Back to basics: Chrysler reverses course, embraces value positioning

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The Chrysler brand is returning to its roots as a value nameplate, backing away from its move upmarket.

"The path to premium was misunderstood," said Jeff Bell, VP heading the Chrysler division. "Premium is in the product, not in the price." He paraphrased a 1924 quote from founder Walter Chrysler to explain the strategy: "I want to build a better-engineered car that outperforms my competition at half or a third of the price."

As a result, every new Chrysler ad will now show the base suggested retail price and focus on the product and its features and benefits rather than imagery as in its previous "Drive + Love" campaign that featured singer Celine Dion.

Omnicom Group's BBDO, Troy, Mich., created the tag "Inspiration Comes Standard." The early seconds in the first three of nine TV spots show a window rolling down, and going up in the final frame. As the spots show various people using vehicle features, the voice-over conducts a question-and-answer session. All the answers are "yes." (See AdReview, P. 81.)

return of the hemi

First up under the strategy is Chrysler's 300, at $23,595, roughly $5,000 cheaper than the 300M model it replaces. It also marks the return of the Hemi engine to the Chrysler brand after nearly 50 years. Dodge Division has carved out good awareness for its optional Hemi engines by advertising the line "Has that thing got a Hemi in it?"

The automaker teased the car's arrival in ads in auto-buff titles last November and December without identifying the car as a Chrysler. It asked readers to guess the manufacturer by going to or sending in the business reply card. Chrysler got 83,000 prospects from the effort; 50,000 of those from the Web site, said Mr. Bell. Most of the respondents, 68%, guessed correctly. But the next-guessed brand was Bentley, the ultra-luxury brand owned by Germany's Volkswagen AG.

To build on buzz for the 300, Chrysler on April 22 will hold an event in all 4,000-plus brand dealers to literally unveil the shrouded car, said Mr. Bell. Launch ads for the 300 will run on national TV broadcast and cable networks.

Wes Brown, an analyst with auto consultancy Iceology, said Chrysler's strategy was flawed in choosing Pacifica as the model to move it upmarket. Its initial model mix was too high-end, which caused sticker shock in showrooms.

Buyers balked at Pacifica's $34, 495-plus price, so Chrysler created a less-loaded Pacifica last fall, costing less than $30,000. Incentives on Pacifica rose from $1,000 in late summer to $3,000 in the fall and its monthly sales rose from 6,642 in June to a peak of 8,459 in December, according to Automotive News. The automaker said it sold 12,916 of the models in the first two months of 2004.

Chrysler can move upmarket, but not with a single vehicle,said Mr. Brown, noting that the brand "needs a string of product introductions that build that positioning." He added, "If you want to be a premium brand, you expect to charge premium prices."

Jim Hossack, a VP at consultantcy AutoPacific, predicted the new model will provide Chrysler the best opportunity to improve its image.

Mr. Bell raved about the early success of Crossfire sales; the car has only appeared in TV ads this year on NBC during "The Apprentice," which Chrysler sponsors. The automaker said it sold 1,052 Crossfires last month, its best month since last August when 706 were sold.

The marketer plans to hike ad spending by $250 million in 2004 for Chrysler, Dodge and Jeep.

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