automobiles « John Caddell's blog

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If you read this blog, you could have seen Toyota’s problems coming…

Thursday, February 4th, 2010

Does anyone remember this post from nearly 3 years ago?

Toyota: The Inevitable Decline Starts Now
18 Feb 2007

It’s Toyota’s PR person’s dream: a front-page story in the Sunday New York Times magazine (by Jon Gertner), depicting your company as a comic-book superhero, slaying its competitors amid exclamatory sound effects (VVRRRMM!). And the article’s teaser hailing your company as not only “not only the best automaker in the world but also maybe the best corporation.”

The PR dream is the executive’s nightmare. Not only is it difficult to build from the pinnacle Toyota has reached; it’s impossible. The life cycle of industry titans lasts decades, but a life cycle it is. Ask NCR, Kodak, Xerox, Western Union, Sony.

Ask General Motors.

Forces beyond those under the control of any corporation conspire to bring it down, once it’s reached such an apex. The forces are shifts in demographics, culture, science–more than technology. Somewhere out there, those forces are at work, humming below the range of hearing, undermining the business model that Toyota has perfected over the past fifty years.

And, no, it won’t be a combined GM-Chrysler that eventually humbles Toyota. The US auto companies are deader than dead as far as the future’s concerned. Instead it will be a new company, perhaps born in a rural area not unlike Toyota’s home, failing humbly, learning lessons, remaining persistent, getting better, creating a vision for the far future, a vision far beyond the passenger automobile. Not unlike what Toyota itself once did.

Who are they? We’ll know in twenty years’ time.

(Illustration by Nathan Fox for the New York Times)

strategy, innovation, Toyota, automobiles, New York Times

Tags: automobiles, quality, Toyota
Posted in automobiles | Comments

Ford uses real customer stories as centerpiece of new ad campaign

Thursday, October 8th, 2009

I’m convinced that authentic customer stories are the best way to convey the values and benefits of a product to others, so I paid attention when I read in today’s Wall Street Journal that Ford is using customer stories as the basis for their latest ad campaign. The Journal writes:

Starting Monday, Ford is launching a new chapter of its “Drive one” campaign, featuring 15-second spots using real customers talking about the “cool” features of their new Fords. It comes as the car maker plans to boost its fourth-quarter ad budget 10% from a year ago.

“It’s all about what real customers are saying,” said Matt VanDyke, Ford’s director of marketing communications. Ford will air 30 to 40 spots over the next 26 weeks that have a grainy, home-video feel. Mr. VanDyke said they are meant to showcase owners’ testimonials as “believable, honest and authentic.”

We’ll have to wait and see whether a “grainy, home-video feel” will convey authenticity or something else, but a move by a carmaker away from geek-speak to human-speak can’t help but be an improvement.

As far as stories go, the rawer the better in my mind. Take this example (previously blogged about here). The NFL, as part of its Super Bowl promos, solicited stories from its players and selected one to be featured during Super Sunday. Here’s the final video:

The NFL, back in 2007, also uploaded all the initial stories, told in the first person, directly to the camera, with no cutting, embellishing or actors impersonating college coaches. The polished ad is funnier and more creative. But the original is more authentic, and better, in my mind. (You’ll have to take my word for it on that account, as the nfl.com has inexplicably removed those videos from its website.)

Why didn’t GM use “Harry Potter Marketing”?

Thursday, June 4th, 2009

I was driving to the local baseball field this week (very slowly–there’s a townwide sidewalk construction project underway and every street is a work zone). Coming the other way was a big Cadillac driven by someone in the Cadillac market sweet spot–a 75-year-old guy.

Which got me wondering about Cadillac and GM’s restructuring and the flashy, angular Caddies they’ve been selling for the past 10 years. The guy I saw was driving an older Seville, long and smoother, a real Caddy.

A few years ago Harvard Business Review’s annual “breakthrough ideas” section included a piece called “Brand Magic: Harry Potter Marketing” by Frédéric Dalsace, Coralie Damay, and David Dubois. The essay argued that marketers, rather than continually trying to reinvent brands to make them relevant to a younger demographic, should allow the brand to follow its audience, aging as they do–the same way Harry Potter ages, from book to book, as his readers age.

To me, it seems a lot easier to manage Cadillac to its demographic and then create some other brand to pick up younger drivers. Easier said than done, I know. But the continual, tortured reimagining of Cadillac is symbolic, I think, of GM’s Sisyphean effort over the past 30 years to show that Alfred P. Sloan’s strategy of “a car for every purse and purpose” had legs. [I mean, did the rap-star-accessory 2001 Escalade really point the way to the future of the brand?]

Trying to reposition a brand involves cutting out some (most?) of what makes it appealing to its current audience. That’s expensive. It also involves a leap of faith–that the name and brand equity can be made meaningful to a new audience.

By pouring billions of investment in new product and advertising to change Cadillac, GM could have nurtured Saturn from a brand that 20-somethings valued (its early 90’s positioning–I know because I drove one!) to one that appeals to forty-somethings: the “aspirational” buyers that Cadillac drew during the ’60’s and ’70’s. It probably wouldn’t have changed much with GM as a whole, but it’s almost certain that they wouldn’t be ditching Saturn and keeping Cadillac if they had done that.

Seems to me that Toyota, with Scion, has the chance to do “Harry Potter Marketing” right. It will be interesting to see if, in 20 years, Scion is still selling weird young-people cars, or ones that their current owners–who’ll be older and wealthier–really want to drive.

(Photo: left, the 2001 Cadillac Seville; right, the 2002 Cadillac Escalade EXT)

Tags: automobiles, brand, marketing, strategy
Posted in marketing | Comments

Can a commitment to green practices save money? Why, yes.

Wednesday, March 25th, 2009

In yet another example of the power of constraints to create innovation, there’s a fascinating article in the recent Wall Street Journal Business Insight section entitled “Greener and Cheaper.” In it, authors Alan Robinson and Dean Schroeder describe the decade-long effort by the managers and workers at the Subaru of Indiana plant to reduce their use of energy and decrease waste. One accomplishment: the plant has not shipped any waste to a landfill in nearly five years.

The findings of the authors is that sustainable practices can go along with cost reduction and efficiency improvements. But it’s a long process and requires constant focus, attention, and executive support. For example, the Subaru plant has had the objective to be environmentally sensitive since its construction 20 years ago.

It’s not all easy money–many of the projects required process redesigns and/or upfront investments that ate up savings for a while. But there are numerous stories in the Subaru experience where the objective to reduce waste led to sustained creative thinking:

In another case, a series of process redesigns that first increased costs ultimately produced lower costs, less waste — and better quality work. The plant used to weld its steel auto frames in a way that produced lots of sparks, which, in turn, left lots of a waste-metal byproduct known as slag on the floor. Subaru started looking for a company that might want the slag for the base metals it contained. It found a company in Spain that wanted to recover copper from the slag. So, Subaru started shipping the slag to Spain — and paying the Spanish company to take the material. Thus, for a while, Subaru was reducing its environmental impact, but at increased cost.

This led it to consider a previously unrecognized waste: excess sparks. The plant devised a new welding process that produced fewer sparks and less slag, lowering electricity and materials costs. Its consumption of copper welding tips plunged 75%. Subaru still ships some slag to Spain, but not as much. The new welding process also shows how attention to the minutest environmental details can lead to savings that a purely cost-driven organization might miss.

Customers are talking, every day, about their concern for the environment and “reducing the footprint.” With thinking like Subaru’s, we learn that environmental sensitivity does not have to be a premium product. It can, in fact, be cheaper.

Tags: automobiles, cost, efficiency, environment, recycling
Posted in corporate social responsibility | Comments