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Lincoln mercury Division's upcoming move from Detroit to California marks the end of a chapter of change for the U.S. luxury division of Ford Motor Co.

The first page of that chapter was written three years ago. Ford approved a product plan creating its luxury Navigator, a full-size sport-utility vehicle, plus two luxury sport sedans that will go on sale in early 1999.

Lincoln also restyled the Continental to attract slightly younger buyers; executives decided to discontinue the Mark VIII this year.

The product births and death are designed to transform Lincoln into a full-line luxury brand and attract younger buyers.


But the linchpin of Lincoln's brand strategy is the Town Car. Its job is to hold onto Lincoln's customers.

Lincoln does not want to change its image or its customer base abruptly. Indeed, from 1990 through 1997, Lincoln sold 885,494 Town Cars.

"We don't want to blow those people off," says Michael Crowley, brand manager for Town Car.

Instead, executives want to broaden Lincoln's appeal prudently.

"There are really not that many players in that segment," says Mr. Crowley. "We see [the Town Car] as the cornerstone of Lincoln, our flagship car."

Lincoln's flagship does hold onto customers. Last year, according to research company Polk Co., the Town Car had the highest customer loyalty rate in the industry.

About 49% of all owners who traded in a Town Car bought another one in 1996.


The downside to such a high loyalty rating is that the company has become overly dependent on its clientele.

In 1996, 70% of all people who bought Town Cars already owned a Lincoln model. About 60% of those buyers already owned Town Cars. So, while the Town Car's job is to keep current Lincoln owners in the fold, executives determined their flagship needed to attract non-Lincoln owners.

To get direction, Lincoln surveyed people who were interested in luxury sedans.

The respondents said they thought that the Town Car was a good product, but they did not see themselves buying one because of four main reasons: It was too big; although the ride was smooth, the car did not handle well; the styling was staid; a Town Car did not fit their self-image.


The 1998 model reflects the respondents' desire for changes in the Town Car, but continues to offer the amenities traditional owners prefer.

Although the new Town Car is a little shorter, it is still roomy. The ride is still smooth, but the handling has been improved. It has a supple new interior, but still provides the perceived safety of having a lot of car around the passengers.

Lincoln continues to market three lines for its Town Car brand: Executive; Signature and Cartier. The Signature series now includes a touring sedan model with more horsepower, a stiffer ride than its stablemates. The car has an aggressive look because it was designed without any chrome trim. It also comes with perforated leather seats and bird's-eye maple.

Lincoln wants the median age of Town Car buyers to move down from 67 to 63 and median household income to inch up from an annual $82,000 to $90,000.


To increase the residual value of Town Cars, Lincoln plans to increase retail sales 10% this year to 67,000 and reduce fleet sales to 28,000.

Lincoln also wants Town Car sales to current owners to decrease from 70% to 55%.

The Town Car's marketing staff is aiming for 20% of sales to come from competitive luxury brands and 25% to come from people moving up to luxury brands. Last year, Lincoln spent almost $51 million in advertising for the Town Car, according to Competitive Media Reporting.

The new ads for the Town Car -- created by Y&R Advertising, Detroit -- are assertive and they do not shirk its heritage as a full-size, smooth riding, luxury sedan.

The new Town Car's "advertising is significantly more confident," says Ian Beavis, Lincoln Mercury marketing communications manager. "We make no apology for the design, the styling of that car, or its position in the marketplace."

Indeed, one print ad shows the Town Car's interior and proclaims: "This should finally put an end to all the `less is more' nonsense."

TV spots boast that the 1998 Town Car handles better, has contemporary styling and has improved engineering.


Unlike actors in other car advertisements -- who look younger than the average age of the model's actual buyers -- actors featured in the Town Car commercials look more like its demographic target of sophisticated 54-to-63 year-olds.

The redesign of its products as well as the boisterous edge on all of Lincoln's 1998 advertising is designed to redefine each model within the brand, as well as establish the Navigator name in the market.

That process began last fall and Lincoln will tie all the models together later this spring in a brand campaign for the division.

Lincoln is preparing for the launch of its luxury sports sedans, the LS6 and LS8 early next year. They make their debut this week at the New York International Automotive Show.

If Lincoln can create a strong brand image now, it will not have to spend a lot of time and money creating an identity for the LS nameplate. The rear-wheel-drive luxury sport sedans will be immediately recognized as Lincolns when they go on sale.

The cars will be priced as entry-level luxury cars at $30,000 to $40,000, a growing segment. Lincoln's marketing staff expects them to attract a much younger buyer to the Lincoln brand.

Those younger drivers are important to the Town Car, too.

As people get older they are less likely to change.

If Lincoln can snare younger buyers in their late 30s and early 40s with its new LS sedans, as it is doing with the Navigator, it may be able to walk a loyal clientele through the product line.

When customers reach their mid-50s, perhaps they'll want something a little bigger, not as powerful, but with just as much style and cachet as their Navigators and LS sedans. Lincoln's plan is for the Town Car to be waiting on them.

It is a brand within a brand. Mr. Cowley says people often trade up in the Town Car line, moving from the Signature, to the Executive, to the Cartier model.

"We want to get them in the brand and keep them in," says Mr. Crowley. "That's where our attention is."

Ultimately, Lincoln wants all of its owners to end up in Cartier Town Cars. But the plan is for them to come from a broader product lineup that begins at $30,000.

Since Lincoln will have more models, it will take more time for Lincoln owners to work their way up to a Town Car.

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