Wednesday, May 23, 2007

Chrysler's New Owner Has Serious Marketing Work To Do

David Kiley

Wrapping up my medical leave this week due to a knee replacement I had a month ago. I have ceded the coverage of Chrysler’s acquisition by Cerberus Capital to colleague David Welch. But there will be more to write about this transformation of Chrysler and I plan to hit the ground running with my new knee.

I read wth great interest a piece in Brandweek about what Cerberus might be thinking about Chrysler’s brands, and marketing personnel. I’d like to take some of the points one by one.

Brandweek: “New majority owner Cerberus Capital Management will depend on a small group of auto-savvy advisors to direct the future of Chrysler….The team that will help the process along includes former Ford Motor group vp marketing and sales Robert Rewey, ex-Ford vice chairman Dvaid Thursfield, former Chrysler COO Wolfgang Bernhard and [former sales chief] Gary Dilts.”

Despite Rewey’s title at Ford there isn’t a single bonafide marketer in this bunch. Ford under Rewey, has just as confused a marketing strategy about brands as Chrysler has today. And the recently confused, impotent marketing strategy for the Chrysler brand hatched and launched by current Chrysler marketing chief George Murphy shows that the company has no legitimate, engaged, qualified marketing minds in the house to make sense Chrysler, Dodge and Jeep.

The only legit marketing mind in the mix is actually communications chief Jason Vines who probably has the deepest marketing orientation of any communications/PR chief in the auto industry.

The only clear strategy at Chrysler these days is the “Grab Life By The Horns’ at the Dodge brand. The slogan and most of the ads actually match the nature and personality of products like Ram, Magnum, Caliber and the forthcoming Challenger.

But the new strategy behind Chrysler, with slogan “Engineered Beautifully,” is another lame, weak attempt at giving Chrysler a brand image people can latch on to. Jeep’s advertising is fouled up, and the company recently transferred ad duties to a small Omnicom start-up agency, Cutwater, to try and bring cohesion to the automaker’s most valuable global brand that has been on the decline the last four to five years. Chrysler opted for the new agency to take advantage of the price/fee advantage Omnicom offers. Give me a break! If I had a brand as valuable as Jeep that was sucking wind, I wouldn’t care about saving a few million in fees out of a total ad budget of more than $300 million. There are available agencies out there with bonafides and ideas that just don’t happen to be Omnicom shops.

Chrysler could have assigned the Jeep business to Goodby Silverstein + Partners, and Omnicom shop, before Hyundai awarded its business to Goodby. Fallon Worldwide, late of BMW’s ad account, is out there. Kirshenbaum Bond +Partners is available, and is the best agency without a car account I have seen in 20 years. The Martin Agency of Richmond, Va. is another one.

Brandweek: “One of the first moves Bernhard made when he came to Chrysler in 2000 was to help kill the Jeep Cherokee, an aging somewhat bland SUV. His influence also held over the prospering sales of the Chrysler 300 and Dodge Charger and Magnum.”

Bernhard has a lot to prove if he is going to play a big role at Chrysler. The 300 is a runaway success. But some of Bernhard’s other choices haven’t been nearly as successful. The Cherokee was already dead when Bernhard arrived. The Liberty was already a done deal to replace the Cherokee. The Magnum has been a flop. The Charger is no better than “okay,” and its sales are heavily dependent on rental fleet sales. Bernhard’s Jeep Commander idea was ill-timed and is another Thrifty special. The decision to greenlight both the Jeep Compass and Jeep Patriot may not turn out well, and the Compass is a disappointment.

Quality of materials and fit and finish of Chrysler’s newest products have been criticized, and all that developed under Bernhard. Oh…and the Chrysler Sebring design approved under Bernhard. Ugh! Another bunt single.

Chrysler has serious product problems and issues right now, and a lot of that has to be laid at Bernhard’s door.

Brandweek: “Gordon Wangers, an independent auto consultant in Vista, CA said, “The marketing team in place at Chrysler is good. If Cerberus is ands off, things will be okay.”

Wow!. Wangers is suggesting that Cerberus stay hands off. There is so little actual marketing talent at Chrysler today that I can only believe Wangers is looking for business. Chrysler’s brands have been in free-fall based on almost every credible measure. Marketing positions are currently filled by a collection of former sales and zone managers. That is just the way Ford filled its marketing slots under Rewey’s direction, so maybe few positions will change.

If that’s the case, don’t look for much improvement or recovery in Chrysler’s brand picture.

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