Yale Curriculum: Marketing Strategy

Four years before Brandweek magazine named Steve Wilhite its Marketer of the Year, Volkswagen faced the prospect of abandoning the U.S. automotive market. In 1994, Volkswagen — where Wilhite rose from sales manager to become head of North American marketing — had bottomed out, selling less than 50,000 cars the year before. Two decades prior, ten times that number had been the norm. “Our business had gone to hell,” Wilhite told an SOM Marketing Strategy class on November 1. “We were told by global management that we had one year to turn it around or the company would have to shut down operations.”

The challenge, as Wilhite told it, was to grow sales volume and re-build brand equity without the benefit of new products, when the existing products had among the highest warranty costs in the industry. The keys to success were re-connecting to the values and character of the brand and tapping into the residual goodwill that consumers felt about Volkswagen. Research told Wilhite and his team that VW drivers were a bit quirky; they liked twisty mountain roads and boasted of exceeding the speed limit. With this in mind, VW parted company with its ad agency of 30 years. Wilhite guided the launch of the “Drivers wanted” campaign that, when coupled with new, higher-performance models, helped the company regain its footing in America. “We had to be fearless,” he said. “We had to accept and celebrate the fact we weren’t for everyone. Cars are a very emotional category. If I define passengers and drivers, how many are going to raise their hand and say, ‘I’m a passenger’? Nobody. Everybody wants to be a driver. That changed the dialogue and allowed us to invite people to experience us.” Within the context of “Drivers wanted” in 1998, Wilhite led the rollout of the new Beetle — a new take on the old standard that was hailed by critics and embraced by customers — which served as the catalyst for future growth.

Wilhite, who recently stepped down as the COO for Hyundai Motor America, was the last of four speakers in the Marketing Strategy course, an elective for second year students taught by Ravi Dhar, the George Rogers Clark Professor of Management and Marketing and director of the Yale Center for Customer Insights. In previous weeks, the class was addressed by Beth Comstock, president of integrated media for NBC Universal; Chris Kempczinski, vice president of waters at PepsiCo; and Anil Menon, vice president of marketing and strategy for the IBM systems and technology group. Over the course of the semester, students looked at how companies build strong brands, how a brand becomes diluted through too much expansion, the benefits of loyalty rewards programs, how an established company grows in a mature market, and the effectiveness and ethics of marketing prescription drugs directly to consumers. “By bringing a live case study to the classroom setting, I hope the students learn that there is a method to the madness and that the frameworks need to be constantly improvised to new situations they will face as they go onto their jobs,” Dhar said.

Wilhite’s career has taken him from VW to a brief stint as Apple’s Vice-President of Global Marketing to larger roles with Nissan and Hyundai. Over the course of his career, Wilhite has learned that a company can’t be successful if it can’t define what it is and what it stands for and communicate these definitions to the marketplace. “The same applies to you,” he told the class. “If you don’t know what you stand for as a brand within an organization, you can start making very poor decisions.”