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For Saturn, the Time is Now

Date: Dec 14, 2006

Source: BusinessWeek

Author: David Kiley

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For Saturn, The Time Is Now

The year 2007 will be crucial for GM's struggling Saturn. It's finally got the great new cars it neededóbut buyers still need to be convinced

General Motors' Saturn is on the verge of either proving itself as an invaluable brand for the company's financial future or becoming an example of how the automaker is incapable of managing a brand no matter how good a lineup of product it has in the showroom.

After 16 years in existence, why now? Because it finally has a lineup of vehicles that is not only as good a group of products as General Motors (GM) has ever lined up under a brand, but products that stack up very favorably against the likes of Nissan (NSANY) and a resurgent Hyundai, as well as, in some cases, Toyota (TM) and Honda (HMC). If the automaker has truly looked after manufacturing quality as well as they say to improve Saturn's J.D. Power ratings, then the X factor is whether the current team managing Saturn's sales and marketing can successfully go back to the future with its advertising and rekindle the engaging and memorable Saturn story that launched the brand in 1990.

The new Saturn products are that good. The Saturn Sky is as good a rendering of a sexy two-seater as the Mazda Miata, and as good as cars that cost $10,000-plus more (see BusinessWeek.com, 5/31/06, "Sky High"). The new Aura sedan, while an unproven newcomer, gives the Honda Accord a run for performance, fit, finish, and design from every angle (see BusinessWeek.com, 10/4/06, "Saturn's Awesome Aura"). The new Outlook, a seven-passenger crossover SUV that I drove this month, is so well executed that my notebook is virtually empty under the heading "Negatives" (see BusinessWeek.com, 11/30/06, "Saturn's Great New Outlook").

Niche Must Grow

The Vue compact SUV, which includes the Green Line hybrid, is not the best in segment. But it's close enough to even the newest redesigned Honda CR-V and Toyota RAV4 to merit close consideration by anyone shopping in the small SUV segment. It has the advantage over its Asian rivals of being offered in a hybrid version. That leaves just the Saturn Ion as the weak sister in the showroom. And that car goes away in 2007 to make way for the far superior Opel Astra, currently available in Europe, which will be rebadged and slightly repackaged for Saturn for next fall.

Saturn's sales, not surprisingly, are on the upswing. October sales were up 20% from the same month a year earlier, and November sales were up 24%. Those numbers, of course, were helped by the sales swoon that took place a year ago after GM, Ford (F), and DaimlerChrysler's (DCX) Chrysler division pulled ahead sales in the late summer with employee-pricing offers. On the year, Saturn is up just 3.5%. The brand sold 205,000 vehicles, spread across five models, in the first 11 months of this year. To put that in perspective, Toyota sold 331,000 Corollas alone so far this year. Hyundai sold 131,000 Sonata sedansójust one modelóso far this year. So, as a whole brand division under GM, Saturn right now can, at best, be called a niche. Saturn is on track to sell about 220,000 this year, down from 280,000 in 2002.

But it has to be more than a niche to earn its keep. And with product as good as it has arriving now, that means Saturn must reclaim some of its "brand story," which has been lost in recent years as GM has grappled internally with Saturn's sentimental and grassroots past. Saturn was patterned after both Japanese styling and manufacturing techniques, giving workers greater involvement in the making of the cars. But the company never made a profit and, in 2004, GM folded Saturn into the rest of the company.

On the Comeback Trail

Yet Saturn at one time inspired thousands of owners to converge at the company's Spring Hill (Tenn.) factory to share and celebrate their affection for the brand. That imagery and spirit around the brand still resonates with baby boomers who bought into the Saturn story about superior dealer service and slightly offbeat cars that had plastic outer panels that could take a crash from a wayward shopping cart without registering a ding.

The plastic panels are gone, but so is a lot of the brand "story." For most of Saturn's 16 years, it was starved of new product. And in the last decade, most of the new product it got inspired yawns and grimaces rather than the smiles that it drew when the brand was launched: the Ion subcompact, with its center-mounted instrument panel and pedestrian styling; the Vue SUV, which had had its share of quality issues; the dreadful LS sedan and wagon, which was a U.S. version of a mediocre Opel model in Europe; the Relay minivan, which was one of a quartet of GM minivans that even GM employees were loathe to buy over a Honda, Toyota, or Chrysler.

Jill Lajdziak, general manager of the Saturn division, knows that the time is now for her brand to make a genuine comeback. But she also knows that the brand is not hitting the right chords in its advertising. "We know we have a lot of goodwill with buyers and even people who haven't bought Saturns, and we are looking for the right voice," says Lajdziak. No patron of marketing as usual, Lajdziak is a tireless booster of the brand. She recently left an Aura sedan parked in front of her house just before it went on sale because she was hoping someone in her suburban Detroit neighborhood would ring her bell. Someone did, and Lajdziak all but closed them at her dining room table.

In the past year, Lajdziak traveled to suburban Washington, D.C., to visit the Webmaster of a Saturn enthusiasts' site, and sat at his kitchen table asking his opinion on marketing outreach and explaining the product and marketing strategy. "The people who follow the brand are very important to us," she says. Saturn has also conducted some 70,000 live online chats with individuals who visited the Saturn site in the last year. Only Toyota 's Generation Y-targeted Scion brand markets that way as well.

Marketing Loses the Plot

Lajdziak, and GM as a whole, struggles a bit with Saturn's almost legendary advertising past. Ads that Hal Riney & Partners created between 10 and 16 years ago are still talked about as material for business school case studies like classic Volkswagen ads from the 1960s. Fans of the ads can play them back almost frame for frame. There was the young woman who was buying her first car and was taken such good care of at the dealer. There was the teacher who sent her picture to Saturn so workers would know for whom they were building a car (the last worker to touch the car tucked the picture back into the car). There was the guy who kept hitting Saturn dealerships for free service, even when he didn't need it, so he could get the free doughnuts. And there was the ad filmed at the Saturn owners' gathering at Spring Hill.

These days, Goodby Silverstein & Partners in San Francisco handles Saturn advertising. And despite the agency's reputation for being one of the best in the worldóit produced the "Got Milk" campaign for the California Milk Processors BoardóSaturn ads have drifted the last four years. It has had three different ad slogans. Ads have ranged from a clever, offbeat ad with no cars in which people moved about suburban and city streets as if they were miming driving, to a recent effort for the Aura, which was loaded with boring images and copy that looked like so much other banal car advertising.

Now, as Saturn is in the middle of launching new models such as the Sky, Outlook, Aura, and Vue Green Line, the manufacturer's conversations with Goodby have centered on the "Gotta Show the Product" mantra. Indeed, it must. But not at the expense of a coherent brand story. Saturn, despite lagging behind the industry average in J.D. Power's Initial Quality Study, which measures consumer complaints in the first 30 days of ownership, is still the leading nonluxury brand in Power's survey of how well consumers like the sales and service experience at the dealership. (Like BusinessWeek.com, J.D. Power is a division of The McGraw-Hill Cos. (MHP).)

Not There Yet

The new advertising has been bloodless, right down to the changed tagline: "Saturn. Like Always. Like Never Before." That line, launched a few months ago, replaced the short-lived "People First" ad line. The Saturn team reckoned that "People First" would not do enough to herald all the new product. Balderdash! All this new product Saturn has coming online is excellent, but it has a short history with people, or none at all. That's all the more reason to really reach for the stars creatively.

Advertising Age columnist Bob Garfield put it this way about the new advertising: "The paradoxical tagline happens to be correct, but in exactly the opposite way intended. This commercial (for the Aura sedan) is indeed like alwaysólike brainless car intros have always been. And it is like never before in the sense that is utterly devoid of the values and brand ethos that have undergirded every Saturn until now."

I'll take issue with one thing Garfield says. The ads haven't really consistently captured Saturn's brand ethos in some time. I'm loath to blame Goodby, which does such good work for other clients. Lajdziak has some explaining to do. GM has a system by which engineering, product, and salespeople get rotated into advertising and marketing jobs. This creates a "playbook" mentality at the midlevels. GM ad and marketing people tend to be cautious automotive generalists instead of professional marketers. But Lajdziak has been at the helm long enough that she should be surer of herself than to allow advertising created by an excellent agency drift to the extent that it has.

Why get all exercised about Saturn? Unlike brands like Hyundai, Kia, Nissan, Mitsubishi, and even Honda, Saturn has a glorious advertising past. Comparisons to its own past may be the toughest the brand organization may ever face. But in that, there is an advantage. For years, Saturn got along with mediocre product, great service, and terrific brand energy. Now that it has tremendous product arriving in showrooms, it mustn't lose its way in the advertising, which recently seems to go better with the mediocre product of the past. Saturn's advantage is that it doesn't need to mimic anyone else's marketing strategy. It doesn't even need to mimic its own past like some pathetic Rocky VI movie. It just needs to remember why people care about Saturn and are willing to root for it again. And it needs to make that brand imagery relevant to people who weren't even of driving age when other automakers were studying Saturn ads for the way marketing ought to be done.


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