I'm excited about two changes in management at two American car companies: Ford Motor Co. and Chrysler LLC, now a U.S. company mainly owned by private equity firm Cerberus Capital Management. Two men named Jim have moved from Toyota to these two U.S. automakers. Both have been hired to act as catalysts of change in product development and new-vehicle marketing and advertising. Why are the appointments so interesting?
When I'm not slaving over a hot stove at J.D. Power and Associates, I make my home in Phoenix, AZ (basically, this means that I'm almost always slaving over a hot something...but I digress). Everyone knows it can get a bit toasty in the valley of the sun in the summertime, and since I have four kids that need to be entertained, summers generally mean one thing: the Parker clan sees a boatload of movies.
I understand the concept of competitive advertising, I just don't like it. Lately, aggressive positioning versus the competition is used in television commercials with increasing frequency, especially during prime time. A short time ago, Hyundai ran a commercial comparing one of its models to a BMW 5 Series. Does it really matter to potential Hyundai buyers how this model compares with a luxury car, some versions of which start at $58,000?
Though I can't explain why, competitive advertising really bothers me. While this type of advertising is nothing new, lately I've seen more and more of it, especially by major automakers. Ford, Hyundai, BMW, Toyota and others are currently running ads that present competitors in a less-than-positive light.
There are nine models currently on the market whose sales performances demonstrate the rewards of leadership. These four cars and five trucks were the first (or nearly first) of their kind on the market and are leading their respective segments:
Continue reading "Leaders of the Pack Benefit Automakers " »
Customer loyalty is important to automakers. When more owners trade their vehicle for a new one from the same brand, it means the brand has to spend less money to capture or conquest owners of competitive products—an expensive undertaking. One key determinant of owner loyalty is the breadth of the brand's product portfolio: the more products a brand offers, covering many different segments, the higher probability an owner can find their next new vehicle within the same brand.
I've never been a fan of competitive advertising. If you have a good product and you know it, I don't think you need to mention another company's product in your ad. After all, why would you want to give your competitor free advertising?
If a non-premium nameplate hopes to compete with the big boys—General Motors, Ford, Toyota and DaimlerChrysler—it needs to, first of all, have an entry in the midsize conventional car segment, and, second, do well in the segment. After all, the midsize conventional (sedan) car segment, which includes models such as the best-selling Toyota Camry and Honda Accord, continues to dominate the new-vehicle market. With a 13.59% share through the first four months of 2007, this segment is the largest of all 26 vehicle segments that J.D. Power and Associates tracks and analyzes.
Continue reading "Making a Name—Midsize Offerings a Must for Manufacturers" »
Do you remember The Pepsi Challenge? In the early 1980s, Pepsi challenged consumers to take the test to determine which soft drink was preferred, Pepsi or Coca-Cola. Several months ago, I took part in the automotive version of this challenge—the Fusion Challenge. As a subscriber to Car and Driver, I was invited to a racetrack to evaluate the Ford Fusion, Honda Accord, and Toyota Camry on a course set up by the magazine, which sponsored the test on behalf of Ford Motor Company.
If you read Part 1 of this blog, you know that Cadillac recently announced its intention to develop a V-12-powered, top-of-the-line luxury model based on the Cadillac Sixteen concept car of 2003. In Part 1, I discussed Cadillac′s ability to compete on the world stage in quality, styling, performance and technology. Is that enough to ensure the success of this future flagship?
Continue reading "Can Cadillac Reclaim Its Title as "The Standard of the World"? (Part 2)" »
In a bid to compete against the Lexus LS, BMW 7 Series and Mercedes S-Class, Cadillac recently announced its intention to build a V-12-powered luxury flagship. I′m not surprised at this development, but the real question is whether Cadillac can successfully compete on this level. The brand was once considered "The Standard of the World." Can it reclaim its former title?
Continue reading "Can Cadillac Reclaim Its Title as "The Standard of the World"? (Part 1)" »
With brand image playing such a major role in automotive marketing these days, it's not surprising that automakers are continually looking for ways to enhance how their brand is perceived by the buying public. One popular method is through co-branding, effectively leveraging the success and positive image of a partner to enhance its own brand. Nowhere is this more evident than in the new-vehicle audio business. Sure, some manufacturers still develop and equip their vehicles with in-house audio systems. But many are employing a co-branding strategy, equipping their vehicles with audio systems from well-known brands that complement the automaker's brand to effectively enhance their image and, more importantly, boost sales.
Continue reading "Auto Manufacturers Look for Co-Branding Relationships to Enhance Brand Image" »
In my MBA marketing classes I learned that first movers gain a sustainable competitive advantage. That is, companies that are first to market with a new product or service can create a lasting advantage. In 1998, Lexus introduced one of the first crossover models. The RX crossover inspired an entire category and still remains the volume leader. Today, the Lexus RX 350 leads the midsize premium crossover segment with a 24% share of sales. The next-best-sellers are the Acura MDX, BMW X5, Volvo XC90, and Mercedes-Benz M-Class. Sure, the RX is the sales leader, but these other crossovers also provide a smooth ride, competent handling, good fit and finish, and acceptable fuel economy. However, being first to market is a key reason why the RX continues to lead the segment.
Continue reading "First on the Block: Creating a New Product" »
Have you ever seen a TV commercial and wondered who came up with the tag line at the end of the spot? With as few words as possible or with a short, memorable phrase, advertising tag lines are supposed to convey the essence of a brand or product. Sometimes they're clever, sometimes they're confusing or nonsensical, and every so often they connect with the intended target audience. Contrived tag lines may have an opposite effect to what was intended, and they can actually turn away prospective buyers.
