From Laughingstock to the Most Trusted Brand: Brand Identity explained through Skoda Motors

The following article is a story of grit and perseverance.

The story has it, in 1894, a 26-year old bookseller by the name of Vaclav Klement was unable to obtain spare for his German bicycle. He then writes a letter to the German manufacturers expressing his disdain and sends them back his bicycle. After receiving a cold response from the German bicycle manufacture and seeing the potential business opportunity, Mr Klement decided to set up his own bicycle repair shop. But since Mr Klement had no prior mechanical or engineering experience, he partnered up with Laurin who at the time was a small-time bicycle manufacturer from a nearby town of Turnov. This partnership, born out of necessity and grit laid the foundation of the famed Laurin and Klement badge which are added to every top-shelf Skoda car till date.

From setting up a bicycle repair shop in 1896 to buying a motorcycle factory in 1898 to producing their first automobile in 1905, Laurin & Klement's origin story teaches us a lot of resilience, patience and hard work.

Brand Identity - Laughingstock of the Automotive World

The Skoda name has been a subject of ridicule and negative perceptions in the brand’s 100-year history. From the heady days of the 1920s where Skoda cars were a symbol of elegance, status and power, at par with Rolls Royce, to their lowest point as communist-dominated cheap econoboxes, the brands identify has been a bit of a roller coaster.

But the brand suffered the most in the UK market, It was a victim to dark British humour due to the communist occupation of central European Eastern bloc countries from the 1940s to the late 1980s – countries were Skodas were being built.

This environment was very restricted and allowed very little intervention from outside in terms of modern technology. Any new or creative ideas were suppressed, and the cars were built to a cost. Most Skodas built during this time shared parts and looked eerily similar to other Eastern blocs’ cars like Lada Samara and Yugo Sana, which were dreary to look at and to drive.

But Skoda, being Skoda, took their version of this car, the Favorit, and added their tried and tested Skoda-designed 1289cc engine. The engine along with Skoda's impeccable build quality meant the Favorit was very popular in Czechoslovakia and other Eastern bloc countries. The car also exceeded expectations of buyers in the UK and Denmark for its solid build quality, cheap selling price and reliability. But they were perceived to have a lower value when compared to their more modern western European counterparts.

Despite their best efforts Skoda just couldn’t shake off their off-brand communist perceptions. What Skoda needed the most was a change in circumstances and sure enough, a change was in order.

The much-needed change came in the form of the fall of communism and the Velvet Revolution which brought about many changes to the region. Chief amongst which was the privatisation of companies in Czechoslovakia and other Eastern bloc countries. Therefore, eager to seize the moment, the state-owned automaker decided to transfer 30% of its share to Volkswagen AG. Over the next few years, Skoda made many technological advancements and started building attractive new models.

But Skoda’s image was slow to improve.

The Renaissance of the Brand

The strategy was simple. They wanted to develop a demand for Skoda cars through public relations. They wanted to convert the negative feelings many people had towards the brand into positive perceptions. This is known as the PR transfer process.

As a brand, Skoda’s brand awareness was very high at 94%, but most of this awareness was still associated with the old Skoda communist image and not with the new Volkswagen owned modern Skoda image. They felt it was important to educate the public on the revised brand’s proposition and core values.

Which were:

● Quality

● Functionality

● Value for money

● Family

● Customer care

● Reliability

But the problem they faced was twofold.

  1. Move away from negative perceptions to neutral perceptions

  2. Sway the neutral perceptions to positive perceptions

Skoda attacked this problem the only way they knew, by being smart, and dare I say sarcastically. The “It’s a Skoda. Honest” campaign was a masterstroke in exposing the hypocrisy in the mentality of car buyers, wherein people would spend money on a worse car if the brand was recognised. Skoda ran thousands of variations of these adverts on British television throughout the late 90s and early 2000s and it worked!

For example, the Vandal ad, wherein a garage security guard is seen tampering with the badge of the new Skoda Fabia. When the owner of the car intervened, the security says that he is sorry, and someone has vandalised his car by placing a Skoda badge on it. The camera pans out at this moment and the text appears, “It’s a Skoda. Honest”. The ad was symbolic of the achievement of the Skoda Fabia, which was a great chic modern hatchback with the stellar build quality and stupendous reliability.

Although the campaign was considered risky by marketing professionals at the time, the campaign was a smashing success. Swaying even the harshest critics and winning over sceptical consumers. The campaign underlined Skoda's reputation for building good quality cars. By 2005, Skoda was selling over 30,000 cars in the UK with a market share of over 1%. And for the first time, since the 90s, there was a waiting list at most Skoda showrooms.

Since then, the brand has won many design awards and consistently topped the customer satisfaction surveys like JD Power and Top Gear. Furthermore, in 2015, Skoda was voted the most dependable car brand in the UK. In fact, Skoda’s marketing and PR strategy were so successful that the brand loyalty i.e. repeat purchase, is the highest amongst any carmaker, at 83%. Which means Skoda owners are likely to buy another Skoda over any other car (the average for car brand loyalty is around 43%).

The Skoda brand is now synonymous with good quality cars that are reasonably priced and suit the customers’ needs.

Talk about changing perceptions, from laughingstock to most dependable brand ever!

Written by Arjun Manohar