Tag Archives: premium

Jaguar – the power to change the world?

jaguar-teaser-hed-2014_0Jaguar is going for it. And, you have to say, doing great things with how it’s communicating the brand. British, edgy, daring, contemporary, it’s making the most of the freedom it has compared with the premium-brand grandees Audi, BMW and Mercedes. It’s Paul Smith to Hugo Boss, Arts and Crafts to Bauhaus, Virgin to Lufthansa, The Who to the Scorpions. It’s punk premium.

The German carmakers can’t reinvent themselves like Jaguar’s doing. They’ve got solid-core brands and big market shares to protect, and are now mainstream players. They sell in every segment of the market, including to fleet managers and folk who would have been driving Fords and Peugeots until a few years ago, whereas no matter how successful Jaguar becomes it’s going to remain a relatively small-volume player. But unlike the other small premium brands, Lexus and Infiniti, it has heritage, so it can communicate like a niche brand, in a confident and exclusive way. It simply doesn’t need to appeal to everyone.

So it’s pushing the boundaries, and the high-profile Good to be Bad campaign works well, at least for the USA. The ad has been well cast with alternatives to the mainstream: Tom Hiddleston isn’t yet stereotyped, and Mark Strong, essentially a supporting actor, makes for a believable villain. Yes, since playing the terrifying Don Logan, in Sexy Beast, Ben Kingsley exudes barely contained psychosis – someone Ray Winstone wouldn’t want to meet in a dark alley. And yet he’s suitably ambiguous, a richly spiced mix of Gandhi, RSC and Iron Man. This is a sharp selection of bad boys for the new brand.

But the use of actors and celebrities, no matter how carefully chosen, is a well-worn route and a rather prescriptive brand tool. We don’t really think that the good-to-be-baddies drive Jaguars.

Jaguar is cooler than this. Earlier this month, somewhat more quietly, it launched the ‘100 Most Connected’ list with GQ, first F-Type customer Jose Mourinho and the very now Editorial Intelligence organisation, which connects the UK’s most influential people and curates relaxed meeting-of-minds get-togethers. The next one is at Aldeburgh, the Victorian Suffolk coastal town. True, it now serves as a seaside London suburb, but it’s very deliberately not Davos.

In engaging with this community Jaguar is aligning itself with state-of-the-art thinking: we’re now in a networked world, where who you know means what you know. Where top-down power is beginning to be unseated by a free flow of information. Where companies are beginning to value knowledge and thinking as much as revenues and profit. Where CSR is beginning to be questioned by a genuine desire to improve the quality of people’s lives. Where we need companies, brands and politicians to believe in what they’re doing.

So here we have Alain de Botton and David Beckham, Peter Fincham and Lionel Barber, Idris Elba and Andrew Neil holding hands in the Most Connected list, gazing out at the sea and feeling the sand between their toes. With Jaguar in amongst it. The message is that the company is progressive enough to embrace the new, post-recession world – one in which failure of the financial system, the need for sustainability and the growth of digital interaction have created a real shift in the way people think and communicate. Jaguar is absorbing influences from the varied spheres which a company providing something as vital as mobility should do.

In an essentially conservative, old-fashioned motor industry driven by the imperative to sell and month-end figures, Jaguar is probably the only brand which can do this. It has an extraordinary opportunity – to demonstrate an understanding that, in future, brands will be shaped not so much by traditional marketing messages as by changes in corporate thinking and behaviour. By actions rather than words. By engaging with people. By doing good.

Utopian vision? It’s happened before. As Henry Ford, the man who mass-mobilised the world, said: “To do more for the world than the world does for you – that is success.”

Note: Go to http://www.citizenrenaissance.com for more about progressive communications from the UK’s leading exponent Robert Philips, ex-Edelman EMEA President & CEO and founder of http://www.jerichochambers.com

Ford says upper-medium segment still important – it is if you’re German

ford-vignale-concept-new-photos-released-photo-gallery-medium_13Ford was quoted a few days ago saying that the upper-medium market segment, in which its Mondeo competes, is alive and quite well. Yes, it still accounts for a significant number of vehicles. But

The shift away from traditional large-ish cars took a permanent and dramatic turn in 2008. Two things happened. The sight of ashen-faced bankers carrying cardboard boxes out of the Lehman Brothers building made people realise that the world was indeed in economic meltdown. Things would change, including our buying habits. At the same time, Nissan had replaced its medium-sized Almera and upper-medium Primera with a single car and consumers were beginning to notice it. The Qashqai had the footprint of the Almera but the interior space of the Primera. It offered the appeal of an urban crossover without the pretenand its owners were buying into a new trend, not an image of company car drudgery.

From a financial point of view people questioned whether they needed a large car. From a lifestyle point of view they questioned what they wanted a car to do. Nissan had invented the popular crossover.

Since 2008 the UK has seen a major shift away from the upper-medium segment to smaller, more efficient and more versatile cars – minis and superminis as well as crossovers, SUVs and MPVs. So, despite that fact that the company car sector – the biggest taker for upper-medium cars – still accounts for over 50% of the market, the segment has dropped by over 45% and is barely a third the size of the lower-medium segment. At the same time minis and superminis, multi-purpose and dual-purpose vehicles have grown, the latter overtaking upper-medium volumes. The only upper-medium car to make it into 2013’s top ten sellers was the BMW 3 Series (at no 7, one place behind the Qashqai).

Which raises the really important issue for Ford. The company was also quoted saying that customers use a manufacturer’s ability to produce an upper-medium model as a measure of brand quality. I don’t think so.

Ford is stuck with the Mondeo. Unlike Nissan with the Primera it has a valuable share of the fleet market. Ford also has a loyal private customer base for whom ‘Ford’ is British. Dagenham. Honest. And of course the company shed its premium brands, Jaguar, Land Rover and Volvo for a One Ford strategy a few years ago. And now, with the relentless invasion of the mainstream segments by the German premium brands, coupled with the new popularity of the value brands, Ford and the the others in the middle ground are being squeezed. Hard. They have to fight back.

So Ford has announced the Vignale sub-brand to be introduced on high-spec versions of the smart next-generation Mondeo, offering dedicated, premium service. Renault is doing something similar under the Initiale banner. GM has dropped Chevrolet to concentrate on targeting Opel/Vauxhall at the German premium makes. The problem is that it’s easy for Audi, BMW and Mercedes to grow their customer base by extending their range to include smaller, cheaper, more family-friendly models. It’s a different thing altogether for a solidly mainstream brand to try to develop an upscale customer base.

The idea that medium-to-large everyday cars offer a quality marker for a brand is only right if you’re talking about Audi, BMW and Mercedes. They can even sell old-school three-box saloons by the bucketload in the form of the A4 and A6, 3 and 5 Series, and C and E Class. And if consumers want to go off-piste they’ve got Volvo for safety and Scandi design, Lexus for hybrid technology and build quality, VW for those who prefer What Car? to Superbrands. No matter how good a Mondeo is objectively – and it is good – the blue oval is a glass ceiling.

For Ford, providing a better experience and better product will almost certainly serve primarily as a differentiator from other mainstream brands rather than enabling them to compete with premium brands. Especially in the upper-medium segment which is largely responsible for way we aspire to the German badges.

 

Is Audi sacrificing brand equity for volumes?

audi-nanuk3_1024-940x628The shape of the car market has changed completely in the last decade. It used to have a bulging middle, stuffed with the mainstream makes, and with premium and value brands occupying the poles.

Now it resembles an egg timer. The middle has been squeezed to within an inch of its life, by aspirational value brands from one direction and acquisitive premium brands from the other. Ford, Vauxhall/Opel, Peugeot, Renault, Honda and Toyota have had their market share ripped apart by Skoda, Kia and Hyundai, and BMW, Mercedes and Audi.

No brand comes close to Audi in shaping this new landscape. The company has embarked on an explosive product diversification programme, offering everything from a supermini to a supercar, with around 50 key model variants including crossover versions of all its volume products. It plans to increase to 60 variants by 2015, partly by entering some of the few segments it’s not already in, with Q6 and Q8 crossovers, a version of VW’s Up! mini and even a people-carrier. Audi’s value to VW was evident at the recent Frankfurt motor show, where it was given its own hall, separate from the one accommodating the group’s seven other brands, where its segment-busting mentality and naked ambition were shown by an off-road supercar concept.

It’s not only the largest of the premium makes by volumes; it outsells Fiat and Citroen, and is within 0.5% of Peugeot and Renault. And now it’s become the UK’s fourth-largest seller, behind just Ford, Vauxhall and VW. The fact that it’s achieved this without a single model in the top 10 emphasises its incredible spread. CEO Rupert Stadler’s recent comment that Western Europe’s market won’t recover before the end of the decade must have felt like a stab in the eye to the beleaguered mainstream brands.

An extraordinary success then. But the future may not be quite as simple: it will be a challenge to maintain brand equity as a result of shifting into so new market segments and growing so fast. Yes, Audi benefits from the scale of VW Group, meaning that it can develop high-quality products economically and price them competitively, so it will continue to churn out very good cars at affordable prices.

But the company has built its business on being premium and aspirational. Its ubiquity means it’s no longer truly aspirational and, by definition, it’s not exclusive: while the exceptionally low interest rates of the last few years have helped grow sales they’ve also helped commoditise the the productsA few years ago owning an Audi meant independent thinking and cool Bauhaus understatement; now it means nothing in particular.  If a brand is present in every part of the market including all the mainstream segments, conquesting business from the mainstream brands, can it continue to perceived as premium?

It will be interesting to find out, and only the customer will decide.

Volvo – more upright, less up tight

13195_10151460597409489_20262807_n-1I’ve just been reading about the new Volvo ad campaign running in the USA. It seems Volvo is now nailing its identity, how it differs and how it’s relevant. And the economic conditions of the last few years mean it’s more relevant than it’s ever been.  In a world where culture is moving away from flashy displays of wealth and towards authenticity, the market has come towards Volvo.

The company has traditionally struggled to get a seat at the premium table. It’s been sub-premium, which is a mighty difficult position to communicate as a virtue, especially to potential new customers. So Volvo became stuck, and with the premium German brands entering lower-priced market segments its task became a lot more difficult. Over the past few years, however, it has realised that trying to compete on exactly the same terms with BMW, Audi and Mercedes is futile, and that it has more relevance as a brand whose products transcend traditional aspiration and perception – occupying its own lateral space, outside the vertical hierarchy. And its hands-off owner, Geely, is giving a great example of brand stewardship by allowing this to be articulated.

Today’s teaser shots of a new concept, a coupe which is exciting but retains Volvo’s solid design language courtesy of new chief designer Thomas Ingenlath, shows Volvo can be taken to new levels of desirability. And Volvo is about to become a leader brand with the launch at the Frankfurt motor show of a cutting-edge new engine family and platform. Yet for all the new sleekness and new-tech, the car which Volvo4has been the catalyst to Volvo’s recent brand journey is the decade-old XC90 SUV. It’s become the default family transport – even Jeremy Clarkson has owned them. As nicely executed as an Audi Q7 and more practical than even a  Discovery. The German brands have massively expanded their product ranges in recent years, inevitably going into SUVs, but range diversification works best if it’s based on real brand values, and the XC90 was an extension of Volvo’s undisputed practical-box-on-wheels principle, reinvented as a lifestyle package.

Volvo is a genuine lifestyle brand. The cars are a pleasure to use and to own, for real people – they’re even more usable than its estate cars of 25 years ago, but now in an aesthetically pleasing form with an increasingly authoritative use of Scandinavian design principles applied to comfortable, well equipped and well-made interiors, with cossetting safety. A Volvo is good place to be – like your living room on wheels, with everything just where you want it. It’s about practical style.

And there’s a kind of luxury in that, never mind just premium value – like a hotel which discreetly anticipates your needs rather than welcoming you with a magnum of Cristal. The cars are understated, work well and are satisfying to use, rather like Apple products. You may not have heard these two brands in the same sentence before, but Volvo, like Apple, is a classless brand. Drive one and you could be a business executive, architect, antique dealer, writer, farmer or housewife. Nobody will judge you and nobody will dislike you.

This is the point of the new ad campaign – http://youtu.be/umzNMC13QEk. A Volvo is less shouty than a Mercedes. A Merc announces itself loudly these days, with its body bulges and creases and its cabin-full of buttons and chrome. Volvo has become the antithesis of this. Ironically it’s now not that far from where Mercedes used be – well made cars with integrity and clean, modern design which become a friend to the owner. Volvo is The Killing, Mercedes more like a Jon Woo film.

Cars say a lot about their owners. But for Volvo what’s important is what they don’t say.

Does i3 blow away the Leaf?

wallpaper-1600x1200-9BMW officially announced the first of its new range of electric vehicles yesterday with a simultaneous launch in Beijing, London and New York.

That tells you a lot: the company isn’t trying to convince anyone that the i3 is anything other than a city car, and one for style-conscious customers at that. It’s not any everyday car. BMW has a likeable honesty – electric cars are a compromise, but this one is less of a compromise than the rest. The company has made sure of that by offering two versions, one battery-only, complete with range anxiety, and a range-extender version with a petrol engine for topping up the batteries, similar to GM’s Ampera/Volt.

BMW has taken a properly ground-up approach to the design and engineering, with an innovative CRP passenger cell and largely aluminium chassis. So it’s light, offsetting the battery weight and helping ensure that is has the handling a BMW needs. And it has more torque than BMW’s own Mini Cooper S, so it’s quick.

But if the i3’s a game-changer it’s in the fact that it’s desirable – and not just because of the badge. It’s stylish and, critically, looks truly contemporary and different from everything else. The interior design is as modern as the technology and as clean as the emissions, with interesting fabrics, light tones and pale wood trim. Trim levels have names like Loft and Suite. Two iPad-like screens give an Apple-like feel. BMW could have made an electric 1-Series but this looks like a concept car. Or a Danish architect’s living room.

It’s cool and hi-tech, as an electric car should be. And it sensibly applies that technology to the practical task of overcoming some of the problems of EVs: the i3 comes equipped for fast charging, and a clever sat-nav system suggests ways of extending the battery range and directs you to charging points.

But the killer app is the cost. Priced from £25680 in the UK for the standard version and £28830 for the range-extender, including the government grant, it makes life uncomfortable for the Vauxhall Ampera (£29995) and even the Nissan Leaf (reduced to £20990). These are larger cars, but that’s not where the market is right now. People want premium and they want it in smaller cars, which happens to suit electric vehicles. So BMW’s answer is different – if i3 owners want to use a larger car occasionally they’ll be able to use something else from the BMW range.

The i3 will be successful precisely because BMW has understood that electric vehicles necessarily have limitations. Except in their appeal.

The elastic brand – Land Rover’s model explosion

Land-Rover-defender-concept-DC100-smallI read today that the replacement for Land Rover’s Freelander will drop the model name and become part of a growing Discovery family. So far so simple – Land Rover already has a confusing brand and model name structure and that’s about to get much more complicated, with the reported intention to diversify its combined Land Rover/Range Rover offering to as many as 15 distinct variants. That could be stretching it a bit.

Time was when Land Rover meant the iconic Defender, now 65 years old and about to be retired in its current form. Then came the Range Rover, which originally had hoseable seats but now comes with ones which will massage you and competes with luxury limousines from Cheshire to China. And as it’s gone upmarket it’s become a brand in its own right. However, the car shares the brand’s name, whereas the models which have moved into the space underneath the flagship, the Sport and the Evoque, are separately identified. Meantime Land Rover’s Discovery has also become something of an icon.

So a strategy of rationalising a rapidly growing range into three model lines – Defender, Discovery, Range Rover – will make sense. It’ll also help maintain the integrity of brands which could be at risk of being diluted by the race for sales growth and the drive upmarket.

However, it doesn’t tackle the issue of an increasing overlap between the models. There is little, it seems, that the new flagship Range Rover does that the new Sport can’t do. At the same time the new Sport will have a seven-seat option which, combined the availability of a four-cylinder diesel engine, jars with its Sport tag – surely practicality should be the preserve of the Land Rover brand, where the Discovery already does practical-meets-cool. Even more so when the next generation, based on the Range Rover, will have the inherent quality at the top end to satisfy all but those who simply must have the Range Rover badge. There’s even talk of a seven-seat Evoque, a car whose success is based purely on style over practicality, to the extent of publicising that it was designed with the help of an ex-Spice Girl.

Of course Land Rover can charge more for products with the Range Rover badge and achieve bigger margins. But, especially when you have brands founded on integrity and now luxury, it’s a dangerous play to let sales growth and diversification steer the brand rather than the other way round.

Land Rovers and Range Rovers are fantastic products but there are few bad cars these days. Mainstream carmakers have introduced premium products, and premium brands have launched downsized models. An already super-competitive market has converged. As a result, brand differentiation and relevance has become the key to consumers.

Land Rover and Range Rover has always had more of that than any other car company. Its challenge now will be to preserve it.