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…)
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:
[youtube]-Ts7Xlv5ZNE[/youtube]
” 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…)
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…)
I was speaking with a colleague the other day and we were trying to think of an instance where an automobile manufacturer (or any brand for that matter) looked back into its own history and re-introduced a brand tagline that had been thrown in the bin.
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.”
In recent years, Audi has done a terrific job marketing its brand. Sales are up globally and will probably exceed 1.0MM units this year (WSJ 8/2/10). In the US, Audi came through the recession on a tear and has never looked back. Great products, great design, with quality that has improved and is now comparable to the best in the business. The Audi brand is aspirational and prestigious in most global markets. While it has lagged its competitors in the US, it has gained in prestige in recent years and many would say it has achieved the vaunted Tier-1 status in this country.
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: (more…)
Jeep is introducing the 2011 Grand Cherokee and it seems it is quite a vehicle:
“The newest generation of Jeep’s iconic luxury SUV can still rock-crawl with the best of them, but it looks a whole lot nicer doing it, both inside and out.” AutoWeek 7/5/10
The new advertising is impressive and seeks to re-invigorate some distinctly American values:
Let’s face it, as Americans we are feeling a little down. The worst recession in generations is a big part of the problem. Nagging unemployment, a recovery that is sputtering and concern over the looming deficit are not helping.
So I think Jeep’s strategy of appealing to values we all hold dear makes some sense. What American isn’t proud of our heritage as a “nation of builders, craftsmen, men and women for whom straight stitches and clean welds are a matter of pride.” We built the railroads, invented the airplane, built the Empire State Building, and created the original Jeep.
The idea that “the things that make us American are the things we make” strikes an emotional cord. A cord that makes us feel proud, and right now a little pride would help. The Jeep Grand Cherokee is something we can all be proud of because it was “imagined, drawn, carved, stamped, hewn and forged here in America.”
Powerful stuff, beautifully executed, leaves the viewer saying “yeah, bring it on.”
Only two things bother me about this commercial. (more…)
The D-segment of the luxury market is tough. The best luxury manufacturers in the world bring their best technology, design and engineering to the table and the result is the world’s best 4-door sedans: BMW 7-Series, Mercedes-Benz S-Class, Lexus LS, are perennial best sellers. It’s tough to break-in, Audi has struggled for years to build volume in the segment with its A8 despite having what many would say is the best product.
So what makes Hyundai think they can introduce the Equus into this rarefied air and succeed?
Let’s get one thing out of the way. From a product perspective, the Hyundai Equus will be a very able competitor to the best luxury sedans in the business. Hyundai has demonstrated that they build exceptional quality cars at multiple price points, the most recent being the Genesis, a near to mid luxury entry. The Equus is already getting good reviews and at $55,000 will offer D-class luxury at a very reasonable price.
The issue for Hyundai is not the product or the price. (more…)
The last twenty-four hours has been full of articles, blogs, tweets, surveys, all questioning the wisdom of the folks at Chevrolet who were apparently seeking to remove “Chevy” from the brand’s lexicon (NYTs 6/10/10). Predictably, people were shocked and the Chevrolet folks accused of varying levels of insanity, some even questioning their patriotism.
Thankfully, as the day wore on, Chevrolet made an effort to explain that it had been mis-understood (see the press release) and that the memo leaked to the New York Times had been “poorly worded.” Unfortunately for the folks at GM, this whole incident has just added fuel to the fire for those folks who want to find fault with every thing the company tries to do. If you take the GM folks at their word, what they were trying to do really isn’t crazy.
At the heart of this dust-up is a real issue. How to most effectively manage a global automotive brand.
Here’s a video of Alan Batey explaining that indeed “Chevy” is just fine but that “Chevrolet” is the global brand:
Put aside Mr. Batey’s understandable defensiveness and his desire to assure us that “Chevy” is OK. (more…)
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…)
For many years I have been concerned that many once great automotive brands have been allowed to fall into disrepair. Mercedes-Benz, a prime example, has been sliding ever since the early ’90s when it walked away from “Engineered like no other car in the world.” Superior engineering was deemed “unsupportable” in a market filled with able competitors like Lexus. Then unfortunately, Mercedes-Benz went through a period where its product quality was questionable. It seemed that the strategists were right, Mercedes-Benz could no longer hang it’s hat on its engineering creds.
That conclusion has always bothered me. I’ve always thought that Mercedes-Benz had a its own brand of engineering, it wasn’t always “better” than anyone else’s (although often it is), but I always felt it was “different” and therefore uniquely Mercedes-Benz. It always seemed crazy to walk away from one of the four or five true category drivers. But in an effort to “broaden” the appeal of Mercedes-Benz, they gave themselves credit for engineering and assumed that all their customers and prospects understood the core of the brand.
After years of neglect, it seems to me that the marketers at Mercedes-Benz are returning to the brand’s authentic roots and regaining their focus on engineering. Here are two commercials that have been on-air recently:
