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Volvo Embraces its Unpretentious Customers in Plan to Regain Ground in US Luxury Market

Posted by Dale Buss on April 15, 2013 07:14 PM

Volvo owners always knew they were different from other consumers. Now, the brand is launching a new, integrated advertising campaign in the US that explicitly appeals to the non-materialistic, minimalist ethos which differentiates Volvo aficionados from buyers of other luxury and near-luxury brands.

In the process, Volvo brand stewards hope to finally begin turning around the sales of a franchise whose US results peaked a decade ago, when the company was owned by Ford, and have kept on sliding over the last few years as Ford lost interest and then, in 2010, sold Volvo to Geely, a large Chinese automaker, for $1.5 billion.

Volvo owners' "interpretation of luxury is different but very real," Tassos Panas, vice president of marketing and product planning for Volvo of North America, told brandchannel. "They're more into life's experiences, and more into a Scandinavian simple design [of vehicles] versus a lot of clutter. They are very much luxury customers and love luxury products, but they don't feel a need to impress others."

Thus, the first new TV ads in the campaign by Arnold Worldwide of Boston, which are breaking this week on national cable networks, underscore these alleged differences. One spot, "Rearview," juxtaposes a Volvo owner's priorities to those of competitive luxury-car drivers.

In the ad, a woman at a stoplight in a Mercedes-Benz SUV is primping her highly put-together face in her rearview mirror, when a women pulls up alongside her in a Volvo XC60. The Volvo driver, pretty but less made-up, seems to not notice the Benz driver next to her. Instead, she looks in her own rearview mirror and crosses her eyes, making her two little kids in the backseat squeal with laughter. "Volvos aren't for everyone," the ad intones, "and we kinda like it that way."

An outdoor effort is targeted in Volvo's top markets, such as southern California, positioning the brand versus traditional-luxury competition—such as with the tag line, "Pretense is so past tense." In Los Angeles, one outdoor sign, already erected, refers to the Volvo S60 as "100% real. Can't say that about everything around here."

Panas said that Volvo specifically is targeting BMW, Mercedes-Benz and Lexus in its campaign and is based on new research in which the brand asked consumers not why they bought Volvos but why they weren't buying these other brands.

"The answers we got were about people not feeling comfortable in a BMW, that Mercedes-Benz was too ostentatioius, that 'everybody in my neighborhood' has a Lexus and I wanted to be different."

Still, in the other major aspect of the campaign, Volvo is directly targeting yet another luxury brand, Audi. In its S60 Challenge, Volvo is working with its dealers to put the Volvo S60 directly against the Audi A4 in a test-drive promotion: If the consumer still decides to purchase an A4 after driving both, Volvo will cover the first month's payment on the Audi.

"A4 is the highest cross-shopped vehicle with the S60, which is why we picked it," Panas said. And while he agreed that Audi itself has made a point of positioning its brand as a "new luxury" alternative to the "old luxury" of BMW and Mercedes, he said, "We want our message of confidence to grow across the board. That bold statement and confidence sends a message to Audi owners and other competitive owners."

For Volvo, "confidence" has been in short supply lately. US sales peaked in 2003 when Volvo had a handful of fresh models and was a centerpiece of Ford's stable of luxury brands that also included Jaguar and Land Rover as well as Lincoln. But financial troubles leading to the Great Recession forced Ford to short-change new-product development at Volvo, and the company has still been gearing the new-product pipeline and marketing presence back up under Geely's ownership.

As a result, Volvo's share of the overall US market has dwindled to just 0.5 percent and, of the luxury segment, to just 6 to 7 percent. For the year through March, while the overall US market increased by 6 percent, Volvo sales have slipped by another 8 percent.

Right now, Volvo is relying on the relatively new sporty S60 and XC60 utility vehicle. Panas promised a 2015-model V60 wagon, all-new to the US, by early next year and a new version of the now-hoary XC90, a larger utility vehicle, in the first quarter of 2015. And as always in the auto industry, it's "new sheetmetal" that really moves the sales needle.

In the meantime, Volvo has re-upped a deal with Costco for special pricing on Volvos for the warehouse club's members. Panas is hopeful that the new marketing campaign will move the brand beyond its largely recent "tactical" advertising which, in part, reflected a paucity of new products and adjustments to Geely ownership, which now seems to have Volvo back on track.

"We came to the point where we feel the most important thing we can do for our business," Panas explained, "is to re-communicate what the brand is all about."

Comments

AB United States says:

Another big issue Volvo needs to address is the dealerships. Maybe these new ads will get people interested but the three local Volvo dealerships I've been to aren't nice. They aren't minimal, Scandinavian, or luxurious. They were desperately in need of renovation and inventory. Hopefully they are going to put some focus on this too or no matter how great these ads are, they won't translate to sales. Who's going to spend 50k at a what looks like a used car dealership.

April 15, 2013 08:48 PM #

Ardill United States says:

My experience was just the opposite. I just purchased my third Volvo a week ago from the same dealership. Sales, finance and service all contributed to my decision to go back for my third Volvo. I am waiting for 2014 models to purchase fourth.

I can find everything I look for at a Volvo. I am not filthy rich to buy a car for different occasions. Volvo provides perfect all in one models. You can feel the performance, comfort and luxury all in he same car. Especially with 4C suspension, you technically have three cars available at the touch of a button.

April 16, 2013 01:43 AM #

Gene Joy United States says:

I don't think it's brand-wide.  The first dealership I visited was an average dealer.  The second was exemplary.  We bought a C70 convertible for  personal use and later a V70 wagon for business.  We've been very happy and although they don't carry the 'status' of a Benz or BMW, they also don't carry the questionable quality and maintenance costs.  As people who for years considered Volvo's stodgy and dull we find that they out-perform a lot of the competition in many ways.

April 22, 2013 09:18 AM #

Brand identity firm United States says:

AB's sentiments seem to align with my own. I have found Volvo dealerships to be somewhat plain and not befitting the image Volvo is trying to portray. Perhaps if the dealer experience was better, I could see myself taking another look.

April 16, 2013 10:39 AM #

Jack Vrooman United States says:

If a single TV spot can make a difference, the one described herein certainly should. Kudos to Arnold Worldwide!

April 20, 2013 06:12 AM #

Comments are closed

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