SATURN LOOKS EAST WITH DIK;TOKYO AGENCY WILL HELP GUIDE GM DIVISION FOR '97 LAUNCH IN JAPAN

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Saturn, the American car built to battle Japanese imports on U.S. soil, is turning to a Tokyo agency to take on the likes of Honda and Toyota on their own turf.

The General Motors Corp. unit has tapped Dai-Ichi Kikaku to develop advertising and a marketing strategy for the car's 1997 migration to Japan. Saturn's ability to create a different kind of car company in Japan is crucial to its parent's plan to nearly double the number of cars it sells in that country to 100,000 by the turn of the century.

As it does with San Francisco-based Hal Riney & Partners in the U.S., Saturn will count on its new Japanese agency to provide important strategic assistance, not just develop advertising. That's why Saturn hired an agency so early, said Joe Kennedy, Saturn Corp.'s VP-sales, service and marketing.

Although Saturn wouldn't disclose spending plans, it is estimated that the car marketer's ad budget could be as much as $15 million within five years of being launched there.

DIK is the No. 8 agency in the Asia/Pacific region, with 1994 gross income of $116.3 million, according to Advertising Age's rankings of international agencies. It won a shootout with two other shops that made presentations last month in Spring Hill, Tenn., where Saturn's manufacturing operations are located.

The other finalists were Tokyo-based agencies Tokyu Group and Leo Burnett-Kyodo. Heading up the reviewing panel were Donald Hudler, Saturn's president, and Mr. Riney.

Instead of making creative presentations, the three finalists were asked to write an imaginary year 2002 speech describing what they did in 1995 and 1996 to make Saturn a success.

"We were looking for their thinking on strategy and planning," said John Orth, Saturn's director-consumer marketing.

Riney will not oversee DIK's work but will work closely with the Japanese agency "to make sure Saturn's culture is captured," Mr. Orth said.

GM and other U.S. automakers are making a concerted effort to increase their presence in the wake of this year's U.S.-Japan trade treaty that reduces barriers to imported cars in Japan.

One big obstacle for Saturn is that "Japanese consumers really see Big 3 products as low quality," said Brian Heywood, a director of R&D/J.D. Power, a joint venture marketing research company formed by J.D. Power & Associates, Agoura Hills, Calif., and Research & Development Inc., Tokyo.

"Saturn's first step is to understand how they are perceived," Mr. Heywood said. Mr. Kennedy said Saturn won't try to literally translate the tactics that have made the company a big marketing success since its launch in 1990.

But like in the U.S., "We want to create a great shopping, buying and owning experience that exceeds customers' expectations," Mr. Kennedy said.

"We'll measure how we're doing in Japan the same way we did in the U.S.-by the enthusiasm of our initial customers," he said. "We think that will say more about our long-term sales success than sales numbers."

Saturn will develop its own retail network in Japan, although GM distributor Yanase & Co. may be involved in some markets, according to Mr. Kennedy.

Because Japanese land prices are so high, Saturn will be flexible in allowing different dealership configurations.

"The important thing is that the retail environment reflect the brand," Mr. Kennedy said.

Mr. Heywood agreed that Saturn needs to control its own dealership network if it is going to try to redefine the shopping and buying experience, as it did in the U.S.

Saturn's timing may be good. One-third of Japanese dealers already carry at least one import brand, and half of the remaining dealers surveyed said they would consider carrying an import, Mr. Heywood said. In addition, Japanese consumers are increasingly conscious of value, making them more receptive to imports because of the high value of the yen.

"It's not going to be a cakewalk. But there's an opportunity because some of the walls are coming down," he said.

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