State of the Brand

Author: Jason Voiovich Ecra Creative Group

Key Points: 1. Most “special financing offer” auto advertising is so bland, you hardly notice. Not this time. 2. Porsche is under tremendous sales pressure, volume down some 27%, and special offers seem to be helping the cause. 3. However, price discounts undermine the value proposition of any brand - but especially lux brands like Porsche. Say hello to deteriorating margins.

Three words undeniably mean “sale” at your local car dealer.

Giant. Inflatable. Gorilla.

It conjures images of smarmy guys in plaid suits and plastic smiles. Add in stale popcorn and balloons for the kids, and you’ve got the makings of a busy Saturday afternoon.

When you arrive, you can count on a bevy of smart-sounding deals: X% financing (where “x” equals some number less than 1.0%), Cash Back deals, Bring Back deals. You can expect to learn what “taking delivery from dealer stock” means. You’ll start to wish you listened more carefully to the super-fast-disclaimer-talk the last time you saw the television ad.

It’s also pretty easy to guess what car nameplates you’ll see on the lot: Chevy, Ford, Dodge, Chrysler, Jeep, Buick, Kia, Hyundai. You might see the occasional Honda or Toyota, but don’t get your hopes up.

It is so common, and so predictable, that it becomes background noise. In the advertising biz, this type of promotion is akin to wiping your backside with your ad budget - no one is listening anymore.

But here’s where it gets interesting. (more…)

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Author: Jason Voiovich Ecra Creative Group

Key Points: 1. There is little doubt the “Cash for Clunkers” generated intense activity and excitement, running out of money in the space of one week. 2. However, the real-dollar impact on the auto industry (or on any other tangible measure you like) of the program is modest at best. 3. The true impact is psychological, working quite efficiently to change the public outlook.

Incentives matter.

I was on the phone last week catching up with the professor who taught me that essential marketing truth more than 15 years ago. He was just back from a trip to Europe. What struck him was how Europeans drove. They owned small, efficient cars that they did not drive very often. In most of the EU, gas ranges from US$5 to $8 per gallon, so it’s not hard to understand why.

On the other hard, Europe has no “car culture” to speak of, and plenty of efficient transit options.

All of that got the good doctor thinking about the old Jeep in his driveway and the “Cash for Clunkers” program (Car Allowance Rebate System - or CARS - is the neato government acronym) and how he could drive a more efficient vehicle. (more…)

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Author: Jason Voiovich Ecra Creative

Key Points: 1. When the shop is slow, Jiffy Lube technicians take the opportunity to drive impulse decisions from passing motorists using direct monetary incentives. 2. The immediacy of the technique makes it quite smart for the chain; Jiffy Lube has reasons for its customers not to think too hard about their decision. 3. While smart, the idea is easily imitated. Jiffy Lube might be wise to consider spicing up the incentives to drive business and boost its brand.

We were on our way to the Pine Tree Apple Orchard in White Bear Lake when the service light came on.

The service light meant, of course, that our 2005 Honda Odyssey wanted its oil changed. Surprisingly, it was at that same moment that my wife spotted a poor, dejected soul standing in front of the Jiffy Lube station holding a small sign that read “$24.99 Oil Change”.

I was content to wait until later in the week to get the work done at the dealer. My wife was not. We stopped. (more…)

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Author: Jason Voiovich Ecra Creative Group

Key Points: 1. Minnesota-based Victory Motorcycles leverages its parent company’s expertise in small engines to break into the motorcycle market. 2. But it doesn’t shy away from the fight: The company focus on high-end touring and custom bikes boldly puts them up against Harley-Davidson. 3. Victory has a fighting chance, but its growth will remain stunted unless it defines more clearly what it stands for, rather than focusing on Harley.

I am not a motorcycle guy.

That’s not a negative statement. Nor is it a positive statement. I just have no real experience with motorcycles of any kind.

But despite that, an ad at the Blaine, Minnesota Green Mill caught my eye. The basic ad copy read: If you were interested in an American-made bike, and if you cared about performance and reliability over “just a brand name”, then you should ride a Victory Motorcycle.

The ad mentioned a few specific performance and reliability measures, but made no specific mention of the “other” American-made motorcycle in question. But for a branding guy, there was no question to which brand Victory was referring. Of course, Harley-Davidson. (more…)

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Author: Jason Voiovich Ecra Creative Group

Key Points: 1. Japanese luxury auto brands reinvented the dealership experience in the 1990s to put the buying experience in line with the image they wanted to project. 2. Other lux brands followed suit, and could afford it. Dealerships for cheaper auto brands also followed suit, but they cannot afford it. Huge numbers of dealerships are failing. 3. The dealership model is likely forever changed; survivors and thrivers will turn to online sales to rebuild their businesses.

My wife’s 2005 Honda Odyssey minivan needed some regular service.

I pulled into the dealership’s staging bay - a clean, well-organized triage line. A service advisor greeted me while another team readied the vehicle for service. A few moments later and I found myself in a waiting room filled with leather chairs, soft music, 48-inch flat screen televisions, private computer workstations, free wi-fi, free coffee, and free doughnuts. About 45 minutes later, the minivan was washed, vacuumed, and ready out front.

Clearly, this was great service in an impeccable environment, and an enviable case study.

There was only one problem: The dealership cannot afford it.

To understand why, we need to step back about 15 years, and learn a little bit about high-end automobile branding. (more…)

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