Jaguar Cars Ltd. plans to overhaul its $150 million annual budget for global marketing. The automaker is breaking with tradition by looking at advertising agencies outside the WPP Group to handle its creative and direct marketing.
Jaguar is part of Ford Motor Co.'s Premier Automotive Group. WPP Group companies have nearly all Ford's advertising and marketing accounts worldwide.
Jaguar is plagued by long-running losses, product woes and uninspired advertising. Industry analysts attribute its problems to a flawed strategy to bring the luxury brand to a mass audience. They wonder to what extent advertising can help the British marque.
Through October, Jaguar's U.S. sales this year are down 15.1 percent from 2003. Jaguar lost an estimated $1.5 billion globally in the past three years.
"We are going through our whole business with a fine-tooth comb," says a spokesman for Jaguar Cars North America.
Jaguar spent $46.5 million in the first half of 2004 on measured media in the United States, TNS Media Intelligence/CMR reports.
Art Spinella, president of CNW Marketing/Research Inc. in Bandon, Ore., links Jaguar's difficulties to its decision to go down-market. Jaguar launched the entry-level X-Type in 2001, aiming it at customers in their 30s.
Buyers who remained loyal to Jaguar even in its most dismal years of poor quality "went through the roof when it started talking to Everyman," Spinella says.
Jaguar's loyalty rate - the share of owners who stayed with the brand when they bought new vehicles - has plunged from 85 percent to 38 percent in the past few years, he adds.
Jim Sanfilippo, executive vice president of the auto consultancy AMCI Inc. of Bloomfield Hills, Mich., says the X-Type "turned Jaguar into a Ford with a Jaguar badge on it."
Jaguar's U.S. sales fell to 39,190 cars through October, compared with 46,180 in the year-ago period. Sales of its X-Type cars fell by 18.0 percent to 18,706 vehicles during the same period.
Ford's use of an ad agency outside WPP would be a blow to the holding company. The automaker is WPP's largest worldwide client. Ford agreed early last year to keep its business within WPP's network.
A campaign for the Jaguar XJ8 by Young & Rubicam Advertising generated controversy by invoking the seven deadly sins. Most participants in focus groups said they found the "Temptation" ads persuasive, but some said the campaign offended them.