It has a feeling of inevitability attached to it, but still, I can’t help but feel let down. For years many of us have held up BMW as the example of a car company that understands its brand and sticks to it. That all just changed. BMW is no longer the manufacturer of The Ultimate Driving Machine, according to this commercial “at BMW, we don’t just make cars, we make joy.”:
The longest running and probably best known automotive industry positioning line has been thrown in the bin in favor of “Joy.” I’m conflicted. On one hand, I’m shocked and I really believe that BMW has made a horrific mistake, but on the other hand, there are aspects of this new campaign that I like.
“The new “Joy” campaign ‘is a big departure for us,’ said Jack Pitney, vice president of marketing for BMW North America. ‘We hope to really add some humanity to our brand’ and show the diversity of its buyers,” — Wall Street Journal 2/15/10
In fact, what I like about the commercial is the humanity. It’s fun to watch people enjoying life in and around their BMWs. To see enthusiast communities enjoying their passions together. To see all kinds of people, some even like me, joined together by a common bond created by a car. It is truly what makes great automotive brands great, that sense of being part of something bigger than you are.
Toyota has been very successful in the US and has undeniably eaten Detroit’s lunch. Now Toyota has stumbled and you can hardly blame its competitors for attempting to take advantage of the situation.
That said, it’s a good time to pause and take a deep breath, because as so often is true, it’s not what you do but how you do it that matters.
Today’s New York Times has an article headlined: “With Toyota in trouble, rivals gain.” Manufacturers are offering incentives to encourage Toyota owners to come in their stores, trade-in their Toyota for a new whatever. Supposedly these incentives are not being widely advertised and dealers are being encouraged not to “try to take a predatory stance in this type of environment.” According to GM and others, their dealers have requested incentive support. Of course they wanted incentive support, there’s blood in the water.
There are a couple of good reasons to push back against this knee jerk reaction to offer incentives. (more…)
Toyota is in deep stuff given the allegations of unintended acceleration, several huge recalls that will cost BILLIONs of dollars, continuing investigation by NHTSA, civil penalties, reduced sales, weakening brand image scores and deflated residual values.
There has already been plenty written about the impact of this on Toyota’s brand reputation. It certainly is going to set them back, some pundits say it’s a “speed bump” for Toyota, others say the situation will effectively “kill” the Toyota brand. I suspect that the “truth” will be somewhere in the middle, the Toyota brand has been damaged, it will take a good deal of time and effort to recover, but it will recover.
Rather than debating the current health of the Toyota brand, I’ve been thinking about the discipline of branding in the automotive category and what its practitioners can learn from Toyota’s experience. Certainly the need to manage the media and to do so in a transparent way is critical. Time is of the essence, the internet can take your reputation and spin it out of control in a heartbeat. Beyond the crisis management learnings, I think that we are seeing the danger of having a brand that is based solely on rational underpinnings. (more…)
Mr. Muller and Spyker have finally got a deal to buy SAAB from GM (Automotive News 1/26/10). It sounds like Mr Muller and his team understand the importance of a brand’s DNA.
By rebuilding the uniqueness of the SAAB brand they will be able to re-ignite the passion of their enthusiasts and build the business. SAAB will never be a quarter of a million unit business in the US but it can be successful. Forcing SAAB into GM’s”success” model was the problem, now it has a second chance.
Congratulations to Mr Muller, Spyker, and SAAB loyalists everywhere. Finally, an automotive brand that will be coming back rather than disappearing. Like Audi before it, bringing SAAB back in the US market place will be a labor of love and a “mission from God.” Sign me up.
There’s an interesting piece in this week’s Adweek by Dean Crutchfield, Chief Engagement Officer at Method: “A Brand by Any Other Name…”
He posits that one of the issues with “branding” as a marketing discipline is that we lack an agreed-to definition, which subjects it to interpretation based on circumstances or agendas. He closes by saying that agencies and marketing services firms need to more tightly define branding:
“If we don’t address this, we could be perceived as an industry made up of people who don’t know how to define what it is they’re not supposed to do. As Grouch Marx would have told us, ‘These are my principles; if you don’t like them, I have others.”
Leaving aside the issue of agency credibility, the automotive industry needs to dedicate itself to building or re-building its brands. Manufacturers who do will succeed in the hyper-competitive “new normal” automotive marketplace, while those who don’t will languish.
The automobile business has traditionally had a shaky relationship with the idea of “branding.” Programs designed to define or position the “brand” are often perceived as the “soft” part of automotive marketing. This perception is in contrast to the marketing specifically designed to drive traffic to the stores or in industry parlance “make the doors swing.” Often manufacturers feel that they have to choose between “branding” and “retail” and more than often than not they choose retail.
I think that part of the problem with the discussion of “branding” in the automobile business is that it most often devolves into a discussion of advertising, as in “this is a brand ad, that is a retail ad.” Brand ads are the ones that attempt to speak to a company’s “values” whereas retail ads feature “product, place and price.” This either/or conversation is specious and has led the industry to it’s current situation, products that are perceived more like commodities and customers who focus on pricing.
Let’s be clear, in the “new normal” automotive market the traditional brand vs. retail discussion is a path to commodity status, decreased sales, decreased profitability and the loss of already weak brand equities. The truth is, every successful automotive competitor will do both jobs, build brand leverage and make the doors swing.
The marketing conversation needs to start in a different place and I agree that it needs to start with a definition of what we mean by “brand.” (more…)
Here it comes again, another automotive luxury brand seeking to have “wider appeal without tarnishing the image” (Automotive News 1/11/10).
Lexus is concerned that their customers are too old and they are not appealing to the next generation of luxury car buyers. A reasonable concern.
Lexus appears to be addressing this concern in the usual way that automobile manufacturers do.
First, you add product to your line-up that is designed to meet the requirements or interests of the new target group (after all, they’re very different from the current customers), then you lower the cost of entry into your franchise (they don’t have as much money as the current customers) and finally use marketing to convince the younger target that your brand is cool (at least cooler than they think it is).
Unfortunately, this approach always has the same result, you may succeed in selling a few more cars to the new target group but you leave your current customers confused and your brand weakened.
The Automotive News article even quotes Jessica Caldwell from Edmunds.com who says: “Lexus was really strong, but they have lost their footing….BMW is the ‘Ultimate Driving Machine.’ We’re not really sure what Lexus is.” I agree with her. The overheated luxury segment experienced so much growth in the ’90s and early ’00s, that many of the luxury marques that were fortunate enough to have clear positionings in the beginning were weaker and less distinct at the end of the run-up.
The SAAB brand is fighting for its life. After being pronounced dead last week, there is a glimmer of hope this morning. I think it’s important that SAAB survive. Not just because thousands of jobs depend on it but because we need brands like SAAB to push back against the commoditization of the automobile industry.
There are lots of reasons to let SAAB go. It hasn’t made money in years. It doesn’t sell enough cars to compete in the global auto industry. GM has starved it for product. It lost its uniqueness years ago. It was really never “iconic,” just “quirky.” The list goes on and on, and many of the reasons are very sound.
I hope that GM will allow Spyker to buy SAAB. An independent company like Spyker could enable SAAB to reclaim its position as a niche brand with a unique product and a loyal enthusiast base. We need a brand like SAAB to prove that interesting, well engineered products still have a place in the industry and can be successful.
In its effort to make SAAB appeal more broadly and therefore justify volume levels that would make it “viable,” GM turned it into just another undifferentiated near-luxury entrant. The world does not need another undifferentiated automotive brand and from that perspective I understand why people think SAAB should go away. SAAB would be yet another automotive brand that was once distinctive, chased volume using the MDIBTYD volume forecasting methodology and ultimately failed because it lost sight of the core values that actually made the brand “viable” in the first place.
The automobile industry is entering new territory as the recession wanes and consumers, who have been emotionally scarred by the last 18 months, remain cautious. Many believe that consumers have been forever changed by this recession and that they will be more conservative with their money for years to come.
No one expects that the automotive industry will achieve the heady sales levels of the early part of this decade.
“By 2013, car and truck sales in North America will rebound to the new normal rate of 15 million to 16 million units” Automotive News 8/5/09
At best, we will attain a “new normal” of 15-16MM units in 2013.
That means that competition for customers is going to be tougher than ever and no one’s business is going to grow just hanging on to the industry coattails. Historically the manufacturers have reacted to these types of circumstances by using incentives. These tactics artificially inflated sales earlier in the decade, pulling sales forward and contributed to the most recent “correction” that has pummeled the industry. Using short-term incentives to steal share is not the answer to long-term prosperity, it’s merely a tactic that gives a franchise a quick shot in the arm. Establishing a brand’s immutable points of difference and creating consumer affinity for it, is what creates value over the long term.
Last week, BusinessWeek published a piece by Ed Wallace about GM making the same mistakes; in it he made the case for branding:
“True, people want a “deal” when they buy a new car. But more important, they want to buy something exceptional….The automotive selling process, done right, has little to do with negotiation: It has everything to do with building value in the vehicle.”
It’s about time the industry took “branding” seriously.
Last weekend, I did something I haven’t done in recent memory…I went to my local Buick dealership. I’ve read good things about the new Lacrosse and I wanted to see it for myself.
The dealership had one car. It looked terrific. The salesman said that it was “more European in its styling” and I agree with him. No land yacht here. My one gripe was the “portholes” on the hood, if that is a Buick styling cue, it’s one they should let go (one man’s opinion).
Regardless of the “portholes,” it was hard not to be impressed by the car. If the 2010 Lacrosse is indicative of where they are taking the Buick product line then I’m already thinking about the brand a little differently.
As impressive as the product was, that was not the most interesting part of the dealer visit. I asked if I could drive the car and was politely told, I’d have to “wait my turn.” People were lined up to drive the new Lacrosse! The best news…they weren’t all 65 and older, quite a few were 10-15 years younger.
Based on one dealer visit and the crowd around the 2010 Lacrosse, perhaps the Buick brand is going to surprise us.
A number of years ago VW introduced the Phaeton to the United States…a $65,000 tourhttp://autoperspectives.com/blog/wp-content/uploads/2009/10/2006_VW_Phaeton_ext_11-150x96.jpg 150w, http://autoperspectives.com/blog/wp-content/uploads/2009/10/2006_VW_Phaeton_ext_11.jpg 433w" sizes="(max-width: 300px) 100vw, 300px" /> de force meant to take the brand up against the likes of Mercedes-Benz. A true D-class car with all the luxury and performance the segment demands. It was truly an excellent automobile and from a product point of view pretty darn competitive. It was also a heck of a lot of car for the money.
The Phaeton failed miserably, with only a few thousand sold.
Many of us thought that VW had simply overstepped, and that the VW brand could not stretch that far up market. Not unreasonable considering that many of the baby boomers still remember the original beetle and VW’s positioning as an inexpensive, small alternative to the behemoths Detroit was producing in the 50’s and 60’s. In fact the “inexpensive” portion of the brand’s original positioning haunted VW for years as the cars became more expensive than consumers expected Volkswagens to be. The Phaeton stretched everyones’ perception of what a Volkswagen could or should be. Most importantly the brand lacked the cachet, the prestige necessary to compete successfully in the Import High Group. Luxury segment consumers were not interested in sporting the VW badge.
Within the last few months the trades have been reporting that Volkswagen AG and Volkswagen of America are more than likely going to bring the Phaeton back to the US market in MY2010. Already industry pundits are incredulous that VW would try the Phaeton again.
I think the pundits are wrong. I think the return of Phaeton will be a success. (more…)
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