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.  There’s a new generation of luxury car buyers coming into the market that are forming their own opinions about what “luxury” means, what connotes prestige and what brands they will value.

What’s interesting about the new generation (call them Millennials if you like, they’re the children of the boomers) is that their view of luxury is being shaped by experience that has included the Great Recession and its re-jiggering of peoples’ sensibilities, high unemployment particularly for their age group, the broken promise that they will do at least as well as their parents not to mention technologies that are changing the way they communicate, collaborate, research and ultimately act as consumers.

All luxury brands recognize that their future depends on younger upcoming luxury car buyers, but the goal of Tier 1 and its conventions risk throwing them off track.  This new generation of luxury car buyers may not need a Taj Mahal dealership or even a latte. They’ll need a product and experience that fits their sensibilities, not their parents’.

I think the future of luxury rests with the next generation and if I were introducing a new luxury entrant or re-building a luxury brand I would focus all of my energy on understanding how Millenials will define luxury and what I need to do to satisfy their requirements.

The luxury segment is going to go through a transformation and becoming a “Tier 1” brand with all its trappings represents “old luxury.”  The long-term winners will figure out how to become the new generation’s luxury brand without losing their existing customer base.  Fortunately, boomers are consumed with the need to be perceived as youthful and forward looking, so chances are if their kids think something is cool, they will too.

* Schedule subject to change.

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

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:

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What joins these stories and people together is that each experienced a horrific automobile accident and believe that they would have died or been terribly injured if they had been in anything other than a Mercedes-Benz. Frankly, that’s no real surprise, as a viewer you know where the films are going, but what’s engaging are the details and the people themselves telling their story.  Ordinary people whom are sharing an experience that could happen to any of us.  The emotion is real and the stories are often riveting.

What’s artful is the way that Mercedes-Benz lets the videos tell the story of the people and they use the post video “learn more about this story” link to provide more information about the accident, the car, the technology and the engineering that enabled the happy outcome, without “selling” anything.

All in all, beautifully done. Makes both the emotional and rational case for Mercedes-Benz as the safest and best engineered vehicles without ever claiming it.

Professionally, I know there are other equally safe vehicles available, but I must admit that the stories of these real people have me thinking that perhaps my family has an edge, if the unthinkable happens, and they happen to be in a Mercedes-Benz.

Well done.

More at:  http://www.mbusa.com/impact

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.  At the Detroit auto show in 2001, VW showed another Microbus concept that got tongues wagging:

This concept was beautiful and even more closely linked to the ’60s original.  At the time everyone was hopeful that VW would decide to build this vehicle and we spent quite a bit of time at the show wondering how true to the concept the final production version would be.  Unfortunately further analysis in Wolfsburg resulted in the demise of the idea as unaffordable.  What a drag.

So now we have the Bulli and people are again excited about a contemporary version of an the ’60s icon.  Will we be disappointed again?  VW’s quest to sell 600,000 units (800M including Audi) in the US argues for a large capacity vehicle in the company’s line up.  The company’s lack of success with the Chrysler minivan based “Routan” supports the idea of a people mover with genuine Volkswagen character.

Seem like good reasons the build the Bulli.  What’s hard to know is the impact of VW’s desire to “mainstream” the brand in the US to increase volumes.  Based on the new 2012 Jetta’s plain vanilla design, it’s hard to imagine that much of the Bulli concept’s character will survive the mainstreaming process.

I for one, would rather experience “deja vu all over again” and be disappointed, than have VW build a vehicle that ends up being more minivan than Volkswagen.  We don’t need more minivans, but a new VW bus, that would be cool.

Here is a link to more pictures of the Bulli and a video from Edmund’s Inside Line.

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:

Admittedly these are long form videos and it would be prohibitively expensive to run them on the Super Bowl as is, but with judicious editing you could easily make a :90 or a :60 that would have been much more impactful. Let’s see…125 years of company heritage and Puff Daddy… or the incredibly emotional true stories of people who believe that a Mercedes-Benz saved their lives.

The resulting commercial would not have met everyone’s requirements; you’d see only damaged product, and there are certainly other safe cars out there but the message would have been simple…Mercedes-Benzes save the lives of people like me.

Pretty powerful stuff.

See more of these “Impact” videos at Mercedes-Benz’ website.

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.

Chrysler demonstrated in one fell swoop why having something important to say and saying it an unconventional way trumps winning the ad contest any day:

Despite being big, emotional, engaging, and important, not to mention beautifully produced and edited, as well as the first time Eminem’s “Lose Yourself” was used in a commercial, this Chrysler commercial ranked 44th of all ads and 12th of auto ads in the Super Bowl according to USA TODAY.

A beauty contest loser, but in the real world where people buy cars, this commercial made people sit up, pay attention, think and then they started talking.  If you doubt the veracity of this statement check out the change in consideration level reported on Edmunds Auto Observer, a week after the game:

A week later, Chrysler’s consideration is still up 87%, no one else is even close.  We all knew this intuitively; chances are if you were speaking to anyone about the Super Bowl advertising, you ended up talking about Chrysler’s ad.

In some circles, concerns were raised.  Will it work? Will it sell cars? Did it show enough car?  Does “Imported from Detroit” make sense? Will only people in Detroit care?  What about Eminem?  Is he good for Chrysler’s image?

All the reasons “why not.”

Fortunately the people at Chrysler and their agency, Wieden & Kennedy had the courage to ignore all the reasons “why not.”

Their reward; 6,966,893 YouTube views (as of this moment), unimaginable news coverage, countless consumer conversations, and 87% higher consideration.

Not bad for an ad.  Exactly what you need to do if you want to take advantage  of the Super Bowl and relaunch your brand.

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. Something funny, something out of the ordinary, something really worth watching and paying attention to.  Historically the automotive advertisers have been unwilling to step up to the Super Bowl plate and swing for the fences creatively (to shamelessly incorporate a baseball metaphor into a piece about a football game).

Last year Audi and its agency did a nice job using the “Green Police” to start a conversation about clean diesel technology.  Funny, interesting, different and informative got Audi into the top 10.

This year automotive participation is at it highest level in recent memory and perhaps for all time.  Audi, BMW, Chevrolet, Dodge, Jeep, Hyundai, Kia, Mercedes-Benz and Volkswagen are all participating. Some of the most creative agencies in the business are creating work for the big game: Wieden (Chrysler), Venables Bell and Partners (Audi), Goodby (Chevrolet), David & Goliath (Kia), Deutsch LA (VW).

Great brands, great products, great agencies and lots of consumer interest. Maybe this will be the year that automotive dominates the game within the game with ideas that get people talking.

If not, it won’t be a complete loss; the football game should be great.

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).  What this very effectively does is take the traditional Tier 1 luxury marques’ reputation for prestige and turns it against them.  Who wants to drive the same car as that couple “celebrating” their anniversary!

I also think the execution hits on a “truth.”  The Tier 1 luxury segment competitors have lost their personality and charisma.  BMW, Mercedes-Benz and Lexus seem less exclusive, more ordinary and alike than ever before.  The luxury segment buyer is ready for something new and different.  To an extent, Audi is capitalizing on this opportunity, but they are walking a fine line because they desperately want to be a blue blood too.

Cadillac seems to be willing to thumb its nose at the traditional notion of Tier 1 luxury and not worry if it ever passes the “country club test” (What will they say at the club when I drive up in a Cadillac?).  Good for Cadillac.   There’s a whole new generation of luxury car buyers coming into the segment, who look at the current Tier 1 brands and don’t want any part of them.  That’s Cadillac’s opportunity (see my earlier post on this topic).

Here are a couple of the introductory print executions:

All in all, I like the “red blooded luxury” positioning and the campaign.  The product photography is beautiful and takes full advantage of one of the most dramatic designs in the business.  This all bodes well for the Cadillac brand.

The only risk that I see is that it will be easy to allow the “red blooded” positioning to turn into a performance story.  If it becomes only about performance then I think Cadillac will have missed the opportunity to separate itself from its Tier 1 competition.  For example, this commercial is also part of Cadillac’s new campaign:

What happened to the “passionate, glamorous, daring” part of the red blooded luxury positioning?  What I see is a nicely executed performance spot. Without the “passionate, glamorous, daring” part of the positioning, “red blooded” could easily become a performance focused idea that makes Cadillac just another high performance luxury segment entrant.

The campaign has only just launched so it will be fascinating to see where Cadillac and Fallon go from here.  I hope they succeed in telling the whole “red blooded” story because with the “passionate, glamorous, daring” piece, Cadillac could become “The New Standard of the World.”   Without it, Cadillac will be just another performance footnote in the history of a segment that has repeatedly raised the performance bar.

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:

A Buick that looks like that and is competitive with the Tier 1 luxury brands is certainly unexpected, even if the executions are pretty standard fare for the industry. I also find the tag line  ”Its the new class of world class” a bit ham-fisted, but it’s on-point.  That may be the best part of this TV it’s on-point.

On the “more interesting” side of the ledger is Buick’s Moment of Truth website for the Regal.  In the spirit of creating a conversation around the Regal, Buick has created a website that sources consumers, enthusiasts, critics and anyone else who comments on the Regal and publishes what they say both good and bad.  The result is a website that is full of good information and leaves you with the sense that Buick is operating in a very transparent fashion.  I give the folks at Buick high marks (see earlier blog post) for being willing to accept the “risk” that they might be criticized in favor of presenting an objective view.

Most recently, Buick has embarked on another interesting marketing approach. Yesterday the New York Times reported that Buick has partnered with MSN to underwrite “a new Web-only travel series on MSN that promises to give an insider perspective on American cities” called “Re: Discover.”  It would be easy to dismiss this as just another product placement effort, but that would sell it short.

Re: Discover is all about really good and interesting content, not Buick.  Local people from a number of cities (LA, Chicago, New York , Miami so far and more to come) talk about their city, their favorite places to go, things to do and why they love living there.  The videos are interesting, fun to watch and I’m sure that a number of local businesses are going to find their customer base growing. Obviously, Buick is hoping that target consumers will enjoy the content and appreciate that Buick made it possible.

Who would ever have expected Buick to compare itself to the best manufacturers in the business, or create a website where critical comments are published or form a partnership with a media outlet where the car is not the star?

Of course, no one expected Buick to be the fastest growing automotive brand in the United States either.

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…

Last Thursday when Michael Robinet of IHS Automotive predicted that:  ”U.S. automotive industry sales could top 17 million by 2015.”

I couldn’t help but think of the current Bud Lite campaign, the one where guys are behaving in a relatively reasonable fashion until they are confronted with a quantity of Bud Lite:

17 million sales!?… Here we go.  Here we go as an industry, losing our minds and acting irrationally.  Using the MDIBTYD method of sales forecasting.  VW has made no bones about its goal of being the largest global manufacturer and I’m certain others would like to prevent that from happening.

We all know what happens.  Sales forecasts increase, production is increased, inventories increase, use of incentives increase and margins decrease.  The real shame is that all the progress that the industry has made in the last couple of years could easily be erased if we chase volume.

I understand the importance of volume given high fixed costs.  I also recognize that predicting sales and production is a high wire act and I don’t mean to diminish the difficulty of those deliberations.

But it does seem to me, that the industry’s default position has been to chase volume.  I hope that this time we restrain ourselves and consider the possibility that slower more deliberate growth, will result in stronger higher margin businesses that are better prepared for the next downturn.  Another happy outcome would be stronger brands and a customer base that is not built on the backs of the bottom feeders looking for commodity pricing.

Let’s hope that when the MDIBTYD forecasting method is being used, that cooler heads prevail.  Here we go….

“The company plans to triple annual U.S. sales of VW, Audi and Bentley models to 1 million units annually by 2018 as part CEO Martin Winterkorn’s drive to overtake Toyota Motor Corp. and General Motors Co. and become the world’s largest automaker.”  Automotive News 9/18/09

Based on the VW brand’s 2009 sales (213,454), volume in the US will almost quadruple: “By 2018, VW wants to sell 800,000.”  Automotive News 1/19/09

800, 000 is a heck of a lot of cars for VW.  Especially considering that VW’s biggest volume year in recent memory was 2001, when it sold 355,648 units (in the 1970′s VW did sell roughly 500,000 units).  Many industry experts have questioned the wisdom and even the possibility that VW might sell 800,000 units in the US.

Volkswagen believes that it can sell 800,000 cars in the US by specifically developing vehicles to meet Americans’ tastes: “VW has concluded that price-sensitive U.S. consumers simply aren’t willing to pay for the extras found in a mass-market European sedan.” Automotive News 7/5/10

Consequently, the “new mid-sized sedan, which will be built in Chattanooga, Tenn., is supposed to be bigger and cheaper than the Passat that it replaces… VW wants to make its Passat replacement competitive with the mid-sized segment stalwarts — the Toyota Camry, Honda Accord and Ford Fusion — and thereby boost sales sharply.” Automotive News 7/5/10

This strategy is also evident in the new 2011 Jetta, which has been de-contented to make it price competitive with the Japanese.  The 2011 US version of the Jetta will have drum brakes in the rear and a torsion bar rear suspension.  The interior has also been cheapened to enable it to reach a competitive price point.  The European Jetta has been dumbed down to meet the needs of the “price sensitive” US customer: “European buyers will get a more costly and more upscale version of Volkswagen’s new Jetta sedan than North American customers.” Automotive News 11/1/10

This approach is being mirrored in the Company’s US marketing. When recently searching for a new advertising agency, the VW CMO offered the following rationale: “The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America.”  Automotive News 8/18/09

So, Volkswagens will be more mainstream in the US, larger, less expensive and less European, more price competitive with the Japanese marques.  While I am tempted to go on a rant about the dilution of the VW brand and the dangers of chasing volume (see my earlier blog post), let’s skip all that, and ask a simple question:

Why buy a Volkswagen that is designed to be competitive with the Japanese when you can buy the more reliable, better built products from Japan (or Korea or the US)?

Below is the latest JD Power IQS study results:

Note that Volkswagen is third from the bottom, ranked 31st out of 33 marques. Honda is 6th,  Nissan is 15th, Mazda is 19th, and even after everything it has been through Toyota is 21st, well ahead of VW.  A customer could also look at Ford (5th) and Chevrolet (14th).

Of course part of VW’s answer to the question is that the VW brand has a certain cachet that the Japanese or US brands do not.  I think that this has been true, customers (me for one) have been willing to overlook the quality issues which have plagued VW for years because they thought they were getting something special, a German engineered driver’s car.  Customers have also paid a premium for the privilege.

But now we learn that US customers are getting the de-tuned versions of the European products.  American VWs are tuned to American drivers’ tastes, rather than the more demanding European “standard.”

This “mainstreaming” of the VW brand may lead to increased volumes for VW but it will also result in increased commoditization, the Jetta’s loss of independent suspension and disc brakes may seem wonky to some, but those technologies dramatically effect how the car handles. If my new Jetta handles just like the Civic and the Corolla, I might as well buy either of them; after all they’re better built than the Jetta.

In the final analysis, this does come down to the brand and what the brand stands for, what its promise to its customers is. “Mainstreaming” the VW brand may generate volume but it will inevitably weaken the brand.

I recognize that ad campaigns come and go, but a brand’s positioning should be consistent.  In 1995, VW’s US management and their agency perfectly captured the core of the brand when they said:

“On the road of life there are passengers and drivers.  Drivers wanted.”

Not so much anymore.  Not mainstream enough.

THURSDAY, NOVEMBER 18, 2010

Source: LA Auto Show website

Here’s the issue.  Tier 1 is funded by the manufacturer and is often referred to as the “brand” communications.  Tier 3 is the communications funded and executed at the local level by individual dealers.  Tier 2 is caught betwixt and between.

Funded in part by the manufacturer and in part by the local market dealer groups.  Tier 2 must serve two masters.  The manufacturer wants to be sure that the work reflects the brand and makes the doors swing whereas the dealers are understandably concerned with just making the doors swing.  Just to make it more difficult, the manufacturer’s marketing team and the dealers often have a different points-of-view about what will make the doors swing.

Tier 2 is where the brand versus retail discussion often gets very heated.   It is very tough to find a balance between the brand and retail messages.  More often than not, you end up erring toward the retail.  We all know what this formula looks like.  The TV commercials are visuals of the vehicle on the road, held together by a litany of product features in the copy and you tie it up with a bow…the deal.  The newsprint is a visual of the car, a couple of sentences covering key features, the deal and some legal disclaimers.

This leads to a sea of sameness when it comes to Tier 2 communications.

But it doesn’t have to be that way.  Tier 2 communications can represent the brand and the retail message successfully and powerfully.

That’s exactly what Ford and its agency Retail First (part of Team Detroit) have done with their campaign using Mike Rowe of “Dirtiest Jobs” fame.  Here’s one of their early commercials:

This is a solid piece of work and I think Mike Rowe does a good job, but what’s really interesting is how Ford and their agency, over-time, improved the advertising.  According to Matt Van Dyke and Dave Rivers of Ford who are responsible for this work, the early work with Mike Rowe was tightly scripted and used actors.  No surprise here, that’s what most companies and agencies, would do.

But look what happens when Retail First and Ford decide to loose the reigns on Rowe by giving him “talking points” and real consumers to interact with:

Here’s another:

Obviously, what makes this work really strong is the use of Mike Rowe, but what a difference when they let him go and just talk to people.  He’s even more genuine, likable, friendly, warm, trustworthy and credible.  Every time he makes someone smile or laugh, you like him even more.  Mike Rowe makes this work stand out and work that much harder (if you doubt Mike’s effectiveness, compare these ads to Chevy’s with Howie Long).

I think this work leaves the consumer feeling positively toward the Ford brand but it also does not shrink from the retail message.  That’s one of the terrific things about Mike Rowe; he can deliver a pretty hard-edged message about product and price without sounding like a shill.

I’m not privy to Ford’s corporate strategy but it is a big brand that covers lots of segments and customers so it needs to be a lot of things to a lot of people.  I would suspect that Ford would be very pleased if “genuine, likable, friendly, warm, trustworthy and credible” washed over their brand from Mike Rowe.  But importantly, based on recent sales, this Tier 2 advertising is also “making the doors swing.”

Finally, here’s my favorite Ford/Mike Rowe ad:

“There’s Max sittin’ in a Mustang, there’s Max sittin’ in an Accord.  What’s cooler?”

Got it.

Please let me know what you think.

This is a wonderful commercial, it’s big, emotional and engaging. Before seeing it, I was certain that I didn’t want an EV, now I’m less certain, and I know for sure that I want to help that polar bear.  I admit that this commercial makes me think about Nissan a little differently; I’m not yet convinced that the company stands for “Innovation for all” but it’s a start.

Nissan has struggled over the years to establish a brand identity for itself. Automotive marketing history buffs can probably trace the issue back to the decision to change Datsun to Nissan in 1981.  In 1986, after a transition period, the brand was officially Nissan.

Since that time Nissan has struggled in the shadow of Toyota.  While Toyota steadily built a reputation for quality and reliability and smashed sales records, Nissan labored as the number two Japanese brand.  Nissan’s brand identity has never been clear and I suspect for many people it’s an simply an alternative to the better established Toyota.

The manufacturers in the vast middle of the market struggle with brand identity partially because they offer vehicles in so many different segments for so many different target customers.  The brands in the vast middle (Toyota, Nissan, Ford, Chevrolet) find it difficult to define themselves because they must appeal so broadly. It’s tough to have a strong focused differentiating brand identity when you must appeal to everyone.

This lack of brand identity didn’t seem like a huge issue when the automobile business was selling 17 million units a year and Detroit was consistently on its heels with lousy products (relative to the Japanese) and uncompetitive pricing.  Even if Nissan didn’t get as many customers as Toyota, they got enough.

But the “new normal” sales level is in 11-13MM unit range.  Ford and Chevrolet are offering terrific products at competitive prices.  Hyundai and Kia have come out of the recession on tear, offering more terrific products, excellent pricing and growing reputations.  The fact is, it’s hard to buy a bad car in today’s market at any price point. So, if quality isn’t much of a differentiator anymore, what is?  Pricing? Potentially, but no one wants to put the incentive needle in again.

Design and styling will always be a one of the differentiators, although many would argue that in the “vast middle of the market” designs are pretty conservative because they have to appeal broadly (there’s that broad appeal problem again).  If not design and styling, what?

In the “new normal” market for vehicles; brand identity and marketing are the essential differentiators.  Creating leverage for your brand is critical in this hyper competitive marketplace.  Nissan clearly recognizes the importance of creating brand leverage, Jon Brancheau, VP Marketing,  said in Automotive News that they were:

“trying to figure out an intelligent way to consistently express the brand.  We have focused on individual models…But it hasn’t laddered up to help halo the Nissan brand. So strategically, we’re headed down a path to come up with a way to express ourselves and the Nissan brand in a consitent method.  The idea revolves around innovation…Innovation has always been what the Nissan brand is about.”

So Nissan is putting a stake in the ground, they’re going to stand for “innovation.” Here is the first commercial in the campaign, as well as a few others:

I admire Nissan for having the courage to stand for something.  If the Nissan brand can stand for “innovation” then they will have a leg up on their competition.  After all, Toyota has taken a hit from allegations of unintended acceleration and no other player in the vast middle of the market has a very well defined brand.

I’m not sure that consumers will give them credit for innovation at first, it seems like a bit of a leap. But over time, if they are consistent in their communications and show us why they are an innovative company our opinions will change.  I know that my opinion of Nissan has already shifted a bit based on that polar bear.

Nissan recognizes the potential of a strong differentiated brand and has obviously invested heavily in its new campaign, but more than anything, brand building requires time and commitment.  It will be interesting to see if they see it though.

Nothing earth shaking here, nicely produced  and very product focussed, the commercials clearly make the point that the Cruze is a car that is surprising people. “Get used to more” is a nice line and a huge improvement over “Excellence for all.”   More than anything else the tone and manner sets these executions apart from recent Chevrolet work:

These commercials certainly make the point that the Chevrolet Cruze offers a lot versus the competition and is worthy of a look but they do not offer a big “ah ha” regarding the positioning of the Chevrolet brand.

It will be interesting to see where they go from here.

We couldn’t think of any and we began to talk about what a mistake that was.  We were able to rattle off a number of instances, where great automotive brands walked away from positioning or taglines that perfectly encapsulated their brands.  Mercedes-Benz left behind “Engineered like no other car in the world.”  Volkswagen threw away “Drivers wanted.”  Chevrolet moved away from “Heartbeat of America.”  A few months ago, BMW, one of the most consistent marketers in the industry, looked as if they were moving away from “The Ultimate Driving Machine” in favor of  “Joy.”  In the case of BMW, this has been hotly denied and “TUDM” still appears at the end of the ads but it has certainly been demoted.

Why does this happen?  Why does it seem so difficult for marketers to realize that they have a real asset that needs to be protected and nourished?  A lot has to do with the constant pressure to increase volume and the find something new to “take the brand to the next level.”  The other factor is the constant churn of marketing management and agencies.  New marketing leadership needs to demonstrate that it is moving the business forward and that means doing something new.  Every agency is genetically coded to do something “new and unexpected” to burnish their reputation.  Bringing back an old idea can also be seen as a copout.

So it struck me this morning when I read an article in Advertising Age where Joel Ewanick was interviewed and he said that Fallon (Cadillac’s new agency) had developed the brand’s soon to be introduced tag-line: “The new standard of the world.”

Here’s what’s fascinating, that slogan was developed in 1908, shortly after Cadillac won the prestigious Dewar Trophy for excellence in manufacturing.  The original line was simply “Standard of the world.”  The line may never have been a “tag-line” in advertising but it was certainly part of the company’s logo and therefore used from a marketing perspective:

This makes it different from Mercedes-Benz new global campaign, which uses an idea from the company’s archives,  “The best or nothing” (Das beste oder nichts). This statement was first written by Gottlieb Daimler but until now was not used for marketing, so they haven’t brought back an old idea.

I think “The new standard of the world,” admittedly with a slight modification, may be one time where an agency and its client has had the courage to look back and rather than reinventing the wheel (pun intended), acknowledge that something done before perfectly captures the essence of their brand and be willing to re-introduce it.

Good for them.  “The new standard of the world” already positions Cadillac more clearly than it has been in decades.  It will be interesting to see where they go from here.

Please comment if you can think of any other instances where an idea has been resurrected.

So why would one of the most well-regarded progressive luxury automotive brands in the world make the silly mistake of blatantly copying their nearest competitor?

A few weeks ago I was in the UK and I happened to walk by Leicester Square in London and was excited to see an Audi display in the park. I went over to have a look and discovered that the display was part of the UK’s introduction of the A1.

The display was called “AreaA1″ and it was getting a lot of attention from Londoners.  It was the first time I had the opportunity to see the A1 in person.  It’s a wonderful car and I hope the folks at Audi of America make the decision to bring it to the US.  It was so crowded, that it was hard to get a picture….at least a good picture:

However, I turned to the other half of the display and was profoundly disappointed by one of the key AreaA1 marketing ideas:

What you’re looking at is an Audi “Art Car” painted by Damien Hirst. The “art” was fantastic (my photography is not) but it still left me wondering “why?”  Why would Audi commission an artist to paint a car when their most direct competitor did it first and has done so many times.  Why would Audi copy BMW?  Why would a brand that has worked so hard to earn a seat at the Tier 1 luxury segment table do something in marketing that screamed “look at us, we’re just like BMW!”

According to Wikipedia, a BMW was first used as a canvas in 1975 when French racecar driver and auctioneer Hervé Poulain commissioned Alexander Calder to paint a 3.0CSL:

Since 1975, BMW has commissioned 17 different artists to create “art cars.”  I think it fair to say that by now BMW “owns” the concept of art cars in the luxury segment. Wikipedia even has an entry entitled “BMW Art Cars.”

That isn’t to say that other luxury marques should not somehow participate in the arts. After all, Mercedes-Benz famously commissioned Andy Warhol to create a series of artworks.  But Audi, one of the industry’s most innovative and progressive companies should find its own way of connecting to the arts, not simply copy BMW.

Unfortunately Audi of America fell into the same trap when it sponsored Art Chicago in 2007. Audi introduced the Audi RS4 Art car created by Brazilian-born Pop artist Romero Britto:

When a competitor has consistently over time used a particular tactic and has become well known for it you can’t differentiate your brand by doing the same thing. You will simply communicate that you are just like the other guys and probably do more to build their brand.  You don’t build a distinct and special brand by copying a competitor.

Having said that, Audi UK’s art car was subsequently auctioned off at Elton John’s charity event for about $525,000, the proceeds will go to the Elton John Aids Foundation.  That might be the only good reason for Audi to copy BMW marketing.

How many times have I sat in meetings with manufacturers and discussed the need to get consumers engaged with their brand in the digital space? Too many times to count and the concerns are always the same.  What if they say things we don’t like?  What if they say something untrue?  What will they expect of us?  How will we respond? Inevitably the lawyers weigh-in and the reasons “why not” stack up like cordwood.

So I think it noteworthy that Buick has found a way to get beyond the reasons “why not” and to give consumers an uncensored voice regarding the new Buick Regal at www.momentoftruth.com.  This is a terrific website with tons of information from a variety of sources, the company, general media, buff books, blogs and real consumers.  The use of Twitter and Facebook feeds, Youtube videos and Flickr is terrific and makes the site feel very credible.  The net effect is that you feel as if you’re getting a chance to see the entire body of opinion regarding the new Buick Regal in one stop.

GM is using technology that searches the web for mentions of the Buick Regal, aggregates it, edits out the profane and posts the rest. The result is really fun and full of interesting commentary.  It’s not quite a dialogue with consumers but it’s a step in the right direction.

I admit that I had to wade through a lot of positive comments to find the few negative ones, but they’re there.

Good for Buick, maybe the reality is that most of the response to their new vehicle is positive!

Brilliant work by Scali, McCabe, Sloves took Volvo from the choice of professors in tweed jackets to the boomer choice for family hauling. The Volvo wagon was a staple in the suburbs on both coasts.  Volvo was even featured in the movie “Crazy People” where Dudley Moore played an ad man who decided that being honest was a good idea and suggested that Volvos were “Boxy but good:

While the brand became part of popular culture and owned safety, it has struggled with that one-dimensional view for years. Volvo has its loyalists who love the brand and it’s products but it also has more than its share of detractors for whom the truth of “boxy but good” was a real barrier to purchase.  The challenge has always been how do you retain and nurture the safety reputation while also convincing a broader swath of the car buying population that the brand is cool and emotionally appealing.

This challenge is not exclusive to Volvo.  Mercedes-Benz and BMW have also worked hard to get “beyond” their reputations for engineering and performance respectively.  The fact is that all these brands represent safety, engineering, performance, quality and luxury at very high levels.  That said, when you’re lucky enough to “own” a reputation for one of the category’s real drivers, then it’s an asset you need to protect.

But it’s difficult.  In Volvo’s case they have wanted to be respected for more than safety and conservative styling because they needed to appeal more broadly to sell more cars.  Over the years they have improved the styling, offered a number of performance variants, expanded beyond sedans and wagons to include crossovers and convertibles.  Yet, consumers, their perception of the brand and sales have not responded in kind.  Part of the problem is that its safety position is so strong and so rational.  Safety is critical and incredibly important to consumers but it is also not cool or sexy.

I believe that when you “own” a positioning, particularly a primary driver, you must “speak” through that lens about other topics or you risk creating dissonance with consumers.  I think this is why Volvo’s efforts to convince us that they have performance credentials have seemed to fall on deaf ears.  Performance conflicts with our expectation of safety.

Recently, Volvo has been running a campaign that I think has found an appropriate “voice” that allows the safety brand to get into more emotional areas without confusing us. The idea that there is something called a “Naughty Volvo” allows the brand to go a little beyond safety without asking us to re-jigger our entire perception of the brand.  I think we all like and accept that people can be a little “naughty” from time to time without losing their essential character.  I think the same holds true for Volvo:

While I like the “naughty” commercials, particularly the ascending levels of naughtiness, I must admit that Volvo’s recent effort to isolate Europe’s “naughtiest” city really got me thinking about the brand a bit differently:

What a nice way to communicate that there’s something unexpected about Volvo. Throw a party in multiple cities with the car at the heart of it, invite all the right people, give them an opportunity to be a little naughty and see what happens.  A good combination of young, cool, contemporary, fun, a few good natured national stereotypes, and just a bit of naughty results in Paris being crowned the “Naughtiest City” in Europe.

What’s the point?  Everybody has a naughty side.  Including Volvo.

Got it.