Mitsubishi chief reshapes creative, media stategy

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Trying to wean the company off profit-draining buyer incentives, Finbarr O'Neill, the new co-chairman and CEO of Mitsubishi Motors North America, plans to make cars the stars of future ad campaigns.

"Marketing is our biggest challenge," he said, adding that advertising from agency Interpublic Group of Cos.' Deutsch, Los Angeles, will evolve. What he'd like to see are ads that differentiate Mitsubishi's lineup from competitors'. "I don't mean [we need to show cars] on a turntable," he said, but ads have to do more than just show that Mitsubishi's cars are "exciting and edgier." He added that the goal is to get Mitsubishi on more shopping lists.

The former CEO of Hyundai Motor America is also studying Mitsubishi's media strategy, which "will probably change" in 2004. That's because he wants to broaden the marketer's reach from the younger buyers successfully wooed by former management to families and "spirited," young-at-heart people. As CEO of Hyundai for five years, he oversaw its dramatic sales turnaround, creative agency review and media unbundling.

`young at heart'

It's too early to discuss how the media buys would change, he said, although he's evaluating print and broadcast network TV. He wants to reach "young-at-heart" prospects vs. those of a certain age.

Mitsubishi spent $216 million in measured media in the first nine months of 2003, according to TNS Media Intelligence/CMR. Broadcast TV networks got the lion's share, $138 million; next were newspapers, with $27 million; and spot TV third with $9 million.

The next six months will be crucial for Mitsubishi, which has to find its "sweet spot" in the market, said Todd Turner, president of consultant CarConcepts. A telling sign will be whether the automaker can turn a profit without generous incentives.

Mitsubishi's U.S. sales success relied on hefty incentives in recent years, including so-called "triple-zero" deals with no down payment, zero interest and no payments for a year. Buyers were shocked to learn how much they owed on the cars after their "free" year was up and many turned in the vehicles or had them repossessed, dealers said.

The deferred-payment deals were eliminated in the final months of Mitsubishi's last management. The marketer said its vehicle sales slid by 24% through November to 238,391 units vs. a year ago. The liberal financing incentives were the main reason Mitsubishi North America posted a $935 million operating loss in the six months ended Sept. 31.

frenetic 90 days

Hired in September, Mr. O'Neill described the activity of his first frenetic 90 days as "drinking water from a firehose."

His influence in advertising will be evident with the launch of the redone Galant sedan in a campaign breaking Jan. 19. The blitz is the automaker's biggest for a single model, roughly $70 million, according to an executive close to the automaker.

Galant's two TV commercials show the car in daylight, breaking the brand's past trend of nighttime shots. Most of the creative was too far along to change dramatically, but Mr. O'Neill said "it's good stuff so it's running."

The strategy shift will be more obvious by the end of the first quarter after executions for other models break. He also plans to increase the brand's ad budget in 2004 by an undisclosed amount.

Another high-profile project will not go forward. When Mr. O'Neill and his team arrived, they ended negotiations with Miramax for its $35 million auto sponsorship of a proposed "Green Hornet" movie. "We're not doing it," he said.

"The first progress [of a turnaround] is microscopic and hard to see," said Mr. O'Neill, adding that it takes at least five years to talk to all car buyers, who are in the market at different times. "It's a never-ending competition."

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