Contrary to expectations when I wrote my previous post, the car posts keep coming. CoComment is down for maintenance presently, and I felt it worth recording what I just wrote at the Kiwi Car Lovers’ Blog, which I discovered tonight, rather than leave it to the Swiss service to keep track of. But it is relevant to the core idea of this blog of branding.
   It’s a fairly well written blog with three contributors, and a case was made about the decline of Mercedes-Benz. In response, I wrote the following.

The quality issues are over these days, in my view, having driven B, CLS and S lately. The ML was a pig—borrowed one that was falling apart and with plastics that were typically nasty-American.
   Mercedes’ problem with exploring so many niches—at some point we will have a Klasse for every letter of the alphabet—is not so much that they do. The issue is that the designs are not cohesive and the company’s approach to using design to express its brand is almost Japanese. In other words, disparate.
   Having said that, the CLS is sublime: it was a car I was ready to hate till I had one for three days, and it fitted as neatly as Pamela Anderson into a red wetsuit.
   As to the smaller cars, the B is competent but overpriced; sure-footed but visually incongruous. However, no manufacturer can survive without going downward, and creating a brand from scratch can be dodgy (to wit, Smart, though establishing brand equity takes time, and I agree with Rob about its US chances).
   I keep saying, ‘Premium is the new mainstream,’ something that is happening in all consumer goods. Cars are no exception to this demand for premium quality in everyday items.
   Thus, the takeover of Chrysler was probably inspired in idea, but sloppy in execution—the destruction of Plymouth, the repositioning of Chrysler, all proving that the Germans, with the possible exception of Volkswagen, are not good at brand management.

   The last sentence is an exaggeration: the German automakers are great at managing German brands, and they learn very quickly from their mistakes. Hence, BMW is having a whale of a time with Mini. But its failure with Rover (which was partly a brand issue—notice how many times the advertising tagline was changed during its ownership and how it could not decide if Rover was a member of the BMW Group) and Mercedes’ with Smart (clever in many respects; less so with its pricing given where Swatch watches were positioned) were on my mind when I wrote the above.
   Not enough emphasis was placed, at the time, on how the brands could be integrated, nor how mainstream, volume manufacturing could be combined with its core competences. (Easy to say with hindsight.) But the Germans were right about three aspects: that new niches needed to be explored, economies of scale would become important, and acquiring a volume manufacturer was a sure way to prevent someone else from buying itself.
   Mini was not a fluke: BMW followed its own handbook on that one, similarly with Rolls-Royce. The rest shows that branding and marketing need to be part of the strategic decision, especially where consumer-targeted products and services are concerned. It is the one interface between organization and consumer.
   These days, fortunately for Stuttgart, DaimlerChrysler has wised up, its brands’ standing so defined that it deems it safe for Chrysler underpinnings to be beneath the Mercedes A- and B-class come the turn of the decade. Plus, the quality shocks of the last 10 years have seen Mercedes’ build improve no end in the last year. All of that sounds like positive brand equity to me.

Del.icio.us tags: DaimlerChrysler Mercedes-Benz BMW premium niche marketing mainstream branding brand Posted by Jack Yan, 09:49  permalink

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