By on August 12, 2007

nickscheele.jpgIn a video interview with Porfolio.com, Sir Nick Scheele explains how he turned Jaguar around. Well, not exactly; after all, he didn't. But the British brand’s former CEO did, as claimed, help raise Jaguar’s American JD Power quality rankings from second-to-last to first. In that regard, Sir Nick reveals that Jag’s ascension up the quality league tables hit the wall in ‘94. The breakthrough: after two years at the helm, Scheele realized Jag’s assembly line workers knew more about build quality than the suits. Scheele empowered the guys on the factory floor, left, ran Ford of Europe for a bit, collected a gigantic pension (and a peerage) and called it good. And now Sir Nick wants Jaguar back. Nooooooo.

I’m sure Ripplewood Holdings turned to Saint Sir Nicholas to assist them in their bid for Land Rover and Jaguar because the private equity group figured [correctly] that building cars is a fiendishly complex business. Best to hire someone who knows how to make a car roll off an assembly line– even if he didn’t do so at a profit (a failure for which the affable peer surely has a plausible explanation). In this they are only partially correct– the wrong part. 

As Scheele’s Portfolio-assisted self-deification indicates, his lordship [still] has no idea what drives an automobile manufacturer to fame and fortune. To give credit where credit’s due, Scheele’s epiphany– his rejection of his class-bound cultural upbringing– brought him very, very close to the truth. Yes, every single employee working for a car company must be united in a common goal, and their input respected and (where appropriate) acted upon. But that goal is not quality. Or design. Or price. It’s the brand.

A tightly focused car brand is the plan, the vision, the way forward, the way out, the way back. It tells the company what kind of cars to make. It tells the marketing people how to sell them. It tells consumers why they should buy them. The brand defines the company, from the janitor to the CEO. Jaguar: pace and grace. What more do you need to know? This: without a strong brand, an automaker can’t pull together the hundreds of thousands of strands needed to form a coherent, inherently attractive car.  

As what’s left of the American auto industry plays a multi-billion dollar game of musical chairs, not one of The Big 2.8’s CEOs has offered any indication to which tune they're moving. Less metaphorically, of branding, we’ve heard sweet FA. 

“Boot’em Bob” Nardelli has not defined Chrysler, Dodge or Jeep automobiles. Alan “$25m will do nicely for my first year thanks” Mulally hasn’t told the world what a Ford, Mercury or Lincoln is or will be– other than badge engineered versions of transplant-a-like. Rabid Rick Wagoner has not stuck a flag in the ground for any of the company’s eight— count ‘em eight— brands.

Instead, all the Big 2.8’s CEOs have fixed the media’s attention on back office issues: cost cutting, incentives, fleet sales, asset sales, personnel changes, union negotiations, foreign expansion, international platform sharing, yada, yada, yada. While there’s no denying that decisions in these areas are critical to their companies’ hopes of turnaround/survival, Detroit’s CEOs are neglecting the one decision that informs all the others: what do their brands stand for?

If the Dodge brand stretches from a cheapo Caliber to a mega-SUV, how can Nardelli's mob decide what to put in/leave out of a Challenger ? Is it any wonder Cadillac's building a sub-CTS when the brand operates with two-thirds of a strap line ("Life, Liberty and the Pursuit")? Now that the Ford Taurus is "America's safest full size car" and Volvo's on the auction block, is safety the new Ford brand? 

Of course, this lack of rigidly defined automotive branding is not just Detroit’s problem. Mercedes and BMW have stretched their brands beyond breaking point (the day of reckoning lies ahead). Even ToMoCo shows worrying signs of diminished brand coherence, as it builds cars that rely on something other than quality for sales (e.g. new xB). Even Porsche, the once tightly focused “fiercely independent” sports car company, seems Hell bent on destroying their brand equity. An SUV and four-door sedan? Great machines. Lousy branding.

There are still a few car brands keeping it real, such as Ferrari and Hyundai. Product excellence and a healthy bank balances indicate that the guys at the very top and the bottom of the market “get it.” As for Jaguar, there’s potential. Although Maserati's invading the pace and grace mindspace, at least the Germans and Japanese are staggering around elsewhere. But fans of the British brand (such as it is) can only hope Jaguar stays out of Scheele’s hands. Jag's savior– indeed the men at the helm of the The Big 2.8– must be ready, willing and able to be a slave to the brand. Nothing more, nothing less.

[See Scheele's spiel here.]

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47 Comments on “Where Have All the Good Brands Gone?...”


  • avatar

    If Scheele can keep Jaguar’s factory humming, get reskinned (read: sexy) XJ and S types on the streets and kill the X, he has a good shot at making some $$ on Jag. What happens when a real product renewal need comes along and there’s no corporate parts bin to choose from is another story.

  • avatar
    KatiePuckrik

    I’ve mentioned before that there are two types of car company.

    You car companies like GM and Toyota where people buy cars with factors like safety class, value for money reliablity, resale value, etc. These are appliance cars. Cars which are donkeys which work, work and work everyday. You get in the car, turn the key and off you go.

    Then, there are car companies like Jaguar, Alfa Romeo and Porsche. These are for people who WANT to buy these cars. These cars have soul, passion and flair. You know, they’re unrelaible, impractical and expensive, but it doesn’t matter. You don’t buy these cars with your head, you buy them with your heart. Unfortunately, Ford NEVER figured this out with Jaguar.

    They tried to apply the “stack ’em high and sell ’em fast” principle which could work with a brand like “Ford”. This explains why they based the Jaguar X-Type on a Ford Mondeo platform. No-one wants to buy a car like this on a platform engineered for a vanilla car! Imagine buying an Audi A6 with knowing that the platform was engineered for a Volkswagen Passat.

    Trouble is, a year ago another knight of the greatest realm in the world (that’s the U.K, to anyone not catching on!) Sir Anthony Bamford, expressed huge interest in buying Jaguar (not Land Rover, funnily enough). This would have been excellent news for the big cat. Sir Bamford comes a long line of petrolheads and could have installed the passion which prevented Jaguar cars from being good cars to being great cars. Not to mention he owns JCB (big heavy duty machinery company, like “Caterpillar”) But he seems to have dropped off the radar. Not sure why.

    Being critical of Toyota, I’m not sure why they created Scion to appeal to young people, when in the UK they have funky cars like the Yaris and the ultra cute Aygo. In fact, one of the Scion’s line up is built on the Toyota Avensis platform which is our version of the Camry! Hardly, young persons’ material! Scion, theoretically, is a waste because the Toyota brand has the cars for a young market. In fact, Toyota should have set up a brand for sporty cars and bring back the Celica and MR2 (a la Pontiac). To show that Toyota can also be passionate car heads and not an appliance company. Even GM does this, albeit badly!

    In short, I’m sure all car companies could do better. If I ran a car company, I’d love to have the main division as my appliance cars, another division for sporty cars and the last division for luxury cars (separately engineered). But the question ultimately is this:

    Is it profitable enough?

  • avatar

    Katie P:

    “You car companies like GM and Toyota where people buy cars with factors like safety class, value for money reliability, resale value, etc. These are appliance cars. Cars which are donkeys which work, work and work everyday. You get in the car, turn the key and off you go.”

    Even in the mass market, a car company must focus on doing ONE thing better than anyone else, rather than trying to do everything better than everyone else.

    A Toyota doesn’t need style– as long as it has class-leading reliability. A Ford doesn’t need total reliability– if it’s “America’s safest car.” A Hyundai doesn’t need to be America’s safest sedan, if it’s the best value-for-money car money can buy.

    Pick a card, any card. But just one.

  • avatar
    KatiePuckrik

    Mr Farago,

    I’m not sure I agree with you there. In my opinion, when I buy a car, I try to look for the best all rounder. I wanted to buy a Hyundai Getz, but it’s safety record wasn’t that good. Not to mention that Hyundai cars ARE good value for money, but it does come at a price, have you seen the interiors?! Cheap and nasty.
    Ford can market “america’s safest car” but if its reliability is in the toilet, how much would you trust the safety gizmos on the car? Renault have a similar problem in Europe.

    But you know what, that wasn’t really my point. All car brands (if you look hard enough) can be managed better, but the real question is “is it profitable enough for them”? Mr Ghosn won’t make Hybrids for Renault because he thinks they’re a “fad” and “won’t last long” (he prefers to push diesels). If he got a whiff of profits in the hybrid market, he’d be in there quicker than Robert Nardelli in Tom LaSorda’s job GM exporting more jobs to Mexico.

    But once again, fantastic editorial, Mr Farago and keep up the good work.

  • avatar

    The choice is often one of survival. Ferrari, Alfa Romeo and Lamborghini are good examples of brands that would not have survived alone with such a narrow brand definition. Now, each one is owned by a totally non-glamorous high-volume, low-margin corporate parent.

    Porsche realized the 911 and Boxster weren’t going to give them the volume manufacturing advantages they needed. As soon as BMW made an X5, they had to respond with the Cayenne.

  • avatar
    Gardiner Westbound

    Excellent point KatiePuckrik! After several practical, reliable appliance cars I opted for some automotive flair settling on an Infiniti FX.

    The view over the long curvy hood is reminiscent of the classic Jaguar I have unashamedly lusted for since high school, the performance excellent, the exhaust note invigorating, J.D. Power long term quality ratings encouraging and Infiniti customer care superb.

  • avatar
    jet_silver

    How many (especially US) brands are left that stand for something other than trading on past glory? Not so many. One example: the RCA brand is owned by Audiovox. Audiovox has traditionally made junk, and the value of the RCA brand is probably thought to be “we can legally pass off an Audiovox product as an RCA one”. When consumers get wise to such shenanigans then the brand becomes a liability, and that’s where US car companies are now.

    Even if a car is good the GM, or Ford, or Chrysler brand reminds me of indifferent service, crap construction, and cynicism. For a slightly different example, I propose that the Apple computer brand is tightly focused, just as the parent article describes. I have a lot of Apple equipment, and in a way it is a warning label: the Apple branding tells me “never buy the initial release of any Apple product”.

    Therefore, having a brand – even if it’s tightly focused – is not the same as having a valuable brand. I buy, for example, Apple computers, Subarus and Naim audio equipment because these brands represent a promise, from people who can deliver on it, that a certain level of quality and service is present. That all these brands appear to meet the tight-focus definition is secondary to the fact that the brands represent integrity.

  • avatar
    tonycd

    “Imagine buying an Audi A6 with knowing that the platform was engineered for a Volkswagen Passat.”

    I don’t have to imagine it; they were essentially sharing a platform for several years. Ditto the successful Lexus ES and the Camry, the Audi TT and the Golf, the Mustang and the ancient Ford Fairmont, etc, etc.

    Platform sharing isn’t automatically poison. In fact, the cost structure of modern automaking makes it inevitable. The keys are to make sure the upmarket brother is 1) good enough (where the Jaguar X-Type failed, and the Audis and Acura TL succeed), and 2) not TOO obviously similar to its downmarket sibling (where most Fords and GMs fail, and the ES and TL succeed).

  • avatar
    willbodine

    That’s a fairly trenchant analysis of what branding is…and isn’t. Not sure about the inclusion of Hyundai as a “focused” brand, though. I’m wondering about Kia, how does that fit into Hyundai’s mission? Redundant, identical, badge-engineered clones mostly. Exactly the situation that got GM and Ford into their current difficulties.

  • avatar
    MX5bob

    “Being critical of Toyota, I’m not sure why they created Scion to appeal to young people, …”

    Because efforts to market the Paseo to young people fell flat. We Americans have very narrow brand perceptions. Honda knew that they couldn’t bring the Legend here 20 years badged as a Honda and sell it for nearly $30k. Toyota finally figured out that if they didn’t want to market cars any differently than how the Camry is presented, they needed a different brand.

  • avatar
    Sanman111

    I think that there are a few focused brands out there still. However, those brands are limiting their growth potential as well. This goes for even fairly manistream brands. Mazda, for example, is one of the most focused brands out there with their Zoom zoom strategy. While they hve found success with the mazda 3, they are still a niche player compared to toyota, honda, and nissan. However, the clear niche does allow them to share engine and suspension components in their vehicles (a big cost plus). While branding is good in some cases, it can also turn pigeon-hole the company if not careful. Toyota “quality” and Honda “efficiency” are definitely better branding tools because they give more latitude in developing vehicles for different tastes while staying under the branding goal.

  • avatar
    esldude

    I guess I just don’t agree with the premise. Comparing GM, Toyota etc. to Ferrari, or Lamborghini etc is like comparing apples to beer. Yes, both are food products, both provide calories etc. One is food, one is mainly a luxury pleasure. Furthermore, as pointed out, most of the very highly focused products were unable to turn a profit, they are owned by much larger less focused companies. And that is probably closer to the truth. An excellent large car company must have multiple focused products. What often happens is each of their products tries to satisfy too many demands. It loses focus in individual products. GM’s solution, one that worked for what at least 40-50 years, was many product lines each of which had different focus. Then individual products in each line for different purposes. If anything, trying to focus on the same or highly similar product categories over several brands is part of the GM problem.

    For some of GM’s demonstration in how effective this can be, they make or until very recently made, very arguably, the finest full size pickup in the world. They also make a very fine relatively affordable Corvette performance car. Arguably the best buy in such a high performance car. Each of these products are pretty well focused by their respective design teams. They are possible at an affordable price because they are part of a huge company that makes it possible at better efficiency than a small hand made low volume maker of such products.

    Basically, you have to make a quality car, that satisfies your target market, at a competitive price. You can be GM, do this for 14 different cars with 14 different design teams and you will do well. You fail to do it, and basically being beat by your competitors will doom your business in the end.

  • avatar

    Two things:

    1. This idea of an “appliance car”– a machine that supposedly epitomizes nothing but bland functionality– is a pistonhead shibboleth. Although there are millions of drivers for whom carving an apex holds no appeal (even if they knew what it meant), they still make fine distinctions between brands and models. In fact, they do this the same way they approach buying a “real” appliance: with care, consideration and a profound understanding of branding.

    2. A brand’s limitations are ALWAYS a good thing. The tighter the brand, the stronger it is. Mazda may not have the sales of BMW– yet– but if the brand is stronger, the business is stronger.

    Is Toyota green, or reliable, or good value, or stylish, or comfortable? The obvious answer is yes. BUT the consumer only has enough mental space to hold onto one of these, and a confused customer creates a lousy brand.

    That’s right: the customer makes the brand. As Al Reis has pointed out many times, the brand exists in the customers’s mind. Perception is all. And the product leads to perception– until it doesn’t.

    A Pontiac minivan? A Porsche SUV? A cheap Jaguar? A BMW with a crap gearbox, lousy steering and piss poor tires? A Ford supercar?

    A brand can only take so many hits before it loses its appeal. It may decades for the result to play out (ask Mercedes), but as TTAC is wont to say, the truth will out.

  • avatar
    jabdalmalik

    “This idea of an “appliance car”– a machine that supposedly epitomizes nothing but bland functionality– is a pistonhead shibboleth.”

    A good point. A car can have utterly forgettable driving dynamics and still be anything but an “appliance” to its buyers. Things like the car’s perceived quality matter enormously to new car buyers, which is why I love reading TTAC reviewers savage things like shoddy haptics or hollow-sounding door thuds.

    People also care about how cars make them look to others on the road. Whereas a pistonhead may view a Camry driver as a boring person driving a soulless anonymobile, that Camry driver probably imagines he exudes good sense and practicality. Reliability is, after all, the standout characteristic in Toyota’s rather sprawling brand image.

  • avatar
    esldude

    I am sorry, you will have to explain, how any huge company like GM, Ford, Toyota etc. will be able to truly focus on the brand as you are describing, and serve enough markets to be as large as they are. I just don’t see it. Toyota’s is reliability, at a fairly low price, in a variety of markets. Yet, what is Lexus? It actually is none of these other than reliability. The Porsche SUV, as much as pistonheads hate the idea, it is Porsche’s largest selling model. I think this branding idea is not a useful explanation the way it is being applied here.

    There are a few metrics that must be met. And you can have dozens of combinations of them. Various combinations of style, reliability, price, purpose, and performance at least. These may not be a comprehensive list of course. But get too far wrong any of those basic characteristics, and you have a product that cannot survive in the marketplace. Get them right, and each individual product can easily survive its market without the parent company having to be narrowly constrained by this branding idea. Branding can enhance, and improve a products performance. Branding alone cannot maintain its survival in the competitive automobile markets in my opinion.

  • avatar
    HawaiiJim

    Esldude’s observation that “An excellent large car company must have multiple focused products” makes a lot of sense. I think the kind of brand focus that Robert Farago prizes is crucial when a car company is entering a new geographic area. For example, Toyota when starting in the U.S. quickly built a brand valued for economy and reliability. But as the company evolves it diversifies to meet many different consumer needs, and thereby gains market share, building on the goodwill generated by its earlier products.

  • avatar

    esldude, HawaiiJim: I don't think you understand the underlying concept. Think of it this way… All restaurant chains have to meet certain basic criteria involving food safety, fire laws, liquor provision, etc. They must also provide acceptable levels of geographical convenience, service, price and comfort. For a restaurant chain to have a strong brand, it must choose one thing at which it excels and making that their "unique selling point." In other words, eating at Subway may cost the same as dining at McDonald's, but pointing that out doesn't do Subway any good whatsoever. Which is why Subway is admonishing its potential customers to eat fresh! Their brand is fresh food. Anything they do that backs that up that message– from uniforms to the restaurant's layout– helps the brand. Anything that detracts from that message- even going off-message to talk about price– damages the brand. The parallel with the car world is easy to see. Thanks to federal regulations and a fiercely competitive market, most cars sold at comparable price points are more or less comparable in reliability, safety, fuel economy, etc. The back and forth over on the S40 review comparing the Volvo to an Acura TSX illustrates how small these differences between brands and models have become.  This means branding is more important now than ever. Why buy a Volvo instead of a TSX? I find it extremely instructive that the aforementioned Volvo vs. TSX debate never ONCE mentioned safety. In that sense, Volvo lost. What's more, I spoke with a Doc last night who said his interest in Porsche has diminished since the Cayenne's debut. What's he going to buy? I love Audi, he said. They make the world's best interiors.  Geddit?

  • avatar
    esldude

    No, I guess I don’t. If the cars are really so close, this sounds like a round about way of saying the best marketing wins, because the product has become a commodity. So clever product presentation is what matters most. The fact one guy (and I am sure he isn’t alone) decides against Porsche because they make an SUV is of no concern if for each of those 3 buy the SUV. Porsche wins even if sport drivers don’t or then again, maybe they do if it keeps Porsche making both rather than closing up shop.

    See even if the ability to make a good, reliable, affordable product has become a commodity, the decisions about what to build become important. Branding sounds like it chokes out ideas, rather than expand them. If the automobile makers are really so equal, sounds like the right time to smartly diversify.

    Slightly off this topic, but if auto reliability is really so equal, is domestic production only being hampered by the legacy cost of retired employees? Short of this, they compete, even on price it would seem. So the other makers, like Toyota in time, will either face the same problem or will simply not be a good corporate citizen. Not that I agree with this idea, just seems it would follow from the automobile as a commodity.

  • avatar
    HawaiiJim

    Great discussion.

    Regarding RF’s example of Subway, when I think of Subway I think of the fresh food but I think equally of the guy in their ads who benefited by losing a lot of weight eating Subway food. I think a brand can have a multiple focus successfully, if the multiple focus is handled carefully.

    Robert’s account about the Doc is intriguing. I remember that when BMW started making SUVs, I immediately wondered if that meant BMW was getting off their focus a bit. Apparently their SUV venture has not hurt them, although I don’t have the data to know for sure. Not necessarily a direct parallel to the Porsche Cayenne issue, but similar.

    Regarding RF’s comment about a certain Volvo vs. TSX debate not mentioning safety, I think Volvo is evolving into a multifocus brand that still emphasizes safety but also increasingly emphasizes distinctive, highly artistic style. Whether large numbers of Americans respond to that focus remains to be seen.

  • avatar
    Ingvar

    A tightly focused car brand is the plan, the vision, the way forward, the way out, the way back. It tells the company what kind of cars to make. It tells the marketing people how to sell them. It tells consumers why they should buy them. The brand defines the company

    If the brand defines the company, then brand recognition within the company defines the product.

    If I were a car czar, I would take the brands five or ten historically most important vehicles, and use them to define future products. If you think of a brand, five cars is enough to tell you all you need to know of what to expect.

    Think Jaguar: E-Type and XK120, MK II and XJ6. That’s the pace and the grace. That’s all you need to know about Jaguar.

    Think Ford: The Ford Model-T, -34 V8, Mustang, Taurus, F-150 and Explorer.

    Think Toyota: Corolla and Camry, Land Cruiser, Celica and Prius.

    And so on and so forth. the point is, building a brand is not that complicated, as long as you now what your core values are, and stay true to that thought. For better and for worse, a brand is its history of products, and a loyal customer base must have something to stay loyal to. Ten years of bad quality is not enough to scare away the Mercedes-Benz customer base. But forty years of bad management and brand negligence is enough for people to stay away in droves even if GM were giving their products away for free. If Mercedes were given some more time, they would learn the hard way that you can fool some people some times, but not all the people all the time. A lesson that the former loyal customer base of GM products have learned in recent past.

    A brand is its history of products, and a customer base is that brands history of done deals and satisfied customers. If the buyer is satisfied with the product and the service in between, he will come back. Otherwise, he will not.

  • avatar
    KatiePuckrik

    I agree (as I said in an earlier post) that brand can have a multiple focus, if handled correctly.

    The company I work for (no names mentioned) makes a big deal of the fact it is a family owned company, but at the same time establishing “green” credentials. But I wouldn’t say that the company I work for has lost its focus. In fact, sales have been rising for the past three years. Again, I don’t know why, because I think the products we make are terrible!

    Take Renault, they now stand for bold design (re: Megane and Avantime), but are now the new kings of safety. Renault beat Volvo for that title a long time ago (which could explain why Volvo don’t seem to be playing up to that image so much now), but again multiple brand focus can be a good thing. Because, in my opinion, even if Renault are trhe new kings of car safety, it means absolutely jack, if they don’t improve their reliablity and quality. Look at any survey in Europe and Renault (in fact, all French marques) are an absolute joke. So, if Renault can’t get a radio to work properly, what chance do they have of making a lateral airbag system fire on time?!

    Mr Farago is right, in that a brand should play to their strengths. think Toyota and most people (even non car people) will think “Reliablity”. But what people mention less often and I’m surprised Toyota don’t play up to this more often, is that their cars are class leading in safety. The Toyota Yaris, Auris/Corolla and Avensis are all Euro NCAP 5 stars, highest you can get.

    Not to mention Toyota’s “green” credentials. In the car world brand is very important. We forget that a car is the seond biggest purchase a person will make in their lives. So that brand must stand for something. So, you have to buy a car, what would you go for?

    Hyundai = More for your money, and reliablity, but cheap and nasty interiors and a brand which isn’t held in high regard (poor man’s Toyota)
    Chevrolet = Long history, but “perceived” reliablity gap .
    Volkswagen = Quality engineering and reliablity, but costly.
    Toyota = Quality engineering and reliablity at reasonable prices with green kudos and good safety, but poor dealerships.

    Naturally, you’ll go for the best all rounder. Surely…..?

  • avatar

    KatiePuckrik:

    Naturally, you’ll go for the best all rounder. Surely…..?

    Don’t call me Shirley. And what’s with all this multi-focus misegos. A brand can’t have a multi-focus any more than a sane human being can have more than one personality.

    In the automotive sphere, the average customer faces a choice of 52 new vehicles– and that’s if they’re just shopping GM! They don’t have the time, patience or understanding to weigh-up various factors. If they’re flummoxed, they go for price. General Motors indeed.

    And BTW: the guy who lost weight at Subway did so because he ATE FRESH. There is no brand disconnect. In fact, it’s bloody brilliant.

  • avatar
    SherbornSean

    The danger in not defining your brand consistently is that the market does it for you. Hence, Fiat in the US became “Fix It Again, Tony” and Mercury Became “Found On Road Dead with Chrome.” And GM’s psuedo-luxo-liners became “Oldsmobuicks.”

    The problem with GM is that there is a disconnect between what the brand *should* stand for, and what the company currently delivers. I’m fine with Chevy being an “American Revolution,” but every time I see that billboard with an Aveo (neither American nor revolutionary), I cringe.

    We all know what Pontiac should be: an inexpensive American enthusiasts’s car. They are trying to get there, but rebadging the Equinox and Cobalt sure hasn’t helped.

    Buick gets it — large, quiet, comfortable, near-luxury vehicles. But the execution on the sedans just isn’t there yet. At least they pared the product line to 3.

    GMC is the the DeWalt of trucks. But it needs to distinguish itself from Chevy better, perhaps by featuring more durable parts (brake pads, tires, stainless steel exhaust, bedliner, interior plastics) to distinguish itself more to the kind of people who buy DeWalts.

    And Cadillac, well, Cadillac simply needs to be the Cadillac of cars. The best.

    Hummer is very well established as a brand. The problem is there isn’t much of a market for rock-hoppers too wide for trails and SUVs too cramped or underpowered to be useful.

    I won’t mention that Swedish brand because I hate to speak ill of the dead. Haven’t any of them seen “The Sixth Sense”?

  • avatar
    KatiePuckrik

    Mr Farago,

    If we use your analogy of a human being and having one personality. Then a human can’t be “reliable” and “fun” at the same time. Nor can human be “Fashionable” and “sporty” without having a split personality. A personality is a make up of different facets of a person.

    I believe that a brand can be multi purpose PROVIDED it can fufil those facets. As much as I love Toyota, it can sell itself as “reliable” “quality conscious” and “well priced”, but never in a million years could it sell itself as “imaginative”!

    But, that’s what I like about your editorials, Mr Farago. We may agree, we may all disgaree, but the one thing we never get is a dull topic! So until the editorial I’d like to say “Good Luck and we’re all counting on you!” :O)

  • avatar

    KatiePuckrik:

    I appreciate the shout-out (every time you tear my argument to shreds). I am a big fan of your insightful commentary on this site. It puts bread on my table. So thanks.

    Now, you know I was referring to the difference between a relatively well adjusted person and someone suffering from multiple personality disorder, not suggesting that people should be one-dimensional.

    And I’m sure you understand my general thesis: branding is about focus. Giving a brand a multiple focus is about as oxymoronic as it gets. It’s a bad idea.

    Anyone remember Harry Nilsson’s “The Point?” A brand has to have one (a point, not a Harry Nilsson).

  • avatar
    whatdoiknow1

    OK, someone please explain to me exactly how exciting and passionate a Corvette or Jeep Wrangler is crusiing down I95? How is drving at 65 to 85 mph down a stretch of interstate in a Vette more exciting than a CTS, Suburban, or mini-van for that matter?

    Passion and Excitment can be dubious traits for automobiles. If you add too much passion into a car people simply will NOT buy it because it now looks quite foolish on the road. Cars are appliances whether we like it or not, Thier main reason for existing is to provide its owners with RELIABLE transportation. No amount of passion will make up for a vehicle that fails in this first regard. That is why Jaguar is were it is at today, why Alfa was driven from the US market, why Porsche is building people moving SUVs, why pontiacs rot on dealer lots, and why Toyota and Honda are unstoppable today.

    Marketing ones products as passionate and exciting can come back to bite you in the a$$ when the next company’s reliable appliance can actually outperform your unreliable “exciting ride”.

    Do not fool yourself into believing that folks are just boring and afaird to try some “excitiment”. There are many pistonheads wheeling around in Accords and other less exciting cars because they are simply better cars than some of those passion ride. Today most so called appliance cars are fast and handle reasonable well. To truly out perform an Accord or “have more fun than you can in an Accord” you will need to drive like an absolute idiot in a BMW 3 series, which aint happening for 99% of the owners of those cars.

    MB is the poster child of “passion and excitement” today. MB was once the maker of what weer arguible the best cars in the world. Never the most exciting but the best. Today MB is selling passion and excitment very hard because their cars are now junk and can no longer standout as the best. Looks like Caddy in the 1970s!

  • avatar
    KatiePuckrik

    Thanks for providing the editorials! Makes my day at work more fun!

    It doesn’t seem like I’m going to win this one (no matter how hard I try). I just feel that if a company wants to say the following things:

    “Reliable”, “Quality conscious”, “Imaginative and bold design”, “Value for money”, “Young and hip”, “Luxurious”, “Classic”. All attributes that a car company would want to have. Then, the company would have to set up a brand for each of these facets. That’d be impractical. I mean, look where multiple brands got GM……!

  • avatar
    TheNatural

    GM could be everything for everybody if they just stick to it. There would be about a 2-3 year interval where everyone is lost, but if done right, they would come back on top.

    Chevy is the everyday man’s car. Intro priced vehicles. Cars, base trucks, SUVs and a corvette for people to aspire to.
    Saturn is the middle class car. A little more options. Easier environment for middle management. No full size SUVs, just cars and CUVs.
    Pontiac is a speed and youngster brand. Platform sharing but carrying cars that would be “SS” or such. Still have muscle cars like the G8. Also release inovative cars like Scion.
    GMC would focus on trucks for the contractor. Nicer fit and finish. Full size trucks and SUVs for the more polished builder.
    Cadillac would be your Premium Sport brand. Focus on customers who would shop BMW, Infiniti and the likes.
    Buick would move into the Luxury brand. Work on getting your Lexus and Mercedes customers.
    Hummer will stick to making off roaders. They still carry the H2, H3 and develop a Wrangler equivalent.

    Of course this means better product for Cadillac and Buick which like I said will take a few years to get the word out. But this way, GM would have a brand to put a car in every garage and not have all the in fighting that just pushes customers away.

    At least I think in a 5 year turnaround plan, this could be possible and after that time frame, GM would have a return to glory.

  • avatar
    Lumbergh21

    OK, someone please explain to me exactly how exciting and passionate a Corvette or Jeep Wrangler is crusiing down I95? How is drving at 65 to 85 mph down a stretch of interstate in a Vette more exciting than a CTS, Suburban, or mini-van for that matter?

    Have you cruised down Hwy 1 along the California coast in a minivan versus doing it in a Corvette or Porsche with the top down? If you have and still can’t appreciate the difference, Lord help you. ;-)

    As far as GM goes, their problem is an obvious lack of focus. With all of the divisions encompassed by General Motors, they can and should be focused within each division. Sure, share platforms and to a lesser extent engines, transmissions, etc., but don’t take a Chevy and slap a different badge on it with some bright bangles and call it a Cadillac. Each of GM’s divisions needs to stand for something. Have an entry in every or most every segment for Chevies, the everyman’s car, but Cadillacs should be ultimate luxury cars, Buicks should fit somewhere between the Chevy sedans and the Cadilacs, and Pontiac should be GM’s “zoom-zoom” division. I think they can just chuck Saturn, that is if they can legally (dealerships). The result would be 3 to 6 products in most divisions with Chevy having a large range of cars. 54 different models! that number could probably be cut in half with no loss of real product. I think that Toyota’s diversification through Scion can be a good thing, if they do it right. I agree though that they also need a sports car division to go with their everyman Toyota division and their luxury Lexus division.

    Their focus is actually what I like about Mazda. Of course, that’s probably because they are focused on what I want. It’s a small manufacturer that is focused on making a practical car with a little devilish twist for those of us who have become responsible family types, but still like flooring it occasionally and having something (good) happen. Try doing that with a Saturn.

  • avatar
    jkross22

    Robert,

    Re: the TSX v. S40 comment, the reason I didn’t mention any safety differentiator is because I don’t perceive any. In fact, according to IIHS, both cars were rated the same. Volvo is losing it’s differentiator due to remaining makes understanding they can’t afford to not win (or at least tie) in the saftey discussion.

    Volvo needs a new/revised go to market differentiator.

    What is the strongest mass market brand in automotive land? Hyundai?

  • avatar
    SherbornSean

    jkross22,
    To calculate the strongest brand, you multiply 2 factors:
    a) the price premium per unit vs. standard, and
    b) the number of units sold per annum

    So, if Hyundai sells 1 million vehicles, at a premium of $100 per vehicle, then the brand is worth $100M. You would then compare that to Porsche, say, at a $10K premium per vehicle times 60K vehicles, to get a brand value of $600M.

    I don’t think Hyundai sells at a premium in the marketplace, relative to other vehicles, so I would say they don’t have much brand value. Toyota and Lexus, which both sell a lot of vehicles at a premium have very strong brands, at least in the US.

  • avatar
    Sanman111

    Well, I definitely agree that brand and model differentiation are what is killing the American 2.8. I don’t need a ford fusion and a mercury milan. How about just one vehicle in a few different trim levels. As a psychologist, I can tell you that less choice has better results in liklihood of purchase and happiness. That is why top selling brands benefit from inertia. However, I am a car guy and have trouble navigating all the GM options, what will the average joe think.

    However, I think toyota has done a good job of differentiating its three brands and models in those brands. There is a little overlap with the yaris and Xd and the 4runner could be axed. Overall, though they do a good job. I think if you have differentiation, then strong branding is not as important and can backfire. Toyota branded Scion as cars for people in their teens and twenties, but many older folks actually loved the scion cars (Mr. Neidermeyer drives the xB). The point is that in this case the branding could have hurt sales. I like mazda too and think they do a great job with their cars. However, unless you have a class leading product, like the 3, branding will only help capture a niche and never make you a leader.

  • avatar
    James2

    Of the two examples of “focused” car companies, only Ferrari qualifies. Haven’t we all read that Hyundai intends to go head on with Lexus, even though they haven’t fully managed to convince Americans that they can compete with Toyota and Honda. I don’t know that Hyundai has even managed to fully shed the lousy reputation given it by the ironically-named Excel.

    Case in point: a coworker’s husband just bought a new Camry, in fact the third Camry bought over the past decade. I’m sure he could have easily bought a same/better-equipped Sonata for far less money, but I suspect the Hyundai (or Kia, Nissan or any other brand) didn’t even cross his mind. Here in Hawaii Toyotas are the “safe” bet. It’s the “no can do wrong” brand, even if reality isn’t quite living up to perception, at least lately. Toyota will have to screw up big time and continuously to shatter its quality/relibility rep. No one cares that Toyotas are fugly, either.

    I’m a Mazda guy. While Mazda is more focused than most, it still pictures itself as a larger company, hence the (sad) fact that the next-gen 6 will be larger to better appeal to the Camcord market. Mazda probably understands that “zoom-zoom” does not equal “appliance” yet they covet the sales of the appliance brands… so the ‘focus’ of the 6 is dulled/compromised in the name of upping sales. Mazda can make it up by bringing the new 2 here.

    BMW is another. The Ultimate Driving Machine seems, these days, to be the Ultimate Marketing Machine. The X5 was bad enough — not so bad as the Cayenne considering that BMW made sedans and station wagons — but now they are venturing into all kinds of new product genres. All the while introducing gizmology (iDrive, active steering, etc.) that detracts from their mission of making Ultimate Driving Machines.

    GM’s problem is that it can’t focus as it as too many issues distracting it. I don’t know that it is specifically Rick Wagoner who should be stating what Chevy is or what Pontiac should be (isn’t that why you have a marketing dept?), though. Aside from back-office issues, though, we all know why GM is not focused: too many brands that each lost sight of the mission a long time ago.

    In the 30s it was easier to position a different brand for a different income or personality, but when Buick started making GNXs and Olds started blacking out the chrome on Cutlasses and, gawd, Caddy came out with the Cimarron… well, there went the brand focus.

    Memo to Luca di Montezemolo: please read this editorial and keep it firmly in mind as you plot the future of Ferrari. You’re the last line of defense.

  • avatar
    confused1096

    whatdoiknow1:
    Passion and Excitment can be dubious traits for automobiles. If you add too much passion into a car people simply will NOT buy it because it now looks quite foolish on the road. Cars are appliances whether we like it or not, Thier main reason for existing is to provide its owners with RELIABLE transportation. No amount of passion will make up for a vehicle that fails in this first regard.
    I respectfully disagree. Most of the Corvette (or similar vehicles) owners I’ve known had the ‘Vette as a 2nd car and kept a rolling toaster as a daily driver. They bought the ‘Vette because they wanted one and it was fun to drive. They did not buy it as a grocery getter or to depend on it as a daily driver. No one considers an Enzo transportation either and there is (I believe) something along the lines of a two year waiting list for them.

  • avatar
    Nemphre

    “Because efforts to market the Paseo to young people fell flat.”

    The Paseo suffered from the coupe overload during the early and mid 90s. Toyota alone had the Celica, Paseo, Camry coupe, MR2, Supra, and until the ‘93 generation, a Corolla coupe. Every single one is dead now. The crazy thing is that they had even more 2 doors in the home market, with stuff like the Sera, Starlet, and Sprinter/Levin. Honda had it arguably even worse with many coupes that competed in the same price range. The Civic Coupe/Hatch, CRX/Del Sol, Integra, Prelude, and Accord Coupe were all fighting each each other for sales. It wasn’t just the Japanese either. Anyone remember the the Chevy Beretta?

  • avatar
    Dynamic88

    I think one point (at least) has been missed – the brand identity can be the real reason to buy the car , or it can be the excuse to buy the car (Volvo – safety)

    Volvo used to be a snob car, and to some extent it still is. One could legitimately buy it for safety, especially several years ago when it really was one of the safest cars, (or seemed so) or one could buy it to set one’s self above the Ford/Chevy/ToyHon crowd, but one might not want to buy on the basis of blatant snob appeal. (e.g. Mercedes – as it used to be)

    In the US one bought a Volvo in large part to show the word that one could afford a Volvo. But safety was a good cloak for the real motive – as well as being a legitimate second motive.

    If safety really does sell – all buy itself – Ford may not be able to produce enough Tauri to meet market demand. (I’m guessing safety isn’t going to be selling that well all by itself)

    Farago is correct, you don’t want to muddle the message by trying to appeal to different wants/needs. You can have a car that has good handling, (in the pistonhead sense) and safety, and reliability, but you have to choose one of those to sell on. BMW sells on the basis of being the Ultimate driving machine. As others have mentioned, 99% of Bimmers will be driven exactly as if they are Chevy Malibus. Most don’t buy a Bimmer to cut an apex through a tight curve, but rather to show one can afford a BMW. But it’s nice to have the excuse that you bought it because you’re an “enthusiat” driver.

    Volvo’s problem is that it is no longer the “safety” car. It still could be if they marketed it as such. It doesn’t really matter that cars of lesser cost might be just as safe – in the mind of most consumers, Volvo stands for safety because of all those commercials they used to run touting their safety. But now they aren’t the safety car, and they aren’t the pretty car, and they aren’t the zoom zoom car, and they aren’t the reliability car, and though I have no real reason to reject Volvo, I have no reason to choose it either.

  • avatar
    213Cobra

    Branding is often better understood by those outside the marketing world as a discipline of exclusion, rather than one of “focus.” Like people, products and companies can have multiple facets of character, but those traits are organized in other people’s minds in a conceptual hierarchy; a tree structure. Sure, you might describe a friend or family member as “opinionated but easy-going….” or “abrasive, arrogant and pushy but friendlier than you’d expect….” But you’re going to start with one characteristic as your first mention, and it’s likely to be consistent. Classifying people in our social and familial systems is a nuanced process because we either must understand them, or we want to. For products, there is much less mental space available. We will only embrace nuance for something we’ve already been convinced to want in the first place.

    General Motors has the most difficult branding job in the automotive industry, and unfortunately they don’t seem to have the domain expertise, specific intellectual capital and willful discipline to meet that challenge. Being the most model-diversified manufacturer, GM must position, communicate, motivate and back-up through practices the corporate brand (GM), the divisional brands (Chevrolet, etc.), the model brands (Impala, etc.), and the sub-models (SS, RS, etc.). Each one of these must be conceptualized, communicated and managed to a high level of precision and discipline, and then the aggregate must be managed as a whole hierarchy.

    Because brand marketing seems squishy and derived from opinion rather than method, to engineers and finance types, it’s tough to get enough respect for it to make the rest of the company subordinate itself to brand. But that’s just what has to happen.

    For much of General Motors’ history, the divisional brands were each at the pinnacle of their own messaging pyramid. Chevy, Buick, Oldsmobile, Chevy Trucks, GMC, Pontiac, Cadillac promoted their brand emotions as distinct sentiments, backed up by product that looked and drove the part. People bought a Buick, not so much a GM car, though there were “he’s a GM man” or “he’s a Ford man,” sentiments. General Motors was so large, dominant, well known that it was environmental. You just knew which cars came from GM just by looking at them. In 1957, you might confuse a Mercury with its Ford stablemate, but there was no way you’d confuse a Ford product with a GM, Chrysler or Studebaker product when it rolled by you on the highway. Chevies *looked* to be within your grasp. Pontiac’s came to look fast and comfortable. Buick’s looked quiet & cushy. Cadillacs dripped charisma and success. The GM brand was a golden atmospheric glow around the division, and the functional difference between an Eldo Biarritz and a DeVille was obvious just by looking. Body-by-Fischer reinforced the allusion to quality derived from craft made into industrial might. There was lots of fiction to this as the years accumulated, but perceptions held up for a very long time.

    In the 1960s, GM put a lot of promotion around the “GM Mark of Excellence,” which became a more conspicuous badge on every car and in ads. At the height of the Bill Mitchell era, when GM was platform sharing but still highly design-specific with its brands, the Mark of Excellence campaign had widespread play, and it resonated with the then-middle-aged WWII vets demo.

    It seems that everything GM knew about marketing and brand management evaporated after the 1973 oil embargo. Engineering was up to its ears coping with the twin challenges of choking off emissions and raising fuel economy in the days before cheap chips and micro-computing. There wasn’t enough management bandwidth to pay attention to anything else. Suddenly, styling differentiation melted, divisional differences in drivetrains dissolved, the imperatives of the public markets accelerated commoditization to attempt to drive volume in the face of rising competition. Brands were essentially jettisoned as competitive weapons.

    Today, big isn’t revered as it was in the middle 50 years of the 20th century. So GM can’t stand for big. It’s time to go back to putting the divisional brands at the pinnacle of the pyramid and like a perfume atomizer, spray the GM brand attributes into the ether. The company has the engineers to compete, as the Corvette, Cadillacs and trucks demonstrate. It has a cost disadvantage to wrestle to the mat, but GM is making progress. Its industrial capacity remains vast and precision manufacturing is in GM’s grasp. But regaining a quality association will take time. So another trait must take the lead: drama. GM needs a new Bill Mitchell, who is backed by strong engineering, bean-counting & purchasing staffs willing to support the brand imperatives rather than undermine them. But all GM vehicles must be visually compelling, penetratingly emotional, and beyond confusion with any other conglomerate’s brands.

    Think about the 1965 – 1972 Chevrolet full-size cars. The body shapes were organically beautiful, judiciously curvy with measured rectilinear relief. The lowly Biscayne retained the basic visual drama of the car, but was shorn of expression. The Impala sharpened up the look and the comforts without undermining the perception of sensibility. The Caprice added a 60s version of bling and cocooned passengers. The advertising reflected and reinforced the differences. No Ford, Chrysler or import could be confused with these cars. In those days, the General sold a million Impalas a year for awhile.

    GM is getting back to visual drama with Cadillac and Pontiac, less so through a distinct Euro look emerging for Saturn. But there isn’t yet an overriding vision of how a portfolio of brands can drive a collection of emotional and desirability perceptions that roll up to GM. This has to come from products soon. But to get started, I’d take 10-15% of GM’s marketing cash to remind this market of GM’s history, and the long line of emotionally compelling cars it has produced, connecting that history to what’s coming.

    The divisional brands must win the sentiments of shoppers, so their brand attributes must be honed by a mindset of exclusion, and the hierarchy of nuance beneath a single point of reference has to be engineered.

    What is Chevrolet? A Chevy is the foundation of your family’s mobility, geographically and socially. “See the USA in a Chevrolet” was an interstate highway-era way of selling this proposition, and the style delivered on the promise that a Chevy won’t embarrass you. SS variants put performance in a working man’s grip.

    What is a Pontiac? Stylish speed.

    What was an Oldsmobile? Powerful elegance, engineered.

    What is a Buick? Effortless command of the road.

    What is a Cadillac? The best; a mark of success.

    What is a Chevy Truck? Affordable workhorse.

    What is a GMC Truck? The Boss’ workhorse.

    What is Saturn? Premium economy.

    The keys to tying all this together under GM are consistent quality, business practices in the buying experience, ability to excite brand-specific emotions, and return to the styling richness that enabled such varied cars as the Corvair and the Buick Riviera to be seen as unmistakably coming from the same company, while each one broadcasts robustly strong individual purpose and identity. People point out that bland sells, as the Camrycord proves. Yep, it does, in the absence of anything else. There’s no new volume in bland, and it’s not in GM’s nature to outbland the Japanese mainstreamers. GM does bland badly.

    Toyota is heading towards the complexity of GM’s marketing problem, but it’s still fairly simple for them. Toyota is all they sold for a few decades, and now only Lexus and Scion are slightly clouding the pool. Ford’s recovery from a brand standpoint is manageable and simpler. Making Lincoln a strong design and engineering-driven brand again and trimming Mercury until Ford’s health is regained will help. They are on the mend, fitfully, on the Ford side of things. Chrysler needs a complete sort-out, with Plymouth gone, Dodge so much tied to muscle, Chrysler fad-driven other than minivans, and way too many SUVs diluting Jeep. BMW, Porsche, Audi, Maserati will dilute their brands due to the irresistable siren call of volume, but their precipice is distant for now. VW is still trying to find its way back to “The People’s Car.”

    It doesn’t matter whether you agree with my characterizations of GM’s brands. They illustrate the point. GM should promote quality when it has a win, but its fundamental historical strengths are the emotions of desirability, optimism and drama. I don’t think the company can call on anything else, for anything else is a denial of its DNA. Bring back focused, dramatic cars at price points that make sense for their targets, and sales will rise. Sure, the basics of quality and craft must be competitive, and family cars cannot strand. But GM’s critical hire is a new Bill Mitchell to strategically cultivate and direct “styling,” and then its next organizational imperative is to restore the power of that post among the executive cadre of engineering, manufacturing, finance and style. If that happens, even GM’s current crop of muddling marketers will finally have their cues for making GM a demand-driven business again.

    One more thing: If desire, drama and disciplined marketing return to GM, the talent pump will start working and the quality of people banging on their doors to work on the business side of the auto industry will inexorably rise.

    Phil

  • avatar
    Nemphre

    “But to get started, I’d take 10-15% of GM’s marketing cash to remind this market of GM’s history, and the long line of emotionally compelling cars it has produced, connecting that history to what’s coming.”

    Younger people generally don’t care about the cars from the 60s. The only GM history we care about are the crappy cars from the 80s and 90s that we’ve had the displeasure of experiencing.

  • avatar
    213Cobra

    It’s not just the ’60s cars. Granted, young people don’t care about what they don’t know, and they have long memories informed by what they did experience. Nevertheless, GM has to chip away at your negative perceptions. Cadillac ran for a short while an ad tracing a succession of high-water-mark cars and even young people who saw it reacted by thinking, “I might want to be part of that.” That’s not evidence, it’s an indicator. But the point is, you have to work from your true composition. Emotion is GM’s core historical driver. It can and should be recovered, and when it is, the company will find its footing. It has spent the last 25 years too often trying to be someone else.

    Phil

  • avatar
    jthorner

    213Cobra Phil has it exactly right. Why is it that the highly paid “executives” of General Motors don’t show any evidence of seeing their branding situation so clearly?

  • avatar
    jurisb

    branding is a non alfa denominator. it is not the thing detroit should worry about now. Start making good products, and the audience will manage to brand themselves to whatever category they want.You need PRODUCTS. Genuine, non- rebadged, in-house build PRODUCTS. do you really believe if toyota made a premium sedan fighter above avalon, it would kill Lexus sales? branding is for week people, who can`t justify their illogical purchases. branding is what the product seems like to be, and Mercury also managed to seem like a brand, but for how long? If you make good cars, they can be paralled at any brand within a corporation, no matter the price range.
    jaguar also managed to fake being premium brand, how much have they succeeded , lagging behind Nippons? at the end the result is the same- sales drop.

  • avatar
    213Cobra

    Product alone can get the job done…eventually. But it’s the slow way, by itself. Brand taken seriously is the operating system for how the producer makes its decisions, and how the market of buyers perceives their effort and experiences doing business with them. Product alone doesn’t drive revisions to selling practices, for example, but brand is a holistic idea that accounts for more than product.

    Brand is the accelerator for the persuasion earned by product, the accelerator for building responsiveness and leadership into a company, and branding gives product reputation persistence. Good brand creation and management pumps people into the awareness, consideration and evaluation phases of the buying process. Product seals the deal and is the primary driver that converts evaluation to purchase.

    Phil

  • avatar
    Dynamic88

    “…do you really believe if toyota made a premium sedan fighter above avalon, it would kill Lexus sales?”

    Yes.

    Ok it wouldn’t completely kill Lexus sales, but it would hurt sales. Premium sedans should be sold by Lexus, not Toyota. That’s why they are separate brands – premium and basic transport.

  • avatar
    jurisb

    if there is agood lexus x and a good toyota y, it doesn`t kill lexus or toyota sales, it kills the sales of brand x that makes a worse product. has Infiniti experienced sales drop because of acura? has toyota suffered Aygo sales because of Scion? a product stands against a product. and what hurts cadillac sales is not an overloaded Lucerne, but foreign brands that simply build better cars. If behind the branding reputation doesn`t stand a real tangible statisitcs, the downward spiral is inevitable……….

  • avatar
    CeeDragon

    213Cobra:
    August 14th, 2007 at 3:20 am

    Brand taken seriously is the operating system for how the producer makes its decisions, and how the market of buyers perceives their effort and experiences doing business with them.

    If brand is the operating system then GM is using Windows 98.

    Sorry, couldn’t resist.

  • avatar
    whatdoiknow1

    There is a reason that Toyota is able to be successful with both the Avalon and Lexus ES350. While both cars are priced about the same they appeal to very different tastes. A $35,000 Avalon appeals to those that just want a very good premium car without the extra brand baggage. There are some folks that do not wish to “flash” but still like to be comfortable. The Avalon makes the perfect Pastor’s car, it is big, comfortable, can be loaded with a ton of features but it is still just a Toyota. The Avalon also has the appeal of being the “fiscally responsible car” (all the luxury without the designer label). Anyone who is familiar with Toyota’s XLE or Limited models will know that these cars are generally equiped to the level of many so called premium upmarket brands.

    The Lexus ES350 is a smaller car but has the extra cache value that many want and expect in a $35,000 car. Call it a jazzed up Camry if you will but it does the job of being a premium luxury car quite well, and manages to look and feel more upmarket than the Avalon.

    If I use my 60 year old parents as an example I can better explain this; The Avalon appeals to my father, the practical conservative man. He understand that the Avalon and the ES350 are basically the same car and will prefer to get more car for his money, he is not brand/badge consious. My mother will go for the ES350 because it is the Lexus and has much more style and flash than the Avalon, it also looks better at the country club.

    My point, Toyota has covered all bases and stands a very good chance of making that $35,000 sale in that household. Whoever wins the arguement between my parents as to which car to buy Toyota will still make the sale and the money!

    Branding and good products go hand in hand. If your products suck the consumer could careless about any other “brands” from that company. Companies that make inferior junk, do just that make inferior junk and a new brand will do little to help. On the otherhand a company with a stellar reputation for quality with be able to mint money with new brands because the consumer is actually looking for “new”, “bigger”, “better”, and “more” from them.

  • avatar
    CoffeeJones

    @MX5bob: We Americans have very narrow brand perceptions.

    Is that more of an American trend, or is it universal across Europe and Asia?
    Somebody here’s got to have studied this sort of thing.

    Anyway, I know people that swoon over the Mercedes badge, even though many drive base C classes that cost about as much as a fully equipped Accord.

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