Chrysler’s new sales and marketing chief, James Schroer, has a three-pronged strategy to prop up the sagging image of DaimlerChrysler AG’s U.S. unit. It will start by boasting about the company’s product line.
“We have to dig out of the current crisis of confidence,” said Mr. Schroer, who left Ford Motor Co. (F) to join Chrysler in February. “Consumers have heard a lot about the difficulties. Now we have to dial up the attention on the features of the products and assure [consumers] they are quality products they can trust.”
Mr. Schroer, DaimlerChrysler’s (DCX) executive vice president of sales and marketing, said rebuilding consumer confidence won’t happen simply by bombarding consumers with ads offering generous rebates and special financing. He contended the automaker will have to actually get more “butts into seats” to spark sales of cars and trucks.
In April, Chrysler began an ad campaign called, “See. Drive. Compare,” which is designed to get people into showrooms to compare products and explore the latest electronics in Chrysler models. Already, Chrysler has offered current Chrysler owners $500 coupons toward the purchase of a minivan to get them to come in for a test drive.
The company even is considering bringing competitors’ minivans — such as Honda Motor Co.’s (HMC) Odyssey and Ford’s Windstar — into its zone offices so dealers can let customers compare the vehicles firsthand. “When you actually get people into the seats and they experience the ride and handling, the sales go up,” Mr. Schroer said.
Phase two of the strategy will focus on Chrysler’s co-marketing efforts with its dealers. Instead of pumping all the marketing money into national programs, Mr. Schroer wants to divert some money to local dealers so they can tailor incentives to customers in their region.
“The things that work the best differ by geography,” he noted. “What appears in Texas is different than what appears in Maine.”
By phase three of Mr. Schroer’s turnaround plan, Chrysler should be exiting its “crisis of confidence,” and the company will be ready for what Mr. Schroer called, “Buzz marketing.”
From lapel buttons to television commercials, Chrysler will begin making ads that he said people will remember. “It’s what people say after the ad that matters,” Mr. Schroer added. “Consumers are bombarded with about 3,000 ads a day, and the average marketing is not worth spending a dollar on.”
He didn’t give many details about what direction the “buzz marketing” campaign would go, but he said the new Dodge Ram pickup truck, which Chrysler will launch this fall, will be a key vehicle in the strategy. “We want to create so much buzz about the Ram that you’ll have to see it even if you don’t like pickup trucks,” Mr. Schroer said.
He added that by phase three of his plan, Chrysler will be able to scale back on rebates and low financing, which have led Chrysler to many of its problems.
Experts say Mr. Schroer will have to work fast.
Chrysler reported a $1.2 billion loss in the first quarter and expects a $2 billion to $2.5 billion operating loss for all of 2001. DaimlerChrysler hopes that Chrysler may break even next year.
In addition, Chrysler’s incentives were higher in March than General Motors Corp. (GM) and Ford, reaching $2,396 a vehicle.
But it appears Mr. Schroer already has begun to make changes at Chrysler. For instance, he worked on Chrysler Chief Executive Dieter Zetsche and Senior Vice President of Sales Gary Dilts to reorganize sales operations into five regional businesses. The units will make decisions about advertising, incentives, products and distribution. The logic behind the decision was to have regional divisions that will be able to respond to local market demands instead of relying on national sales and marketing for all regions.
Some dealers say they like Mr. Schroer’s ideas. Detroit-area Chrysler dealer Joe Ricci said he’s anxious for the company to begin its co-marketing strategy so he can focus advertising and incentive programs in his area.
“Every region has different buying habits and trends,” Mr. Ricci said. “You have to peel the onion back and see what layers are there.”
Nevertheless, some skeptics believe Mr. Schroer’s plan is no different than what every other automaker is trying. “Everyone wants memorable advertising. They all want to get rid of incentives,” said Art Spinella an auto analyst with CNW Marketing/Research. “I’m not sure if anyone can do it well.”
Copyright (c) 2001 Dow Jones & Company, Inc.
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