The role of brand has never been more important for car makers.
The industry is at a tipping point: manufacturers are producing the best cars ever in terms of engine performance, design and safety, which makes differentiation on the basis of functionality incredibly difficult.
Meanwhile, the issue of building and sustaining reputation and trust has been brought into sharp focus.
Strong brands are a fabulous investment, and need to be nurtured and cared for.
They help consumers make short-cuts to purchase decisions.
They cushion the impact of a crisis.
Most crucially, they create long-term financial growth and stability – the stock prices of the companies that own the strongest brands in the BrandZ Top 100 massively outperform the MSCI World Index and S&P 500, according to Millward Brown analysis.
But the automotive industry’s thinking has become increasingly short-term, with a focus on short-term sales, short-term incentives and short term ROI rather than long-term brand building.
This approach has not proved rewarding: the world’s 10 most valuable car brands have lost 3% of their combined brand value over the last 10 years, compared with an increase of 126% for the top 100 ranking as a whole.
Looking at the strategies of those global brands that consistently achieve value growth year after year, five clear priorities emerge for automotive manufacturers with ambitions to differentiate by boosting their brand power – that covetable predisposition for consumers to choose one brand over another.
Become more meaningful – connecting with consumers on an emotional level as well as delivering great functioning cars.
Already renowned for its technology leadership, Toyota – the most valuable car brand in the world, worth $28.9billion – has recently been working hard to boost its emotional appeal.
Loved brands exist in partnership with consumers, looking for ways to improve their lives, caring for their needs better than others and trying to understand the world from their perspective.
Over the past 10 years, the rise in value for brands scoring high in the BrandZ ‘love’ metric was a staggering 10 times greater than their lowest-scoring rivals.
Find innovative ways to create a point of difference
Brands that are seen as different are more attractive, and create greater affinity.
The most differentiated car brands are worth twice as much as their less differentiated rivals, and have grown their collective brand value 3% over 10 years compared to a 30% drop for those that are less differentiated.
A point of difference could be found in something that’s unique about the product – like Land Rover’s automatic pothole detection technology – or the brand experience, in terms of ideals, values, experience, tone of voice, personality or design.
Lexus, the tenth most valuable car brand, ended 2014 with its highest UK sales total since 2007 following a huge effort to become more distinctive by blending innovative styling, advanced technology and the established benefits of its quality and reliability.
Ford (no.5), meanwhile, launched Vignale – a unique sub-brand proposition designed to keep and attract more aspirational customers.
Create salience with powerful communications
A clear, resonant brand proposition aligned with compelling advertising will create massive brand growth.
Those brands in the top 100 that consumers feel are strong in both areas grew 168% over 10 years, compared with 76% for those with a good proposition but weak advertising.
But Millward Brown’s testing of auto ads with UK car buyers shows that 17% are seen as ‘dull’ and 11% as ‘boring’, indicating that there’s room for improvement.
Navigate the new path to purchase
Although consumers still tend to buy vehicles at dealerships, the decision-making process and influential touchpoints are increasingly online.
Brand owners need to understand where, when and how to best reach and influence their target audience: it’s no longer about pushing people through a purchase funnel, but rather guiding them through a journey that comprises multiple touch points.
Be absolutely consistent
Even a single moment of inconsistency can damage years of brand building, so it’s essential to remain consistent and focused on the needs, desires and expectations of the target audience.
It’s crucially important that brand communications are not viewed as individual ‘pieces’ of marketing.
Manufacturers need to understand the full 360° marketing communication system and how its different parts can build and impact on each other.
As the car industry consolidates, not all brands will survive. There simply isn't enough demand.
Established brands face decline in the face of new, innovative competition – including tech giants Apple and Google, the world’s two most valuable brands, which are moving into the automotive space with in-car technology and even vehicles.
“To compete in this new market, car makers will need to fiercely protect their corporate reputation, as well as their brand reputation.
They should be thinking and acting more like a software company than a manufacturer of ‘hardware’, and throwing away their traditional business models.”
For me, it’s going to be less about ‘what the car can do’ and more ‘what you can do in the car – and how that makes you feel’ that will count.
Author: Nick Bull (pictured), senior director, research-led consultant Millward Brown UK