That was the response of Deborah Wahl Meyer, VP-CMO at Chrysler, when she was asked to cite consumers' greatest misperception about its vehicles. It is the job of Ms. Meyer, the former VP-marketing of Toyota's luxury Lexus brand, to turn that notion around. Chrysler's auto recall rate is about the same as those of Detroit's other two carmakers, she said.
Motor City will be watching closely next month as Chrysler breaks an ad campaign from BBDO for all its brands estimated at $25 million. Ms. Meyer showed the new commercial at the Detroit Adcraft lunch last Friday which is themed "the new day" at the "new Chrysler." The spots use third-party testimonials to tout Chrysler vehicles' interiors, quality, warranty and value. The idea is to show that the automaker has changed.
And indeed it has. Private-equity firm Cerberus Capital Management bought a majority interest in Chrysler from Germany's Daimler last year and took the company private.
More than perception
This marks the third time since the late 1970s that the carmaker has advertised itself as "the new Chrysler," according to Todd Turner, president of consultant CarConcepts. "If it was only a perception problem, they could fix it with communications, and even so, that takes a lot of time and money."
Mr. Turner said auto recalls aren't a true barometer of quality since they apply only to safety-related problems. He recommended that Chrysler officials focus on all aspects of their products, including fit and finishes, ride dynamics and interiors -- citing the rattling and vibrating of the rear axle on an all-wheel-drive Dodge Caliber he recently rented.
It is clear Chrysler has a way to go in convincing consumers. Its three vehicle brands, Chrysler, Dodge and Jeep, all rank below the industry average and near the bottom among the 35 nameplates in consultant J.D. Power and Associates' 2007 Initial Quality Study. The study is based on responses from 97,000 buyers of '07 model cars and trucks 90 days after purchase.
Power's latest Vehicle Dependability Study, which surveyed more than 47,000 original owners of 3-year-old models, ranked the Chrysler nameplate just below the industry average, with Dodge and Jeep further down the list.
Chrysler's new models should help, since consumers tend to believe fresh products are improvements over older offerings, said Pete Hastings, senior VP and analyst at Morgan Keegan & Co.
Ms. Meyer said Chrysler's major launches this year include the all-new Dodge Journey crossover this quarter, the return this spring of the Dodge Challenger coupe muscle car after nearly 35 years and the redone Dodge Ram pickup this fall.
Chrysler will show the Challenger at the Chicago Auto Show next month. Ms. Meyer said the 9,000 preorders for the car, done via dealers, exceeded expectations.
She said the biggest difference between Chrysler and her former employers Toyota and Ford is how quickly the automaker can make decisions. A verdict on a new campaign or strategy can come within three days instead of three to six months. The coming ad campaign took less than two months to put together, Ms. Meyer added. "The pace of change is exciting."
The Motor City on the RopesWhen Chrysler Chief Marketing Officer Deborah Wahl Meyer took the stage at Detroit's Adcraft Club on Friday, there was an elephant in the room among the 1,000 members at the sold-out lunch. Chrysler's creative and media agencies had, just within the past two days, told some 120 staffers their jobs were being eliminated or moving to New York.
"They should have canceled the meeting," which had been booked months before, out of respect for the members losing their jobs, remarked one media-sales representative. Another quipped that he didn't want to sit too close to the stage to avoid getting blood on his new suit if someone took a potshot at the marketer.
On Jan. 9, Chrysler agency BBDO Detroit in Troy, Mich., let go some 80 employees. Then on Thursday, PHD's Troy, Mich., office informed 40-plus of its 150 employees it was moving planning operations to its Manhattan office, as well as national TV buying. Most of the cut staffers, including several executives, will stay on until early February. Mike O'Malley, president of the Detroit office, did not return calls for comment, and a PHD spokeswoman in New York declined to comment.
By mid-afternoon Jan. 10, several dozen PHD staffers, former employees and media reps had gathered at a local watering hole in a show of support, or what several called "a wake."
If Ms. Meyer was nervous at the luncheon, it didn't show. The Detroit native, who returned last summer from Toyota in California, told the audience, "Our agencies have been amazing" and "are doing some of the best work they've ever done."
She outlined five core business fundamentals the automaker is pursuing: putting the customer first, quality, being green, going global and being open. The last one is somewhat ironic, since Chrysler announced a month ago its top communications VP, the popular and respected Jason Vines, would leave Jan. 1, with public relations now reporting to human resources.
Todd Turner, president of consultant CarConcepts, said the move shows Chrysler "doesn't value PR as part of communication tools, and that is going to hurt them."
Ms. Meyer also laid out the tenets of the automaker's 2008 Marketing Action Plan, which, while broad and somewhat vague, offer hints to Chrysler's marketing and media strategy.
The PowerPoint slide Ms. Meyer showed listed them as "Targets are out, individuals are in"; "Narrow the perception-reality gap"; "Go granular"; "Optimization"; and "Core metrics." On the last item, Ms. Meyer said: "We can't not know where every dollar is going. No accountability is no longer acceptable." Chrysler can't rely on a national plan and focus, she said, which is why its "granular" plan is to do more work regionally.
The automaker is looking at whether to combine staff and duties internally again for the Chrysler and Jeep brands, Ms. Wahl told Advertising Age. That could reduce head count and expenses. BBDO and PHD are in the midst of consolidating staff on the two brands, said executives close to the matter.
But it's not just agencies that will have to adjust. Bela Kogler, associate publisher of The Progressive Farmer and an Adcraft board member, noted that just a few years ago, Detroit had sales offices as prominent as those in Manhattan. Now, he said, area media outlets will be forced to restructure their business in Detroit.