Archive for the ‘Auto manufacturers’ Category

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Does the concept of “Tier 1 Luxury” have a future?

Wednesday, August 10th, 2011

If you follow the luxury segment of the automobile business in the US, then you know that the best and most powerful brands are those considered to be “Tier 1.”  They represent the largest volume brands in the segment, have the most loyal customers, command the highest margins, have the highest resale values, are the best defined, are the most prestigious and the most desirable.

Every Tier 2 brand aspires to be in Tier 1.  Audi set the target years ago to become a Tier 1 brand and some would say that it has achieved that goal.  More recently Cadillac has made no bones about the fact that it wants to be a Tier 1 brand and has set it sights on BMW.  Infiniti is striving to make it into Tier 1 and Jaguar would like to return.  The fact remains that only Mercedes-Benz, BMW and Lexus have achieved the volume, credibility and prestige to be true Tier 1, everyone else is Tier 2:

That said, I think the goal of becoming a Tier 1 brand may be a fool’s errand in today’s luxury segment.  It made sense almost 20 years ago when Audi set that as the target but does it really make sense today?

Tier 1 is full of accepted conventions that must be present in order for the brand to be truly Tier 1.  For example, in the Tier 1 world, all dealerships must be exclusive and should be Taj Mahals built to reflect the prestige and loftiness of the brand they represent.  In these Taj Mahal dealerships, customers must be served lattes, have a customer experience befitting their level of success and certainly not have that experience sullied by the presence of mass market product or customers.  In Tier 1, as defined today, manufacturers must offer three sizes of sedans, at least two cross-overs, a sports car as well as a tuner division that churns out high performance model variants.  In traditional Tier 1, it is essential to have a D-segment (think MB S-Class, BMW 7-Series, Audi A8) sedan that represents the brand’s ultimate execution of a luxury vehicle.  It’s pretty rarified air up in Tier 1, but if you can get there, profits and volumes are huge.

Here’s the rub, the whole Tier 1 paradigm has been built around the baby boomer generation and I can’t help but wonder if the conventional thinking about Tier 1 runs the risk of taking a manufacturer down a path that will be less relevant in the future.  (more…)

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Posted in Auto manufacturers, Automotive Retail, Strategy | 4 Comments »

2011 New York Auto Show Press Conference Schedule

Thursday, April 7th, 2011
Wed., April 20 Company Location
7:15 – 9:00 (breakfast) Opening Press Breakfast
(Carlos Tavares, Chairman, Nissan Americas)		 Special Events Hall
9:10 – 9:35 Honda Level 3
9:40 – 10:05 Ford Level 3
10:10 – 10:35 Jeep Level 3
10:40 – 11:05 Nissan Level 3
11:10 – 11:30 Hyundai Level 3
11:35 – 12:00 Mercedes-Benz Level 3
12:05 – 12:55 (lunch) Chevrolet North Hall
1:05 – 1:30 Subaru Level 1
1:40 – 2:05 Scion Level 4
2:15 – 2:35 Volkswagen Level 3
2:40 – 3:00 Audi Level 3
3:05 – 3:25 Porsche Level 3
3:30 – 3:50 Jaguar Land Rover Level 3
3:55 – 4:20 Chrysler Level 3
4:25 – 4:45 Rolls-Royce Level 3
4:50 – 5:35 Plastics Make it Possible 1D05
Thurs., April 21
8:15 – 8:45 (breakfast) World Car Awards Breakfast South Concourse
8:45 – 9:30 World Car Awards Press Conference South Concourse
9:35 – 9:55 Tokyo Motor Show Crystal Palace
10:05 – 10:25 BMW Level 3
10:30 – 10:50 Saab Level 3
10:55 – 11:20 Kia Level 3
11:25 – 12:15 (lunch) Mazda Level 3
12:20 – 12:45 Fiat Level 3
12:50 – 1:10 Bentley Level 3
1:15 – 1:35 Lotus Level 3
1:45 – 2:05 Mitsubishi Level 1
2:10 – 2:30 Shelby Level 1
2:35 – 2:55 EV – Pavilion Ride & Drive Level 1
3:05 – 3:25 Disney’s Cars 2 Crystal Palace
3:30 – 3:50 Bark Buckle Up TBD

* Schedule subject to change.

For more information about the Auto Show, go to www.autoshowNY.com.

 

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Posted in Auto manufacturers | 4 Comments »

The power of real people helps re-build the Mercedes-Benz brand.

Friday, March 4th, 2011

The power of “real” people in marketing is certainly not new. The latest iteration of  the idea is peer-to-peer marketing in social media. The underlying notion is simple, whether it is social media or a traditional “testimonial” commercial, consumers are more likely to trust the opinion or experience of people that they perceive to be like them…real and therefore trustworthy.

Mercedes-Benz has been in the process of re-building their brand’s core values (see earlier post) and recently has been focusing on safety. Mercedes-Benz’ use of real people to make their case for safety results in a very compelling campaign. Here’s a recent television commercial:

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” The accidents changed their lives, the films could change yours.” While the television commercial is nice, the real power comes if you visit the website.  There you can select from a whole range of films and hear each person’s or family’s story. Here are a couple of examples: (more…)

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Posted in advertising, Auto manufacturers, Branding, Uncategorized | 2 Comments »

VW’s Bulli concept, the VW Bus, Jerry Garcia and Yogi; deja vu all over again?

Tuesday, March 1st, 2011

Wow.  VW just introduced a new people mover concept in Geneva that has everyone talking.  Understandably so, it’s called the “Bulli” and it’s great:

Obviously this idea shares some genes with the original and iconic VW Bus which many of us associate with the ’60′s, hippies and perhaps a simpler time:

The VW Bus has such a deep connection with the ’60′s, the counter culture and baby boomers, that a tearful one was used in an ad by VW to commemorate Jerry Garcia’s death in 1995:

So a reincarnation of the iconic VW Bus is inherently exciting and interesting to many Americans.  The Bulli concept seems to be creating the kind of interest in Geneva that has everyone hoping that VW will decide to put it into production.

Unfortunately, we’ve been here before.   (more…)

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Posted in Auto manufacturers, Branding, Uncategorized | 10 Comments »

Mercedes-Benz scores with (a) safety but not in the Super Bowl.

Wednesday, February 23rd, 2011

Mercedes-Benz participated in the Super Bowl for the first time a couple of weeks ago and they did a commercial that celebrated the company’s rich 125 year history while borrowing a little interest from Puff Daddy:

In USA Today’s Ad Meter, this commercial finished in the top third at 19th.  Of automotive commercials in the Super Bowl it was ranked 4th of 18.  Not a bad showing for the brand but it certainly isn’t getting talked about the way Chrysler’s “Imported from Detroit” spot or VW’s “The Force” commercial is.

I must admit, I felt a little let down.  The Super Bowl is such a huge platform and it demands that you have something important to say and that you do it in a different way. Chrysler understood this and is reaping the benefits.  Mercedes-Benz basically said that they have been building cars for 125 years and the newest ones are now available. Really?  Puff Daddy was enough to get noticed and for the car wonks among us there were lots of wonderful old MBs in the ad but that’s the best they good do with $6MM in airtime on the Super Bowl?

I’m sure the Super Bowl commercial reflects the push and pull of all the various constituents.  The agency folks want the message to be simple and easily understood, the company marketing people want it to be differentiating (125 years) and the dealers want to see product.  Check, check and check.

On balance, the commercial was solid, certainly nothing wrong with it, but it could have been so much more powerful.  Last year I came across some terrific videos from Mercedes-Benz that I think give a glimmer of what could have been: (more…)

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Posted in advertising, Auto manufacturers, Branding | 3 Comments »

The Super Bowl: The big winner was an ad beauty contest also-ran.

Thursday, February 17th, 2011

This year’s ad beauty contest was fascinating on a number of levels. Like last year, one manufacturer made it into the top ten.  Last year it was Audi, this time it was their corporate brethren at Volkswagen:

VW followed that up with a second commercial that took the 12th spot (#2 for autos). A pretty good showing for the VW guys and their agency, Deutsch LA.

After that things began to slip pretty badly for the auto industry according to USA TODAY.  The chart below details each of the eighteen automotive spots and shows how they ranked in the automotive category and among all the ads in the Super Bowl:

So again, despite having 18 commercials in the big game this year, the auto manufacturers were mostly average at best.  Mini even tried puerile humor, which in the Super Bowl is usually a guarantee of good results, but even “Cram it in the boot” didn’t get it done.

Another year, another set of mostly average commercials, another disappointing showing in USA TODAY.

Except that one auto manufacturer demonstrated that the Super Bowl ad beauty contest truly is just that, a thin veneer that looks great but has little substance.

(more…)

Posted in advertising, Auto manufacturers | 1 Comment »

Super Bowl XLV–Will the auto industry carry the day?

Wednesday, January 26th, 2011

Last year, I asked the same question and I think the answer was “no.”

Audi’s terrific A3 TDI commercial led the automotive pack, ranked 6th of 65 by USAToday but all the others were also-rans. Here’s how the automotive participants ranked in last year’s advertising beauty contest:

A dismal showing by the auto industry.  Despite being one of the highest interest product categories with some often fantastic products, we seem to be unable to captivate the Super Bowl audience.

To be clear, getting highly ranked in USAToday’s poll has nothing to do with judging a TV commercial’s effectiveness, it simply is a measure of a panel of consumers’ reactions and “how much they liked each ad.”  But it is without question, ‘the game within the game.’  As a Super Bowl advertiser you spend $3MM or so for 30 seconds and the chance to get noticed and liked. It’s an opportunity to get tongues around the world wagging about your ad, your brand and maybe even your products.

But to make that happen, you have to do something amazing. (more…)

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Posted in advertising, Auto manufacturers, The Agency Business | 2 Comments »

Cadillac opens 2011 with a new campaign: “Red blooded luxury.”

Monday, January 3rd, 2011

If you happened to be watching the Rose Bowl on New Year’s Day, you may have seen Cadillac’s new campaign, its first from new agency Fallon.  The new campaign is the first for Cadillac under the aegis of Joel Ewanick who gave the business to Fallon shortly after his arrival last year.  The campaign seeks to clearly position the brand by “taking hold of red blooded luxury” according to Don Butler, VP Marketing, Cadillac.  Mr. Butler went on to define red blooded luxury as “dramatic, passionate, glamorous, daring, a whole new approach to the luxury category.”

Here’s the introductory commercial:

Strategically, I think this work is smart.  I like the idea of setting up the other Tier 1 luxury marques as “blue-blooded” (cold, aloof, distant, rational) and juxtaposing Cadillac’s “red blooded luxury” (passionate, glamorous, dramatic, daring).   (more…)

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Posted in advertising, Auto manufacturers, Branding, Strategy | 6 Comments »

Buick behaves unexpectedly.

Monday, December 13th, 2010

When General Motors was going through bankruptcy many industry observers were surprised that Buick would be one of the four brands that would be part of the new company (along with Chevrolet, Cadillac and GMC). The explanation was that the Buick brand was very successful and respected in China. What was left in the “un-said” was that Buick was a basket case in the United States.

Since coming out of bankruptcy there has been lots of discussion and coverage regarding Chevrolet and Cadillac but relatively little about Buick.  Chevy represents 70% of the company’s business and certainly warrants attention.  No one was really surprised that shortly after arriving, Joel Ewanick hired Goodby, Silverstein & Partners to help re-build the Chevy brand.  Cadillac, the company’s luxury brand also seems to garner a lot of attention.  With bold designs, terrific new products, another new agency (Fallon), the folks at Cadillac believe that they are in a position to finally break into the Tier 1 portion of the luxury segment.  Marketing for Chevy and Cadillac has been stepped up and through November sales are up 18% for Chevrolet and 38% for Cadillac.  All good.  There’s also quite a bit of anticipation for the Superbowl as one or both of these brands will launch new campaigns in the big game.

While Chevrolet and Cadillac seem to grab the headlines, Buick has been quietly going about its business and making unexpected progress in the US market.  In fact, Buick is the fastest growing GM brand; it is also the fastest growing automotive brand in the United States with sales +54% year to date.

It would be easy to attribute Buick’s success entirely to product, after all the new Lacrosse and Regal are pretty darned impressive (see my earlier blog post) but that would be unfair to the marketers.  The folks responsible for marketing at Buick continue to find interesting ways to let us know our expectations of Buick are misplaced and that we should think of the brand differently.

This starts with the television advertising that clearly establishes an unexpected competitive set for Buick:

(more…)

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Posted in advertising, Auto manufacturers, Branding, Strategy | No Comments »

17 Million in sales predicted for 2015, here we go…

Friday, December 10th, 2010

Things have been looking up in the US market for the automotive industry lately.

Sales have been improving.  November was strong with most companies showing significant gains and one, Hyundai, blowing past everyone else with a +46% increase over same period year ago.  Some marques like Audi are predicting that they will achieve new sales records in 2010 and break the 100,000 unit mark for the first time.  It looks like we’ll finish the year at about 11.5MM units, up about a million over 2009.  Next year sales are expected to improve to 12.8MM.

The LA Auto Show was up beat; there were a number of new and exciting products shown (my personal favorite was the Audi quattro concept).  The sense of the industry moving forward was palpable; it was good to be there.  Then of course there’s GM’s successful IPO, where investor interest was so strong that the share price exceeded everyone’s expectations.

Even more important, the industry has made important progress during the worst recession within memory.  Given the widely held view in 2008 that we were entering a “new normal” with significantly lower industry sales, manufacturers took steps (some with taxpayer help) to reduce production capacity, which has led to dramatically lower inventories at the dealer level.  In turn, lower inventories combined with better product quality have led to lower incentives and higher margins.  Some manufacturers (BMW, Fiat) are even attempting to encourage consumers to order cars and wait for delivery as Americans become accustom to lower inventory levels and the idea that the car they want won’t be on the lot.

Sales on the rise, higher margins, lower inventories, Americans ordering cars, what’s not to like?  Nothing, all good news, until… (more…)

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Posted in Auto manufacturers, Retail, Strategy | 4 Comments »

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