CYPHERS' SUBARU LEGACY: NUDGING BRAND UPSCALE; EXEC MOVES FROM MANAGER OF FIVE REGIONS TO AUTOMAKER'S MARKET ING CHIEF

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As H. WILLIAM "BILL" Cyphers III took over Subaru of America's national marketing, the automaker geared up for its largest-ever U.S. ad campaign.

Named VP-marketing in late June, the 51-year-old Mr. Cyphers was clear on his priorities.

"Immediately, what's important is a successful launch" of the all-new Legacy and Outback, he said.

Subaru last month debuted nine 30-second TV spots for the marques (AA, Aug. 2). It has committed about $45 million to the effort -- about 57% of this year's budget.

It could cap a strong year for the all-wheel-drive niche player. In the first seven months of 1999, Subaru sold 85,478 vehicles, an 8% increase from 1998. July sales of 13,233 units were the best since 1987.

FEW CHANGES PLANNED

Perhaps that's why Mr. Cyphers -- succeeding Timothy Mahoney, now general marketing manager at Porsche Cars North America -- and agency Temerlin McClain, Dallas, aren't looking to change much.

Although they're broadening ads to include the Legacy and Forester as well as the Outback, the current spots continue to use Australian actor Paul Hogan as spokesman and maintain Subaru's humorous tone.

"In general, we're happy with our marketing," Mr. Cyphers said. "We've had three of our best years ever."

However, he said Subaru is expanding its use of new media and will increase spending on Web banner ads to $500,000 this year, up 200%.

Subaru has contracted with Cobalt Group, Seattle, to design and administer dealer Web sites. The effort, in which 80% of dealers have enlisted, aims to give sites a uniform look, in part to counter identity problems with dealers carrying more than one brand.

In addition, Mr. Cyphers said Subaru is "subtly nudging the brand upscale."

Although major sports sponsorships may be beyond its budget, Subaru backs active sports that match its owners' interests. It sponsors events of the newly formed Masters Rowing Association; Mr. Cyphers noted that rowing is a fast-growing collegiate sport among women.

Prior to taking his current position, Mr. Cyphers was VP-field operations, managing five regional operations. A graduate of Michigan State University with an M.B.A., he spent 10 years at Ford Motor Co. before joining Subaru in 1984.

Mr. Cyphers said he has "been on the receiving end of a lot of advertising campaigns and seen how they work and don't work on the dealer level. I've got a good feel for what's going to work."

That doesn't necessarily mean ads dealers love, he said.

WINNING DEALERS OVER

"If you have ads that the dealers don't like but they're selling cars, you can get around that," he said. "If you have ads that the dealers don't like and they aren't selling cars, that's the kiss of death."

But for now, there's little static over Subaru advertising. The decision to stick with Mr. Hogan, who has pitched Subarus since 1995, is backed by research showing that "he's wearing well," Mr. Cyphers said. And Subaru dealers love the actor's "Crocodile Dundee" persona.

"We're all supportive of Paul Hogan," he said, "but the dealers -- they're

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