Chrysler Vs. General Motors: A Tale of Two Car Companies
We've all heard it before: Having a great product is key to great marketing. But what happens when you've got a great product and the marketing is a bit of a mess?
Auto experts are pondering that very question with regard to General Motors, which has been rolling out some of the sturdiest, most attractive cars in its history, yet posting dismal sales results. The ouster of its global CMO, Joel Ewanick, has prompted increased scrutiny of the company's marketing, and for months many observers have questioned the resonance of the "Chevy Runs Deep" ad campaign -- which interim chief marketer Alan Batey has pledged to keep.
In contrast, Chrysler's "Imported From Detroit" campaign has propelled two years of double-digit sales gains. The ads have been creatively lauded, something rarely seen anymore among auto companies. And those within its marketing suite, led by Olivier Francois, have their heads down and are showing no signs of upheaval.
For two U.S. carmakers who just three years ago were nearly in the same predicament -- on the brink of bankruptcy and getting bailed out by the U.S. government -- GM and Chrysler today are in radically different places, when it comes to brand reputation.
"The actual product-quality gap and design gap between import brands and Chrysler and GM has never been this narrow. Product is not a problem for GM. It's image that is holding them back," said Jesse Toprak, VP-market intelligence for Truecar.com.
The strides GM has made with its marketing have been overshadowed by its controversial decisions such as shunning Facebook advertising on the eve of the social-networking giant's IPO and pulling out of the Super Bowl.
Agency execs at Chevy's newly created global agency structure in Detroit, Commonwealth, are said to be keeping their heads down and just focusing on getting out work as asked. But it remains to be seen how long GM will stay committed to its current ad tack.
""Chevy Runs Deep' is telling a story from the past. It's saying this lineage runs through generations of families, and there is loyalty there for our brand," said Americus Reed, associate marketing professor at University of Pennsylvania's Wharton School. "But retrospectively asking consumers to think about a nostalgic feeling is taking them back, instead of giving them more hope, more aspiration."
"The biggest obstacle to GM's growth has been the brand-image issues, especially in metropolitan areas like New York, Los Angeles and Miami," said Mr. Toprak. "Import buyers in these markets are simply not going to respond to campaigns like "Chevy Runs Deep.' It means nothing to them," he said. The carmaker need "to emphasize that GM vehicles are immensely improved in terms of both design and quality and they are also cars that people should be proud to own."
Agency execs close to Chrysler say the very thing that can be frustrating about working with the carmaker is also its strength: that Chrysler CEO Sergio Marchionne has "never seen a campaign he didn't like," said one of those executives. That means Chrysler agencies are worked incredibly hard, churning out tons of spots that are often left on the cutting-room floor. But in the end, the carmaker gets the results it desires.
Case in point: Chrysler's "Imported From Detroit" Super Bowl campaign by Wieden & Kennedy, which went viral and netted honors such as top billing at the Effies. What's more, it and other Chrysler ads -- such as one for the 2013 Dodge Dart—are winning praise from the creative community.
"When it comes to advertising, there is no secret formula," Chrysler's CMO and head of the Fiat brand, Olivier Francois, told Ad Age . "Advertising and marketing initiatives must always align with your brand's objectives and beliefs. They must speak intelligently to your consumers and in a manner that is visually appealing and unexpected so that you capture their attention."
Mr. Francois reports a direct link between the marketer's "Imported From Detroit" campaign and car sales. "Part of the reason was that it was relatable and honest," he said. "By using the city of Detroit's history as the backdrop and a symbol of resilience, it helped redefine the Chrysler brand and invigorate sales of the entire product lineup."
Last month, Chrysler Group recorded its 28th consecutive month of year-over-year sales upticks, with the Chrysler brand leading the way. U.S. sales rose 13% to more than 126,000 cars and trucks in July, beating the overall growth rate for the industry industry of 11%, according to Automotive News.
In contrast, GM's U.S. vehicle sales fell 6.4%, to just over 201,000 cars and trucks. General Motors' Mr. Batey was not made available to comment.
Better news may be on the horizon, though, thanks to the launch of the new Cadillac ATS and GM's plans to launch about a dozen new models in the next 12 to 18 months.
"Cadillac is going to pick up toward the end of the year and into 2013," predicted Libby Murad-Patel, senior director of strategic insights at Jumpstart.
Because the reception for vehicles from both companies has been positive, say experts, the key differentiating factor will be in how they promote them.