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Ford Leaving Chrysler, GM in Its Rearview

Ford Leaving Chrysler, GM in Its Rearview
Strategy to Build Brands, Discount Less Pays off As Automaker Steals Sh
are



Published: March 09, 2009

DETROIT

Suddenly, the wind is at Ford's back.

Maybe it's the rising quality of its cars. Maybe it's the halo surrounding Ford for passing up federal funds being devoured by its Detroit rivals. Or it could simply be Ford's focus on building image in its marketing while others flog incentives. But for whatever reason, America seems to have decided that Ford is a better idea after all.


Through January, Ford Motor Co.'s retail-market share had risen for four consecutive months for the first time in 14 years, and that share was coming from General Motors and Chrysler. New data from CNW Market Research show that 19% of consumers who planned to buy a GM passenger car in January or February instead bought a Ford, Lincoln or Mercury. Some 15% of people who set out to buy a Chrysler or Dodge car in January instead switched to one of Ford's brands.

"Times like these can provide opportunities for us to distance ourselves for the long term," said Ford's Ken Czubay, VP-sales and marketing. "We are doing fine from a conquest standpoint."

Indeed, in the first two months of the year, the number of qualified buyers who planned to buy a Ford jumped 16% from 2008, CNW said. Qualified buyers who intended to buy GM fell 12% and Chrysler 33%.

Huge leap
That's a remarkable feat for Ford, considering that until three years ago, it was running ads tagged with the rather pathetic plea, "If you haven't looked at a Ford lately, look again."

"To be able to grow even a little bit of share in such a tough market is an accomplishment," said Cameron McNaughton, president of auto consultant TreeFarm Partners. Ford "is doing a terrific job."

More impressive is that Ford has moved up in America's estimation even though it has not touted in marketing the fact that it hasn't accepted a government handout. Ford said it never really considered doing so, figuring its limited funding is better spent on brand building.

But another reason may be it simply doesn't need to. CNW President Art Spinella said 93% of Americans already know Ford is not now dependent on government funds, while 95% of consumers polled by his company know GM and Chrysler are on the dole.

Any ads by Ford along those lines "would absolutely be the wrong thing to do because it would look like they're dancing on GM's and Chrysler's graves," Mr. McNaughton said.

Keeping quiet
"For Ford right now, the right way to handle this is to stick to their knitting," said one top industry creative with knowledge of auto accounts. "They should say the positive things about the quality of Ford products, as they've made huge strides, and their products are much, much better than ever before." He added: "The Page Ranking that they are getting around the whole bailout is doing that job for them."

Of course, there's also the real chance that Ford may have to stretch out its hand after all if its reorganization plans don't work out.

Ford also felt the brunt of the industry's worst sales in 40 years. Ford, Lincoln and Mercury's U.S. sales plunged 48% to 96,044 units vs. February 2008. And though Ford's retail share had climbed for four months, in February its retail share fell one point to 11.5%, which it attributed to an industrywide drop in full-size pickup sales, a category it dominates.

But if consumers were going to buy a truck, they were likely to think Ford. CNW data show that 32.6% of Americans who intended to buy a GM truck in January or February instead chose a Ford Motor product. Ford had the highest conquest rates from GM among the six biggest car companies and was tops for winning over consumers who initially intended to buy a Chrysler truck.

Even so, the Ford brand still has a way to go when it comes to cars. Toyota and Nissan managed to grab more consumers who intended to buy Chryslers, according to CNW.

Newfound confidence
With its newfound strength, Ford has also regained its ad swagger. The company is displaying a strong tone of confidence in its launch ads for the second-generation Ford Fusion midsize gas-powered sedan and first Fusion Hybrid. Ford's Matt Van Dyke, director-marketing communications, said the multimedia blitz, which includes four months of TV advertising that broke last week, targets the so-called "upper purchase funnel" of people who aren't in the market for a vehicle.

That strategy is the opposite of the one GM, Chrysler and other automakers in the crumbling new-vehicle market have been using, which is to heavily aim at people lower in the funnel, or closer to purchase.

Ford's approach will allow it to build brand equity and demonstrate that when Americans are ready to buy, there will be a Ford in their future. Mr. McNaughton said he likes the straightforwardness of Fusion's launch TV spots from WPP Group's JWT Team Detroit, which highlight fuel efficiency and the vehicle's Sync technology. "People don't want dancing girls; they want facts and information."

The automaker is also taking a different road in trying to wean itself off incentives. "We are zigging while some are zagging in the incentive world, and this is the way Ford Motor Co. is going to build for the future," Mr. Czubay said.

Incentive spending in the industry overall was up $400 per vehicle from January to February but down $800 at Ford, said George Pipas, sales-analysis manager for the U.S. at Ford.

"Retail messages with $5,000 off aren't enough" to woo buyers these days, Mr. McNaughton said. "Ford is taking the higher ground. That's really smart."


LINK:Branding, Discounts Let Ford Beat Chrysler, GM - Advertising Age - News

Rick

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