August 5, 2009
While it's been stated over and over that you can't shrink your way to success, it should also be maintained that you can't spend your way to success.
Take for example Ford Motor Company and Hyundai, OEMs that have emerged in brand recognition and favorability in this calendar year. Both have marketed themselves effectively, using quality product, sound production and launch timing (see Genesis, Fusion Hybrid); a great story (Ford backing away from government loans, Hyundai's Genesis earning various accolades); valuable incentives (Hyundai Assurance Plan, Ford Advantage Plan); and ... lots and lots of advertising ... self-assured advertising, while competitors messages come across more desperate, or are not there at all. (Through May, Ford and Hyundai had each spent about 3 percent more in total advertising compared to last year, while GM and Toyota spending was down 17 and 19 percent, respectively, according to TNS Ad Intelligence).
The press has roasted GM in every way imaginable, and Toyota's losses and leadership changes this year have been widely publicized. Meanwhile Ford and Hyundai have enjoyed the rewards of faltering competitors, and have become the darlings of the automotive press and even general news outlets like USA Today and the New York Times.
In an article from Holman W. Jenkins, Jr. on WSJ.com, he spells out an interesting parallel on the courageous nature of Ford's depiction in the media. He states that the tone of some of the positive coverage Ford is receiving is a bit of an exaggeration. "Ford's press coverage lately portrays Ford as almost a character from an Ayn Rand novel "bravely, disdainfully waving away government money."
Ford and Hyundai have obviously taken full advantage of the opportunity that was laid before them — the industry's recent superpowers — GM and Toyota — are struggling mightily this year, spending less money and effort on marketing and advertising and focusing much of their energy on short term sales issues. Meanwhile, Ford and Hyundai have assertively communicated value to consumers in search of an auto company to trust and depend on, all the while making lots of promises.
Not to say that making promises is a bad idea... as long as they are fulfilled. Out-shouting competitors is one way to gain attention and interest from customers, especially if you can afford to do it. Keeping customers depends on a marketer staying true to its value proposition. Hyundai and Ford have a tremendous opportunity to come out of this recession as healthy, highly considered brands and sustain success for the long term. Following through on the pledges they are making today in marketing messages and customer communication will be immensely important to that outcome.
With all of that said, there's no guarantee that the auto industry will rebound from its current abominable state and that new vehicle sales will suddenly skyrocket back to normal levels — save for a favorable blip from the CARS program for a few weeks. Consumers have bigger fish to fry these days and may not have the confidence to embrace the new car smell for a couple of years yet.
Ford and Hyundai may run into some issues keeping up their share of voice in the market if consumers are immune to any incentives out there for them. An industry continuing to sell cars at low volumes unseen in a quarter of a century won't boost anyone's advertising budgets. And when things do eventually turn around, and the share of voice in the market is suddenly shared by many others again, will Ford and Hyundai have won the hearts and wallets of American consumers enough to continue to keep pace?
That answer will depend on whether or not they keep their promises.