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AUTOMAKERS STEER TO AGILE MARKETING CONSUMER RESEARCH DRIVES TREND TO MASS CUSTOMIZATION

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Snapshots of agile automotive marketing, 1995 style:

In shopping malls in the test markets of Milwaukee and Portland, Ore., curious consumers approach Plymouth Place, an interactive kiosk dubbed a "Tech Cart" by Chrysler Corp. Two touch-activated computer terminals allow them to view running footage, select options and get a pricing printout for a Neon or Voyager.

Using registration information from R.L. Polk & Co. and database information from Time Warner publications, General Motors Corp.'s Chevrolet division has determined which subscribers are likely to buy a coupe versus a sedan. Each of 14 million subscribers to Entertainment Weekly, Life, People, Sports Illustrated and Time saw either a Cavalier coupe or a Cavalier sedan ad, depending on the matchup.

Toyota Motor Sales USA aired a 30-minute infomercial on its new Tercel that was tested on network affiliate stations in New York and Los Angeles. Of the 30,000 requests for more information that resulted, about 60% asked for computer discs instead of brochures. That figure indicates the test, which ended in mid-January, reached its target of younger adults, who are more likely to be adept with computers.

Black professionals in 10 cities are being invited to take test drives of up to three days in a new Chrysler Cirrus. Chrysler is drawing participants from the subscriber lists of Black Enterprise, Emerge and Essence, and from members of black organizations.

No, the automakers haven't abandoned mass media. The automotive category spent more than $2 billion on spot TV, over $1.5 billion on network TV and better than $1 billion on magazines in 1993, according to Competitive Media Reporting.

But a big-bucks mass media buy alone no longer passes for a marketing strategy-not with hyper-competition involving global players that have an arsenal of media options and a glut of statistics about individual consumers.

The auto industry traditionally has been a business where a handful of products were marketed to a mass audience. For various reasons, product customization was the exception to the rule.

But in the industry today, the need is for agility-to use many tools, both mechanical and marketing-related, to meet the wishes of specific consumers.

In the early, pre-marketing stage, the car companies are practicing the theory of "agile manufacturing": the ability to incorporate mass customization in the production process, with each individual product meeting the specifications of a certain customer type.

Actually, marketing and manufacturing are no longer separated. The process of creating agile marketing plans begins by factoring in consumer behavior to design the car or truck. It then goes all the way to the promotion of the vehicle and even the handling of an owner after the sale.

"Marketing is not doing one thing right, it's doing 1,000 things the best you can," says Robin Smith, managing director of D'Arcy Masius Benton & Bowles, Bloomfield Hills, Mich., the ad agency for GM's Cadillac and Pontiac divisions.

Arthur "Bud" Liebler, Chrysler's VP-marketing and communications, recalls that just a decade ago the carmaker was teaming up with McDonald's Corp. to offer a hamburger, fries and Coke to take a test drive. Today's auto marketing efforts, he notes, are a lot more targeted, not to mention sophisticated.

"With more competitors playing in more segments of the market, with more media choices, it's absolutely more complex," he says. "Trying to keep up every day is an enormous challenge."

So many tools are available that some automakers suffer paralysis by analysis, according to George Peterson, president of AutoPacific, an auto marketing consultancy.

"Some automakers let themselves be overloaded by everything," Mr. Peterson says. "The challenge is to sort through the information and develop a cohesive marketing strategy and supporting tactics to focus a message to areas that really need support."

Mary Treisbach, director of marketing at Subaru of America, says automakers need to carve out ways to speak directly to smaller groups of consumers.

"Some companies are slower to do that [however], because there is a real reluctance in our business to change the way things used to be," she says.

Agile hasn't been an adjective often applied to giant GM. But Philip Guarascio, VP and general manager-marketing and advertising for GM's North American Operations, says the automaker is working hard to leverage the advantage of size through increased coordination.

With seven vehicle marketing units, GM has more opportunities to test new technologies and media.

"We look at it as an opportunity. We can get more experience in a shorter period of time because of the breadth of the organization," Mr. Guarascio says.

"Agility is when you're quick and sure-footed, and that's what we need to be," he adds. "We don't want to be nimbly moving into things that don't make a large amount of sense. That doesn't mean we're not going to make mistakes, but when we're taking a risk we want to know it."

As automakers rely on more than traditional advertising, they're also counting on a wider range of resources than just traditional ad agencies.

Mercedes-Benz of North America, for instance, has hired Los Angeles talent agency International Creative Management to develop exclusive music, TV and other entertainment properties for the auto importer. ICM also will help integrate interactive media into the marketing mix for Mercedes.

"It's harder to reach prospects through traditional advertising alone," says Andrew Goldberg, general manager-integrated communications for Mercedes. "We need to be there in a multiplicity of places."

GM also is expanding the use of outside resources, Mr. Guarascio says.

"There's so much technology happening, any organization to remain competitive needs a much wider breadth of resources and it needs a focused strategy against which to measure opportunities and investments," he says.

Another aspect of agile marketing involves slicing and dicing the market into demographic, geographic and lifestyle segments.

There's been a surge in marketing efforts directed to women, to ethnic minorities, and to specific age groups such as the young-adult members of Generation X.

"Minority groups want to know that we recognize their spending power," says Chrysler's Mr. Liebler.

Mr. Peterson says media and messages need to be tuned differently to reach specific demographic targets based on gender, ethnicity or age.

"No group wants a condescending message. Even Xers, while their media habits are different, want a straightforward story delivered to them," he says.

Agile marketing also implies being able to change on the fly.

"We try not to lock down a battle plan too far out in front, because you can find a lot of opportunities," says Steve Lyons, Ford division's general marketing manager.

For instance, as Ford shows off its redesigned Taurus at auto shows, "we're getting feedback on what people are most interested in, what's their hot button," Mr. Lyons says. "We'll want to be able to adjust our communication to hit those points. The old way would have been to have the campaign in the can."

The foundation for agile marketing is a thorough understanding of customers.

According to J. Ferron, Detroit-based partner in charge of Coopers & Lybrand's automotive consultancy, that knowledge will enable an auto company to save costs because it will only produce vehicles that dealers can sell.

"A consumer revolution is happening in groceries, in electronics, in clothing. The auto industry is not immune," Mr. Ferron says.

"If you're an automaker that's not focused on the customer-if you're focused on protecting your dealer body or your manufacturing base or your suppliers-then you're looking through the telescope the wrong way," Mr. Ferron says. Leah Rickard contributed to this story.

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