Looks outside WPP: Jaguar hunts for marketing panacea

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Troubled Jaguar cars, plagued by long-running losses, product woes and uninspired advertising, is looking to overhaul its estimated $150 million marketing globally. But auto experts, tracing the company's problems to a flawed strategy to bring the luxury automobile to the masses, wonder to what extent advertising can help the storied British brand.

With U.S. sales down 15% through last month, Jaguar isn't just looking beyond its global agencies, Y&R Advertising and Wunderman-it's also breaking with tradition by considering shops outside WPP Group. Desperate measures are needed: Jaguar hasn't turned a profit since Ford Motor Co. acquired it in 1989. The brand lost an estimated $1.5 billion globally in the past three years, according to Automotive News.

"We are going through our whole business with a fine-tooth comb," said a spokesman for Jaguar Cars North America. In the U.S., Jaguar spent $49 million through July 2004, according to TNS Media Intelligence/CMR.

"Part of the problem is Jaguar went downmarket" with the 2001 launch of its entry-level X-Type, said Art Spinella of auto consultancy CNW Marketing/Research. CNW's research since then, he said, showed that fiercely loyal buyers, who repurchased Jaguars even in its most dismal years of poor quality, "went through the roof when it started talking to `everyman."'

The loyalty rate plunged from 85% to 38% in the past few years. The X-Type, aimed at 30-somethings, "turned Jaguar into a Ford with a Jaguar badge on it" said Jim Sanfilippo, exec VP of Omnicom Group's auto consultancy AMCI.

Not only did its U.S. sales fall to 39,190 units through October versus a year ago, sales of its best-seller X-Type dropped by 18% to 18,706 during the period.

staying in the family

For Ford to use an agency outside of WPP would be a blow to the holding company, which in early 2003 inked a deal in which Ford agreed to keep its business within WPP's network. Ford is its largest client globally.

Y&R's Irvine office has been the creative agency handling Jaguar, although Y&R's Brand Buzz collaborated on the recent "Temptations" campaign for the XJ8. (See the spot at AdAge.com QwikFIND aap09o). While focus group feedback showed most viewers found the ads persuasive, a small group found "Temptations" Seven Sins offensive.

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