Are Some Brands Stretched Too Wide? - Brief Article

Automotive Industries,  Feb, 2000  by Ray Windecker

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Brand management, long simmering within the minds of automotive marketers, has now bubbled up into mainstream thinking. There is a long history of management of umbrella brands -- Chevrolet and Ford vehicles were and are something for most of us. On the other end of the brand-management balance beam are Rolls-Royce and Ferrari, cars that historically maintained an image of price-based egoism. Consider the BMW 7-Series and Acura NSX as alternatives that provide comparable service at substantially lower price, but less ego gratification.

Today, we have micro-management. Umbrella brands are being fractured and expanded. Sometimes the vehicles fit, sometimes they do not. But the cost of models that don't easily fit underneath the umbrella are marketing costs spread too thin, sapping resources that could help boost sales.

The Chevrolet Metro is for the truly frugal and the Chevrolet Corvette is for the frugal middle-class personal-sports buyer, yet both fit comfortably under the Chevrolet umbrella.

Conversely, the Acura NSX fits uneasily under the moderately upscale Acura umbrella. The analytic viewpoint: The Corvette's price is only one-third higher than the second highest-priced Chevrolet while the NSX is twice the price of the second highest-priced Acura. Which best fits the umbrella?

Of the umbrella brands, Ford is a clear volume leader at 3.4 million units sold in 1999, followed by Chevrolet at 2.6 million.

Some points to consider:

* After Ford and Chevrolet, volumes diminish rapidly.

* "Trucks" are the key to truly high volume. They are also the key to higher luxury-brand volumes. Many of the highly acclaimed brands generate comparatively low volumes.

* The departing Plymouth brand moves more vehicles than do 23 other "umbrella" brands.

COPYRIGHT 2000 Cahners Publishing Company
COPYRIGHT 2000 Gale Group