If you want an example of what can happen if your brand loses its focus and doesn’t go “all-in” to stand for something meaningful, unique and true, consider the case of Volvo.
Back in the early 1970s, Volvo’s agency, Scali McCabe & Sloves (SMS) of New York, was tasked with developing a campaign that would elevate what until then had been a quirky Swedish car company that became the poster child for the “boxy” (unsexy) sedan.
SMS talked to scores of drivers who swore by their Volvos, and in the end, one piece of insight stuck out. Rabid Volvo fans tended to be better educated, more liberal and tended to make decisions less on emotion and more on cold hard facts (at least that’s what they reported). If Mercedes was the brand for the Wall Streeter, and BMW for the aspirational mid-level exec, then Volvo was for the college professor.
Volvo ad from Scali, McCabe Sloves, circa 1974
The agency then created a campaign (mainly in magazines and newspapers) around the “facts” that seemed important to Volvo’s buyers. The campaign was built around the tagline “The car for people who think.”
For more than fifteen years, Volvo held to this position, and over time, became known for its uncompromising commitment to safety, as exemplified by such things as crash-resistant passenger cages and rear windshield wipers. For time, they actually used crash test dummies as the brand’s “spokespeople.” Volvo was seen (and actually was) as the carmaker who was on the cutting edge of safety technology.
Volvo’s ads unapologetically featured long copy, and were designed to “look like” the vehicles themselves, eschewing fancy lifestyle or performance photos and stylish, contemporary fonts. With a fraction of the budget that most European automakers boasted, Volvo not only carved out a meaningful niche for itself, but also saw sales rise impressively, topping out around 140,000 vehicles. Drivers who bought Volvos did so because they thought of themselves (and wanted to be seen) as thoughtful people who weren’t swayed by “less significant” things like styling and performance. Volvos became huge with the Chai Tea-drinking, NPR-listening, pipe-smoking, Utne Reader-reading, “Twin Peaks”-watching “leather elbow patch crowd.”
Then, starting in the 1990s, Volvo inexplicably made a dramatic turn. Management made the decision to compete head-on with the fast-growing German marques. They started turning out more “stylish” models. Added turbo-powered performance. And basically, chose to compete with the Germans on their turf, instead of forcing them to play defense on the whole “safety” position.
Volvo definitely paid the price for trying to be like everyone else. Their sales have fallen by half since 2004. The company has gone through a couple of ownership changes, first sold to Ford Motor Co., then recently to Geeley Automotive of China in 2010.
Besides losing their safety positioning, Volvo also lost their safety edge. None of their models have showed up in the top ten of the National Highway Safety Board crash tests for many years. Younger drivers likely have no feeling about the brand, if they are aware of it at all.
But perhaps, Volvo died for you. It stands as an example of what happens when you have a strong position that is meaningful to a decent percentage of the category’s buyers, and then fail to invest in it, both through an operational and marketing standpoint.
Given the tough comeptitive landscape of the auto industry, it’s hard to see Volvo making any kind of dramatic comeback in the near future, at least here in the states. There are a quarter of a billion drivers in China, though, and that may prove to be Volvo’s next hunting ground.
Volvo’s 1990s strategy was far from inexplicable. If your key brand attribute becomes a hygiene factor (price of entry) then you are in trouble. This is especially true if that attribute is controlled by legislation or a standard set by an external body, such as Euro NCAP. Everyone has to meet the legislation, and the higher voluntary standard becomes a price of entry to be considered “safe”. Exceeding this standard therefore has less and less marketing value the higher it becomes – especially when doing so makes your car heavier and therefore liable to fail on economy criteria.
So Volvo had to change otherwise they would have become more irrelevant more quickly.
The problem was they backed the wrong horse – targeting performance German sedans and wagons – when they should have embraced the SUV much earlier and with much more determination. SUVs were where the profits were, even then, and they still are.
And SUVs were a much better fit to the Volvo brand than saloons. In one of their key markets, the UK, they had already lost their key urban professional Volvo Wagon market to the original Land Rover Discovery, which people bought in their thousands even though (then) it was incredibly thirsty as a gasoline model and painfully slow and noisy as a diesel.
They should have learned from this more quickly and redefined their business around these higher vehicles, marketing the very real active safety benefits of the high driving position and great visibility. They did well with their XC90 and XC60 SUVs, which probably saved the company, but their brand message was confused by T5 racing cars. Had they done that, they could have owned the urban SUV market (ie those not primarily about off road) on the same safety and sense ticket that had previously done them proud.
Paul, you’re on to something when you talk about how Volvo could have made serious inroads in the SUV market. Not only was it a white-hot category here in the states, but they were primarily sold as “family vehicles.” And who’s more concerned about safety than parents, right? My bet is that if they’d done it right, they could have been way more successful in the SUV market than BMW or Mercedes.
Have you thought of apply for the CMO position at the “new” Volvo?
Mickey