First published in Marketing magazine, 27 April 2005

All cars are global products. They literally have components from every country around the world. Car making? There’s no such thing really, it’s not manufacturing, it’s assembly. Like a mega meccano kit, but presumably with the instructions in 48 different languages. Cars don’t just share little bits like wiring, CD players or windscreen wipers. They share big bits too like the same platform or engine. That’s how the economics work. Scratch a Jaguar and hey presto it’s a Mondeo underneath. A Skoda? No longer a skip with wheels but a Volkswagen with a lower status badge.

It’s fairly obvious then that underneath the bonnet and seats, cars in defined price brackets, have huge similarities. So if they’re largely the same, the key to sales must be differentiation on the stuff you can see, and the development of brands which buyers will covet. A classic marketing business in fact, where innovation, design and desirability will get the sale.

Of course, instead of going for shameless marketing tactics to tempt us, you could go the “undercut your rivals” pricing route. There’s a flaw in using price as the differentiator however, it involves severely cutting costs, and that means you can’t pay for development and innovation. To be honest it’s usually a short term tactic. But if like Rover, you use it for the long term, the only option that leaves is production-led madness, the same strategy that destroyed the rest of the British car-making industry a few decades ago. But history didn’t deter the would be buyers of Rover – give that dog a bone.

Unbelievably the consortium that bought Rover for a tenner from BMW (that should’ve given them a hint), declared their strategy was to “keep the cars as they were”. Pile ‘em high and sell ‘em cheap. You can imagine it in the factory canteen: “Don’t worry lads, Rover is British and people are loyal. They’re not swayed by flashy foreign rubbish”.

Any marketing professional will tell you that consumers aren’t loyal to anything much anymore, and it’s certainly not a good idea to bet thousands of jobs on the fact that they are. We can cite the classic British case studies of the 1970’s that went something like this: Forget the world around you. Work hard. Keep your head down. Get absorbed by the craftsmanship. But shock horror, when you look up the buyers have been unfaithful and traded in the old battleaxe for a younger, sexier model. And they won’t be coming back. The well-documented perils of production-led rather than marketing-led business philosophies are embedded in marketing teaching. Did Rover not employ any marketing people, or did they just ignore them?

Meanwhile BMW might have sold off the adopted family plastic, but they smartly kept the Mini. That most British of icons. They didn’t keep it because it had innovative engineering or solid build quality, and they knew it would need a big investment in re-design. They kept it for its inherent differentiation and great marketing potential; a huge asset which allows for premium pricing and hence the budget to pay for design, innovation and cool marketing.

How did the German company, market the new Mini? They carefully crafted and highlighted its ‘Britishness’. If that’s not humiliating enough, you can even order one with a Union jack plastered on the roof. Rover’s competitive counter-attack? Any colour so long as it’s old fashioned. The irony is breathtaking.

©Sue Nelson 2005