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Thanks to its car ignition problems, General Motors is recalling 29 million automobiles worldwide. If you’ve ever scanned the price of an auto repair you know the labor is what gets you, not the parts – so you can imagine how that number is going to hit the GM bottom line. Like a 29 million pound tank. GM’s most profitable cars are its huge SUVs. It is reported that a $60,000 Suburban provides $10k in profit while an energy efficient Chevy Cruz yields $1,500 in profit. We all know which car is better for mother earth, but GM, which has the power to move the market away from gas guzzling, likely won’t.  Too much to lose. GM’s share of the SUV market is now up to 70%. (Seen a picture of the smog in China lately?)

Ford’s new aluminum body F-150 pick-up truck is a step in the right direction. SUV loving Chrysler/Dodge/Fiat is bracketing its large car and truck sales with some much better looking Fiat 500s…very cool and efficient cars of the future. My Prius has over 165,000 miles on it, saving me about $9,000 in gas and cutting pounds of carbon into the atmosphere.

Here’s the point. GM, which is about as American and Apple you know what, continues to lose its way. The corporation needs a strategy and a leader. A leader with beyond the dashboard vision. The old gray mare is not too big to fail. Not anymore. American’s love our metal, but we love our amber waves of grain better. Peace.

 

 

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A brand strategy.

If I were to try to determine the brand strategy for REI, a camping and outdoor store, I’d have to say it was “Get Out.”  I saw one of their print ads today and it made me want to get out of my chair and hit the mountains.  The ad showed snow covered peaks in the background. Sodden green grass field in the fore. A small open, netted tent postage size in the middle of the picture and some other gear, perhaps a drying sleeping bag, nearby.  My brain was snapping internal pictures.

If good advertising makes you feel something then do something (Ford’s Jim Farley quote), this is great work.  My mom might fly by this ad.  Not me.

The brand strategy Get Out is active. The double meaning of Get Out suggests “no way” or unreal.  Also the unseen, the vastly alive.  Any brand manager, creative director, or retail POP manager, selecting pictures for ads, home pages or displays, would know what criteria to use to make a selection with this this strategy.

Yesterday I posted about an offer to do a brand audit — looking at work and backing out what I believe to be the brand strategy. For some companies – companies with good consumer awareness—this will be an easy task for me. REI is one such company.  Peace.

 

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The finals last night at the Griffin Farley “Beautiful Minds” brand planning competition came down to two ideas: “Bikes with Benefits” and “Don’t Take That Shit.”  The former selected for its cultural currency and energy, the latter for its create-a-movement potential.  The judges, looking at briefs on the CitiBikes program, made the right call giving the competition to the Bikes With Benefits team.  

Great ideas should be able to come from anywhere, yet Bikes With Benefits was a creative idea as well as a strategy — and that can be a problem for some creative teams. Don’t Take That shit was not so much creative as it was a spark for creative. It may have won the room but it didn’t win the judges.   

Another Farley, Jim Farley of Ford, once said great advertising makes you feel something then do something. Both ideas accomplished this. Both strategies were strong.  One idea showed better. Peace.

PS. Great job BBH, Sarah Watson and Angela Sun.  This event is a keeper.

 

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No back-patting here (okay maybe a little) but my prediction that the Chrysler/Fiat combination was a smart one has come true.  The car market grew 13% last year and Chrysler sales weighed in at 20%.  Chrysler outperformed the market by 7%.  GM and Ford at 3% and 4%, underperformed the market. Bringing a little European design and smaller car sensibility to America has, indeed, translated into sales and margin. The approach, tempered by some Jeep and Dodge DNA, put Chrysler back on firm ground.

A point of concern, however, is CEO Sergio Marchionne’s comment at the Detroit Auto show.  He feels a U.S. recovery will pave the way for growth of his more heavy metal cars and trucks, like the Jeep Grand Cherokee and the Dodge Ram truck. This is just the type of talk that got us into trouble in the first place.  I would expect to hear this from Ford and GM but not Chrysler (Fiat).  Twenty somethings and the emerging car buyer market (read future) will not be demanding guzzlers. And in 10 years a 30 MPG car will be a guzzler.

Don’t fall for this Mr. Marchionne. Keep your eyes on the big prize. Stop the supersizing.  Find beauty in the small. The efficient. Meep meep. This is way forward. Peace.

 

 

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Car sales were reported yesterday and they were quite good.  Year over year for the month of September there was a 13% increase.  The New York Times lead story in the business section announced “the best results in 4 years.”  I’ve been blogging about the automobile industry since the beginning of What’s the Idea? mostly because I’ve been so angered by what’s been happening.

People need cars.  People need money. People need to be more responsible to the planet.  These observations drive my points of view.

I have a suggestion for the auto industry, especially GM and Ford the two companies that performed most poorly. Spin off your truck divisions. Divest completely. They need their own leaders, R&D (design with a capital D), manufacturing and marketing. Most times when there is a divestiture it’s government encouraged.  But time it should be market driven.

My second suggestion relates to advertising. Volkswagen, Kia and Audi are doing good work. The brands themselves are strong enough (4Ps-wise) to allow for advertising to work. The marketing officers and executive teams of these companies are on board with investing and pushing ad boundaries. Using good ad shops. (So is Chrysler.)

During the bail-out meetings a couple of years ago, in the picture of with Ford and GM executives sitting around the table with president Obama, had not a smart phone was to be seen. The Q-Tips were running the show (insider car target reference).  We need to drop the leash here too. Peace.

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Chrysler paid back over $7B in loans to the U.S. government yesterday.  Did they just have than money laying around?  That s lot of Benjamins.  Did they just borrow if from a sheik?  No they earned it. Blocking and tackling my friends.  Rekindling old loyalties me droogies.  Fixing the product, getting the right new people in place and fixing the message. When Daimler moved into the Chrysler brand, they tried to do all these things but couldn’t.  Fiat and the U.S. marketing stewards did.  And now they have da monies.

Good blocking and tackling.  Just like Ford did.  I knew the Fiat move would be a good one…meep meep.  The company is known for stylish small cars, just what the economy ordered. But Chrysler is also making a move with Dodge, which is a bit more of a surprise. Hemis and un-mommy mini vans and a return of the muscle car for real motor heads (Can you say Challenger?).  This is Dodge’s sweet spot.

Marketers are not talking about Chrysler in terms of cools social programs a la Ford, they are watching the rebirth of a company through focus on the 4Ps. Roots baby.  Eminem baby.  Where’s Kid Rock? GM is blocking, but I’m not so sure they’re tackling.  The foreign value brands are pretty much growing a bit over the pace of the market. Ford may want to look over its shoulder — is it losing its hunger? Is it placating the dealers once again?  Come on Chrysler. It’s pay back time! Peddle down. Peace.

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Ford is a wonderful marketing story – following years and years of big car stasis and poor management it has begun down a colorful new road.  The cars have gotten smaller, management has its eyes on the horizon and in a country where borrowing is rampant, it gets props for not taking the government cheese. Cool technology, too.

G.M. has made smart decisions, but still feels like a company run by old dudes with dandruff on their suit collars.  Most businesses can sell off flagging assets and brands, get smaller, refinance, wave the flag and make a comeback.  Sorry to sound disrespectful because I want G.M. to win, but the company doesn’t feel particularly contrite or forward thinking, the Chevy Volt aside.

Chrysler, on the other hand, still struggling and playing tortoise to Ford and G.M.’s hare, is an interesting company to watch. America loves an underdog…just watch the World Series or Super Bowl some time.  And America loves European styling and design. Chrysler is the former and has a chance at the latter. It has gone quiet for a while in the area of new product development while working hard to design some exciting new cars. Good move.  While Ford’s new small cars will have big American grills and other old style embellishments, I’m hoping Chrysler will be creating some Fiat-like smaller cars that people on the street can’t keep their eyes off. Were I Chrysler, I’d design hot looking, efficient cars that appeal to women: a French looking car, then an Italian car, perhaps a German-styled car. Women love style. This is a design approach whose time has come.  It never would have flown decades ago, but it will today.  Tortoise shell glasses anyone? Peace!

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“Chrysler looks beyond BBDO for advertising” is the headline on Ad Age Digital this morning. BBDO has always done great work for Jeep, but Jeep was an iconic brand with a branding idea. The Chrysler brand doesn’t really have an idea. Ford doesn’t have a powerful branding idea. And certainly GM doesn’t. But GM doesn’t really need one because short of GMC trucks, you won’t find a car with a GM name on it. Volkswagen had an idea but let it slip away to the point where when the market was ready for the idea (small, efficient, eco-conscious), they weren’t there. Had they been, they might now be on their way to a defensible position as the world’s largest car company. Even Hummer has an idea.  

 

When you possess a branding idea — also called a brand strategy — product design and innovation become easy. When you don’t, you change vendors, partners, ad agencies, and management. And that’s not much of an idea. Peace!

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Being a brand and marketing planner is exciting because in order to be good you need to be a futurist.  I often rail against rearview mirror planners who only look to the past to develop product and brand strategies.  Certainly you need to understand the past to formulate hypotheses about the future, but watching film of swimming and understanding its mechanics is not like jumping into the water for the first time. You may feel better prepared but it is still scary.  

 

So why is brand planning fun? Because predicting the future, though hairy, can be  lucrative and change the marketing world. Steve Jobs comes to mind.  

 

Here’s an exercise in predicting the future: Car dealerships across the U.S. are closing.  Many Ford dealers have shuttered their doors and the wave of Chrysler and GM closings is almost upon us.  In 12 months time drive down the highway in your town, where all the fast food restaurants are, and you’ll see abandoned care dealerships aplenty.  The economy is awful, but should be showing signs of life by then. What business or business category will move into those fallow real estate sites?  If you had Zuckerberg money, what would you build? Peace!

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Here’s a conundrum. If you had to go out today and buy an American car would you feel  differently standing on a GM or Chrysler lot than a Ford lot? Ford, during all this economic tumult, has been standing on its own two feet. Sure it has crazy debt, lots of bad contracts, and big dusty trucks sitting on the back of the property, but it is still standing on its own two feet. 

 

GM and Chrysler, on the other hand, are being propped up by the government; each chewing on billions and billions of taxpayer dollars, hoping to stay afloat.

 

So here’s the conundrum, do you want to buy a car from a company – Ford – that has demonstrated a modicum of fiscal responsibility?  A company with enough foresight to hold off the insolvency dogs? Or do you want to reward companies that could not see what was right in front of their faces…companies demonstrating horrible management skills? Remember though, in the latter companies (GM and Chrysler) you are part owner. Your tax dollars are keeping them alive.  If Henry Ford were alive…

 

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