Carmakers, including General Motors Corp. and Ford Motor Co., originally based their 3-year-old brand management restructurings on consumer product, food and beverage marketers. Now, they're starting to study fashion, consumer electronics and computer software companies as their brand structures evolve, according to consultancy A.T. Kearney Inc.
The auto industry admits it makes commodities, but the brand management approach to commodities might not be enough for the car industry, according to Kearney VP Jim Mateyka.
The industry is now focusing on the three new categories due to their ability to keep customers at the leading edge with products they need and want, Mr. Mateyka said.
His comments came last week when he revealed findings of a new Kearney study, for which the consultancy talked to six undisclosed carmakers.
Other observers agree with the move by the industry.
Autos are more like the fashion business than others, said consultant Christopher Cedergren, managing director of Nextrend. The mix of new-car buyers is affluent and very image conscious.
'WEARING' YOUR CAR
"Aren't vehicles like clothes -- don't you really wear your vehicle?" Mr. Cedergren asked.
Fashion retailing can be applied to car selling, with more boutique-like stores, said Susan Jacobs, president of auto consultancy Jacobs & Associates. "Fashion would affect how products are designed and how the products are presented in retail."
The Kearney study also indicates it's too soon to tell whether or not automotive branding is a success.
The industry has embraced branding partly because it's increasingly difficult to differentiate products in a market with more entries and partly because of increased product parity.
It costs more to build brands these days, the survey found. During the 1970s, marketers could establish a new brand by spending $10 million on marketing annually for two consecutive years, Mr. Mateyka said. In this decade, the figure has jumped to $75 million per year but takes three to five years, he said. Also, branding has only begun to have an impact on the way the car companies do business.
The first changes in an approach come in advertising, from six months to a year after branding programs begin, Mr. Mateyka said.
Once branding programs are in place for three to five years, new-product development will be impacted. It will take eight to 10 years to improve auto retailing, modify corporate cultures and alter consumer perceptions, the study said.
LOOKING TO ELECTRONICS
Carmakers are studying consumer electronics as a model to help gauge the public's receptiveness to new technology.
"A lot of the retail revolution has taken place" in this category, Mr. Mateyka said. So-called big box chains, such as Circuit City Stores, have become more powerful than manufacturers now fighting for shelf space.
Republic Industries, which became the nation's largest auto retailer virtually overnight, is helping to spur what auto experts are calling the auto retail revolution.
The auto industry is "so far behind other industries in terms of how they retail," said Ms. Jacobs, noting outdated facilities and store locations.
Formal automotive branding has helped organize and link a variety of the marketers' efforts, she added, including product messages and owner retention.