How Ford's new brand strategy works

What is a brand? A brand is trust. A brand is a distinctive name, trademark and trade dress that clearly identifies and enhances the value of a product, service or company" --Gregory Kolligan, partner and managing director, Brand/Equity International.

Ford Motor Co. gathered 600 of its people from around the world for a six-day meeting at a downtown Detroit hotel early in June to plot a new global brand-management strategy.

Citing "competitive reasons," Ford won't elaborate on its plans. However just prior to the clampdown, Ward's Auto World obtained an exclusive interview with Edward E. Hagenlocker, president of Ford Automotive Operations, who provided the basic outline of what Ford's up to.

Ford already has been moving quietly in this direction since 1994. But now that the big Detroit brand pow-wow has been staged, look for it to gain momentum in '98 and beyond.

Mr. Hagenlocker and other top officers attended the June meeting. So did the company's recently appointed brand managers, division general managers, vehicle line directors (VLDs) responsible for product development, advertising agency representatives, market researchers, dealers and others. Their goal: to establish a sharper identity for each Ford nameplate, each division and the Ford oval itself. The major emphasis, however, will be on nameplates.

Ford's new product development strategy also adds urgency to getting its brand process in place: By the turn of the century, Ford targets reducing its product cycle time from 36 to 24 months, taking a big I bite out of the time it needs to establish a new model in customers' minds. The same plan calls for reducing product platforms from 24 to 16, but increasing derivatives from each from five now to eight. That's a lot of complex shuffling, with a potentially big impact on the brand side if Ford were to lack a system for sorting it all out.

The new-product development process is part of the company's Ford 2000 globalization plan that began taking shape in January 1995. Now brand management is being added, a move that's "consistent with Ford 2000, where we've looked at all of the processes we've used over the years," says Mr. Hagenlocker. "We've developed some pretty strong brands, so we have the ability to capture the equity and essence of the brand,".

"You can describe a product by its attributes or features, but a brand is more than that; it's a promise that gets a little more emotion and excitement around the customer needs and wants that really aren't as easily translated into the design or the component, but is (still) very important," he says.

Unlike GM, which has recruited brand specialists who've made a mark in other consumer goods such as diapers and cereal, Ford has promoted brand managers from within.

In still another departure from GM, both the Ford and Lincoln-Mercury divisions are combining all of their vehicles into five groups under single brand managers who in the U.S. report to the division general managers; GM, by comparison, assigns brand managers to each individual nameplate.

Although brand managers are close partners with the VLDs, Mr. Hagenlocker says the two aren't necessarily "joined at the hip," as GM describes the relationship between its brand managers and vehicle line executives (VLEs) who together share bottom-line responsibility for each brand. Instead, he stresses that both are key players on larger teams involving the full range of vehicle disciplines.

The brand managers again as distinguished from GM, are responsible for vehicles that can cross over Ford's five global product-development vehicle centers established under Ford 2000: small cars, front-drive cars and trucks (mainly minivans at the moment), rear-drive cars, light trucks and commercial trucks.

Mr. Hagenlocker confirms that with fewer platforms, Ford may not need the expensive structure of five unique vehicle centers.

Under the new brand-management approach, Ford Div. vehicles are lumped together to appeal to the specific "lifestyle" needs of prospects. They include "Family" vehicles (Crown Victoria, Taurus, Windstar, Aerostar); "Expressive" (Explorer, the new Expedition and an upcoming small sport/utility vehicle); "Sporting" (Mustang, Thunderbird, Probe); "Youthful" (Escort, Contour, Aspire and Ranger); and "Tough" (F-Series trucks).

Lincoln-Mercury Div., which sources say actually took the first step toward brand management late in 1994, has no overall image umbrella like Ford Div.'s "lifestyle" designation. L-M concentrates more on vehicle demographics, such as age and income. Its five groups are Continental/Mark VIII; Town Car/Navigator; Tracer/Mystique; and Grand Marquis/ Cougar.

Brand managers at both divisions are charged with developing greater distinction between each car or truck in their group versus competitors, using feedback from marketing research and customer clinics to grasp marketplace changes. "Prior to Ford 2000, we had minivans managed by Truck Operations, yet 80% of the customers came directly from the car side," says Mr. Hagenlocker, explaining that from a brand standpoint minivans should have been -- as they are under the new set-us --marketed along with Ford's other family-oriented vehicles.

And what if a vehicle is dropped? He won't confirm Aerostar's demise, but if that does indeed happen, the Ford Div.'s "family" brand manager has to find ways of keeping customers from fleeing the Ford oval by coming up with another Ford vehicle such as Expedition, for example, which has some similar attributes to Aerostar such as towing capacity.

How much power do the brand managers have in relation to the VLDs in determining the final product? Mr. Hagenlocker hedges a bit: "There is not a first-among-equals kind of concept; they are part of the team, and they both have roles that complement each other. So they will jointly sort that out."

What happens when the vehicles under one brand manager do poorly while his counterpart in another group has hot products? "There will be no winners or losers," Mr. Hagenlocker underscores. "This is a case of defining what the customer wants, and seeing that our brand strategy is consistent with that."

Unless your last name is Van Winkle or you never watch TV or read newspapers and magazines, you know instantly the message these simple three words convey: Trucks that can take whatever is dished out.

First used some in the early '70s, the slogan by itself hasn't propelled Ford Motor Co. into U.S. leadership in light-truck sales. It naturally takes solid product & as well.

But look at the vaguely named F-Series pickups: When the final figures are tallied, Ford will have sold approximately 775,000 F-trucks during the 1996 model year, making it the best-selling car or truck in the nation for the 14th consecutive year and the No.1 -selling truck for 19 years running. Explorer and Ranger, both originally F-truck sub-series, also have built strong reputations, and it's no coincidence that trucks now account for 55% of Ford's total U.S. sales compared with a 43% truck share for the overall market.

Mustang, introduced 32 years ago, has a similar cachet. Despite some ill-conceived models -- remember the dinky Mustang 11 during the '70s? -- Mustang remains Ford's single most memorable marque. It almost was relegated to history during the early '90s, but was saved when Ford realized that the "pony" car's brand equity was too valuable to jettison.

Thunderbird is another brand Ford has messed with during the car's 40-year history. But, like Mustang, T-Bird says Ford. There are reports it will return to its original heritage as a uniquely styled small sports car within a few years.

Taurus, now in its 11th year, still has a strong image. But sharply different styling for 1996 and stiff competition from Honda's Accord and Toyota's Camry make it more difficult for Ford to hold onto Taurus' claim as the best selling car in America. Recent spy photos indicate Ford will sharpen the car's swoopy styling for 1998 to answer some critics who say it's too radical. Shorter term, Ford reportedly is fighting the perception that Taurus costs more than it does by attempting to portray it as an affordable family car -- a clear admission that its original brand strategy for the revamped '96 backfired.

After Taurus, the list of Ford marques having a sharp focus dwindles rapidly Jaguar? That's a different story. Econoline? Perhaps. Escort, Crown Vic and Mark VIII? Maybe. Probe and Aspire? Hardly. Like the other U.S. automakers, Ford repeatedly has replaced brand names with new monikers. Thus Contour and Mystique, introduced as '95s to succeed a pair of aging compacts -- let's see, was it Tempo and Topaz? -- still are far from household words, even though they're decent vehicles.

As it unfolds, Ford's new brand management thrust may help shore up some of its lackluster models. But it won't help much if the products don't live up to the boasts.