When Busy Brands Miss

Most of us have worked within companies that are very task oriented. Inside these companies, there are meetings upon meetings for the latest product launch or to scrutinize every last minute detail of a new ad campaign.

In this operations-oriented culture, “busy-ness” is most usually viewed as progress, minding the knitting and getting things done. No question these are all necessary things for running brands. But here’s the rub; too often, while companies are rushing to do the right things, or caught in the rut of “rinse and repeat marketing”, they can miss out on delivering for consumers and their brands, or worse, do actual harm to the brand.

Very few companies excel at strategic marketing. By contrast, many brands are more comfortable “being busy” with tasks.

Busy Brands Missing Signals: McDonald’s

McDonald’s is an iconic American brand with superior process and operations. But Ronald McDonald has been taking hits lately. And the punches have been coming fast. Business Insider reports that McDonald’s has chalked up 12 straight months of declining sales in the massive U.S. market, with sales down 4.1% in the latest quarter. And the scarier problem is this: the number of 19-to-21-year-olds visiting McDonald’s once a month has fallen by 13% since 2011, while the number of 22-to-37-year-olds visiting has not grown. No question, McDonald’s greatest strength, and its greatest weakness, is the formula it wrote for the fast food business and its high carb sub-brands like the Big Mac and Egg McMuffin.

McDonalds is all about consistency in quality, service and cleanliness across its franchise network but it either didn’t see the emergence of a changing palette for healthier food, or it was too busy to do anything about it. McDonalds has finally seen the writing on the wall and is now in the process of adjusting menus and service experience to meet customer needs. But what took this once innovative company so long? Sure, burgers and fries are staples for the McDonalds brand, and tastes have changed, but when customers were signaling for healthier choices, McDonalds should have been at the leading edge of that change.

Getting It Right?: Chipotle

A lot of those younger customers that used to frequent McDonalds can now be found at Chipotle. Indeed, the “fast casual” food category has been growing quickly this past decade and Chipotle has been a key driver. The recipe for Chipotle has been identifying a consumer desire for higher quality food with more complex flavors but still served fast. What’s more, Chipotle has burnished a healthier and higher moral ground image using sustainably raised ingredients starting with antibiotic-free pork and chicken and avoiding cattle raised with antibiotics or growth hormones. What’s more, Chipotle has innovated with unique brandcom like the famous Scarecrow video play that tells its brand story and has been viewed by more than 16 million visitors on You Tube. Chipotle is also at work on a strategic plan looking at the next ten year lifecycle for its food and service offerings. By staying relevant to customers, Chipotle has been rewarded with 20% sales increase 2014 vs. 2013, a 31% increase in revenue and a share price increase of 57%. Ay Carumba!

Busy “Branding”: University of Michigan Football

For years, the U of M Wolverines have built a power brand with wins on the gridiron, the “Victors” fight song and the tradition of great coaches like Fielding Yost and Bo Schembechler. But recently, the brand has seriously lost its way. A few years back, the school hired Dave Brandon, a U of M alum and corporate titan from Domino’s Pizza. Brandon saw an opportunity to monetize the heritage of the Michigan brand with a more overt style of corporate marketing. He’s orchestrated skywriting, Super Bowl jet flyovers and even fireworks after games. He also created an oddball donor opportunity for naming rights to the head coaching job and put the quarterback in a number 98 jersey to salute former Michigan player Bruce Harmon. But perhaps the biggest gaffe was jacking up the price of tickets over losing seasons. In sum, Brandon has been running Michigan football like Jerry Jones runs the Dallas Cowboys; a football game wrapped in a carnival act that nobody asked for. And the whole thing just isn’t working. Indeed, as U of M’s record has slid to a humbling .567 winning percentage from 2007-2014, angry students have protested school administration to fire him while nicknaming him “Brandin’ Brandon”, a shot at his marketing sell-out of this once proud and powerful football brand. More than anything, while Brandon sought to move the Michigan brand into the future, he’s left the loyal Michigan fans who identified with its simple traditions behind. All they seem to want is a winning football team, a good fight song from the marching band and an affordable seat. That’s all. Good brands know their customers and when to keep it simple.

Getting It Right: Seattle Seahawks

In 1984, as a salute to the loyal and boisterous Seahawk fans, owner Mike McCormack retired the number 12 jersey to the city to acknowledge their importance as the 12th man on the field. Seattle fans are known as the loudest in the NFL, and were in fact the reason the NFL commissioned a noise rule in 1985. As an extension of the team, and as another salute to Seahawk fans, a 12th man flag was created that can be found throughout the city during football season and is proudly raised in a ceremony each gameday by a season ticketholder. It’s a little hokey maybe but it’s a genuine reward for the fans and now a beloved tradition for the brand.

In branding, as in good design, less is often more. But it’s not easy to see the right balance and emerging trends when everyone is so busy “doing the right things”. Is your brand in sync and connecting with your customer? Is there someone looking at strategy along with today’s tactics? If you aren’t, chances are that someone else will.

Brandmachine is in the brand solution business. And in the business of going to newer and better places.

www.360brandmachine.com

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Does Apple “Think Different” Enough?

Like many, we watched the reaction from the press, the Street and industry experts as Apple launched the new iPhone 6 and the Apple Watch. Apple has become the go-to standard as a marketing best practice for many reasons. Nobody tries to meet the needs of technology consumers like Apple from product design to retail experience, and few companies have as clear an internal compass, even with the passing of Steve Jobs. While Apple remains one of the most valuable and powerful brands in the world, we think it might be time for more “thinking different”.

So we were looking forward to this announcement day for a while. And we were pulling for that classic “and one more thing” catchphrase moment which did in fact come to pass. To be sure, Apple made some significant news today. The iPhones are great examples of continuous improvement and the highly anticipated Apple Watch definitely brought some oohs and ahhs.

But it’s hard not to feel a bit let down for wanting to see more from this iconic American company. In retrospect, maybe it’s because the world is catching up to Apple while Apple maybe isn’t transforming the world like they used to. Like many recent Apple events, the recent launch was more about evolution than revolution. Is it possible that Apple might be losing a tad of their brand differentiation and therefore a tad bit of relevancy? Is it still the maverick company that has enabled more people to do so much so easily? Here’s a quick look at the Apple brand:

Innovation: From a design perspective, the iPhones and Apple Watch follow the tried and true path of beautifully simplistic Bauhaus-inspired design. But, guess what? Nobody makes a dowdy mobile phone anymore. Just ask Samsung, the world’s most profitable mobile phone maker or other Android brands that have aped Apple’s sleek cases and intuitive UX. And while the Samsung Galaxy 5 has been on a roll, why was Apple so late to market with big screen phones when so many consumers have been clamoring for bigger devices for so long?

And somehow, being sold on the Apple Watch isn’t as easy as it should be. Several mobile companies have already released or announced their own smartwatches, including Sony’s SmartWatch, Motorola’s Moto360 and Samsung’s Gear Live. However, those devices have struggled to catch on with mainstream consumers. Part of the reason for that is a killer app for the category has failed to emerge (although it also hasn’t helped that the world has been waiting to see what Apple would bring to market). Not to be “glass half empty,” but is it possible that smartwatches are an answer to a question not enough people are asking? Is there enough there, there? By contrast, nobody ever raised that question about the revolutionary Mac, iTunes or iPhone.

Pricing & Security: Apple should be a bit concerned about changes in the mobile industry external factors environment. Apple’s pricier phones have been most popular in markets where subsidies have lessened sticker shock, but now those incentives are mostly gone and consumers are looking anew at Apple features and higher prices vis a vis competitors. And, nobody, including Apple, saw the threat hackers could impose on their security infrastructure with the harvesting of nude celebrity photos. Indeed, security experts were shocked at the lack of perimeter security on iCloud. Monitoring social networks this week saw more negative buzz for the Apple brand than positive, the first time this has ever occurred. So far, Apple has weathered this storm but more needs to be done. In this case, maybe Apple needs to “think different” about the more rational and functional “ante” of the category.

Overall, Apple remains a strong and maturing brand that needs to stay hungry while it stays the course. And we have no doubt that its best days can be ahead of it. And it’s still a power brand. Think about this. What other company gets consumers standing in line days in advance of a product launch? And when was the last time you carved time out of your day to see a brand’s new line of wares in a press conference?

But Apple can do better. And perhaps one of its rivals can teach the brand a few lessons.

Google has exhibited the kind of innovation and daring that once were the exclusive hallmarks of Apple. Take for example GoogleX that makes WiFi available globally by putting satellites tied to balloons over the earth. Or, look at the gee whiz factor Google created with Google Glass. As such, it’s no coincidence that Google passed Apple in the 2014 BrandZ Top 100 Most Valuable Global Brands study.

More than anything, Steve Jobs got the concept of Wow. And “thinking different.”
And those are the things that will continue to make Apple one of the world’s great brands.

By: Kevin Smith

Brandmachine is in the brand solution business. And in the business of going to new and better places.
www.360brandmachine.com

Will Cadillac Emerge as the American Audi? Johan de Nysschen’s To Do List.

Recently, in a major industry announcement, it was learned that one of the automotive industry’s rock stars has left his lead Infiniti post to join Cadillac. Johan de Nysschen, who formerly earned his stripes at the red-hot Audi brand, takes the helm as Cadillac is now well-into the second phase of a brand renaissance. Our take is that this is a strong hire for Cadillac and if de Nysschen is truly given the time, resources and wide-ranging authority that GM President Dan Ammann has promised, Cadillac can continue its rise to challenge the luxury leaders.

But first, de Nysschen will need to steer Cadillac into some calmer waters as Cadillac has hit some rough seas during the past year. Despite great buzz around the highly anticipated ATS launch, sales have been faltering and as of July 1, Automotive News reports that Cadillac is sitting on a 113 day supply of inventory; one of the highest in the U.S. industry. And the launch of the highly anticipated ELR, the brand’s flagship electric coupe has been a major disappointment having sold just 400 examples of the $76,000 vehicle since February while being packed with over $10,000 in incentives.

So here’s our look at what’s in store for Cadillac as Johan takes the big chair at Cadillac:

Setting Expectations: Cadillac spent nearly 4 decades eroding brand value with a litany of product and image setbacks. Now going on the second generation of its brand and product renaissance, it’s only recently that Cadillac has made significant headway in its turnaround. Indeed, it has taken ten years, and easily more than $10 Billion to get the brand back on the rails and moving in the right direction. But despite these investments, most industry analysts still see Cadillac as a solid tier 2 luxury brand and suggest the brand will need another renewed commitment and investment for long-term success. Cadillac is building competitive products but the premium segment trades heavily on exclusivity, leading technology and cachet; areas where Cadillac needs to raise its game again after many years of neglect. De Nysschen needs to get everyone on-board with how long the next phase of the turnaround will take and what it will truly cost. Again, he has the perspective of the Audi brand comeback from the brink during the “unintended acceleration” drama in the mid-80’s to where it now competes toe-to-toe with BMW and Mercedes—a thirty year march of persistent focus, investment and delivery. So everyone needs to buy in from the GM Board, to GM President Dan Ammann and CEO Mary Barra to let him do his thing the right way.

Culture & Governance: One of Cadillac’s core challenges is that it competes for resources against GM’s “other mouths to feed” across the portfolio. For instance, Cadillac has long-needed a premium flagship but other brands in the GM stable have had equal, if not more critical needs and wants as well. So the ongoing challenge is who gets fed first? That needs to change. Premium brands bring huge margins but also require a relentless focus and continual investment without cutting corners. At premium focused BMW and Mercedes, these aren’t the same everyday challenges. And at mass and premium brand house VW AG, where de Nysschen has extensive experience, there is a proven balance of feeding the workhorses (VW, SEAT and Skoda) and simultaneously the race horses (Bentley, Bugatti, Lamborghini, Porsche Ducati and Audi) with equal care. No doubt, de Nysschen, the former Audi executive that made a business case for Audi resources while at VW AG will have useful experience, insights and outsider perspective in this role at GM. But GM’s stakeholders also need to let Cadillac stand as GM’s “tip of the spear” without bureaucratic interference. They need to hold de Nysschen accountable for P&L and brand metrics on a realistic timetable, but they also need to give him what he needs to succeed. And, de Nyschen, with GM’s support, needs to craft an esprit d’ corp across the Cadillac enterprise. Maybe consider making Cadillac the destination Division at GM and staff it with the best and brightest as was the case in the brands’ halcyon days. Bring back Cadillac’s gold flag that flew over the headquarters building and maybe even create a physical location for the Cadillac Motor Car Company.

Product: de Nysschen is said to have a critical say in Cadillac product planning and we bet one of his first initiatives will be filling-in the low-end of Cadillac’s line-up as was his intent more recently at Infiniti. The Milennials are starting to play an important role in the luxury market and they are seeking a different luxury expression than their parents. This cohort will represent a huge opportunity for Cadillac to start anew and the affordable Mercedes CLA and Audi A3 have proven big hits with younger buyers. Cadillac needs smaller & affordable yet premium products like these mach schnell. At the upper end, Cadillac will finally get a worthy flagship with the 2016 LTS and while it will feature some of the cues from the gorgeous El Miraj concept, we are hearing comments from observers that, although evolved, its’ Art & Science design language is starting to look dated after more than a 10 year-run.

Cadillac’s bold and polarizing design strategy has definitely cut a clear path for the brand but it’s also in sharp contrast to the more simplistic Bauhaus cues of BMW Audi and Mercedes that many luxury buyers prefer. As such, it may need a fresh look and de Nysschen should have an important say in what that is. What’s more, de Nyschen will bring a much needed eye for “magische handwerkskunst”, what Germans refer to as “magical” craftsmanship”. If he can further elevate Cadillac materials and interiors and fix Cadillac’s CUE system to emulate Audi’s industry-leading Audi Connect, Cadillac will clearly benefit.

Pricing: GM leaders were hopeful that the new series of Cadillac products could command competitive premium pricing at par with luxury leaders; as such Cadillac priced directly at competing import brands. But the ATS launch has shown Cadillac is still struggling with their parity strategy. Presently, according to dealers, Cadillac products can’t command pricing in line with the top echelon brands. Pricing is especially viewed as a key challenge for the ATS and inventory has been building up, but instead of dialing down production to meet demand, Cadillac has hit the incentive button and residual values have suffered which are key to the luxury leasing business and long-term brand health. Johan will have a delicate balancing act with pricing until Cadillac earns its premium value stripes to price at par with its competitive targets.

Place: Despite years of trying, Cadillac has struggled taking Cadillac global. Cadillac has also been late to the booming China market; however, the brand is finally starting to get some traction with sales up 67% to 50,000 vehicles in 2013 with hopes to double its China sales within a few years. To that end, GM has also spent big on a new Chinese plant to spur that rapid growth. Closer to home and on the dealer front, Cadillac dealers will need some love with all the recent leadership changes but early signs are that they are impressed by the Johan hire.

Brand Image: Cadillac’s brand baggage ultimately manifests in its inability to draw more import buyers to the brand. But the problem isn’t awareness but rather a lack of relevancy and credibility to a generation of car buyers that have been fed on the performance, technology and cachet of German luxury. In a gesture that Cadillac recognizes a need to change, Cadillac’s logo has been refreshed to present a less dated look. And Cadillac’s driving dynamics, as exhibited in the ATS have raised eyebrows for beating its BMW 3 series rival. Similarly, accolades like the CTS pick as Motor Trend’s Car of the Year, are helping to further burnish the brands’ carmaking credentials.

Promotion: Cadillac still needs to find a voice and “brand glue”. Former GM CMO Joel Ewanick took a bold leap with resurrecting the famous “Standard of the World” tagline but that’s been abandoned in yet another churn of Cadillac taglines, marketing manager jobs and agencies-of-record. Indeed, it’s hard to keep count of the brand managers and agencies that have worked on the business from Modernista! to BBH to Fallon to Rogue over a stretch of just a few years. What’s more, it seems that Cadillac often ascribes to a “launch and abandon strategy” with limited advertising support of nameplates after vehicle launch cycles. By contrast, de Nysschen’s Audi has one of the most consistent strategies in the luxury game under the global platform “Vorsprung durch Technik” (global) and “Truth in Engineering” (U.S.). This is the kind of internal/external brand platform that Cadillac needs and Johan will be looking to new CMO Uwe Ellinghaus, who brings experience from BMW, to help re-invigorate Cadillac marketing globally.

Without question, Cadillac’s new leader has a long “To-Do” list. But at the same time, Cadillac has made headway on the journey and has strengths it can build on. Given a continued focus, investment, patience and non-interference from GM leaders, Cadillac’s best days can surely be ahead of it with a seasoned leader like de Nysschen at the controls.

–authored by: Kevin Smith, Principal/brandmachine

brandmachine is in the business of creating brand solutions and going to newer and better places.
www.360brandmachine.com

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The Mini Brand Has Gone Missing….Or, Has It?

By Kevin Smith

We recently had a chance to test drive the all-new 2015 Mini Cooper. The good news is that the new, improved and highly refined Mini is now one of the best premium small cars in the world. The not so good news is that it’s no longer as unique and fun as the Minis before it. As Mini continues to expand its product range into sedans and SUV’s, and as BMW seeks to grow small FWD cars off common vehicle architecture, it needs to make sure it maintains leadership in fun-to-drive cars that represent the core of the brand promise. What’s more, while listening to customers for ways to improve the car, they also need to preserve the attributes that make Mini advocates so loyal and passionate for the brand.

The all-new 2015 Mini has just recently gone on sale and has been pretty well-received by the popular press and buff books. That said, it’s not getting the same kind of love from “Mini Nation”; the bread and butter loyalists that write the checks and spread the Mini gospel. Their main issue with the new Mini is it’s “mini-ness”…or, more appropriately its’ increasing lack thereof.

With each subsequent Mini Cooper generation, much like VW’s Golf (and even the Mustang recently), the Mini hatch has grown in size and weight taking on more adult-friendliness with better room, ride and comfort while seemingly leaving out more of the fun-loving, playful pup of the original 2000 model year re-incarnation.

Styling

At first glance, the Gen III is not huge, but it’s certainly not “miniature” either. This becomes more obvious when comparing it in the context of Mini’s design evolution. In a nod to increasing industry pedestrian crash standards, the new Gen 3 Mini stands taller, the front overhang is longer and the car gains a bit more cartoonish grin as well. Make no mistake, the new Mini maintains its iconic shape but with each generation it moves a bit further away from its original and more minimalist retro-futurist design.

Interior

Get inside and the first thing you notice is a much bigger cabin and higher cowl height more similar to other small cars on the market. And your passenger now sits further away from you versus “right next to you” in the best of the British motoring small car tradition. Surely, many owners asked for a bit roomier interior through the IQS surveys and Mini has certainly complied; indeed, the boot area is a claimed 50% larger and knee room is equally improved. We’ve heard that a few Mini owners have also complained about the classic throwback instrumentation of Gen I and Gen II models and those complaints showed up on J.D. Power scores. So those who had issues, as well as new customers to the Mini brand, will appreciate the more conventional placement of the speedometer, moving from the big round dial in the middle of the dash to a small pod behind the steering wheel like most other small cars.

Similarly, the window controls move from their fighter pilot in-dash toggles to the more traditional in-door location and the cheap plastics and rat fur headliner have been replaced by near-BMW quality soft touches. The new Mini control panel is cute and functions nicely but it’s possibly a bit too gimmicky featuring a big ring that lights up with driver interaction for heating & cooling and radio volume.

Road Test

Our first test car was a Volcanic Orange Cooper S equipped with a BMW-developed 2.0 liter 4 cylinder and six speed automatic with paddle shifters (a 6-speed manual was sadly unavailable). The new S powerplant puts out 189 HP while delivering a claimed 28MPG city and 40MPG highway and 0-60 sprints in 6.5 seconds. We immediately drew comparisons to the outgoing 2013 model and noted that the new car is more solid-feeling but it seems to have a “taller” over the road feeling which takes it one more level away from the glorious handling of the original Mini. In Sport mode, the steering can dial up a pretty nice on-center feel but the size and added weight of the new car creates more of an isolated experience and a general loss of connectedness to the driving experience.
We have been critical of the second gen Minis losing a bit of the go-kart feel of the first gens and we see more of the same with this car. However, we feel the new BMW sourced engine is definitely a keeper offering the most refinement and power throughout the rev range of any Mini engine offering to date. The paddle shifted 6-speed manu-matic is also a significant improvement and offers near DSG responsiveness and faster acceleration than the manual tranny Mini. Punch the gas and the new Mini exudes a nice deep roar with a hint of turbo twist. Hit an on-ramp and the Mini plants its feet and begs for more. Still, while this car can outhandle most any small car, we miss the more juvenile “wild thing” handling of this Mini’s older brothers that made it more unique than any car on the market.

We also had an opportunity to test drive the 3 cylinder base coupe and came away maybe even more impressed by this entry-level car versus the nearly $4,000 pricier S model. Powered by BMW’s new Twin Power 3 cylinder turbo this model is a lot of fun to drive and definitely a better bang for the buck. Mini shaved a whopping 2 seconds off the outgoing base coupe’s 0-60 time with this new set-up and while 3-pot motors have been a tough sell, we think this one is a gem. It’s basically a 3.0 liter BMW inline six sliced in half and in addition to surprising smoothness and boost, serves up 30 mpg city and 42 mpg highway. The base Cooper is on sale starting at $20,745 and offers a lot of premium small car virtue.

Takeaways

Kudos to BMW and Mini for making a damn fine machine that sets a new bar for premium small cars. The Mini has finally been fully injected with “BMW-ness” and we think it will be a solid performer in the showroom. But again, we feel these cars miss the mark as better Minis. Overall, much like parent company BMW has recently compromised their “ultimate driving machine” product delivery, we feel Mini needs to keep an eye on their brand DNA by building the most fun-to-drive products in their segments.

We’ve heard from our sources that the zesty Mini recipe may have been diluted to address the aforementioned ”Things Gone Wrong” customer complaints in an effort to improve IQS (quality) scores and as such gain more loyalty and conquests for the brand.
But if that’s the case then perhaps BMW overlooked the other critically important customer pleasing aspect of quality; “Things Gone Right”…the many aspects of quality that make people smile and often overlook a car’s shortcomings to a certain degree. The Mini Cooper is still fun-to-drive but it has lost its highly differentiated and relevant brand position as the King Hooligan of the hot hatches.
We believe BMW’s emerging platform strategy has a lot to do with this new and more premium Mini (both good and bad). The sweet motors, the craftsmanship and refinement are all BMW. That’s great. And we get the goal of leveraging common platforms and architectures for efficiencies. But that’s also the rub. BMW brand will soon be in the FWD car business with their upcoming Active Tour 1 Series. We hate to say it but we sniff a hint of badge engineering here as this Mini seems more like what a BMW-branded compact car would be (and soon will be) like. Again, these are wonderful small cars, but can we please get our rough-edged Mini back?

But perhaps we’re sounding the alarm to soon. After all, the crew in Bavaria have answered the critics by showing us how they steered BMW back to its Ultimate Driving Machine roots with their latest generation of 2 and 4 series cars. And certainly they can do the same with Mini.

As BMW has brought us the 2-Series as a spiritual successor to the 2002 and original 3-Series, we’d like to see a new and smaller nameplate entry slotting beneath the more grown up Mini Cooper and perhaps joined in the showroom by the uber cool Rocketman concept, which debuted at the 2011 Geneva Motor Show and that one day soon could be that car.

Couple the Rocketman to the recently teased Mini Superleggera Vision roadster and Mini is back on track with some new swagger that will surely please newcomers and loyalists alike.

http://www.360brandmachine.com

For FIAT/Chrysler, It’s Draft Day in America

By Kevin Smith

We couldn’t help but draw comparisons between two big industry events staged this week; the NFL Draft and FIAT/Chrysler’s highly anticipated presentation of their global business plan to analysts.

In both cases, we saw prospects polished up and presented to the media with high hopes and lots riding on their futures. There were bold proclamations, swagger and hype, and no shortage of criticism leveled from expert analysts.

Just 5 years ago, FIAT stepped in to clean up the mess left by Daimler and later Cerberus Capital. And now, with an IPO coming soon, we will see the companies come together as FCA (Fiat Chrysler Automotive) and enter the global car league with a unified front. Chrysler is setting the stage for that moment and their analyst presentation this week was a seminal event to build momentum toward the public offering on the NYSE in October.

Looking back over the past few years, Sergio and the Turin crew have done an admirable job to create a new culture and operational turnaround. The true believers in Auburn Hills, echoing the line in the Chrysler 200 Super Bowl spot, have truly “been to hell and back”. Still, this comeback has mostly been led by highly profitable Ram pick-ups (U.S. market share rise to 21.7 percent) and the Jeep brand (solid Grand Cherokee launch, Cherokee late but gaining good traction). Make no mistake, it’s still easier to score with trucks and SUV’s; passenger car success and FIAT’s struggles remain ever-present challenges in Auburn Hills. What’s more, platform and manufacturing integration, keys to creating more efficiency, still trail industry leaders significantly and the company has little participation in the booming expansion in China and a home EU market that remains in comeback mode. In sum, they are due a tip of the hat, but there’s still a lot of work to do before end zone celebrations commence.

So it took many by surprise when Chrysler campaigned this week that they would soon be nipping at the heels of industry leaders like Ford and Toyota in the next few years. And there’s a lot to like here. The brand portfolio, long an overlapping mash-up fueled by badge engineering dating back to the ‘60’s, is finally getting sorted out with some solid thinking. Chrysler will play “down” as the volume car/crossover brand with new products and as the sole bearer of the minivan flag. Ram does trucks. Jeep meantime will step on the gas with an eye to a million units and a bigger global footprint while Dodge will go niche as a focused performance brand. On the luxury front, Alfa Romeo will fight tier one premium players like BMW and Audi, with eyes on big volume, while Maserati and Ferrari play the halo role. All good. And overdue. And hey, not a bad little brand portfolio they’ve assembled here. Where it starts to get a little loose are the shock and awe volumes and profits and the pace of investment and growth between now and 2018.

By 2018:
• It expects overall sales to jump to 7 million worldwide from 4.4 million last year.
• Grow profits of $7 billion a year by 2018.
• Grow North American sales to 3.1 million up from 2.1 million in 2013
• Chrysler brand sales increase from 350,000 in 2013 to 800,000 in 2018
• Spend nearly $10 billion on its luxury brands
• Doubling Jeep production by 2018 to 1.9 million vehicles as it plans to build its iconic SUV in six countries, up from just the United States.
• Worldwide revenues to jump from 86 billion euros ($121 billion) to 132 billion euros ($184 billion) with 9 percent annual growth.
• Expanding Jeep production from four United States plants to 10 plants in six countries by 2018.
• Will build 900,000 Jeeps annually outside North America

Nobody likes perseverance, a comeback story and calling a shot like Americans. Joe Namath cemented his reputation that way. Tom Brady was passed over in the draft, played with a chip on his shoulder and went on to be an all-world QB. Even Rudy persevered and finally saw the field at Notre Dame.

But Wall Street analysts are a different bunch. They like numbers. They like them justified. And they like consensus. They look at things like the external factors environment, the capital required for R&D, platform alignment, commonality and brand equity. To them, it’s less about a moving PowerPoint presentation, Super Bowl spots and untapped brand DNA and more about how you deliver the numbers. So here’s the rub.

The Chrysler business plan looks good in a war room at Chrysler HQ. But like a football draft war room with tons of film clips, you don’t get a sense of how a recruit will do until the pads go on and the scrimmage goes live against the seasoned vets. Chrysler is just figuring out the global car game against a lot of blue chippers with big time reps. Toyota, VW, Ford and GM have been there and done that. They too have been building plans and there won’t be any red jerseys when that rookie drops back and steps into the pocket.

We think the new FCA will be more than all right over the next five years. Indeed, many analysts laughed at the projections of Chrysler’s last five year plan and Chrysler actually hit many of those targets; but we don’t see the sweeping growth laid out in the business plan. Jeep has big global volume and profit upside for sure. And Ram has shown the ability to punch above its weight (although it won’t be refreshed for a while now). Alfa has loads of untapped potential but the bar is high and moving higher fast in the global luxury game. However, it remains to be seen how core volume FIAT brand will fare longer term not to mention a trailing environmental playbook for the corporation.

With a 12% stock decline after the investor meeting it’s clear that analysts aren’t buying into the numbers. One analyst pointed out that the company is seeking a 56% increase in an industry expected to grow 15-16% over the same period. Still, we like the moxie of the crew in Turin and Auburn Hills. If Chrysler can deliver half of what they’re calling for in the business plan it will be a stronger concern for years to come; in other words, FCA could be a nice pick-up in the draft at the right price. As always, for footballers and brands, it’s less about what you say, and more about what you do on the field that counts.

http://www.360brandmachine.com

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