Factors There are large opportunities
for international trade in the
EV industry of Japan as there
is lesser entrepreneurship
exhibited over EV
manufacturing in the country.
Presence of potential
indigenous brands and lack of
interest over alternative fuel
cars makes Japan more
suitable for the launch of e-
Golf model cars.
Table 3: CAGE Framework table
(Source: Volkswagen e-Golf 2018)

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The economic and administrative factors are the biggest factors responsible for the success of a
market entry. In this context, the above analysis that is almost all aspects, China is turning out to
be a better capable and more suitable country for the launch of the e-Golf car.
Objectives:
Smart objectives guide companies to run the business accordingly and handle any problem in a
way that the set object will not be compromised. SMART which stands for Specific, Measurable,
Attainable, Relevant and Timely achievable. Following objectives will be focus to run the
business in new competitive market.
 Volkswagen is trying to generate 1 to 2% market share by promptly utilizing the two
basic advantages like the supportive administration and lack of worthy competitors in the
EV market of Japan. This is how the business of Volkwagen would be sustainable
 Offering innovative products, Volkswagen would entice customers to switch to EV cars.
The number of customers switching to EV cars would help in measuring the output of the
business venture.
 They need to keep updated with the latest market innovations coming from the end of
other EV manufacturers like Nissan Leaf and Mitsubishi iMiEV. This would make the
above mentioned targets attainable.
 Followed by success in initial sales targets, the company also has the target of enhancing
their promotional campaigns by 10%. This is how; the organization can develop itself as
a reasonable brand name in the country and later in the entire SE Asia.
 The gross margin that the company wants to achieve in a year is 1.5%.

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 The customer identities like demand for sustainable vehicles and elegance in outlook of
the cars need to be maintained.
 The organization wants to establish e-Golf model of car as a brand name within 18
months of market launch.
Strategies for Market entry and sustenance
Competitor Analysis
Volkswagen is a major car manufacturing brand name around the globe with brands like
Audi under their belt. Audi as well as Skoda have been highly popular in the Asian countries
including China. However, after the diesel engine scandal, other major car brands like Renault,
Ford or MG Motors have gained the impetus to occupy significant market share of the
established markets of Volkswagen. In order to revive the market share of VW, it is necessary
that they come up with some alternative product line which would bring about a drastic change
in the perception about the mechanics and the on road capability of the organization (ZHANG
2016). Currently, it is rather difficult for VW to enter the Japanese market with their
conventional series of cars, owing to the challenge they would be facing from Toyota, in this
regard (ZHANG 2016). That is why, it is strategically very important that they come up with an
alternative line of EVs, in order to capture the Japanese market.
In order to enter in the new competitive market, Volkswagen needs to go with some
strategies which differentiate us from rest of the producers in the market. Following will be the
key strategies which will help us to not only survive in the competitive market but also to
maintain our good image in the mind of customers.

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Demographic segmentation:
• Age: 20-60 years
• Gender: Male/Female
• Income: $3000-$4000 and above $4000
• Social Class: Upper middle class, upper middle Class
• Life cycle stage: Bachelors, retirees, etc.
Image 1: Average annual salary in Japan
(Source: Review 2019)

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Population Distribution in Japan
Graph 3: Population distribution in Japan
(Source: Review 2019)
Analyzing the above graph, it can be justified that the targeted segment of customers for the EV
would be the segment of middle and upper middle class with income range between $10000 to
$100000 and $100000 to $1 million.
Targeting Strategy
From above given segments Volkswagen will select those individuals who are more
loyal, beneficial, and can create good marketing through positive word of mouth for our
business. As Volkswagen has decided to target those individuals who by age are young people,
by social class they belong to upper middle and upper class and especially the businesses. The
customers with the abovementioned income range would generally have a lifestyle that would be

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supported by sophistication and individualism and will hence be able to, and will know people
who can afford the new Volkswagen EV’s that will be launched in the market (Batzer 2019).
Benefit segmentation:
The best possible segment who can be our more profitable customer includes Businesses,
and those who want to protect the environment. Benefit segmentation is more favorable for our
business strategy because it shows the more favorite group of customers who could be beneficial
for our business success (Batzer 2019).
Geographic Segmentation:
In geographic segmentation Volkswagen has segmented people based on residents of
Tokyo Japan, and other bordering countries. Volkswagen will also target other European and
Asian countries as Malaysia, Singapore, UAE, etc. Data in below chart shows that Japan has
controlled its population growth rate that is also a main reason behind boosting an economy of
country. The largest city of Japan is Tokyo with population of 8 Million along with this there are
near about 13 more cities with more than 1Million population. (Review, 2019). Hence, in Tokyo,
during the initial part of the market launch, the organization is going to target the people salaried
with above $100000 an year or the entrepreneurs or big business holding individuals. However,
the main importance with be families people. Though Volkswagen is not going to target
everyone, this population structure shows that the chances of business growth are sufficient
Volkswagen are going to target right population in Japan at right time (Batzer 2019).

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Graph 4: Car ownership listing of Japan
(Source: Tradingeconomic.com, 2018)
Positioning:
Finally, it is the time to create good position in the mind of customers through our unique
offerings, such as entertainment, affordable, environment friendly cars and lot more.
Volkswagen is trying to attract a greater number of customers by creating perception of
environmental care, easy to ride, and good moral by having unique product. Our customers will
perceive our offerings as technological advance, unique, and affordable (Masiero et al. 2017).
Marketing Mix:

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Marketing Objectives
In order to secure good position in Japanese’s competitive environment Volkswagen
need to not only focus on the product itself but it also need to coordinate other three
elements Price, Place and Promotion head to head with it.
Positioning Map:
Figure 1: Positioning Diagram
(Source: Developed by the Researcher)
Product:
The first EV vehicle comes in mid-19th century when electricity was considered as affordable
and batteries have power of storage of electricity that facilitates a car to run mileage by
consuming charged batteries. The branding would be dome entirely from a sustainable and
High
Quality
Low Price High Price
Low Quality
VolkswagenFord
Toyota

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environment friendly point of view. The factors like the rising pollution level, the government
policy for EVs as well as the sustainability and longevity of the cars would be emphasized in the
promoting campaigns (Review 2019).
The specs and features of e-Golf
(Source: Review 2019)
Price:
Price is second important factor of marketing mix which tells that customer is willing to pay for
that product and company is also ready to sell the product by keeping in mind the profit margins.
Price is also key element which determines that whether people are going to buy our product or
not by considering all necessary elements as affordability, its features and other customized
factors. All other elements of marketing mix show the company need to bear cost as its expense,
but this only factor price is the source of revenue for the company. The unit price for e-Golf is

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starting from $31300 (Volkswagen e-Golf, 2018), and onwards. This pricing is selected keeping
in mind the average income range of the targeted customers. This list price is the source of
revenue for the company and for its better sell and more units sells company need to negotiate on
pricing. In comparison to other marketing mix elements Price is only factor that company can
change easily as compare to other three marketing mix elements. (Chand, 2017).
Place:
It suggests where customers can get our product, distribution channel, methods of transportation
and inventory level company maintain. In starting Volkswagen are targeting Tokyo as a main
place and then Volkswagen will move to other cities and finally internationally. The car dealers
who previously had dealerships of Nissan or Mitsubishi would be targeted in Tokyo, with a
promise of higher returns (ZHANG 2016).
Promotion:
The third major marketing mix tool is Promotion which conveys the benefits of product to the
customers through different marketing tools which are described below in detail. For e- Golf it is
necessary to use both traditional and digital marketing tools to fully aware the customers about
the products. The traditional television advertisements are very popular in Japan and with
portrayal of the favorite celebrities endorsing the brand. The same strategies would be followed
by Volkswagen also. Other than that billboard advertisements and newspaper ads would be
provided also (Masiero et al. 2017).
Traditional Marketing:
2018 Volkswagen e-Golf can also be promoted through traditional marketing because of its
impact among customers who use to engage with these tools. There are different Traditional

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marketing tools such as Billboards, Magazines, newspapers, flyers, etc. Some common and most
important tools are described below (Candelo 2019).
Billboards:
Billboards play key role in attracting audience especially when they are placed at right places,
such as on busy roads, near city points, and at bridges side so that audience can get message
easily consciously and unconsciously which ultimately result in attention towards product and
service (Candelo 2019).
Social Media
Which social media shall be the most heavily used for marketing is a million-dollar
question? It depends on our target market. Volkswagen came to know that this marketing
strategy will work the best when integrated with various other marketing tactics. Following
social media channels should be used for e-Golf electric car 2018 (Masiero et al. 2017).
Facebook
Facebook is the most viral social media platform that provides much-targeted audience to
business. 2018 Volkswagen e-Golf can place its message of being environmentally friendly and
most customized electric vehicle car in Japan (Batzer 2019).
YouTube
YouTube, world largest video website, is the platform where people from all over the
world prefer to watch videos. If e-Golf brand videos are placed on YouTube and social media
platform, then users will view it and will get its message clearly of being the most
environmentally friendly and most customized electric vehicle car in Japan (Yim and Chong
2018).

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Twitter
Twitter is unique social media network along with user base of 328m monthly users
where 500million tweets are sent per day. 2018 Volkswagen e-Golf will be promoted by using
free and subscription mode to attract people and to convey our message clearly (Yim and Chong
2018).
Instagram
Among almost 5Million users of Instagram, 2018 Volkswagen e-Golf will be promoted,
and company will try its level best to attract its customers through this marketing tool as well by
conveying messages through short videos (Masiero et al. 2017).
Professional Website:
A business website serves as the most important tool for marketing. Volkswagens will
generate new website for its new EV car and present all necessary information about car which is
given in product description so that customers will get enough information about the product
(Candelo 2019).
Marketing Expense Cost in (,000) %age of Total
Market research £1000 23.8%
Marketing communication
Advertising through Local
TV/Radio channels
£1500 36%
Advertising through local
magazine
£500 11%

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Social Media £1000 23.8%
Other £200 4.7%
Total £4200 100
The advertising budget would be emphasized on cost saving for the first 1 and half year.
this is the impression for the budget for that definite time period.
Actions:
Marketing department with the help of other departments will take charge to make
successful and beneficial entry in international market. Initially company is supposed to conduct
research for at least three months and then focus on what promotional tools should be used. It is
necessary to use promotional in a way that first 2018 Volkswagen e-Golf should be promoted
through social media for initial one month after conducting research for the demand of this
product and then move towards other traditional such Billboards and magazines to aware
customers and residents about our product (ZHANG 2016).
This chart is created by Henry Gantt and its name is assigned to this chart which helps
companies to be in a right direction by keeping in mind the schedule which can also be created
through different software’s. This chart helps project managers of e-Golf to review that either
they are going with enough pace or the target they have set before starting the project, or more
importantly it helps employees to keep in mind that they must complete the task on time so that
other activities do not disturbed or stopped because of their laziness.
Gant Chart

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Activities Time in
Months
1 2 3 4 5 6
Market
Research
Market
Survey
Customer
Survey
Market
Potential
survey,
based
on ;localiti
es and
income
segregation
of the
potential
customers.
Facebook
Twitter
Instagram
YouTube
Billboards
Magazines
Positioning

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Control:
In order to get success at our new international market Volkswagen are required to have
effective control and monitoring system. In order to launch successfully our new 2018
Volkswagen e- Golf Volkswagen need to monitor each step effectively. For example,
Volkswagen needs to conduct research through most effective research conductors such Japanese
Statistics 2018, etc. Volkswagen are also supposed to focused on our promotional campaign that
whether Volkswagen are achieving our set objectives or not, means whether people are showing
their interest towards this new product or not (Masiero et al. 2017).
For this Volkswagen have a separate department which will ensure smooth business
operation. In order to manage good customer relationship, Volkswagen will use CRM software.
Customers Relationship Management Software:
This software will manage customer information and documents it in a single database so
that at any stage Volkswagen can get easily access of it and manage customers accordingly. This
software also records all customers’ transaction through mail, social media and phone call and
allows businesses to monitor customer transactions and their satisfaction and comments about
our business (Batzer 2019).

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MARKET.
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