Thursday, December 15, 2011

Vroom vroom ding ding part I

As electric vehicles begin to become more commonplace, most of the attention has fallen on the implications of these cars and trucks on our transportation and energy systems.  However, I’m paying increasing attention to the integration of two large, heavily-marketed industries: automobiles and consumer electronics.

Recently for instance, Suzuki announced that it had teamed with Panasonic to help develop an electric scooter. Until recently, Best Buy sold electric motorcycles.  For that matter, the confluence of motor vehicle and consumer electronics industries hardly began with the 21st century.  In 1930, Motorola got its name by way of a portmanteau incorporating “motor” and “victrola” and began producing the first radios for cars.

However, recent innovations have changed the game.  While consumer electronics companies have long provided entertainment features to cars, they now supply substantial expertise in more critical areas such as battery technology, interface design and microprocessor use.  Of course, I don’t really understand any of these things, so I’ll focus on what I do understand, the marketing.

With this post and the next, I’d like to discuss what I think auto and CE marketers could learn from each other.  Today, I’ll start with the flow from Detroit to Akihabara.
  • Sub-brands matter, too.

    CE brands enjoy some excellent reputations.  Sony, Panasonic, Samsung and others enjoy perceptions of high quality.  However, try to tell me the model of TV you have; not the manufacturer, but the model.  Unless you’re a CE geek (disclosure: like I am), you probably don’t know that your Sharp LCD is an Aquos or that your Panasonic flatscreen is called Viera.  Now, tell me what model of car you drive.  Easy, right?

    Because CE technology changes so quickly and because models come and go with similar speed, CE marketers seem to create and abandon sub-brands often.  Look at the auto industry: Honda has used the Accord nameplate for 35 years.  Chevrolet has sold Malibus since 1964 (albeit with a break in the 80s and 90s).  Harley-Davidson’s Sportster model goes back to 1957.

    Not surprisingly, the one CE manufacturer who understands the value of sub-brands makes devices with a bitten piece of fruit on them.  The MacBook line now has Air and Pro designations.  And even mobile neophytes know the difference between the iPhones 3 and 4.

    Why do sub-brands matter?  Sub-brands give consumers the same sense of promise that a brand does, only in a more specific way.  “Cadillac” means “luxury,” but “CTS” means “sporty luxury.”  “Ford” means “quality,” but “F-250” means “heavy duty quality.”
  • Service sells.

    Conventional wisdom holds that auto dealers make more profit on service than on new car sales.  As a result, service greatly differentiates many auto brands.  On the positive side, Lexus has tremendous owner loyalty not because they build cars so much better than anyone else’s, but because their dealers lead the league in convenient, personalized service.  On the negative, many consumers swear off brands if the dealer acts rudely or does a job poorly.

    Again, Apple understands the value of this aspect of marketing.  The Genius Bar at Apple Stores handle all and sundry complaints about Apple products.  Moreover, the stores themselves help Apple avoid a key problem with CE: unhelpful/ignorant help.  With only one tightly-managed set of products to know, Apple Store reps generally know enough to get the customer up to speed.

    Thinking that Apple should start selling cars?  Well, here’s one auto industry lesson they don’t know.
  • Competition improves the breed

    Automakers, like CE manufacturers, compete in the marketplace.  However, automakers also compete on the track.  This competition serves two purposes:
    • It allows manufacturers to design and test new technologies under the most brutal of circumstances.  Americans may not recognize the benefits of these technologies, unless they drive plastic-bodied cars with carbureted 350 cubic-inch engines and no headlights, the state-of-the-art in Nascar.  However, most automakers develop technologies for the track that trickle down to the street.
    • Competition also enforces brand loyalty.  Even in Nascar, which compels race teams to field very similar cars, auto brands create tribes among fans.  A Chevy fan wouldn’t root for his own mother if she drove a Ford.  And if she drove a Dodge, well, let’s not consider that possibility.

Sure, some CE brands compete mightily on message boards.  Witness: PC vs. Mac flame wars or the great Canon-Nikon feud.  However, the manufacturers don’t meaningfully compete in any direct way outside of the cash register.  I’m not sure how smart phone racing would work, but it seems like a worthy endeavor to me.

Now, CE manufacturers haven’t exactly failed at marketing.  As I’ll discuss in the next post, CE has a lot to teach automotive.  For now, however, let’s give some credit to the folks who taught us how to judge someone based on what he or she drives.

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