Chrysler hears From Ad Agencies About Brand Woes

Posted by: David Kiley on September 21, 2009

Chrysler this week will hear presentations from several ad agencies pitching its Chrysler, Dodge and Ram Truck accounts.

The task given to the agencies was the following: Give the company a plan and creative ideas for the fourth quarter with an eye toward re-positioning the brands long term. The agencies that win will literally be in commercial production this coming weekend.

For Chrysler brand, the agencies were told to concentrate on the Town & Country minivan and 300 sedan. For Dodge, they were told to hone in on Charger and Journey. No mention of Dodge Caliber or Challenger in the brief.

The dictum for Dodge was to position the brand around an idea of “Modern American Performance.”

For Chrysler, it was trickier. There was a thought and direction conveyed to agencies to position the car upscale. But the problem is that Chrysler isn’t really getting any meaningful new product for a few years. The five year old 300 is, at best, a “value” proposition when compared with cars more expensive. With rebates, for example, one could drive away a 300 Touring for around $26,000, a few thousand less than the new Ford Taurus, and, arguably, even more below other cars one could conceivably compare the 300 with: Nissan Maxima, Toyota Avalon.

But I find comments reported in Automotive News and attributed to Peter Fong, Chrysler CEO and head of sales for all the brands, a bit…well…interesting.

“Fong envisions the Chrysler brand as ‘a notch above Lincoln, a notch above Cadillac.” This suggests a substantial change, because Chrysler vehicles generally sell for many thousands of dollars less than Cadillacs.”

” ‘The [Chrysler] Sebring and the [Dodge] Avenger attract different customers, but their prices are too close to each other,’ Fong said.”

“Chrysler executives vow to separate Chrysler and Dodge.”

Trying to position Chrysler above Caddy seems like a reach. We have seen this movie before. The Chrysler Crossfire? The original Chrysler 300C managed to achieve transaction prices well above $30K with a Hemi. But its age has caught up with it. A loaded Town & Country, too, managed prices well North of $30K in the good old days.

But here is the problem. Fong’s comments indicate an intention to take Chrysler where it has never really been in the lifetime of today’s buyers. And don’t talk to me about the 1930s and 40s. At least Cadillac, still amidst its recovery and makeover, was, in my lifetime, a benchmark; as in “That stereo is the Cadillac of stereos.”

Chrysler’s makeover under CEO Sergio Marchionne is starting to look a little like a paper tiger. The company seems to be charting the course of its brands on a clean sheet of paper, with the intention of taking them where they would like to see them go; where it seems logical.

The company doesn’t want to wind up with Chevy and Buick when it repositions Dodge and Chrysler. It wants to have a Chevy/Cadillac or Toyota/Lexus kind of offering.

Good luck with that in terms of selling Chrysler as a Caddy, Lincoln or Lexus alternative. Brand futures are not earned on paper. They are earned with a smart, sound product plan plus clever engaging marketing. But this idea that you can market your way passed a brand’s history and past is folly. Chrysler brand is still K-car for many buyers. And it will take a long time to put PT Cruiser and Sebring behind us before we start thinking of Chrysler as an alternative to a Caddy CTS or even Lincoln MKS.

Chrysler, the company may find out after they have spent a bunch of money on this plan, doesn’t so much equal Cadillac, but Oldsmobile.

Reader Comments

Bill

September 21, 2009 10:14 AM

Replay the movie "Get Shorty."

Didn't John Travolta's character refer to the plastic Olds minivan as "the Cadillac of minivans?"

GM Daughter

September 21, 2009 10:43 AM

My sister bought a PT. Pretty Troublesome. >;)

Bob Hamilton

September 21, 2009 11:54 AM

Why do Chrysler's plans remind me of 'lipstick on a pig'? Obviously they need to fix the PRODUCT first; something that should have started a long time ago.

Rich

September 21, 2009 12:38 PM

Poor Chrysler has been lurching from one rescue plan to another for decades, doing well for awhile and then back into "I really need help" mode. Let's hope Sergio Marchionne has the intelligence and financing to come up with something that will last more than a few years.

billd

September 21, 2009 12:52 PM

Peter Fong is dreaming. Or perhaps that's the kind of prattle required for him to keep his job. Chrysler is finished. It doesn't matter what they do, the market has decided. Since Fiat has decided to not put cash into Chrysler, they will expire once the Government bail out money is used up.

Schmeltz

September 21, 2009 1:05 PM

Good article David. In my observation, you can't just will a product to be something it is not, and have it magically conform to your ideals. For instance, calling a Chrysler 300 a Cadillac or Lexus fighter, obviously doesn't actually make it a Cadillac or Lexus competitor. The stuff has to match the mush. Chrysler products need to be doing everything faster and better than everyone else to build the reputation of the brand. Certainly wouldn't hurt to have J.D.Power or Consumer Reports backing them up either. Better fit and finish, better quality materials, better performance, efficiency, technology, etc., all costs money. Lots of it. GM and Ford learned this the hard way the last few years, but they are starting to reap the rewards as a result. Fiat has already stated that they will not insert any new money into this Company. So where is the money coming from to improve or enhance Chrysler's current products, not to mention future products? I've said before that I think the Chrysler and Dodge brands are being moved down the conveyor belt to being dissolved once the Fiat cars are ready for production. How else can a company with less than 10% U.S. market share, and virtually no engineering staff, poor quality reputation, and practically no money, maintain 5 divisions, (Fiat, Chrysler, Dodge, Jeep, and Alfa Romeo)? Something has to go.

Barring some miracle or secondary gov't intervention, or both, I just can't fathom how in the world the Chrysler and Dodge brands will survive the next few years. I'll add one last thing; if Chrysler can find a marketing firm that can completely do a 180 for their brands' images, those marketers would be worth their weight in gold.

Barbara D Holtzman

September 21, 2009 2:14 PM

I've always liked the Chrysler brand, but still have always seen it as mor eon the same line as Buick and Oldsmobile, just younger and snappier. ALternative to Cadillac and Lincoln? In what universe? It would be nice to command the price, although they'd also have to provide both the quality AND dependability of the venerable brands, not to mention the range of styles. Even if that were possible, I can't see Chrysler as more than third in this race.

Van

September 28, 2009 10:50 PM

I have a military - auto industry partnership idea connected under the government loan to the auto industry program.

Here it is:
The auto makers which received taxpayer loans now owe the government big $$.

The military currently gives re-enlistment bonuses to retain certain service members with specified skills. This costs the taxpayer money to retain critical skills within the services.

Example: Sergeant Smith is offered 50K to re-enlist for 6 years in the Army.

GM gives Sergeant Smith a portion of this re-enlistment bonus in the form of a car at cost worth 25K.

The Army gives Sergeant Smith the remaining 25K in cash ensuring the total 50K re-enlistment bonus is paid.

GM now owes Uncle Sam 25K less off the balance, the Army required 25K less for re-enlistment funding and Sergeant Smith is driving a new US made car at a great price.

Smarter folks than I could work the details so this program would be worthwhile for all players.

What do you think? Best, Van

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