Automotive News - October 13, 2008 - (Page 34) OCTOBER 13, 2008 • 41 Farley: Small cars are big opportunity for Ford im Farley is wrapping up his first year as Ford Motor Co.’s group vice president of marketing and communications. Since he joined Ford from Toyota Motor Sales U.S.A. last fall, Farley has initiated a major branding campaign, expanded the role of dealers in the company’s marketing and overseen the marketing launches of such new vehicles as the Ford Flex crossover and Lincoln MKS sedan. Now Farley, 46, is preparing for the launches of the redesigned F-150 pickup truck and European-accented small cars. He discussed these initiatives with Retail Editor David Kushma and staff reporters Mary Connelly and Jamie LaReau. J STRATEGY 2009: JIM FARLEY We’re on target. It’s a gut-wrenching process. I can’t tell you what those targets are because this is our family, and it’s a very private endeavor. And we are seeing, obviously, a lot more stress. It’s a very difficult time for our dealers. In some sense, it’s freed them to have to face making a decision. We are really sensitive to the profitability of our Lincoln-Mercury franchise. We resolved the issue around Mercury. We resolved the product cycle plan for Lincoln. And Ford-Lincoln-Mercury is the kind of retail network we’re going to want more of. Ford has always treated the networks pretty separately, unlike our competitors. Do Ford’s financial problems limit your ability to put money into consolidation deals to make them work? We are committed to having the resources required to have an efficient, sustainable retail network. Obviously we have to be careful and look at our business continually and the weakening industry. It certainly will have an impact on all of our projects. But I would say it would have a marginal impact instead of a fundamental one. What sorts of green initiatives will Ford be making in 2009? I’m really excited to launch EcoBoost. We’re taking our expertise in direct-injection turbocharged diesel engines and moving that to North America. It’s a democratized technology, which is the essence of Ford. This is not a vehicle that’s sold for $100,000 to 100 people or even $50,000 to thousands of people. Both the six-cylinder and four-cylinder application of EcoBoost — we’re talking about millions of people. I’m also excited about the expansion of our hybrid lineup to Fusion. This product execution is really neat. As a marketer, it’s a big opportunity for me to highlight what makes Fusion different. I get the chance to have people think of Ford and fuel economy together. We’ve really underutilized the hybrid investment we’ve made. The Escape Hybrid has the highest conquest (rate) of any product in the lineup. But when people think of hybrid, they don’t think of Ford, so it’s a really big marketing challenge. Do you anticipate any change in the next year in your relationship with your major ad agencies, JWT and Y&R? No. We have a very robust relationship with them around the world. We’ve done a lot of different things with (parent company) WPP over the last year with the launch of the brand. I’ve been very impressed with their mental flexibility and their security to try new things. We had a small agency from New York work on the MKS. They did a great job. A lot of agencies would say no, it’s our team or no one. But WPP was incredibly mature and excited. I really chalk it up to us giving them permission to do great work and inspiring them in our briefing. It’s a very different paradigm than almost any other car company. We’re in good shape with the agency. I don’t see any changes. All I see is more pressure for us to be a better client. c You’ve been on the job for about a year now. What are your impressions? I’ve been pleasantly surprised by the competence of the product development team. I’ve been incredibly impressed with the emotional resilience of our dealers and their ability to survive. We’ve invested in a brand campaign in the United States. Our loyal customers have responded to it nicely, and some conquest customers were surprised by the message. It takes time to build favorable opinion. It takes product. Customers become very skeptical, but it’s exciting to see Ford’s identity emerge beyond trucks. What does Ford need to do to make its small cars aspirational to American consumers? In the past, the global cars coming into the United States never really lived up to Americans’ expectations — the powertrains, the quality in some cases. Now we have a once-ina-lifetime opportunity at Ford. We’re on the bigger side of each of the core global segments, and that’s about the right size for the U.S. That’s the manufacturing side. Boomers are moving down as they’ve become empty-nest couples, but they have money. Some parents and their children are looking at the same segments. And the parents are bringing all of their convenience and exclusivity expectations to those products. If you look at the price distribution curve of those core segments, we’re starting to see a tail develop. Many C-D cars may start at $15,000 or $16,000, but they’re selling $30,000 hybrids or very high-end versions. The opportunity is to duplicate that in the B and C segments, to develop the execution of the product at the higher end of the curve. That’s a very important part of our revenue stream. But it comes down to product execution. You can’t just put leather and a sunroof in your EX version and expect to get people excited. You’ve got to develop some exclusivity and some real aspiration. You’re getting ready to launch the F-150 at a time of high fuel prices, tight credit and slow truck sales. What’s the marketing message going to be? The people who are buying trucks today absolutely need trucks. Casual consumers of trucks are delaying their purchase or even parking their truck. Our bet is on core engineering — class-leading capability, how well JOE WILSSENS Will your digital ad spending continue to increase in 2009? It will be generally about the same. Ford is very aggressive on digital. I can’t give you the details in terms of total spend, but 15 to 25 percent of our spending is digital. It’s significant. it tows, electronic systems, sway control. Of course, we have a lot of nice functionality, more rear seat room, more technology in the vehicle. The fuel savings we’re bringing to market are important to the cost of ownership. I think our bet is pretty much in line with where customers have shifted. Our message is not going to be who can pull the biggest supertanker. It won’t be a thermonuclear war of ridiculous demonstrations. Our presentation of the product will be more eye-level with the customers, more respectful of their situation. I don’t want to say serious, but I would say refreshingly relevant. Do you anticipate launching the truck with incentives? I can’t tell you, but I will acknowledge that even the people who are interested in buying a new truck have more negative equity than they did six months ago because of the shift in segmentation and used-car values. So we can’t just stick our head in the sand and say, hey, we’ve got a new truck. These are the realities that we have to face now. We are in the midst of considering both the base price and the go-to-market strategy. How would you describe the launch of the Flex? Good but not great. The sales have been about what we expected, maybe slightly less. I think it’s going to be three to four months before we find the natural selling rate for Flex. We’ve seen our sales pace pick up as we started to advertise nationally. I would rate the launch maybe a little bit more positively than some other people, because of the quality of the customers and how they feel about the product. The people who own Flex are really excited about it, and they’re not necessarily Ford people. Which direction do you anticipate your marketing budget taking in 2009? Our resources should be about the same as this year. We have many more launches, but we don’t feel we need national advertising campaigns for all of the products. We have a good plan for being more efficient by emphasizing grass-roots marketing, through trade organizations and our enthusiast groups. We also are involving dealers more in marketing. We learned a lot with the MKS launch. We went to the key Lincoln-Mercury dealers around the country, did intense training. We had almost 10,000 sold orders — like three months’ worth of orders — after we did this. That’s the kind of marketing that will be very important for us next year as we launch core products like Fusion. How is your dealership consolidation effort going? http://www.msxi.com http://www.msxi.com
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