Posts by Andrew Ortlieb - Detroit

‘Pure Michigan’ campaign boosts morale among locals

Published by Andrew Ortlieb - Detroit on August 27, 2010 in North America. 0 Comments Tags: , , .

Earlier this year we wrote about the misguided “Your Singapore” campaign, which was successful in attracting foreigners (the direct target) but agitated local anxieties. By contrast, the ongoing “Pure Michigan” campaign, aimed at stimulating domestic tourism, has additionally served to boost Michiganders’ morale. Seeing so many positive things being promoted helps fight off the darkness among locals. It’s become a “rallying cry” for the state.

Michigan often gets tagged as a Rust Belt state, and Detroit is frequently used as the prime example of urban decay, or outright industrial/manufacturing decline. There’s some truth to this, but there’s much more to this state. “Pure Michigan” shows the beauty and stunning diversity of the state in an emotionally compelling way and gives clear, relevant reasons why people should spend time here or even locate a business to the state. Watch a few of these TV spots; if they don’t even slightly stir some emotions, you should see a cardiologist.

Desperation play pays off for GM

Published by Andrew Ortlieb - Detroit on December 4, 2009 in North America. 0 Comments Tags: , , , .

I’d written earlier that GM’s satisfaction guarantee was an act of desperation, something a car company would do when it had few, if any, other options. Desperation move or not, early results show it’s working, with GM’s sales up 5 percent in October in an overall flat market. All four of GM’s surviving brands were up for the month.

It wasn’t just the guarantee: GM hit the airways hard, heavily pushing the “May the Best Car Win” theme, with Chevrolet the primary focus. And incentives were up substantially, especially for Chevrolet, and the trade-in data suggests it’s overwhelmingly GM buyers coming back for another.

But none of that matters right now. Market share was up, and GM is hinting that November will be strong as well. GM needed a big month, and some good news, and got both. The guarantee seems to be what got the ball rolling, so it has to be judged a success so far. Sometimes desperation plays pay off.

gm-may-the-best-car-winPhoto Credit: www.gm.com

Little-known financial brand leverages Wall Street disenchantment

Published by Andrew Ortlieb - Detroit on November 30, 2009 in North America. 0 Comments Tags: , , .

Sun Life

Once admired for their financial acumen, well-known brands like Citi, Morgan Stanley and Goldman Sachs (and, to a lesser extent, any of the hundreds of firms that took federal bailout funds) now have a vibe of wanton recklessness, if not outright criminality.

Sun Life Financial sees an opportunity in this. As its president recently stated: “Sun Life has a 144-year-old record of financial security, over 20 million customers worldwide, and excellent financial strength ratings, yet U.S. consumers are not familiar with our brand.”

A new campaign, “Get to Know Sun Life,” focuses on the fact that Sun Life has never needed a bailout and emphasizes its long, strong track record of consistent returns. Perfect timing on this: Some people will never again trust the big Wall Street firms, so a company that can offer a clear, safe alternative will get fresh consideration.

Photo Credit: www.sunlife.com

Another smart move from Hyundai: Showcasing its good buzz

Published by Andrew Ortlieb - Detroit on November 6, 2009 in North America. 2 Comments Tags: , .

picture-11picture-1Another Hyundai follow-up: There’s a reset happening in the U.S. car biz, caused by the financial/economic meltdown, the bankruptcies of GM and Chrysler, and even recent quality glitches from Toyota. A handful of brands are capitalizing on this reset, perhaps none more so than Hyundai, which is winning awards, gaining share and garnering more media attention. Hyundai wants the world to know this, so it created Hyundai Momentum, a place it describes as “Everything you need to know about Hyundai, as told by everyone but Hyundai.”

It’s impressive. The site highlights just how many positive things are going on with the brand, and the story is told through the conclusions and opinions of unbiased parties. This has to make an impact on buyers looking at the brand for the first time. This seems so basic; why wouldn’t all brands do this, or at least the ones with ample positive stories to share?

Flurry of promotions weakens JoS. A. Bank brand

Published by Andrew Ortlieb - Detroit on November 5, 2009 in North America. 2 Comments Tags: , , .

josabankI understand that retailers still have to keep turning over stock during hard times. But some are going about this in a way that does serious damage to their brands. JoS. A. Bank, the North American menswear chain, had a reputation of offering pretty good stuff at a fair value. That image is gone, as their recent promotions have me believing their prices are pure fiction. The base offer is now “buy one, get one free,” and they also do a “buy one suit, get another suit AND a sport coat free” on Mondays and Tuesdays, with similar deals available on Wednesdays and Thursdays.

In our first AnxietyIndex Quarterly earlier this year, we advised that if tactics aren’t approached in a branded way, brands risk becoming genericized. Like I said, times are hard, but JoS. A. Bank’s strategy has me convinced that (a) The original prices were way too high, or (b) The only time to shop there is when the promos are crazy good. Neither option is good for the brand. There has to be a better way to move clothing.

Detroit Lions latch onto ‘all you can’ tactic

Published by Andrew Ortlieb - Detroit on October 14, 2009 in North America. 0 Comments Tags: , , , .

untitled1What screams value more than an unlimited quantity at a fixed price? Given today’s ultra-value-conscious consumers, the “All You Can …” offers are increasing, and they’re no longer limited to crab legs. JetBlue did an all-you-can-fly for a month, for $599. The Epic Pass in Colorado allows for unlimited skiing at six mountains, also for $599.

Since selling tickets to Detroit Lions’ games is a challenge—a local depression, the nation’s highest unemployment, the first 0-16 season in NFL history—the team has launched an “All You Can Eat Seat.” It includes the game and as much junk food as a fan can stomach, for the same price as last year’s ticket alone.

Since this won’t damage the Lions’ brand, it’s a good idea, as it shows that the organization is trying to make the experience more affordable for downtrodden fans. That counts for something around here right now.

Sports gear brand creates new customers with clinics

Published by Andrew Ortlieb - Detroit on September 24, 2009 in North America. 0 Comments Tags: , .

warriorWarrior Lacrosse gear is the best; it’s created by real lacrosse players and used by top professional and collegiate players. As a result, this Michigan-based company is the market leader in performance lacrosse equipment.

So what does a brand do when it already has a hefty portion of the pie? Grow the pie by making the sport bigger. To that end, Warrior Lacrosse sponsors clinics for kids getting interested in the game. These cost just $25 (vs. a norm of about $250) and include daily lunch, stick and T-shirt. 

The recession has hit many higher-income households hard, so generating goodwill and interest in a “rich kid” sport among non-traditional participants is a great strategic move (in addition to offering something very positive to at-risk Detroit kids). Much like Henry Ford’s revolutionary $5 daily wage once helped create Model T buyers, clinics like these form Lacrosse players. Once kids get hooked, they’ll be prime Warrior target consumers, ones already exposed to the brand in a good way.

Warrior isn’t just looking for customers, it’s creating them. Very smart. 

Can GM’s money-back guarantee get it on car buyers’ radar? Not likely

Published by Andrew Ortlieb - Detroit on September 14, 2009 in North America. 2 Comments Tags: , , , .

General Motors knew a post-bankruptcy world would not be a friendly place, but August’s 20 percent drop in a month when the auto industry was slightly up—dealers were swamped with Cash for Clunkers deals—was an eye-opener. Something must be done to stop the bleeding, and getting on new-car buyers’ shopping lists is critical.

GM’s warranties are already better than average, however, and cash incentives have lost their potency. So GM has no more aces up its sleeve … except a money-back guarantee! New chairman Ed Whitacre explains that the “new GM” is so confident in its products that buyers can drive them for 60 days, then bring them back if they don’t love them. The tagline is “Let the best car win.”

If only it were that simple. The problem is that it’s not about the “best car” anymore, it’s about everything to do with GM’s historical baggage, recent design disasters, long-established brand images, perceived quality, record losses, bankruptcy, tax-funded bailouts, layoffs, euthanized brands, dealership closings, “car czars,” the federal government, etc. A 60-day guarantee can’t undo any of that.

The question many new-car buyers will be asking isn’t “Does GM have the best cars?” it’s “Do I want to be associated with GM in any way?” I don’t think any guarantee will change that answer for the vast majority.

Porsche dents premium image with appeal to pedestrian buyers

Published by Andrew Ortlieb - Detroit on September 9, 2009 in North America. 1 Comment Tags: , .

In a perfect automotive world, when demand drops, carmakers would sharply lower production and just wait for demand to pick up again, protecting brand image, pricing and profit margins. This never happens, as the makers need huge amounts of revenue flowing through the system, and dealerships go broke if sales drop too far. They can’t just let nature take its course; sales have to be juiced during bad times. Porsche is no exception, but it has to be extremely careful. This is a brand that sees a third or more of buyers paying cash, so rebates will have minimal effect on sales ($115,000 is a lot of money, and so is $105,000 after a $10K giveback), and the cheapening of the brand can be devastating.

So the Porsche Moment offers 1.9 percent financing and lease deals. Sales details show the percentage of cash buyers decreasing as the utilization of cut-rate financing rises, so all Porsche has done is turn cash buyers into payment buyers, as overall sales are still way down. As a premium brand, Porsche must develop more creative ways to entice buyers to the showroom—pushing financing options that appeal to more pedestrian buyers just doesn’t get the job done.

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A shower of tax dollars

Published by Andrew Ortlieb - Detroit on August 5, 2009 in North America. 0 Comments Tags: , .

dodgeThe U.S. government wants to stimulate new vehicle sales, so along comes “Cash for Clunkers.” The original idea was to pay people to trade the oldest, most inefficient vehicles for more fuel-efficient cars, but it quickly devolved to a plain old cash incentive, meant simply to move metal. Any metal, it seems, as someone driving a big SUV could trade it in for a new big SUV and still get the cash (as long as it gets 2 whole mpg more than the old vehicle). (The cash-for-clunkers program has proven so popular in fact that much—if not all—of the $1 billion Congress had allocated toward it has already been used up, leaving the government to consider its future.)

Chrysler is offering to more than double the federal incentive (or match it if you don’t have a qualifying clunker). They’re now pushing really, really cheap deals, like a Dodge Caliber (pictured) for just $7,590.

This program will work very well in the short term—much the same as drinking a dozen beers works in the short term. The hangovers are the problem. When the program ends, they’ll have to find another way to make their vehicles really cheap, ’cause they’re doing a helluva job convincing people that their vehicles should be really cheap. This will make for a pretty good July and August, but the long-term challenge will be so much more difficult: Half off today but full priced tomorrow is a tough sell.