Chrysler hikes spending to rebuild brands after 'incredibly quiet' spell

Jean Halliday
Advertising Age
November 8, 2009 - 10:39 pm ET

DETROIT -- After five months of near silence on the marketing front,
Chrysler Group is roaring back with a new attitude. The automaker is
ratcheting up advertising this quarter and plans to do so in each of the
next two years, CFO Richard Palmer said last week. He spoke at the unveiling
of Chrysler's five-year plan under Fiat S.p.A., which took control of
Chrysler as it emerged from bankruptcy in June.

Chrysler Group will spend $100 this year for each new vehicle sold in
the United States at retail (excluding fleet), rising to $170 per vehicle
next year and $210 in 2011.

By the calculations of Joe Phillippi, president of Auto Trends
Consulting, that would put Chrysler's spending at $1.4 billion next year,
based on the automaker's sales forecast.

Chrysler Group vehicle sales fell 30 percent last month from a year
earlier and are down 39 percent this year through October. CEO Sergio
Marchionne said, "I can give you one reason: The fact that we've been
incredibly quiet for the last five months, so the marketing positions of all
our brands have been incredibly weak."

He cautioned attendees not to be pessimistic, citing his success at
turning around Fiat. "We would not reinvest $23 billion if your expectation
is not to re-establish these brands."

But while the dollars might be up, some observers believe they might
be spent too much on traditional mass media and that there's a disconnect in
the marketing messages for Jeep, Ram and Dodge that the public will find
hard to reconcile.

Chrysler's plan is big -- literally. Three experts who attended the
meeting were given a loose-leaf binder 2 inches thick outlining it.

Dodge: ‘A complete overhaul'

To start with, Chrysler hopes to reposition Dodge cars from rugged to
refined and youthful, said Ralph Gilles, CEO of the brand. He called it "a
complete overhaul of our branding and positioning" by the second quarter of
2010. Within that framework, the automaker is also changing its targeting,
going after consumer lifestyles rather than age groups or price classes,
because, he said, "people are aging gracefully" and "fun is ageless."

Gilles said several ad ideas are under consideration, and he showed a
video themed "The Physics of Fun" said to have been created by Chrysler's
multicultural agency GlobalHue of Southfield, Mich. The shop referred calls
to the client.

The repositioning for Dodge is a stretch, said John Wolkonowicz,
industry analyst at IHS Global Insight, noting that "Dodge was never about
refined and you can't just suddenly be refined." As a self-described
believer in generational dynamics, Wolkonowicz is not a fan of Dodge cars
chasing a mind-set instead of certain age groups.

Jeep: On-road focus

Jeep, too, is shifting gears, veering away from its established
workhorse roots. CEO Mike Manley said the brand will be less focused on
"sheer capabilities" and more on fuel economy and on-road driving manners.

Jeep research found that only 30 percent of consumers are interested
in true off-roading, so the brand aims to appeal to both its traditional
"adventurers" and "dreamers, a larger group of people who are
time-constrained by family and work, who want authentic gear with the hope
that one day they'll be able to do more and dream less." He said the
Wrangler will remain "the ultimate expression of the brand" and come with
standard 4x4, off-road ability, but the nameplate will get more derivatives
and models, some with two-wheel drive.

It's not exactly a new strategy. Germany's Daimler AG, an ex-parent of
Chrysler, tried expanding Jeep earlier in the decade with city-street
friendly models like the Compass and Patriot, said Peter DeLorenzo, founder
of AutoExtremist.com. Neither model did very well.

Analyst Phillippi said Chrysler can expand Jeep into non-off-roaders
but the automaker has to be careful "not to sissify" the rugged brand.
Styling will be crucial for the new Jeeps, he said. "They got to look like a
Jeep."

The GlobalHue agency also handled Jeep's general campaign with the
theme: "I live. I ride. I am. Jeep."

‘My name is Ram'

Richards Group of Dallas was tapped for the new Ram work after a pitch
that included incumbent BBDO Detroit, and it created a spot with an
audacious media buy -- 190 times in prime time on its first night alone. The
first spot, titled "Manifesto," was narrated by agency founder Stan
Richards. The theme is "I am Ram," and it uses a montage of photos as the
narrator says things such as "I am fueled by optimism and a can-do spirit,"
and "I will not yield. I will not coast to a stop. My name is Ram."

DeLorenzo called it "heavy, old-school macho," and many commenting on
the spot at AdAge.com were critical. "It looks like an animatic," commented
Producer449, New York. "And secondly, it has more cliches than I've ever
heard in 60 seconds. Or maybe it was 30 seconds but just felt like 60
seconds."

Massachusetts dealer Tom Barenboim said, "I didn't get the message or
the value of the proposition." He also said he's he's staying open minded
because he was told he had to see all three phases of the blitz.

Manley said the goal of the first phase is to generate awareness for
the brand's new philosophy. The narrator in the TV spot for the second
phase, which breaks later this month, talks about not living through other
people. The campaign's final phase "is a real call to action that will
create a pathway to sales that is very different from traditional methods,"
he said.

Chrysler: Seeking to turn heads

The Chrysler vehicle-brand presentation by CEO Olivier Francois -- who
was tapped months ago to oversee all the carmaker's marketing, advertising
and brand development -- was the strongest made by any of Marchionne's 15
lieutenants, said Wolkonowicz.

Francois, who keeps his job as the head of Fiat's upmarket Lancia,
showed an emotional brand vision video for the Chrysler 300 that could
easily be transformed into an ad. "Whatever happened to American style?" the
video's narrator says. "When going for a drive was a big deal. We turned
heads. ... At Chrysler we believe it's time to get it back."

 

Advertising without product can just annoy customers.
The GM volt ads probably delayed some purchases.