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post #1 of 2 (permalink) Old 08-10-2004, 06:13 PM Thread Starter
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ANALYSIS: Chrysler learns how to market after miscues

From the Detroit Free Press:

ANALYSIS: Chrysler learns how to market after miscues
300 takes off after Pacifica's troubles
August 10, 2004
BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER

It takes more than eye-catching styling to make a new vehicle a hit.
Witness the difference between the introduction of the redesigned Chrysler 300 sedan this year, compared with the all-new Pacifica crossover a year earlier. Both were stylish, innovative and much-anticipated entrants that stood out in an over-crowded marketplace.

But, for a plethora of reasons, the Pacifica stumbled out of the blocks, while the 300 took off like a rocket, with almost three times the sales in the same period of time.

Touting 25 model launches this year and the next two, the U.S. unit of DaimlerChrysler AG can't afford a repeat of the Pacifica's problems. Neither can Chrysler Group's executives, who saw about two dozen predecessors leave after that weak start.

In the interest of education, here are seven lessons learned plus a bonus piece of learning.

Stay within the brand

The Pacifica turned heads, but the price turned them off.
People considering Chryslers just weren't ready for a sticker that belongs on a Lexus, Cadillac or Mercedes-Benz.

Jeff Bell, vice president in charge of the Chrysler and Jeep brands, said the prices left their potential customers talking to themselves: "The person on the street was like, 'Wow, that Pacifica's interesting.'
" 'Yeah, but it starts in the forties. . . . I don't know if it's worth' " it.

The whole picture

In truth, not all the Pacificas were that expensive. But that was the impression made by the first ones on dealer lots.

With the 300 sedans, Chrysler made sure to get the V6 models priced in the $20,000s on the road, not just the Hemi-loaded ones in the $30,000s.
Look-alikes

But people who buy the 300 Limited with a V6 engine don't want to look like they're driving around in an econo-bucket.
So, while there had been a big drop-off between the looks of a high-end Pacifica and a less pricey version, that isn't the case with the 300.
"We very consciously made the Limited look like the 300C. It's basically the same look without the engine," Bell said.

Under the radar

Stealth marketing, by definition, is not the kind of strategy where you brag about the details. It encompasses the undercover efforts to influence customers without the obviousness of, say, an advertisement, a Chrysler Block Party customer-appreciation event or a Chrysler engineer announcing his entrance in a gear-head chat room like an actor at a movie premiere.
"We do a lot of monitoring of blogs (short for Web logs, or Internet diaries) and of chat rooms, of discussion boards," Bell said.
He said the company has a "buzz index" to see how its products are being received.

So can a company give that kind of grass-roots excitement a goose?
"Yes, you can," he said confidently.

Show me the car

What shouldn't be a secret is the vehicle for sale.
For five months, Chrysler's many Pacifica ads seemed to show everything except the Chrysler Pacifica: a red carpet (in black and white), the rain, an empty road, Celine Dion's ankle.
None of which moved a lot of metal.

Chrysler took a lot of flak for trying to bluff its way into higher-priced segments. Bell claims it was actually working pretty well -- until the Pacifica.
"It was the Pacifica launch that made it all seem like it wasn't a very good idea," he recalls. "And the reason was because it wasn't enough on the product. That was the thing."

Now the marketing message is focused on the vehicles, their features and the prices, Bell said.

Show me the money

The Pacifica hit the market in March 2003 with no customer incentives. By June there was $1,800. Two months later, $2,780. Two months later, $4,140, according to Edmunds.com, a consumer-oriented Web site.

The 300 was the opposite: It started with total incentives (customer cash, dealer cash, discounted loans and subsidized leases) of $1,518, which have since edged down to $1,333, Edmunds reports.

Early registration returns from R.L. Polk showed that as many as half of the 300s were sold to fleets as company cars or rentals. But once sales got going, they rolled along on their own.

The public relations machine

Spin doctors can't make a weak car sell, but they can knock down a potential roadblock.

For the 300, the issue was rear-wheel drive.

How could a company that sang along with the industry chorus that front-drive cars had better balance on snow and ice suddenly start selling family cars with spinout-prone rear-wheel drive?

Sensing the potential backlash, Chrysler's public relations staff took a bunch of journalists, Wall Street analysts and dealers up north to Houghton in March to drive the 300 and the Dodge Magnum wagon and see how well they handled on the cold and slick.

Rear drive "became a non-issue," said Jason Vines, Chrysler Group vice president for communications. "We took away the distraction, and the focus became the beauty of the design, the quality of the vehicle and the engineering brilliance."

Meanwhile, media coverage of the 300 has been plentiful. In the first five months of sales, national newspapers and news services mentioned the 300 sedan 366 times. For the comparable time frame, the Pacifica generated only 250 reports, according to a Nexis content review.

Still learning

So what has Chrysler learned from the introduction of the 300?
There's nothing wrong with faux bling.

Anyone with enough cash can drop $35,000 on a shiny new 300C with the legendary Hemi V8 engine. And Chrysler dealers will be glad to sell you one.
But the 300 Limited comes with a peppy 2.7-liter V6 that starts below $24,000, right in the heart of America's top-selling sedans, the Toyota Camry and Honda Accord.

"I think that we can make hay at the lower end of the range against the Camry and Accord," Bell said.

"What do you choose, a vanilla wafer or a Mrs. Field's double-chocolate chunk cookie?"
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post #2 of 2 (permalink) Old 08-10-2004, 07:45 PM
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Quote:
Originally Posted by moparman
From the Detroit Free Press:

Still learning


.
But the 300 Limited comes with a peppy 2.7-liter V6 that starts below $24,000
Base comes with the 2.7. Touring and Limited come with the 3.5. And yes they did royally scew up the Pacifica on pricing.
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