Managing import brands

The term "brand management" may be a buzz word contrived by Americans, but U.S. automakers are not the only ones practicing the art. In fact, it's entirely possible that import and transplant automakers have managed their brands so well that they triggered the Big Three's new marketing maneuvers.

With few exceptions, import and transplant automakers have not resorted to as much brand jockeying and model name-changing as their American counterparts because they apparently have a firm grasp on what the market wants. That, by most measures, is the essence of brand management.

Honda's Accord and Civic and Toyota's Corolla and Camry are examples of vehicles that have been top competitors in their segments for a long time. And there's no question of the lofty prestige Mercedes-Benz and BMW hold in the world's luxury car batting order.

"Branding and brand equity are very important to us," says Jon Bucci, national advertising planning and media manager at Toyota Motor Sales U.S.A. Inc. "We don't need fix-it men from outside the organization." Mr. Bucci, of course, is referring to Toyota, but he might as well be talking about the majority of import and transplant automakers.

Likewise, Honda of America Manufacturing Inc. spokesman Andy Boyd says, "We let the product define what we are."

Two foreign companies, however, have had brand management problems in the last decade: Nissan Motor Corp in U.S.A. and Audi of America Inc. Nissan's problem resulted from a faulty strategy while Audi got caught in a safety brouhaha.

In 1982 Nissan was rolling along selling very popular small pickups, 510 sedans and Z-series sports cars under the Datsun banner in the U.S. when Japanese management decided to eliminate the Datsun name and switch to Nissan, which it already was using worldwide.

"From the consumer's point of view, Datsun went away and Nissan was a new company," says Tom Orbe, vice president of marketing for Nissan Motor Corp. in U.S.A. "It took five years for Nissan to get the same level of name recognition as Datsun. Now the Nissan name recognition is higher than Datsun was but not as high as Toyota."

"The Datsun Z car, the 510 sedan and the small pickup were designed for America and were fun to drive," recalls Bob Thomas, whose public relations firm represented Nissan in the U.S. for 20 years, including the name change era. "They were tailored for the market. Nissan never carried that brand identity."

The first car sold in the U.S. to bear the Nissan name was the '82 model front-drive Stanza, a replacement for the Datsun 510. Stanza also carried a Datsun badge, furthering the confusion. The second U S Nissan was the '82 1/2 Sentra, which replaced the reardrive Datsun 210. Carryover models kept the Datsun badge.

"The Japanese are very patient people and they firmly believed that people would in time, learn to accept the Nissan name," says Mr. Thomas. "And in the long run they're right, but that name change hurt the momentum of an exciting company. They threw away a lot of equity. And they let the change happen in a slow, cumbersome way."

The first television commercial acknowledging the name change didn't appear until the 1984 Olympic Games, two years later, and dealers didn't change signage for many years after that. "They lost so much identity that they couldn't reclaim it," adds Mr. Thomas. "It was very, very costly."

Nissan currently is embarking on a $200 million brand-building campaign aimed at reminding people of its Datsun heritage. It focuses on Nissan's first U.S. chairman, Yutaka Katayama, now 86. It's his "Love life, love cars and love people" philosophy that Nissan is trying to recapture, both in its corporate culture and its advertising.

"We want to he the import brand of choice," says Mr. Orbe, who outlines a two-fold brand-identification strategy. The first part is making people aware of Nissan's heritage, which shows longevity. "We've been here for 30 years and always have had stellar products," says Mr. Orbe. The second part focuses on intangibles such the dealership experience. "When you deal with Nissan, things happen the way they should," he adds. "The product is what you expect it to be, and we're enjoyable, kind of fun."

But just when it looks like Nissan is turning the comer, it makes another decision that runs counter to its "fun" strategy. The 300 ZX, traditionally its flagship image car, is being dropped for economic reasons.

While Nissan was struggling with its name change, Audi suffered a disastrous blow in the mid-'80s when CBS's 60 Minutes alleged that Audis had a design defect causing them to accelerate without warning, creating a major safety problem. The rest of the media hopped on the bandwagon, and Audi's "unintended acceleration" stigma sent sales plummeting -- despite strong evidence by Audi engineers to the contrary.

Audi is making a gradual comeback from that hit and is hoping the new all-aluminum A8 luxury sedan flagship will add momentum to Audi's return to glory in North America.

"What Audi needs in America is image growth," says Gerd H. Klauss, vice president of Audi of America Inc. He feels the A8 is the right car to help restore Audi's onetime strong image. "The A8 is an important car for us in America, as we get back into mainstream status," he says.

The new Audi flagship fills a void in the $50,000-plus segment and "legitimizes Audi as a high-end automobile," says Mr. Klauss, who is shooting for 30% to 40% annual growth in North America. Through August, Audi's U.S. sales were up 62.5% from a year ago.

Most other import and transplant automakers have escaped any tarnish and have developed strong brands, sans buzz words. The plan? Research the market, put high-quality products in a segment and build brand equity.

"Quality, reliability and dependability are the main reasons people buy our products, and they are the cornerstone of our franchise." says Toyota's Mr. Bucci. He admits that global competition is forcing Toyota to plan farther ahead, but he sees no reason to retool on the brand front like his U.S. competitors. "Our vehicle names have equity, recall and recognition, so there's no need to look for new panache," he adds.

Honda is another brand-image success story. Accord always has been a well-built, efficient and economical car. Civic has al ways been at the high end of the entry-level market, although it has matured with buyer expectations.

"They've never changed their positions in the marketplace, and every four years we have a new model, and every two years there's an update," explains Honda's Mr. Boyd. The exception to the rule is Prelude, which has experienced more change than most imports. It started as an affordable coupe but matured into a more expensive sports car in the $20,000-plus price range. That happened because Prelude usually carries Honda's latest performance technology, such as the VTEC engine and 4-wheel steering. The Civic coupe, whether by accident or design, filled the affordable, stylish and sporty coupe void created by Prelude's graduation.

Honda's Acura, as well as Toyota's Lexus and Nissan's Infiniti divisions, were master strokes in brand management. Each company realized that its customers would eventually outgrow economy cars and want something to step up to.

Acura may have made its first branding mistake in its decade of existence. The Legend was Acura's first model in 1986 and it forged an enviable reputation; indeed, the Legend name grew to boast greater recognition among buyers than the Acura name. Surprisingly, Acura dropped the Legend marque last year, replacing it with the TL sports luxury sedan.

"Acura is going through a renaissance," says Mr. Boyd, describing Acura's change to letter designations such as TL, RL and CL. He says research shows letter-nameplates work better in upscale markets. "There's a lot of equity that we're abandoning during the change," he admits.

Meantime, the RL sedan is positioned as Acura's new flagship while Integra has two years left before a major redo and a likely name change to letters.

Another Asian automaker, Mitsubishi Motor Sales of America Inc., is stepping up its brand imagery with a brand-focused ad campaign for the coming model year with the theme "Built for living." Explaining that people don't go to a Galant or Eclipse store, Mitsubishi executives say the new campaign will show that the brand's cars, like other vehicles with Asian heritage, are practical yet spirited.

Mercedes-Benz of North America Inc. has a unique cachet that needs no new brand strategy. "We are the oldest car manufacturer in the world. We invented the car. We have 110 years of heritage and we're proud of it and build on it," says Joe Eberhardt, general marketing and product manager for Mercedes. "We're the third or fourth most recognizable brand in the world behind Disney and Kodak" (and, perhaps, Coke).

Despite that name recognition, and a logo that is symbolic of high quality and fine European craftsmanship, Mr. Eberhardt says Mercedes isn't resting on its laurels.

Using its brand heritage as a foundation, Mercedes is growing into new, non-traditional, lower-priced segments in 1997. With its U.S.-built sport/utility vehicle priced at $35,000-$40,000, Mercedes will be competing with Chevy's Blazer, Ford's Explorer and Jeep's Grand Cherokee. "It'll be right in the fray, not out in the fringes," says Mr. Eberhardt.

Also due in 1997 are the SLK 230 roadster (around $40,000); and the CLK 320 coupe (also in the $40,000s), both more affordable than past Mercedes offerings. "It's rare (to have such a slew of new products at one time), but it's an outgrowth of what we call our product-offensive strategy," Mr. Eberhardt says. "We did our homework on all of our new products, so that they fulfill or exceed expectations and are affordable."

Of course, having a Mercedes emblem on the hood can't hurt.