brand in new markets. WORLD BRANDS;FIAT STRATEGY DRIVES PALIO INTO EMERGING MARKETS;CAR MAKER HOPES TO ATTRACT NEGLECTED CUSTOMERS

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[sao paulo] The Palio is unique to the Italian town of Siena. It's the name of a passionately competitive horse race that every summer pits 17 contrade (local neighborhoods) against each other in fierce rivalry and ancient pageantry.

Palio is also the nameplate on Italian car maker Fiat's attempt to create a new kind of world brand-starting in Brazil.

As marketers increasingly develop international ideas far from their global headquarters, Fiat chose Brazil to launch the new car and create the ad campaign that will roll out with it.

$10 MILLION INTRO

Fiat introduced the Palio in Brazil in April with a $10 million TV, print, radio and direct marketing campaign. The theme line, which does not translate particularly well into English, is "Fiat Palio, the encounter."

Ads make a simple, highly visual association between the qualities of the Palio and a pair of hands, ranging from an adult clasping a child's hand (to suggest safety) to a closed fist (indicating strength).

The Palio, with three-door and five-door hatchback models, is Fiat's effort to scoop a bigger share of the emerging markets that will offer the fastest growth over the next decade. Fiat hopes this new launch will appeal to consumers in these markets who often feel they are second-class customers, stuck with outdated car models.

Giovanni Razelli, Fiat's CEO for South American operations, who is in charge of the Palio project, estimates that in a decade developing countries in Latin America, Asia and Eastern Europe will more than double their share of the world car market-to 33%, from 16% today.

EASY TO BUILD, FIX

Designing with this mass market in mind, Fiat says the Palio is a relatively sophisticated car that is not complex to manufacture and is easy to repair and service. In Brazil, prices range from $15,000 to $20,000.

"Smaller cars needed to be modernized in Brazil," said Carlos Chiesa, creative director at Leo Burnett, SÌo Paulo. Burnett, one of Fiat's two worldwide agencies (along with D'Arcy Masius Benton & Bowles), is handling the Palio internationally.

Fiat chose Brazil for the Palio launch largely because the car maker has a powerful 26% market share there, as well as a long history of surviving Brazil's economic and political instability.

The Brazilian factory has the capacity to produce about 300,000 Palio models a year. According to Mr. Razelli, Fiat hopes to be turning out a total of about 1 million Palios a year in 11 countries by 2000.

The car will be launched next year in Argentina, to be followed by Poland, South Africa, Morocco, India, Turkey, Venezuela, Egypt and other markets.

Contributing: Amy Barone, Milan

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