Posts Tagged ‘Lexus’

Deja vu all over again, here comes the VW Phaeton.

Thursday, January 29th, 2015

Just yesterday Automotive News had an article that reported that amidst a cost cutting drive, Volkswagen has decided to re-introduce the uber expensive Phaeton model:

“…the “people’s car” maker plans to spend millions of euros upgrading a money-losing luxury sedan.”–Automotive News 1/28/15

The blogosphere has erupted with any number of industry observers pointing out the illogic of re-introducing an Mercedes-Benz S-Class competitor when you have announced that you’re cutting costs and, oh by the way, the Phaeton has been a huge money losing proposition ever since it was introduced at the 2002 Geneva auto show:

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I acknowledge the inconsistency of an austerity plan side by side with a re-jiggered luxo-barge but I admit to being a bit fascinated with the idea of the Phaeton.  The last time we went through the “we’re bringing the Phaeton back” phase was in 2009, right after the end of the great recession. At the time I wrote a post (“Has the VW Phaeton’s time come?“) and offered up the possibility that the Phaeton could be the luxury car for a new post recession sensibility.

I still think that possibility still exists, but the surging millennial generation adds a different twist to the idea.  After all, so many millennials grew up driving Volkswagens and we know for a fact that VW holds a special emotional place in American culture.  In five years millennials as a generation will be driving luxury segment sales. I think about a new generation of luxury car buyers, who are emotionally attached to the VW brand, who want to naturally separate themselves a bit from their parents and their parents’ luxury car choices (Mercedes-Benz, BMW, Lexus) and I say to myself that’s an opportunity!

Boomers were never going to drop $65 large on a VW, they remember the original beetle, and VW as an economy brand.  The millennials don’t have that institutional memory, for them VW is Jettas, Golfs, and Passats that were actually premium priced relative to their competitive set. Is it really such a stretch to think that this new generation of luxury car buyers might consider and buy a large luxury entry from VW? (more…)

Until now, Cadillac has proven the adage: “Nothing hurts a bad product more than good advertising.”

Tuesday, December 10th, 2013

This morning Cadillac introduced a new campaign from its new agency (Adweek 12/1013). The good news is that for the first time in a decade and a half, the product is as good or maybe better than the advertising.  The new ATS and CTS are getting rave reviews from the industry pundits and there seems to be broad agreement that finally, the Cadillac product is up to the job of moving the brand into the rarified air of Tier 1 luxury where Mercedes-Benz, BMW, Lexus and Audi compete.

The Cadillac brand has been through a lot of marketing fits, starts and shifts over the last decade and a half. Messaging has been inconsistent and no real brand values established. That said, there have been some terrific ad campaigns that have gotten the brand noticed, unfortunately the product wasn’t as good as the advertising.

In the 2002 Super Bowl, Cadillac introduced its “Breakthrough” campaign (from Leo Burnett) hitting the heart of the boomer generation with Led Zeppelin:

The Breakthrough campaign really helped Cadillac get noticed again after years of being ignored by boomers who were buying Mercedes-Benzs, BMWs, Lexi and Audis.

In the mid-2000s Cadillac changed agencies (to Modernista) and produced this commercial for its “Life. Liberty. and the Pursuit” campaign:

In 2008, Cadillac introduced Kate Walsh as a spokesperson and raised a few eyebrows:

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“People don’t buy what you do; they buy why you do it.”

Tuesday, October 29th, 2013

Simon Sinek spoke at TED in September, 2009 and he offered this wisdom about leaders and powerful brands: “people don’t buy what you do, they buy why you do it.”

I was reminded of this in a conversation with a colleague in the automotive industry.  He asked me what I thought of his most recent advertising.  There was nothing decidedly wrong with the advertising but it fell into the trap of doing what Sinek called speaking from the outside-in.  In other words the advertising basically said we sell luxury cars that have these mildly interesting features.

I told my colleague that I felt that the advertising didn’t have a point-of-view that came from the brand and therefore it fell short of having the power to change perception.  I spoke about the need for “core values” that in turn would shape the brand’s perspective.  I suggested that he needed to find the 2 or 3 immutable truths about the brand without which it wouldn’t be the same brand.

Sinek gets at the same issue by asking:  “What is your belief? What is your cause?”  Another way to express it is: What is your company’s or brand’s ethos, what are your guiding principles?

People don’t buy what you do; they buy why you do it.

How can it be that in an industry where we expect people to make the second largest purchase of their lifetimes (a home being the largest) the “why you do it” piece of strategy gets so little emphasis.  We know this to be true because so much of the marketing in the category is uninspired.  Most of it emphasizing features and pricing in mildly entertaining executions.

But there are a few great automotive brands that do understand “why they do it.”  Mercedes-Benz, BMW, Audi, Jeep, Suburu, Lexus all come to mind.  Each of these brands have a defined “why they do it” that truly shapes what they make and at their best how they market it.

Despite from time to time losing their way, these great automotive brands always seem to come back to their “why they do it.”

Recently, Mercedes-Benz introduced their latest S-Class.  The S-Class has always been the epitome of what Mercedes-Benz represents.  True to form, the S-Class marketing overtly expresses the brand’s “why they do it:”

While I don’t love the line “The best or nothing,” it is a literal translation of “das beste oder nichts,”  the company’s “why they do it” in the founder’s own words. Somehow editing the translation seems inappropriate.

Just today Jeep announced the introduction of the new Cherokee and despite having seemingly lost their way in recent years, here comes a new campaign about the joy of adventure and exploration, values that have always been at the heart for the brand: (more…)

Do customers really want an “experience” from automotive manufacturers and their dealers?

Monday, October 14th, 2013

I don’t know about you, but I really don’t want to have an “experience” with my automobile dealer.  I don’t want my dealer to send me birthday cards, acknowledge my anniversary, or give me special gifts that reflect my personal preferences. I’m not even sure I’m open to periodic emails from the dealer or manufacturer because somehow “periodic” becomes every other day. I don’t want that kind of relationship with the company(ies) I purchased my cars from.

Yet automobile manufacturers seem intent on differentiating themselves based on “experience:”

“The need to deliver exceptional, truly differentiating customer experience has never been greater,” Steve Cannon,  CEO, Mercedes-Benz NA, Automotive News 1/21/13

“Lincoln wants customers to receive the kind of pampering, both at dealerships and online, that they would get at luxury hotels.” Automotive News 8/20/12

This is not new, the industry, particularly the luxury marques have been working on improving customer experience for years. These efforts were precipitated by the introduction of Lexus. When Lexus was introduced in 1989, the DNA of the luxury segment and the whole industry was re-arranged.

Customer service was re-defined. (more…)

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…)

Infiniti: From “rocks and trees” to “brush-strokes,” can it become a Tier I luxury brand?

Wednesday, June 9th, 2010

Yesterday’s Automotive News had a brief piece about Infiniti marketing that struck me as interesting.  In it, they reported that “Infiniti has told its dealer advisory group that it is committing to a five-year run for the new ‘Way of Infiniti’ campaign–a long-term pledge intended to reassure retailers that the brand will have a consistent message.”

I immediately thought to myself “Good for them.”

Infiniti from the very beginning has had a difficult time establishing a brand identity and finding a way to execute it in communications. Introduced in 1989, Infiniti was Nissan’s response to the introductions of the other Japanese luxury marques, Acura and Lexus.  The original Q45 was a sporty performance alternative to the Lexus. Unfortunately, Infiniti got off to a rough start when it introduced the car and brand with the infamous “rocks and trees” campaign created by its agency Hill, Holliday, Connors, Cosmopulos.

The “rocks and trees” campaign sought to present Infiniti as the result of the unique Japanese culture and sensibility.  The campaign attempted to make its Japanese origin an asset, similar to the way that the German brands have used their ‘German-ness.’  The Infiniti ads were very different than any automotive company had ever done (they didn’t even show the car initially).   (more…)

JD Power’s 2010 Vehicle Dependability Study–It’s tough to buy a bad car.

Thursday, March 18th, 2010

JD Power just released its 2010 Vehicle Dependability Study and there are some surprises.  Porsche is ranked 1st, Lincoln 2nd and Buick and Lexus are tied for 3rd. It wasn’t so many years ago that Lexus dominated the VDS study as the perennial number 1 and some may wonder what has happened?  Particularly in light of the well publicized Toyota quality issues.

The fact is that nothing has happened to Lexus, they design, engineer and build an extraordinary vehicle.  What’s happened is that the other manufacturers have improved to the point where every year it’s a genuine dogfight to get to the top spot.

There were some other surprises that weren’t so good….  (more…)

“Lexus’ plans: Not just big-bucks sedans”—Do you know where your BOHICA t-shirt is?

Monday, January 18th, 2010

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.

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