Even to physicists, Einstein’s best-known theory, the Theory of Relativity, is extremely complicated to state, much less explain. His lesser-known theory, the Theory of Insanity, is so simple it can be stated in just 13 self-explanatory words: “Insanity is doing the same thing over and over and expecting different results.” This makes Cadillac’s latest marketing plan insane, according to a February 16 Advertising Age report.
In a $12 billion, multi-year capital expansion plan, Cadillac division president Johan de Nysschen is going to extend the line of Cadillac models. Downward. With “[a] small crossover SUV and an entry-level car priced below the Cadillac ATS.”
De Nysschen may not know this, since he’s been on the job only five months, but Cadillac tried this kind of line extension twice before. Neither time worked.
In 1981, Cadillac introduced the Cimarron. Aside from the rebadging and the sticker price, the only differences between a Cadillac Cimarron and a Chevrolet Citation were that the former had painted instead of taped-on pinstripes and a real (if tissue-thin) wood veneer instead of vinyl covering the dashboard. This introduction, at a time when traditional Cadillac buyers were aging or dying off, represented an attempt to take sales away from that pesky upstart, BMW. It didn’t.
In 1997, in a triumph of hope over experience, Cadillac rolled out a cheaper model called the Catera, positioned as “the Caddy that zigs,” whatever that meant, complete with an animated spokesduck called Ziggy. That didn’t work either.
As the 21st Century dawned, so did the realization that cars made with 1950s-design obesity, sluggish handling and spongy ride would no longer cut it. So they started rolling out a series of new “Art and Science” models, claimed to incorporate “sharp, sheer forms and crisp edges – a form vocabulary that expresses bold, high-technology design and invokes the technology used to design it.” The Escalade, introduced in 1999, the XLR and SRX (2004), the STS (2005), the DTS (2006), and the STX (2013) all helped restore a failing brand’s sales without being cheaper.
But by then, the damage had been done. While the overall US auto market is up 9 percent since 1984, Cadillac’s sales are down 47%. Compared to that, writes Al Reis, “Mercedes is up 350% and BMW is up 379%.” And before you write that off as a big percentage of a small base, he adds that “both brands outsell Cadillac by a wide margin.”
Now, Cadillac’s poised to do the same thing a third time in the confident hope of different results. But this, Reis argues, will not only shrink their totsl sales and share of market, but also undermine what really matters – their ownership of what he calls “a word in the mind.”
Cadillacs were once so highly thought of that the phrase “the Cadillac of X” was coined, meaning that a particular brand was better than everything else in its category. The Cadillac of lawn movers. The Cadillac of strollers. The Cadillac of dish washers. The Cadillac of Christmas trees.
In the parking lots of high-end country clubs, Cadillac used to be the dominant brand. No more. Today, those same lots are loaded with Mercedes, BMW and Lexus vehicles.
Mercedes-Benz owns “prestige.” BMW owns “driving.” Volvo owns “safety.” Subaru owns “4-wheel drive.”
So what word does Cadillac think it can own? According to Cadillac’s Mr. de Nysschen, “We want to build our reputation as a purveyor of high-performance drivers’ cars.”
So that’s it. No just “driving” machines, but “high-performance driving” machines. Lots of luck.
There’s nothing wrong, per se, with line extensions or even low-priced products. It’s only when they contradict or dilute the brand perception you’ve spent years of work and thousands of dollars to build in consumers’ minds, that they become problems. That’s why, when Porsche and Volkswagen introduced their new 914 roadster in 1969, they called it the VW 914 in Europe and the Porsche 914 in America.
So before you plan that line extension, make sure it reinforces, not undermines, your brand’s perceived identity. Otherwise, like Cadillac, the only thing you’ll learn from history is that you don’t learn from history.