R R 7 Left brain reality vs. right brain perception, cont’d What’s a Volkswagen? • In the mind, it’s a small, cheap, reliable car • That’s what made the Beetle such a huge success Management changed reality • Introduced the $65,000+ Phaeton • Reviewers loved it – it’s a great car • Competition: Mercedes‐Benz “S” class, Lexus LS, BMW 7‐Series • The problem – perception of a VW • Results were a disaster – in 5 years VW sold only 3,354 Phaetons in the U.S. “Hey Honey, I‘m getting you a $65,000 VW instead of a Mercedes‐Benz” • How will that go over? • Perception vs. reality 7 VW Beetle: $20,790 VW Phaeton: $65,000