munkis
10-06-2009, 02:52 PM
http://www.brandweek.com/bw/content_display/esearch/e3i0d52172227325f281a60469e43009174?pn=1
Good Article.
http://www.brandweek.com/bw/photos/stylus/106419-Subaru_logo_large.jpg
"Recession-proof” usually refers to industries like insurance and health care that continue to do brisk business in a downturn, but is there such a thing as a recession-proof brand? If there is, Subaru may be Exhibit A.
For the first half of 2009, every automaker in the United States sold fewer cars than during the same period in 2008 except Subaru, according to Autodata. Even Hyundai, which stemmed losses and gained 12 percent market share with its if-you-lose-your-job-you-can-return-your-new-car Assurance plan, was down 8 percent. In July, when the federal government's Cash for Clunkers program boosted auto sales across the board, Subaru's rose more than 50 percent compared with the previous July.
Subaru’s 4 percent jump in sales for the first half of 2009 (versus the industry’s average 32 percent decline for the same period) doesn’t have an obvious impetus. The brand’s ad spending for the period, for instance, was $55 million—down 22 percent from a year earlier, according to Nielsen Co. data. Subaru’s advertising, which employs the tagline “Feel the love,” hasn’t won any big industry awards for Carmichael Lynch. (“Not spectacular enough,” said director of corporate communications Michael McHale.) Subaru’s social media strategy rests on the shoulders of one man. (McHale again.)
Subaru did have some advantages in the current economic environment, though. It was one of the few car companies pitching new products, the 2010 Outback and Legacy, which boasted better mileage than the previous year’s models. The company also has no models that cost more than $29,999 (list), limiting the brand’s exposure to the luxury market, which was hit hard in the current recession.
But to get to the root of Subaru’s appeal, consider this statistic: 40 percent of Subaru owners pay cash for their car, more than double the industry average. That reveals a truth about the brand’s customer base: they’re thrifty and conscientious.
Wes Brown, an analyst at Iceology, which has consulted for Subaru on marketing issues for a decade, said that if Subaru is recession-proof, it’s because it markets to a psychographic that is itself able to withstand the economic downturn better than most.
“They have a customer base that apart from being naturally pragmatic are very financially savvy,” Brown said. He recalled that eight or nine years ago while doing research for the brand in Portland, Ore., he found that all the Subaru buyers not only paid in cash, but had done all the paperwork ahead of time. “That’s the mentality of a Subaru person,” he said. “If that’s the way you think, you have been relatively insulated [from the recession.] If you want to go out and get a new car, you go out and get a new car.”
Timothy Mahoney, svp and CMO of Subaru of America, has a slightly different take. Mahoney said the brand has been laying the groundwork for years to have a recession-proof brand. “We know who we are,” Mahoney said, “and we do it consistently.” The brand put a strategy in place three years ago around its current positioning and he said the quality of the product and the value that Subaru’s cars provide are the main reasons it is prospering. “All those things individually sound quite simple to do, but the landscape’s littered with companies that don’t know who they are or don’t execute against that brand promise.”
But doesn’t, say, Hummer know who they are? “I think certainly the times we are in now are favorable winds for us, but it’s not just about being in the right place at the right time,” said Mahoney. “We spent a lot of time defining who our customers are and having a relationship with them.” Such consumers like the fact Subarus look different and are a little offbeat, he said.
According to Dean Crutchfield, a New York-based brand consultant, Subaru is one of a handful of what he calls “affinity brands”that appeal to a fairly frugal, female-skewing psychographic. “They’ve been able to meld themselves with the lifestyle of their customers and have been able to make their customers their owners,” said Crutchfield, who said J. Crew, L.L. Bean, Toms of Maine and, to a degree, Apple are among other affinity brands that Subaru buyers like.
Meanwhile, Jim Hall, an auto analyst with 2953 Analytics, said while Subaru’s thrifty consumer base has helped the brand ride out the recession, Subaru couldn’t post a jump in sales without attracting new buyers. “You don’t grow by selling to the people you’ve sold to before,” he said. To stretch beyond its current 2.2 percent of the market, though, Subaru may have to expand its image a bit.
Already, the brand’s advertising is split between promoting the brand’s “intelligent choice” credentials and more performance-oriented claims. Brown points out that, outside the United States, in fact, Subaru’s image is much more about performance. Brown said the split in U.S. advertising reflects a conflict with Subaru’s parent company about the brand’s direction.
But Crutchfield said there was no evidence of a divided focus among the average consumer. He supported Mahoney’s assertion that the brand has been very good about explaining what it stands for and turning customers into advocates.
“The Subaru driver is fiercely loyal and is out there recommending it,” Crutchfield said
Good Article.
http://www.brandweek.com/bw/photos/stylus/106419-Subaru_logo_large.jpg
"Recession-proof” usually refers to industries like insurance and health care that continue to do brisk business in a downturn, but is there such a thing as a recession-proof brand? If there is, Subaru may be Exhibit A.
For the first half of 2009, every automaker in the United States sold fewer cars than during the same period in 2008 except Subaru, according to Autodata. Even Hyundai, which stemmed losses and gained 12 percent market share with its if-you-lose-your-job-you-can-return-your-new-car Assurance plan, was down 8 percent. In July, when the federal government's Cash for Clunkers program boosted auto sales across the board, Subaru's rose more than 50 percent compared with the previous July.
Subaru’s 4 percent jump in sales for the first half of 2009 (versus the industry’s average 32 percent decline for the same period) doesn’t have an obvious impetus. The brand’s ad spending for the period, for instance, was $55 million—down 22 percent from a year earlier, according to Nielsen Co. data. Subaru’s advertising, which employs the tagline “Feel the love,” hasn’t won any big industry awards for Carmichael Lynch. (“Not spectacular enough,” said director of corporate communications Michael McHale.) Subaru’s social media strategy rests on the shoulders of one man. (McHale again.)
Subaru did have some advantages in the current economic environment, though. It was one of the few car companies pitching new products, the 2010 Outback and Legacy, which boasted better mileage than the previous year’s models. The company also has no models that cost more than $29,999 (list), limiting the brand’s exposure to the luxury market, which was hit hard in the current recession.
But to get to the root of Subaru’s appeal, consider this statistic: 40 percent of Subaru owners pay cash for their car, more than double the industry average. That reveals a truth about the brand’s customer base: they’re thrifty and conscientious.
Wes Brown, an analyst at Iceology, which has consulted for Subaru on marketing issues for a decade, said that if Subaru is recession-proof, it’s because it markets to a psychographic that is itself able to withstand the economic downturn better than most.
“They have a customer base that apart from being naturally pragmatic are very financially savvy,” Brown said. He recalled that eight or nine years ago while doing research for the brand in Portland, Ore., he found that all the Subaru buyers not only paid in cash, but had done all the paperwork ahead of time. “That’s the mentality of a Subaru person,” he said. “If that’s the way you think, you have been relatively insulated [from the recession.] If you want to go out and get a new car, you go out and get a new car.”
Timothy Mahoney, svp and CMO of Subaru of America, has a slightly different take. Mahoney said the brand has been laying the groundwork for years to have a recession-proof brand. “We know who we are,” Mahoney said, “and we do it consistently.” The brand put a strategy in place three years ago around its current positioning and he said the quality of the product and the value that Subaru’s cars provide are the main reasons it is prospering. “All those things individually sound quite simple to do, but the landscape’s littered with companies that don’t know who they are or don’t execute against that brand promise.”
But doesn’t, say, Hummer know who they are? “I think certainly the times we are in now are favorable winds for us, but it’s not just about being in the right place at the right time,” said Mahoney. “We spent a lot of time defining who our customers are and having a relationship with them.” Such consumers like the fact Subarus look different and are a little offbeat, he said.
According to Dean Crutchfield, a New York-based brand consultant, Subaru is one of a handful of what he calls “affinity brands”that appeal to a fairly frugal, female-skewing psychographic. “They’ve been able to meld themselves with the lifestyle of their customers and have been able to make their customers their owners,” said Crutchfield, who said J. Crew, L.L. Bean, Toms of Maine and, to a degree, Apple are among other affinity brands that Subaru buyers like.
Meanwhile, Jim Hall, an auto analyst with 2953 Analytics, said while Subaru’s thrifty consumer base has helped the brand ride out the recession, Subaru couldn’t post a jump in sales without attracting new buyers. “You don’t grow by selling to the people you’ve sold to before,” he said. To stretch beyond its current 2.2 percent of the market, though, Subaru may have to expand its image a bit.
Already, the brand’s advertising is split between promoting the brand’s “intelligent choice” credentials and more performance-oriented claims. Brown points out that, outside the United States, in fact, Subaru’s image is much more about performance. Brown said the split in U.S. advertising reflects a conflict with Subaru’s parent company about the brand’s direction.
But Crutchfield said there was no evidence of a divided focus among the average consumer. He supported Mahoney’s assertion that the brand has been very good about explaining what it stands for and turning customers into advocates.
“The Subaru driver is fiercely loyal and is out there recommending it,” Crutchfield said