Mark Hutchins vividly remembers being struck by the Mercedes-Benz exhibit at the 1990 Detroit auto show. 'Their cars were overpriced, overweight, overengineered,' Hutchins, president of Lincoln Mercury, recalled.
Indeed, in 1990, Mercedes-Benz epitomized excess. After record sales in 1986, its cars had grown big, heavy and overpriced. The company itself was complacent and even arrogant.
Then Lexus and Infiniti turned the U.S. luxury car market upside down with better customer service and superior value. At the same time, economic recession and a new luxury tax on expensive cars prompted yuppies-turned-maturing-boomers to get more prudent about their high-ticket purchases.
The two choices for Mercedes-Benz were clear, but equally perilous. It could maintain the status quo and risk becoming a fossilized anachronism. Or it could chart a new course that might dilute its still-powerful brand image.
Mercedes chose the latter; it chose to reinvent itself and its image with an integrated six-year plan that included new products, new markets and new advertising. Today that effort is heralded as one of the automobile industry's best examples of brand management.
On a pedestal
Back in 1990, the challenge was clear: 'We were an icon on a pedestal. We weren't relevant,' says Mike Jackson, who took over as president and chief executive of Mercedes-Benz USA in January after eight years as executive vice president of marketing, service and sales. 'We needed to move from admiration to aspiration.'
In Germany, the parent company decided it needed to expand its lineup into sport-utilities, roadsters and lower-priced convertibles. The plan was to blend traditional Mercedes expectations with more emotion and a stronger sense of product innovation and value. And it would do so with real products, not rebadged or adapted versions of existing vehicles.
Bringing new hardware to market would take time. But Mercedes needed to begin polishing its image immediately in the all-important U.S. market. It found a strong-willed leader in Jackson, an 18-year veteran of its U.S. organization. As a chairman of the Mercedes National Dealer Council, Jackson had become an outspoken critic of the company's product evolution and U.S. marketing. He accepted the job only with the understanding Mercedes would commit to radical changes.
It didn't take long to see Mercedes meant business. Dealers were told to adopt new business practices and, where necessary, build exclusive Mercedes showrooms or be bought out. When it was over, the company's U.S. dealer count had plunged from 425 to 300, and there were $1.2 billion in new sales facilities.
Jackson's team developed the ability to describe current customers in detail, and learned what needed to be done to turn them into strong advocates. It would take more than vocal customers to revive Mercedes' image, however. So Jackson went shopping for a new ad agency.
He found what he was looking for in Marvin Sloves, the mastermind behind Volvo's safety-oriented advertising. Jackson's deal with Sloves, founding partner, president and chairman of Scali, McCabe, Sloves Inc., was every adman's dream.
After telling the other agencies that they had not received the account, Jackson went to Sloves' New York office to tell him that he had won, even though Jackson didn't much like Sloves' proposal either.
Says Jackson, 'I don't like the tag line. I don't like the creative. I don't know about media plan. I can't tell you anything that I like, but you're back in the car business,' Jackson told Sloves.
'I cried,' said Sloves. 'I was so happy.'
Says Jackson, 'I promised that for every piece of creative I asked for, I would deliver a very coherent, clear, crystallized objective and strategy of what it was to achieve.' He also pledged to approve any campaign that met his stated objectives, and vowed to give Sloves complete creative freedom along the way.
The agency's first effort, a TV commercial touting the new 1993 C class, was a shocker. As the new sedan drove across the screen, '60s blues rocker Janis Joplin cried, 'Oh Lord, won't you buy me a Mercedes-Benz?' Equally unusual: The car's starting price of $30,000 was prominently displayed.
'I knew the phone was going to ring off the hook, but the agency had delivered what I had asked for,' recalls Jackson. Sure enough, there were a few complaints. But within two weeks, all the calls were accolades. 'Of everything we've done,' says Jackson, 'the Janis Joplin ads were off the Richter scale, overwhelmingly good.'
By 1996, Sloves' agency was ready to launch an all-encompassing 'Falling in Love' campaign that featured Mercedes products not yet on the market, including the M-class sport-utility, the SLK roadster and the CLK coupe and convertible. The message: expect the unexpected from the 'new' Mercedes.
Soon after, Mercedes began delivering the goods - the M class, the SLK, the CLK coupe and then the CLK Cabriolet; new, powerful engines; special editions of existing products, like the C43 and E55; and the announcement of plans for the ultraluxury Maybach. 'If you can't deliver on the expectations, then don't run a brand campaign,' Jackson declares.
Now Mercedes has come full circle as it prepares to launch its redesigned flagship S-class sedans in spring. The new cars, says Jackson, 'epitomize the brand,' and should lay to rest worries that the company's flurry of new products somehow has led it astray from its heritage.
Jackson won't say much about the S-class ad campaign, but he says his message to the agency was clear: Though the car bristles with innovation, features and technology, don't get lost in the details. 'Think about Marilyn Monroe,' he says. 'Would you communicate the individual parts of Marilyn Monroe, or her totality? The totality, of course, is greater than the sum of the individual parts.'
Meantime, Mercedes isn't about to rest. 'We've climbed the mountain,' Jackson says, 'but it's one thing to climb the mountain and another to live on the mountain.'