Category Archives: Automotive

Jun 11

There’s dumb, and then there’s GM’s decision to drop the nickname ‘Chevy’

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June 11Every
now and then a corporate marketing decision comes along that is so positively stupefying
that it stops me dead in my tracks. GM's decision to drop the word 'Chevy' in any
and all sales and marketing materials and replace it the more formal
'Chevrolet' is one of those landmark blunders. This is a
train wreck before it even happens. Late
Thursday, Chevy tried to clarify their marketing misstep with this video which,
sadly, only further confuses the matter.

Citing
the consistency that other leading brands such as Coke and Apple have employed
in their communications efforts, Alan Batey, GM's VP for Chevy's Sales and
Service and Jim Campbell, Chevy's VP of Marketing, say opting for Chevrolet
will make the brand name more recognizable with consumers. Yeah, sure. And, I
want a pound of whatever drug Messrs, Batey and Campbell are consuming. It has
to be totally mind-altering.

Chevy,
as the Times article rightly points
out, is an American icon. It's right up there with baseball and apple pie.
People won't stop using it because the brand decided to formalize the name.
Talk about change for the sake of change.

If
Batey and Campbell had their way, FedEx would go back to being called Federal
Express, ARod would go back to being Alex Rodriguez and erstwhile Peppercommer
Stein would revert to Andrew Stein. And, trust me, the latter just isn't going
to happen.

Regardless
of the inanity of their move, the Batey/Campbell dynamic duo will now pour
millions of dollars into a re-branding and re-positioning effort. And, for
what? To get people to say Chevrolet instead of Chevy. That won't happen
either.

Corporate
America never ceases to amaze me. Just when it seems as if smart and
sophisticated marketing campaigns from the likes of OgilvyOne, Crispin and
others are starting to change the way we engage with consumers, something like
dropping the name Chevy comes along.

There's
dumb and dumber. But, this may be dumbest. Period.

Feb 23

Is Toyota this decade’s Enron?

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The latest terror suspect Najibullah Zazi, as well as the makers of Avandia and hot dogs have to be breathing a little easier this morning (well, at least the Avandia and hot dog makers are).

February 23 All three were caught in the crosshairs of breaking crises, but avoided being the lead item on nightly news and talk shows thanks to good, old Toyota.

Good and old are apt descriptors for the automaker. I say that because Toyota's management is practicing what was once considered smart management and crisis communications in the good, old days. Denial, obfuscation and evasiveness worked well in the dark, distant past. But that was then and this is now.

Silence seems to be the watchword of Toyota's communications strategy today. This, despite mounting evidence that their entire line of cars is stricken with a fatal flaw: an accelerator that doesn't have a fail safe mechanism.

As a result, politicians, consumer watchdog groups and investigative journalists alike are salivating like Pavlov's dog at the prospect of bringing down a big, bad business caught being a big, bad business. It's a Hollywood movie plot that screams out for the likes of Michael Douglas, Meryl Streep and Dustin Hoffman in the lead roles.

And, it also goes to show that all the public relations and advertising in the world are meaningless if the product is rotten and the company's leaders are caught covering up the damage. All of which leads to my question of the day: Will Toyota be this decade's Enron?

Feb 12

Are you guys still in business?

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February 12 - out-of-business Everyone's buzzing about Toyota's troubles. If I've read one image expert's opinion about what the Japanese carmaker needs to do, I've read a thousand.

Lost in all of the Toyota tumult, though, is Chrysler's total inability to capitalize on the opportunity.

Unlike Ford, who grew their January sales by 25 percent and GM, which moved the sales needle north to the tune of 14 percent, Chrysler's sales nosedived by eight percent. Why? According to a recent Ad Age article, the average consumer thinks Chrysler went out of business. Ouch! Selling cars in the Great Recession is tough enough without having to overcome the perception that you no longer exist.

I think I know how Chrysler executives must be feeling. The same thing happened to us (albeit, only for a day or two and within a decidedly smaller universe).

In the early days, Peppercom was known as Middleberg Light. Don Middleberg had built the top dotcom PR firm in the country and our nascent business was seen as a smaller, but rapidly-emerging competitor.

So, when the dotcom bubble burst and clients started falling faster than Autumn leaves in a windstorm, we took a major beating. At the peak of the downturn, we also suffered a very unfortunate service disruption. Our phone lines went down and our web site went black. We fixed the problem within 24 hours and didn't think too much about it. A day or so later, though, I received a few e-mails and calls from friends in the industry asking if we were still in business. Wow. Talk about a wake-up call!

I did exactly what Chrysler is attempting to do now. I over communicated. I made sure we announced promotions, new client wins (no matter how small or inconsequential) and re-marketed existing service offerings as 'new and improved,' I made it my business to make sure the PR universe knew Peppercom was alive and well.

Chrysler needs to continue shouting at the top of their lungs and from the highest mountains lest people continue thinking they're the 2010 version of the Edsel.

Typepad should do communicating as well. Typepad is the company that hosts my blog. They recently changed their model and it's badly impacted the Repman blog. Visitors aren't being permitted to post comments and I'm not being alerted to any comments that manage to appear. We've made countless inquiries to Typepad to get the damn thing fixed but, so far, we haven't heard a thing. Hey Typepad: are you guys still in business?

Feb 04

Detroit has to be loving Toyota’s troubles

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February 4 - Toyota-cars Like most car owners, I've been amazed to see how many problems Toyota is experiencing with its cars. I'm also surprised to see how poorly they've handled it (The New York Times reports that Toyota issued the recall only after U.S. Transportation Department officials had to fly to Japan to 'remind Toyota about its legal obligations.' Apparently, the car maker knew about the pedal acceleration issues as long ago as April, but did nothing to alert consumers about it). I've heard about differences within the ‘auto culture’ before, but didn't think they extended to not doing the right thing.

In the midst of the Toyota chaos (and the latest report that the legendary Prius is also experiencing problems), I have to believe the shell-shocked, erstwhile Big Three are gleefully rubbing their hands. For once, Detroit's egregious mistakes and missteps are out of the spotlight. For once, Detroit can focus on regaining the monumental market share losses of the past three decades.

But, will they? Ford is beautifully positioned to do so (and, apparently saw a 25 percent sales increase in January). Chrysler, though, is a mere shell of its former self and actually dropped eight percent in January sales. If they can't take advantage of Toyota's weakness now, will they ever? And GM, which changes CEOs more often than Chipotle churns ad agencies (see yesterday's blog), posted a healthy 14 percent January sales gain.

Despite the Ford and GM successes, I think Toyota will be just fine. They've built tremendous brand loyalty over the past 30 years by owning dependability and affordability. And, I for one, still have a classic Pavlovian response whenever I even consider purchasing an American car (I shudder in horror just thinking about the shoddy workmanship of years past).

Toyota has to come clean in a hurry (which can be a tough thing for an auto company that is used to holding its cards close to its corporate chest). 

The carmaker can easily regain its image and reputation mojo if it stops stalling, starts repairing and goes beyond a few 'mea culpas' from its U.S. executives on CNBC, MSNBC and Fox Business.

Tell us why the problem happened, Toyota. Tell us why it took so long for you to respond and why U.S. officials had to force you to do so. And, while you're at it, tell us what's up with the Prius.

Tell us you've fixed all the problems. And , most importantly, tell us why it won't happen again.

Detroit is still way too weak to capitalize on Toyota's missteps. That said, time's a wasting. And, I'm not liking the lack of transparency.

Nov 05

Standing Behind a Brand Promise

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Guest Post from Matt Sloustcher, Peppercom

November 5 - gm-logo From government bailouts to bankruptcy, it has been a decidedly tough year for General Motors. Adding insult to injury, the company’s archrival just announced a surprising $1 billion in profits while GM continues to hemorrhage. Even the much anticipated “May the Best Car Win” marketing blitz launched with decidedly mixed reviews.

Amidst all of the muck, a positive story surfaced last week that I hope is a sign of greener pastures to come. It all started during a media conference call with GM’s marketing guru and vice chairman Bob Lutz to discuss the previously mentioned marketing campaign. While lauding the performance of Cadillac’s 556-horsepower CTS-V, Lutz boldly stated that he would challenge anyone in any production sedan to a race around Monticello Raceway.

What followed next probably surprised Lutz. Jalopnik, a popular auto blog, took him up on the challenge, and Lutz accepted. 120 others soon followed, and GM selected three journalists and five laymen to participate in the race. In the end, the 77-year-old Lutz posted the seventh fastest time overall, and the CTS-V took home four of the five fastest lap times with more experienced drivers at the wheel.
In addition to standing firmly behind their word, Lutz and GM earned a ton of respect from enthusiasts for participating in the challenge. Automotive companies are notoriously risk averse, and in this instance, GM put their guard down and let the CTS-V do their talking for them. In the days that followed, I counted 50-plus articles that resulted directly from the challenge.

After the event Lutz commented, “There's enormous attention being paid to this, and if you compare this cost-wise and effectiveness-wise to, say, making a bunch of TV commercials, this is a highly effective way to get the word out about how good the car is. If we sell 50 or 100 of the CTS-V off this, we'd consider it a success."

While I was happy to hear Lutz affirm the value of effective PR and out-of-the-box thinking, I would argue that the event was a success no matter what its effect on sales are. The common perception today is that GM’s best days are long gone, and by simply standing by its word and living up to its brand promise, the company has started to restore the credibility it needs to successfully reinvent itself.

Apr 09

We have no intention of becoming PR’s version of the Packard

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Al Ries, marketing, branding and positioning guru
extraordinaire, has penned a most fascinating opinion piece in a recent Ad Age. April 9 - Packard

The Ries piece (I couldn't resist) warns such marketers as
Starbucks and Cadillac to stop cheapening their brand before it's too late.
Ries says the long lost Packard automobile did just that and died as a result.

Prior to The Great Depression, says Ries, Packard totally
dominated the U.S.
luxury car market. In fact, Cadillac was little more than a distant blip in
Packard's rear view mirror. But, when the downturn came, Packard developed a
much lower cost alternative. The cars sold well. But, when the economy
rebounded, newly affluent Americans went with Cadillac, which had remained true
to its high-priced, high-quality roots throughout the Depression. Packard never
recovered and eventually disappeared altogether in 1957.

Now, fast forward to today. I see lots of commentary in the
PR and advertising trades from agency leaders who are suggesting that others
follow their lead in cutting billing rates to 'ensure ongoing business and
demonstrate value.' I see other 'leaders' offering 'lite' versions of their
positioning, media training and media relations services or charging $500 per
press release. I think such 'strategies' scream desperation and cheapen an
agency's brand.

I think, instead, we should be providing additional value by
being more creative, getting closer to our clients' customers and helping our
clients fight the good fight when their purchasing, finance or legal
departments suggest wholesale marketing cuts.

Cheapening your brand by lowering your billing rates or
giving away your services in "a la carte" menu style will cause you
huge headaches when the economy rebounds. And good luck convincing your clients
that you deserve a rate increase just because other vendors have increased
theirs.

We all have to endure budget cuts. They're a fact of life.
But offering the PR version of instant coffee a la Starbucks or a Cimarron a la Cadillac is a penny-wise, pound-foolish
strategy. (And Cadillac's mistake of the 1980s was all the more dumbfounding,
considering that it defied the very strategy that made them a big name brand
coming out of the Depression.)

The good times will return. Maintaining one's position as a
high quality service provider during the downturn will ensure a swifter return
to heady profits in the days to come. We, for one, have no interest in
becoming our industry's version of the Packard.

Mar 04

Marge, I Hate to Say This, But It’s Probably Best if We Hold Off on that New Lamborghini

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You know the times are tough when even Lamborghini is reporting a dip in sales. Yes, the uber rich are holding off on purchasing the latest and most ostentatious models of the uber sleek, uber pricey automobile.

I wonder if the remaining rich are doing so because they're suffering from a post-Madoff, morning-after malaise or they simply see it as being smarter (and safer) to be more politically correct in their purchases.Lamborghini-concept-s

Either way, what should Lamborghini do from an image and reputation standpoint? Hold fast with their breathtakingly high sticker prices or, a la Mercedes, begin bastardizing their brand with lower end, low cost models?

I'd advise them to remain in neutral. I think Mercedes and Starbucks made the wrong choices in their down-market moves. There may be more potential buyers, but what becomes of the brand's image and reputation? There was once a certain panache that went along with driving a Mercedes or sipping a Cafe Latte and listening to Coltrane at a Starbucks. But, the Mercedes 190 looks and rides like something straight outta Motown and Starbucks instant coffee projects an air of desperation to me.

So, here's hoping those high-flying folks at Lamborghini strap themselves into the proverbial cockpit and ride out the downturn. If they do keep the pricing pedal to the metal, I, for one, will be clapping and shouting, "Bravissima!"

It's high time that one brave, iconoclastic, if ill-advised, manufacturing company turned a blind eye to the economic cataclysm and held fast to its exorbitant pricing. 

I may not be buying. But I will be clapping.

Jan 29

Hello, Is There Anybody In There?

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General Motors recently announced it was cutting one of two shifts at its Lordstown, Ohio, plant, which produces small cars. Just a few months ago, the very same factory was running on three shifts plus overtime just to keep pace with the need.

What happened? Well, gas prices that had soared to more than $4 per gallon this pastGm_general_motors_logo
Summer are now back to around $2. And, the Big Three are back to making monster machines. And Americans are back to buying gas-guzzling SUVs and trucks.

Hello, is there anybody in there? Will we ever wake up and end our love affair with gas-guzzlers? Will Obama's car czar step in and finally put the brakes to this short-sighted mindset by manufacturer and consumer alike? Who knows?

One thing we do know, though, is that a day of reckoning will come. Maybe not today. Maybe not tomorrow. But, soon, and for the rest of our lives (I've been waiting to use that line for three years now).

Ah, but the car companies need sales, lots of them and right away. And, we Americans live solely for the moment. And, so we buy big.

Dwindling oil supplies? Permanent dependence on foreign crude? Gas prices at $10 a gallon? Who cares? Keep building the wrong type of car, Detroit, and we'll keep buying it. Our kids will just have to deal with the consequences.

Dec 17

It Could Be Worse, You Could Be in Detroit

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Imagine trying to recruit a top creative talent to work at a Detroit ad agency right around now. "Look, Sid, Detroit's got everything: it's a vibrant city with a booming economy. It has mild winters, the NFL's best team and, to top it all off, traditional advertising is just bursting at the seams. What's not to love, Sid?"

Now, that conversation may have worked in 1957, but could you imagine trying to lure anyone with a modicum of talent to the Motor City today? What would the recruiter really say, "This is ground zero for the recent economic meltdown and we're damn proud of that fact. Sid, you can be an integral part of a quarter-century of precipitous rack and ruin. Imagine the stories you can tell your grandchildren!"
GM
I cannot imagine what it must be like living and working in Detroit right now. Campbell-Ewald, which has represented Chevrolet since before the flood, just slashed 100 jobs. And, get this, if Chrysler goes belly up, Detroit-based Omnicom ad agencies will be left holding the bag for some $80 million in media buys. Talk about a head-on collision. 

Even if the government does come to the Big Three's rescue with a bailout, who'd want to work there? Detroit's proven it can't innovate, its legion of remaining executives still see rebates as their overarching marketing strategy and an entire generation of car buyers equate American-made automobiles with shoddy workmanship.

Still, if the bailout does come, the automakers will start spending money again and the recruiting calls will follow. "Sid, baby. Work with me here. We need a guy with your skills and creative juices. And, besides, when you're in Detroit and working on a car account, there's literally nowhere to go but up. Put in a few years here in Detroit and, I promise, Sir Martin or someone will move you to a real market where you can work on clients that actually make quality products. Hey, we'll even throw in an overcoat, snow shovel and food stamps. Whaddya say, kiddo?"

Nov 20

Fuqua’s Poster Boy of the ’90s has Become the Jeff Skilling of Our Times

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When we represented Duke University's Fuqua School of Business in the 1990s, we heard faculty and administrators alike wax poetic about their shining star, Rick Wagoner. At the time, Rick was rising through the ranks of America's (and the world's) largest car company, General Motors. And, he was emblematic of how far a Fuqua grad could go in the business world. Gm_to_close_windsor

Fast forward to yesterday's Congressional hearings and, sadly, Mr. Wagoner has become an icon for the sagging American economy. Under his cautious, reactionary leadership, GM did just about everything wrong: pulling back from hybrid and electric cars, investing in gas-guzzling SUVs and Hummers, and waiting way too long to curtail excessive UAW pay scales and lifetime healthcare for former employees.

Yesterday, along with the leaders of Detroit's other two horribly-run car companies, Wagoner came before Congress to beg for a $25 billion bridge loan. To add insult to injury, he flew back-and-forth on GM's corporate jet. In fact, Wagoner and his peers have failed in all aspects of public relations.

Rick Wagoner's earned a spot alongside such other infamous American chief executives as Ken Lay, Jeff Skilling, "Chainsaw" Al Dunlap and Dennis Kozlowski. He didn't do anything illegal. Wagoner just didn't do anything smart or strategic, which is what top B-school grads are expected to do. 

When business historians analyze the rise and fall of the American automobile industry, Wagoner will most likely have the final chapter and epilogue all to himself. As for the Fuqua School, I have to believe they've started shining the spotlight on other, more successful alums.