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I'd like to hear Buickman's take on this, since his plan's focus is mostly independent of product type. - Ming

SUVs and light trucks become an obstacle for marketers
July 12 2008
LA Times
By Alana Semuels

It's the ultimate marketing challenge: Persuading people to buy something that they don't seem to want anymore.

These days, that something would be gas guzzlers. Sales of light trucks declined 28% in June from the same period last year, according to Autodata Corp. With dealers stuck with tens of thousands of big vehicles on their lots, the automakers' advertising agencies are under pressure to come up with a way to move them.

"Every carmaker is having the same conversation: 'How do we motivate people to buy in a climate when oil is $140 a barrel?' " said Rob Schwartz, executive creative director at TBWA/Chiat/Day, a Los Angeles ad agency.

Right now, automakers are taking multiple tacks and seeing whether anything works. Some want to appear to be tackling the issue head-on and are talking about fuel economy -- even when they're plugging sport utility vehicles. Others are making a play with discounts. Another strategy is to avoid mentioning the gas guzzlers altogether and focus on smaller cars instead.

If you stop fast-forwarding through TV commercials you might be surprised to see some touting the fuel economy of the new Ford Flex, the Cadillac Escalade and the Dodge Journey -- all big vehicles that make a Prius look like a mouse.

Talking about miles per gallon is essential, some automakers say. If Ford didn't mention that its seven-passenger Flex gets 24 mpg on the highway, "it wouldn't even make buyers' consideration," said Jennifer Flake, a Ford spokeswoman.

"We've transitioned to talk about fuel economy because it's what's first and foremost in consumers' minds," said Steve Rosenblum, director of marketing for GMC, which advertises its Acadia as having the best fuel economy of any eight-passenger SUV. It gets a combined city-highway 18 mpg.

Isn't that a bit like an elephant bragging that he's lighter than a hippopotamus?

"If you're the elephant, it matters," Rosenblum said. "What you want to do is get the best within the category."

That might be why Hummer ran a print ad stating that the 2008 H3 has a "lower annual fuel cost than many SUVs." It's a bit unclear which SUVs Hummer could be referring to: The H3 gets 15 mpg combined, according to the Environmental Protection Agency.

A Hummer spokesman said the company used EPA data to make its claim, and that vehicles such as the Nissan Pathfinder, Audi Q7, Infiniti FX45 and Lexus LX570 have higher annual fuel costs than the H3. The claim is partly true: H3 has a lower annual fuel cost of all of those vehicles -- except some versions of the Pathfinder and the Audi. The versions with smaller engines have a lower annual fuel cost than the H3's.

Some experts doubt that comparing one gas guzzler with another will work.

"Because of the Internet, so much information is available that people are going to be able to discover the truth," said Stephen Berkov, the former head of marketing at Audi who is now executive director of client strategy at Edmunds.com.

Some carmakers are giving up on advertising SUVs for the moment and are spending less on advertising overall. From January to March, automakers spent $2.6 billion on TV, radio, print and billboard ads in the U.S., a 10% decrease from the same period in 2007, according to Nielsen Media Research.

"They'll just cherry-pick what they talk about, and only talk about the cars that make sense," said Pat Adams, managing director of Secret Weapon Marketing, which does advertising for Southern California Honda Dealers.

That's why you're hearing BMW talking about its hydrogen car, GM plugging its hybrid SUVs rather than its non-hybrid SUVs and Saab deviating from its message that its cars are "born from jets" -- a plane, after all, seems like the one thing that burns more fuel than an SUV.

It's hard to get people to buy a big vehicle when gas is so expensive. So why not give them some incentives? Maybe stuff a few bills into their pockets?

Ford is offering "employee pricing" on its F-Series trucks. Volkswagen will give $1,500 in college tuition to families who buy its Routan minivan by the end of the summer. Anyone who buys a 2009 Volkswagen will receive free scheduled maintenance for three years.

Chrysler, which saw a 36% year-over-year decline in car sales in June, launched a "Let's Refuel America" campaign guaranteeing $2.99-a-gallon gas for three years to buyers of many Chrysler, Dodge and Jeep vehicles.

"We knew that fuel prices were a huge concern for our customers, so we looked for something that would help them out," said Carrie McElway, a Chrysler spokeswoman.

But some experts said Chrysler's campaign may be backfiring by calling attention to a lineup that's not very fuel efficient.

"We believe that an apologetic approach doesn't work in situations like this," said Mike Wolfsohn, creative director of Ignited, an El Segundo agency that was a finalist for the Mitsubishi account. "If you don't have cars that deliver great mpg, you're not going to attract consumers who care about mpg."

Full Article: http://www.latimes.com/business/la-fi-garage12-2008jul12,0,601193.story

 

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I understand vehicles like the Ford Flex, Outlook, Vue, Acadia..etc....at 24mpg highway or so are much better than getting in the teens in a Hummer or full sized SUV...but with gas so high..I kinda shake my head when I hear that on a commercial. I'm thinking...I'll need a LOT more than 23 or 24 mpg highway before I drop nearly $30,000 or more on one of those.
 

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I understand vehicles like the Ford Flex, Outlook, Vue, Acadia..etc....at 24mpg highway or so are much better than getting in the teens in a Hummer or full sized SUV...but with gas so high..I kinda shake my head when I hear that on a commercial. I'm thinking...I'll need a LOT more than 23 or 24 mpg highway before I drop nearly $30,000 or more on one of those.
If you need a big vehicle, these mpg ratings are helpfull. Afterall, we all can't use a Prius or Civic. Try fitting 6 or 7 people in a Camry and tow a boat for camping and such. 24 mpg is 20% better than the 20 mpg a Tahoe gets.
 

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If you need a big vehicle, these mpg ratings are helpfull. Afterall, we all can't use a Prius or Civic. Try fitting 6 or 7 people in a Camry and tow a boat for camping and such. 24 mpg is 20% better than the 20 mpg a Tahoe gets.
at 15,000 miles per year the cost difference between 24 MPG vs 20 MPG at $4 a gallon is $500 a year,$41 a month not 1/10 what a new car payment would be. with the bad trade in value of the SUVs and difference you would spend it would take years to break even. people need to do the math as i have seen this happen back in the 70s and 80s.
 

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Agreed, no one should swap a 20MPG (if it really gets that around town, and don't use old 2000 MPG figures and compare to a new 2008 vehicle, which is unfair) for a 24MPG crossover.

But the question is for people in the market for a new vehicle anyway. Seriously, how many people really need to be driving an 8-passenger SUV or crossover when they only use that capacity on rare occasions?

Let's say they really don't need 8-passenger capacity. I know I had an 8-passenger van once and it was just 2 of us (I used to be very into gardening as an amateur nurseryman, and A/C is better than the wind in an open bed). Would I buy that kind of vehicle again? Most likely not, even now with 3 in the family, and the great cargo room it offered.

Could Buickman (and smart GM marketing) convince me to get into one anyway, though? :)
 

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I think you could help sales of big SUVs (or any vehicle) right now. Here's a couple ways:

1. Give a Tahoe similar stying cues of a high MPG car. Give it a version of the Malibu/Traverse nose. It looks like its more part of the "family" - with some of those family members achieving high mpg. If someone needs the capability, it reduces some of the stigma.

2. Advertise the MPG of the SUVs. If it gets 15 mpg, say it does. 15 MPG does not sound nearly as bad as the fear and trepidation that some people (that could afford a big SUV) may have in their head.
 

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The 6.2L V8 with a 6 speed automatic or the 4.5L diesel with a 6 speed automatic should be the only two engine combinations available in the 1/2 tons. Sorry GM, the new diesel engine will have to be at no extra charge over the gasser.

Solid front axles immediately need to replace the IFS system in the 3/4 and 1 ton trucks.

No bluetooth, navigation, or other nonsense.

Trucks need to be trucks, not wannabe cars.
 

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at 15,000 miles per year the cost difference between 24 MPG vs 20 MPG at $4 a gallon is $500 a year,$41 a month not 1/10 what a new car payment would be. with the bad trade in value of the SUVs and difference you would spend it would take years to break even. people need to do the math as i have seen this happen back in the 70s and 80s.
I agree about the price difference for 15,000 miles of driving per year. Crazy to trade in a 20 mpg for a 24 mpg vehicle just to get a few extra miles per gallon. I'm refering to people shopping for a new vehicle. Some people need the bigger vehicle, and advertising a 24 mpg vehicle is a way to inform people that alternatives to big B-O-F Suv's are out there.
 

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effective marketing would not increase the size of the market by much more than perhaps an incremental amount. what it would do however, is enlarge our slice of the available pie. furthermore, it would allow us to do so profitably.
 

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If you need a big vehicle, these mpg ratings are helpfull. Afterall, we all can't use a Prius or Civic. Try fitting 6 or 7 people in a Camry and tow a boat for camping and such. 24 mpg is 20% better than the 20 mpg a Tahoe gets.
I don't deny that some people "need" these vehicles.

But I think many others are re-evaluating their lifestyle and realizing that they don't really need to carry 6 people, or they only tow their boat twice a year, or they can rent a van/pickup when they need it, or they can get to the ski slopes just fine without 4WD.

My parents were in the "we need a SUV" mode for many years. Now the thing sits in the garage except on the small number of occasions when they actually do need it. It will never be replaced.
 

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"We've transitioned to talk about fuel economy because it's what's first and foremost in consumers' minds," said Steve Rosenblum, director of marketing for GMC, which advertises its Acadia as having the best fuel economy of any eight-passenger SUV. It gets a combined city-highway 18 mpg.
I saw a commercial for a Kia Sportage where they were talking up its great fuel economy.
That puny POS gets worse highway mileage than an Acadia and about the same overall!!
 

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The key to marketing and selling SUV's in this market is to find a market segment that will and MUST continue to buy SUV's and trucks.

What this market has done in the past 1-2 years is contract. It has not disappeared.

Large families cannot drive Civics or Cobalts. THey needs large vehicles. That's where CUV's come into play. But CUV's don't have the ability to tow hefty things.

The market is much smaller. And perhaps it will only support a handful of brands instead of a slew of them.

Again... it's just a matter of finding the right segment.
 

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Somebody might be able to come up with a campaign that is helpful to clear out some bloated inventory, (probably with the help of huge rebates) but the reality is that the SUV and Truck market is going to continue to shrink. No marketing scheme is going to change that.

Manufactures will need to develop more fuel efficient and lighter weight SUV's and trucks. In the case of pickups some smaller vehicles are needed.
 

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I drive an 08 Suburban (1500) 4x4.

In Texas a 300 mile trip is nothing...almost lunch.

At 75 MPG I can average just over 16 MPG.

Last trip kept it at 67, bumped the tires a few pounds and watched how I was driving.

Returned 18.4...thats a 14% increase by paying attention.
 
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