Evolution: (From l.) A 1953 ad touting the smoothness of a Mercury ride; an introductory ad for the '61 Comet, an early challenger to compact cars like the Rambler; and the debut of the "Man's Car,'' the '67 Cougar. MERCURY RISING: REINVENTING A BRAND: DIVISION HEADS WEST AND 1999 COUGAR KINDLES REPOSITIONING

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After decades of floundering, Mercury now believes it has found an identity.

The Ford Motor Co. brand is hanging its hat on "fun, flair and flexibility," as it aims for younger buyers. The positioning was developed after 18 months of research with owners and non-owners.

Research started around April 1996, about a year after Lincoln Mercury Division installed brand management. Research accelerated after the arrival of Jim Rogers as the division's general marketing manager in December 1996.

"New-car buyers generally like Mercury," Mr. Rogers explains. "Mercury customers felt Mercury was for individualists who wanted something different than mainstream Ford [Division] products."

The research also showed owners felt Mercury vehicles were more innovative than most people thought.

MERCURY'S `IDENTITY CRISIS'

Mercury was introduced as a brand in 1939. Founder Henry Ford wanted the name to be simply Mercury; his son, Edsel, wanted the brand to be Ford Mercury. That was the start of an "identity crisis" that's continued over the decades, says Mr. Rogers, half-kidding.

Part of Mercury's muddy image stemmed from its products, which looked very much like those of Ford Division, but with a few extra features, slightly different styling and a higher price, Mr. Rogers notes.

Next month, Mercury will launch its first distinct vehicle, the 1999 Cougar coupe. Cougar reflects the brand's new positioning, as will all Mercury vehicles arriving in the future.

Sales projections for the new Cougar are estimated at 50,000 units compared with the previous model, which sold 30,516 units.

Products are key in the brand's repositioning, says Mr. Rogers.

"It's very difficult to carry off the imagery without product," he says. "You can't substitute imagery for product or rely on just product without imagery."

THE NEXT STEP

The average Mercury sedan owner is 63 years old, says Mr. Rogers. The brand started to woo younger buyers when it introduced the Villager minivan in 1994. Now the average owners of Villager and the Tracer compact car and Mountaineer sport-utility vehicle are in their early-to-mid 40s.

Cougar will be targeted even younger, at 25-to-40-year olds.

"It's the next step in relevance for our brand," says Mr. Rogers.

Mercury has plans for other new products, which it hasn't revealed.

Lincoln Mercury Division will relocate from Detroit to Irvine, Calif., later this year. That will give it more autonomy from Ford Division. The division hopes to tap into new trends in fast-paced California.

Mercury's lineup currently offers "a grab bag of products that don't have a consistent theme," according to auto consultant Susan Jacobs, president of Jacobs & Associates. She cited the Grand Marquis sedan, which tends to appeal to older buyers and the new Cougar coupe at the other extreme with more contemporary styling.

But the brand can't afford to abandon its older owners so early in its repositioning strategy, she says.

"Mercury right now is at the beginning of a fairly lengthy process" of changing its products to appeal to younger buyers, says Ms. Jacobs. The evolution could take five to six years.

GOING TO CALIFORNIA

But Mercury's evolving lineup needs consistency of theme in styling and levels of features and trim. Auto brands with younger owner bases don't have to spend as many years as Mercury evolving their lineups, says Ms. Jacobs.

The brand's move to California, she adds, is "psychologically a positive move because it represents a distance from Ford [Division] and lets Mercury move forward in its product development."

Mercury worked with its agency, Y&R Advertising, and sister agency Wunderman Cato Johnson, both Detroit, to develop a brand campaign. Mercury, which did not introduce any new products last fall, wanted to create brand awareness before launching the new Cougar.

Timing of brand messages is crucial in creating consideration, a survey by A.T. Kearney Inc. found. Sixty-one percent of survey respondents say brand management is very important or extremely important to consumers up to six months prior to a vehicle purchase. Brand management declines in consumer importance within two weeks of purchase, the respondents said, signaling brand decisions are made before car buyers go to showrooms.

Mercury wanted a word it could own, says Mike Belitsos, exec VP-executive creative director at Y&R.

"When you think of `imagine' or imagination, you're going to think of Mercury," he says.

TAPPING INTO YOUNGER MARKET

Of three proposed campaigns, the client picked "Imagine TV," a humorous, edgy spoof of channel surfing with several short vignettes of game shows, court dramas, kung-fu movies and vintage films. Mercury kept its 2-year-old tag "Imagine yourself in a Mercury" in the $24-million ad campaign during the fourth quarter of 1997.

The carmaker is continuing the push this year. Mercury will use the same format for Cougar's May launch, says Mr. Rogers.

The "channel-surfing" creative format was chosen because the target is baby boomers and Generation X, who grew up with TV, says Laurie Null, exec VP-managing director of Wunderman.

"We know they flip channels, so we're flipping it for them. We knew we had to engage viewers quickly," or they'd change channels, she adds.

MORE TARGETED APPROACH

Mercury is trying new sponsorships that reflect its new positioning and demographics as well.

The brand is sponsoring a 10-member cycling team competing in more than 40 pro races to be broadcast on Outdoor Life cable network. The tour will allow tie-ins with local dealers.

Mercury also inked a multi-year deal with Andy Pargh, who bills himself as the Gadget Guru. Mr. Pargh gives half-page product reviews in USA Today dubbed "Imagine This" every other Tuesday. Mercury runs a print ad on the other half of the page.

In January, Mercury kicked off one of Ford Motor's biggest on-line pushes with the launch of (www.1999cougar.com), the Cougar Web site. Wunderman, which developed the site, also created a Cougar-giveaway promotion to help collect prospect names.

Now that Mercury has a new strategy and ad campaign, it needs to stick with it longterm, says Ms. Jacobs, the consultant. Too often, auto brands dump ad campaigns if sales don't rise within 18 months.

Mercury, she adds, is using its new positioning and advertising to "try to create the groundwork for a more solid strategic positioning as it moves forward beyond 2000."

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