Branding irons hot at Chrysler

How seriously does Chrysler take brand management? Even design interns working at the automaker last summer were involved with it.

Assigned to create 1/4-scale concept cars for the year 2005, they had to research and interpret what each brand meant before designing their individual Jeep, Dodge, Plymouth or Chryslerbadged vehicles. They even had to visit dealerships and pose as buyers interested in certain types of vehicles and brands.

That's more research than Chrysler used to do for real cars.

General Motors Corp.'s efforts at brand management have gotten the lion's share of attention lately, but the concept clearly is well established and here to stay at Chrysler Corp. -- albeit in a new and improved form.

The smoke and mirrors of the '80s have been abandoned in favor of a much more substantive approach at Chrysler that focuses on developing products that meet the real needs of customers -- instead of slick advertising gimmicks and rebates.

"At one time we had too much brand management and not enough product focus," says James T. Holden, Chrysler Corp. executive vice president for Sales and Marketing. "We had six distinct brand organizations and we were going to rule the world with brand management and advertising instead of product. Now we've got the balance."

That's not to say Chrysler won't be advertising. The automaker recently announced it will spend $40 million on a new advertising blitz designed just to bolster its corporate image.

It's the first major corporate advertising program from the automaker since 1992 and it's aimed at putting to rest any lingering doubts about Chrysler's financial health following management's battle with shareholder Kirk Kerkorian.

Consumers may not yet understand the subtle differences between shopping for a Dodge -- rather than a Plymouth -- minivan, but just wait. The branding irons are hot at Chrysler, and the automaker's marketing gurus have rounded up a lot of changes that already are affecting new marketing programs. Expect to see much more distinct brands in the '97 model and beyond.

You'll see more focus on entry-level buyers and personality at Plymouth, more performance at Dodge, and more luxury at Chrysler. You won't see any leather-lined $30,000 minivans with the Plymouth label, or stripped models with year a Chrysler badge. Jeep will continue to protect and rein-force its already iron-clad image.

But don't expect the automaker to hire a cadre of new marketing experts from the outside like GM.

While many at GM argue that outsiders bring new thinking and new energy to vehicle marketing, most high-level Chrysler executives seem to find the idea of marketing cars and trucks just like contact lenses or laundry detergent revolting.

Chrysler President Robert Lutz made it clear at a recent new model introduction that someone with experience in marketing disposable diapers need not apply for a brand management position at Chrysler.

"I'm not sure what problem they had that that (strategy) was going to solve. We don't have that problem," says Mr. Holden.

"This place is full of car freaks," he adds. "If you're not, you're going to struggle. We think that breeds passion into the product and passion into the way we market the product. I wouldn't want to try it with someone who wasn't. That doesn't say that if you sold some commodity product half your life that you don't have a gull wing Mercedes stashed in your garage.

"I hate to say you can't come from another industry and learn, because we benchmark outside our industry all the time. But I think for us, when you go out and do that benchmarking you have to know what to believe and what to discard.

"A certain amount of naivete is wonderful," he continues, "but often the proposals don't recognize the complexity of this business or the way we operate. We prefer to stick with car people."

Product clearly is where Chrysler's brand management philosophy is focused. Just like the summer interns developing their concepts, Chrysler designers and engineers now more than ever are focused on their vehicle's purpose in the marketplace.

"We want to build product in the most efficient fashion. We want to be world-class and the low-cost manufacturer, but in the end the product has to stand for something, and it stands for the logo on the hood," emphasizes Mr. Holden.

Trying to establish a brand image with advertising messages and gimmicks after a vehicle already has been developed doesn't work, Mr. Holden says. A clear definition of what the product is and what the brand stands for has to be developed first, and that information then has to be transmitted upstream to the technical community in the platform team so future products will be "true to the brand."

"The brand organization is the conduit to make sure the product development that's going on way upstream in (Chrysler design chief) Tom Gale's shop or (engineering chief) Francois Castaing's shop recognizes the equity we're trying to build. They do the tradeoffs necessary to maintain the sanctity of the brands."

One example of how effective branding works is Chrysler's $30,000 Town and Country luxury minivan, a vehicle with a market niche and profit margin that is the envy of automakers all over the world.

When it was first offered with fake wood on the sides and a little bit of extra side cladding, Chrysler managed to sell only about 4,000 units annually. Now Chrysler is selling about 80,000 annually.

"What did we do? We gave it a distinctly different front-end appearance with a waterfall grille. We gave it cues you can't get in any of the other vehicles, different interior, wood grain. We put some options in that we wouldn't have otherwise," Mr. Holden says.

"As the luxury-car segment has been going down, it's been going to sport/utilities and luxury minivans. We've got the only luxury minivan.

"I think we recognize what Chrysler is supposed to stand for: luxury transportation. We were willing to step outside the four-door sedan paradigm and stretch the product."

GM has endured much criticism for allowing many of its key brands to lose their identity and often compete against one another, instead of the competition, but Chrysler has had its share of problems as well.

Chrysler's Jeeps and Dodge pickups may now be some of the most clearly defined brands on the road today, but it wasn't long ago that Chrysler was known mostly as a producer of nondescript K-cars -- with every version seemingly named LeBaron.

Furthermore, the automaker's Eagle brand never has managed to establish itself, and the Plymouth nameplate has suffered a severe loss of identity.

When Plymouth was formed in 1928, it was one of the industry's first dedicated entry-level brands, and after only four years it became the No.3 seller in the nation -- a ranking it held for 20 years.

In the '30s the marque still emphasized value but grew more sophisticated, incorporating advancements such as hydraulic brakes and power steering.

Hot rodders latched onto Plymouth in the '50s, using a Plymouth chassis as the foundation for the street rod. This focus on performance continued into the '60s muscle-car era. Aficionados still utter the names Road Runner, Super Bird and Barracuda with reverence.

But a couple of recessions and fuel crises in the '70s forced Plymouth to change direction and forget what it stood for.

"Somewhere along the way -- probably in the late '70s or early '80s -- the brand began to lose its way," admits Steven A. Torok, executive director of Chrysler Sales and Marketing Operations and the former general manager of the Chrysler Plymouth Div. "We got older, much less hip, and we lost that critical balance of afford-ability, innovation and personality. That cost us in terms of the brand's image and its role."

Such difficulties have promoted numerous drastic measures corporatewide, from developing high-profile niche cars like the new Prowler to pump up the Plymouth name, to ditching the famous Chrysler "pentastar" logo on vehicles in favor of brand-specific labels from the past that try to impart a sense of heritage. New vehicles that share platforms among several brands -- such as the L-H sedans -- also will be more distinctly styled in the future.

And like GM -- which has combined its Pontiac and GMC marketing divisions -- Chrysler also is making big organizational changes, such as consolidating Chrysler-Plymouth and Jeep-Eagle. That's a move some say will further blur Chrysler's brand lines, but Mr. Holden argues it's not a problem.

"I think there's a tendency for people to say 'Well, you're trying to blend these brands.' That's not at all the case," he says. If you think of a Nordstrom's or any highline retailer, the fact they may sell Spaulding sporting equipment and Nike sporting equipment doesn't necessarily change or blend or weaken the brand for Spaulding or Nike.

"There's nothing that really cannibalizes another. So why wouldn't I want customers to go in and see all those products in one place?"

Such arrangements also result in big, exclusive Chrysler Corp. distribution points that have sufficient volume and customer bases to invest in excellent dealer facilities and service departments that can support customers well in the long run, Mr. Holden adds.

"What about the product distinction for each of those brands? What I want is less internal competition. Dodge fighting Plymouth. It used to be this company had a long history of Dodge guys peeking over the wall to see what the Plymouth guys were doing, and no one was looking out the window to see if Ford or Chevrolet had an idea. We're way past that now."

Like other automakers Chrysler has initiated intensive studies that analyze exactly what role brands such as Plymouth should play.

Three years ago, for instance, executives launched the "Plymouth Renaissance" project, which analyzed and questioned what Plymouth's role should be. The answer, says Mr. Torok, was to return to the brand's roots: offering affordable cars for young entry-level buyers.

That's led to vehicles such as the Plymouth Breeze, a sporty, low-priced version of Chrysler's J/A cars that still has a sense of style. And, of course, the Prowler: an extremely low-volume niche car that already has generated more publicity and positive name recognition for Plymouth than any advertising campaign could buy.

Due out in the spring of '97, the unusual neo-hot rod is by far the most unique vehicle to enter the new model year and harkens back to Plymouth's 1950s hot-rod roots. It's also loaded with lots of interesting technology, which already has been explained in detail by the automotive press.

Expected to be priced at about $35,000, though, it hardly meets Plymouth's "affordability" mandate. But because the car clearly is a low-volume specialty car, that's a tradeoff marketers feel will not seriously mar the burgeoning new Plymouth brand image.

So in an age when many tight-fisted consumers are buying "no brand" products to save money, can brand management really survive long term?

"Customers want a brand, even in generic drugs," says Mr. Holden. "I step outside and instead of buying the fancy $50 drug, you go to Rite Aid and buy the generic drug. But it says Rite Aid on it. So Rite Aid spends some time building its brand so that you trust Rite Aid.

"I don't want to buy something that isn't identified. Water, for crissake. Is it Evian? It's water. How basic can that be? But it has a brand on it. It may be one of the greatest marketing coups of all time if you think about it."