LOWER PRICES, MORE ADS POWER INFINITI REVAMP;BUDGET TO BE BOOSTED 50% AS PART OF DRAMATIC EFFORT TO REVIVE IMAGE

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Nissan Motor Corp. USA's Infiniti, in a dramatic move to rebuild its image, is cutting prices, slashing incentives and making a big bet on advertising.

The luxury division said it will increase spending by 50% for the fiscal year that began April 1, by far the biggest budget since it began in 1989. Infiniti spent $85.7 million in calendar '95, estimates Competitive Media Reporting.

The drive from TBWA Chiat/Day, Venice, Calif., to restage the marque kicks off June 13 and will include TV and magazine ads, a 10-day newspaper ad blitz and letters to owners.

UP TO 10% PRICE CUT

Infiniti today cuts its suggested retail prices from 5% to 10%, with the sticker on the flagship Q45 dropping $5,620 to $47,900. But it also is reducing incentives and cutting dealership profit margins. What customers end up paying won't change much, but Infiniti hopes the emphasis will shift from heavy discounting.

"We're just making the approach to the transaction price more narrow," said Robert Thomas, Nissan Motor Corp. USA president.

With $8,000 advertised discounts commonplace on the Q45, Infiniti faces a marketing challenge in weaning consumers and dealers from the addictive constant sales to more value pricing. Infiniti tried to cut lease discounts two years ago but had to reinstate them when sales plummeted.

"It's hard to get off drugs, absolutely," said Tom Patty, TBWA Chiat/Day president and worldwide account director on Nissan. "It can only happen when there's a total reconstruction of the business."

So Infiniti is attempting just that by:

Eliminating most incentive promotions in exchange for lower prices. Infiniti, though, isn't adopting Saturn-style no-haggle pricing and still will offer some incentive and lease discounts.

Automatically sending a cash rebate to consumers who buy a car with no incentive if Infiniti launches an incentive on that model within 30 days of purchase.

Giving used-car buyers the same treatment and perks as new-vehicle buyers.

Training sales people to do less deal haggling and to be more adviser and less adversary.

Infiniti's old model moved the cars: By adding products and huge incentives, Infiniti has made sales rise every year since its 1989 launch. And it's a perennial leader in quality and customer satisfaction. But what Mr. Patty called the "deal of the week" approach detracted from the brand image.

This year, Infiniti's sales are down 22% through May. Toyota Motor Sales' luxury Lexus was down 5.5%, while American Honda Motor Co.'s Acura was up 12%.

INTENSE COMPETITION

Infiniti and Acura have long trailed Lexus in brand image, and all three Japanese entries are facing intense competition from Mercedes-Benz and BMW.

Honda is reviewing all aspects of the Acura division, including its ad account, now at Ketchum Advertising, Los Angeles.

Infiniti's new TV campaign, with three stark, b&w TV spots featuring Dave Brubeck's melodic "Take Five," make no mention of the product. Instead, Infiniti ad spokesman Jonathan Pryce provokes viewers with a series of questions as he observes cool, confident Infiniti owners.

"Why do you play the game? Is it worth it?" he asks.

Five-page gatefold ads in 30 magazines and four-page newspaper ads will support.

NEW TAGLINE

The campaign introduces a new tagline, "Thinking of you," spoken by jazz singer Nancy Wilson, who makes a cameo in one spot.

The TV spots, shot in the winter chill of Prague, are curiously cold for a campaign breaking in summer. The next major leg of the TV campaign, resurrecting Infiniti's "Total Ownership Experience" theme of customer satisfaction, will have a warmer tone when it breaks later this summer.

Infiniti is launching the campaign as every other automaker hawks model-year close-outs.

Infiniti will use the campaign to set the stage for the fall introduction of a revamped Q45 and the marque's first sport-utility.

"What you're seeing now is just laying the foundation," Mr. Patty said.

Mr. Rechtin is a reporter with Automotive News.

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