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Brands, Not Cars, Key Contends Fiat/Chrysler Exec

Have we heard this song before?

by on Mar.15, 2012

Fiat global brand chief Olivier Francois during the launch of the new 500L.

The idea that a car sells the brand doesn’t apply in the expansive world of Olivier Francois, Chrysler/Fiat’s chief marketing officer.

It’s the brand and its message that ultimately sells the car, Francois told the Automotive Press Association in Detroit. A lot of companies use cars to sell the brand but Francois has deliberately reversed the equation.

“The brand had better stand for something,” explained the French-born executive, noting he uses the exact same formula in Europe where he is in charge of the Fiat and Lancia marques.

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Francois also stressed that timing is critical. Chrysler’s celebrated Eminem ad, which was shown during the Super Bowl in February,2011, would not have worked a year earlier because there wasn’t any solid evidence yet of a Chrysler comeback. A year later it would have been considered “old news,” he added.

While denying the controversial Super Bowl ad featuring Clint Eastwood had any kind of a political message, it was devised to capitalize on the fact the political races were part of the every day conversation in the US.

Francois added he watched the ad play on the Super Bowll telecast in a pizza place in the Detroit suburbs and knew the Eastwood ad had an enormous impact by watching the reaction of the noisy crowd, which went silent as the ad played. He knew going in Eastwood would command respect that made the ad memorable, he said.

Francois doesn’t dismiss the idea car ads should feature the product but they also should have some underlying message and emotion. “Advertising in Europe is much more emotional,” said the Chrysler CMO, who stressed that he trusts his gut instinct more than consumer research, which he dismisses as something of a crutch.

“When you are a French guy in at Italian company working in Detroit, there is a culture shock,” said Francois, who during his first visit to Detroit spent a weekend holed up in a hotel room watching CSI episodes and commercials.

What he discovered was the local appeal of vinyl windows, the critical role of cupholders, as well as making sure any price offer ended in nine, added Francois, who joked he later put that lesson to work during negotiations with Eminem.

“People said, ‘How did you get him? What did you offer him,’” Francois recalled. “We I offered him new vinyl windows, a bigger cupholder and a great lease deal.”

So far Francois’ efforts are paying dividends for Chrysler. “Consideration” by potential buyers is up, sales are up and the buzz surrounding the company has helped lift it above the political squabbling that still surrounds General Motors, which also went through bankruptcy with government help back in 2009.

Skeptics, however, might question the assumption that the brand – and the marketing – are first and foremost.  That’s a tune sung a decade earlier by former General Motors brand czar Ron Zarrella.  And it ultimately failed to reverse GM’s steady decline in sales and share – or head of its slide into bankruptcy.  The bigger maker ultimately reversed course, hiring automotive legend Bob Lutz to help restore the focus on product.

But Chrysler officials aren’t dismissing the role of product – Olivier underscored that during a separate appearance, earlier this month, at the Geneva Motor Show where he unveiled the new 500L, a stretched 4-door version of the Fiat 500.

The Italian brand got off to a slow start last year, sales only reaching half the original estimate.  Francois now believes it should gain momentum as more variants of the 500 are rolled out, along with the 500L.  But he also stresses that marketing the brand will be essential, no matter what the product.

And he can point to the numbers to support his case.  Since launching a controversial ad campaign with pop star Jennifer Lopez last year, awareness of the Fiat brand has risen sharply, and sales momentum has surged this year with the debut of two edgy TV spots.  The first, a racy pitch for the 500 Abarth edition featuring exotic supermodel Catrinel Menghia, aired during the Super Bowl. She was joined by Hollywood bad boy Charlie Sheen in a second spot.  Whether product or marketing, Fiat sales have surged since the beginning of the year.

Paul A. Eisenstein contributed to this report.

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4 Responses to “Brands, Not Cars, Key Contends Fiat/Chrysler Exec”

  1. bwob says:

    Paul, I have to lob in with George on this. If anything M. Olivier was ill-advised on how he said what he said, but in the context for the Fiat group the basics behind the idea are sound.

    I am not a fan of the idea that the car sells the brand, The car, the hardware define the brand’s values. That, in turn, is what is used to promote and evangelize the car AND the brand. Where Zarella and his soap salesmen lost the point – utterly – was thinking replacing one modelling platform in Buick’s styling studio (for example) with a ‘room’ showing big, overstuffed chairs and comfy shoes would define what Buicks were. If anybody needed the slightest bit of proof these mouth-breathers with Zarella’s ‘brand religion’ were a bunch of delusional nutcases, that was a great indicator. No sip of the Kool-Aid™ required.

    Cars/hardware build the brand/marque/whatever you want to call it, but they do not sell it, certainly not in this day-and-age. This is the place post-Ford Mazda has failed and at a time it can least afford a failure of any kind. So far – and based on the Fiat Group presence outside of North America, I don’t see any of this happening either.

    Jeannie Davis is right on the button that manufacturers are not making soap or instant coffee or least of all ‘units’, but they are making cars. However my experience indicates that there are market (and marketing-savvy) people who know that and it’s their own version of the Ten Commandments. The products, sorry CARS, they work on are no less focused on the hardware, being better than what came before than any of the epochal cars that may have come before. However they understand that marketing and branding are a key part of success.

    Let’s be honest: Porsche and Ferrari both have become brand Icons that overshadow the hardware beneath them and it was not solely the hardware responsible. This as a result has allowed these two brands (sorry) even more than any others to reach a nirvana where they are immune to traditional marketing assaults by other manufacturers. Even Rolls-Royce, Bentley, Mercedes and BMW aren’t at this plateau.

    Much of this sort of product-led (but not wholly product-dependent) product marketing helped create these brand images and like it or not, they are something the public responds to. In the case of the Fiat Group and under the current management they’ve done a pretty good job (outside of the United States) establishing the foundations for ‘new’ Fiat and ‘new’ Alfa Romeo. Ferrari’s PFG to start with position has been improved – maybe ‘finessed’ is a better word – and cemented under the current Fiat Group management. This bodes well, though works in progress like Lancia and what to do with Alfa Romeo in North America are still challenges that await. Ditto Chrysler/Dodge/Ram.

    Someone like Fiat in North America is coming from the back of the pack so they need some of this ‘superficial’ nonsense. Also, whether we want to admit it or not, the mass consumer in the USA also responds to celebrities (a situation I find especially nauseating after my 20 year sabbatical from the USA to find skinbags of ooze like ‘Snooki’ having celebrity status). A few broadcast ads – especially during an ‘event’ like the Snoozerbowl – do not make a strategy. They are merely tactical weapons in the bigger strategic war.

    But based on what’s been done so far by the Fiat Group I think lumping M. Olivier and his team (as well as the rest of the Fiat Group management) with a decade-long train wreck Like Zarella and his zombie squad is disingenuous at the very least.

    Marketing has to sell the brand created/supported by the hardware and the smart guys do not do one to the exclusion of the other. Nor do the knowledgeable marketing people attempt to redefine what they already have as brand values in a vacuum like Zarella’s “100 point” psychobabble. So far – and based on the Fiat Group’s efforts outside North America – I don’t see indications that Fiat’s going the same way GM did with Zarella and his people.

    By the same token I don’t know if M. Olivier has studied what happened with GM, but if not Signore Sergio should make him do some homework, if only to make certain history does not repeat itself.

  2. stoneyjack49 says:

    I could not disagree more with the comments left above. Ferrari and Porsche are not driven by product — you have to be an advertising geek to believe that. Ferrari and Porsche are all about product!!

    Ferrari introduces one new model every year. They constrain product availability and absolutely protect their price positioning at all costs. The company is run by an engineer who strongly believes that product and product innovation builds brand.

    Regarding Fiat – the job is quite simple, there is only one product. After looking at entertaining commercials that will eventually win awards, I have to ask the question —do you know anything about the product?? This feel good entertainment does absolutely nothing to build the brand or in the end sell cars. Why don’t you ask the Olivier how much money Fiat is spending on incentives in addition to the absolutely bloated national TV spend that is evident when buying NCAA March madness.

    Carlos Ghosn, arguably one of the top CEOs in the world has said in his books “there is no problem in a car company good product can’t fix”. I am in his camp, not the above academic dribble.

    • Paul A. Eisenstein says:

      Personally, I am also of the opinion that product matters, first and foremost. But to try to say brand doesn’t matter would be to ignore certain obvious realities. Toyota is perhaps the best example. Its current Corolla is one of the oldest and least competitive products in its segment. And the new Camry has received, at best, mediocre to fair reviews. Where a Chevy to offer either the maker would face serious issues. Were the new Ford Fusion to be on a par with the overly cost-cut Camry it would be seen as a failure and likely wouldn’t have nearly the momentum the midsize sedan does because it carries the Toyota badge. Meanwhile, few makers would’ve gotten through the various challenges Toyota has faced in recent years were it not for the perceived value of the brand. Now, for a Porsche or a Ferrari, missing the mark on product to such a degree probably wouldn’t be tolerated though their brand value still pays off in other ways.

      I think the reality is that brand v product should not be seen as an either or, but which is most important may be a sliding scale depending upon the marque.

      Paul A. Eisenstein
      Publisher, TheDetroitBureau.com