Peugeot seeks to rejuvenate the lion

The lion is limping. It was going from strength to strength for almost ten years but during the past two Peugeot has taken on the appearance of a wounded animal – losing sales and dipping below its peak eight per cent market share.

Now the company has decided to act. It has ditched its famous strapline – because it was no longer grounded in truth – in favour of the more anodyne Peugeot the Drive of Your Life. The shift reflects a wider change at the car manufacturer, where the unfortunate coincidence of ageing brands and cut-throat competition in the UK have left it trailing other marques and in danger of being overtaken by French rival Renault.

It is pinning its hopes for a reversal in fortune on this week’s launch of the Peugeot 406. “It is the most important car we have ever launched,” says advertising and sales promotion director Kel Walker. In the past three years virtually every manufacturer launching a new car has said it is their most important launch – in Peugeot’s case it is true. It cannot afford to slip further.

It is also, at 12.5m, the biggest advertising campaign the French manufacturer has undertaken in the UK and potentially its most controversial. This year’s total advertising budget, with work for the 106 and 306 later in the year, will be almost 40m.

The aim of the marketing programme and TV advertising, which breaks this week, is three-pronged: launch the car, create corporate branding and, it hopes, herald the dawning of a new era for Peugeot in the UK.

The new endline is designed to cement its position as the fourth largest manufacturer in the UK and propel it toward a ten per cent market share within two years. It now holds 7.4 per cent of the market, having slipped from an all-time high of eight per cent in 1993.

In a market where one per cent is equivalent to 100m the importance of the 406 is obvious. But it is also being launched into the most competitive sector in the most competitive car market in Europe.

More than 70 per cent of sales will be into the fleet market – the classic “repmobile” sector historically dominated by the Vauxhall Cavalier and the Ford Sierra – both of which have had multimillion pound radical makeovers to transform them into the Vectra and Mondeo respectively.

The car is a direct replacement for Peugeot’s flagship brand, the 405, which for a time was number three in the mid-sized sector. A position it has surrendered to the Renault Laguna.

The fleet sector accounts for an estimated 25 per cent of all UK sales and the cars often epitomise the brand character of the whole range – so if you get it wrong it doesn’t affect just one car but the whole business.

Peugeot, along with every other manufacturer, is acutely conscious of the fact that the market is becoming prohibitively expensive to enter. In line with the other players, it is continuing to use TV advertising for image-building programmes but resents the growing cost and has reviewed its use of other discip lines for the 406. Direct marketing, sales promotion and launch events with dealers have all taken on a greater significance with this launch.

This year manufacturers will spend a record amount on advertising, topping 1995’s 500m, itself a record.

Walker is resigned to living with the cost of inflated TV airtime prices. “As a manufacturer you take the view that there is a weight of expenditure which is the entry price to the market and you have to support that financially.”

The fact that spending is going through the roof and marques are increasingly similar makes it more difficult to differentiate between brands. In that environment the marketing and advertising are more significant in the creation of a distinct positioning for a car.

The 406 is positioned as the thinking man’s repmobile. Not flash, but having a “quiet potency”, according to Walker.

“We are putting more resources into direct contact with our customers and if that is successful we will not have to spend as much on future launches,” says marketing director Rod Philpot.

“We will not be getting out of TV completely – it is the image builder – but the hyper inflation pushing up costs is making people ask how they can spend their money more efficiently.

“Ten years ago we were expected to encourage showroom traffic, put the ads on TV and leave the dealers to do the rest. Now we are involved at every step with the dealers.”

The television campaign created by EURO RSCG Wnek Gosper is central to the new image of Peugeot.

Entitled “Search for the Hero”, it reflects on the fact that we have more than 12,000 thoughts each day and tries to highlight some of those passing through the mind of a 406 driver amid “beauty shots” of the car.

The scenes range from war-torn cities to a young girl about to be run over by a petrol tanker, to the birth of a baby. The more thoughtful Nineties contrasted with the consumerist Eighties when the Peugeot 405 was taking our breath away by burning down cornfields.

The message says there is “no such thing as an average person”, the implication being that the Peugeot 406 is no average car.

The only colour in the black and white film is the red coat of the young girl. This will inevitably lead to accusations of plagiarism from Stephen Spielberg’s Schindler’s List. But more importantly for Peugeot, the car is targeted at company reps renowned for their knowledge of go-faster stripes rather than their views on the war in former Yugoslavia.

The ad could be seen as a cynical attempt to shock, by linking life and death situations. It is, after all, just a car, all be it a gleaming silver one, that the ad is selling.

“The idea has been received very well,” claims Philpot. “This is a man who has a lot more about him than your average driver. It is not our intention to cause distress – you have to strike a balance between impact and taste – it is not gratuitous.

“We want the advertising to create the magic, the sparkle that will make people say I must put the 406 on my shopping list. A lot of ad vertising does not reflect real life, this does.”

In truth it reflects a highly stylised view of real life. It will require powerful magic to push Peugeot to its target of ten per cent – an extra 50,000 sales.

Peugeot sees the 406 as pro viding a healing balm for the wounded lion. If the lion shows no signs of improvement by the end of the year, it may be forced to seek alternative treatment.