Even big cats can lose their way in the jungle

Many years ago Porsche, a company whose handling of marketing is generally as adroit as that of its thoroughbred sports cars, made a bad strategic error.

In seeking, quite rightly, to escape over-dependence on the evergreen 911 series, the German car manufacturer tried to broaden its appeal to younger, less affluent customers who would then step up to the 911 in later life. This starter model, the 924, was attractively styled, arguably better balanced than the rear-engined 911, and sensibly priced. Unfortunately, it suffered from one fatal error. In spreading the development costs, Porsche had collaborated with its sister company, Volkswagen, and fitted a lowly Audi engine in the new sports car. The car never recovered from this dent to its image and was withdrawn, after disappointing sales figures, a few years later.

There are some interesting parallels here with Jaguar, Ford’s luxury sports car marque that now seems destined for the auction room. When Ford acquired Jaguar in 1989, it too was a one-range brand (in this case the big XJ saloon) struggling for a broader definition. Ford quickly remedied some of the production and marketing issues, by astutely revisiting the past. In 1996 it introduced a new XK top-end sports car, which took up where the E-Type had left off. In 1999 it launched the S-Type, a sports saloon positioned below the XJ that bore a deliberate resemblance to Jaguar’s other 1960s triumph, the Mark II series. Global sales duly responded. In 1994 they were 6,594; by 2000 they had soared to 90,000.

So far so good, but in the modern, global car industry, accountants reign supreme: Jaguar needed a base entry-level model. There was nothing in Jaguar’s historic positioning to offer guidance. But, then again, there was nothing relevant in Mercedes or BMW’s brand vocabulary either. So why has Jaguar’s entry-level strategy been so conspicuously less successful than theirs?

At the time, in 2002, the X Type seemed quite well judged. Carefully taking its styling cues from the grand-daddy XJ, it bought the pleasures of high speed, four-wheel drive motoring for not a lot more than &£20,000. Jaguar’s global sales continued to soar, to 130,330 in the year of its launch. Success was not to last: by 2004 they were back to 119,000; this year they are unlikely to exceed 85,000 globally.

No doubt this precipitate decline has something to do with Ford’s failure to tackle reliability issues; or to move sufficiently fast into the burgeoning diesel sector. But these are tactical failings. The strategic problem was that consumers never bought the X-Type, which formed the backbone of Ford’s over-optimistic 200,000 a year sales projections. And they failed to do so because it was uninspiring. It’s unfortunate that Jaguar customers have come to feel that they are driving an up-spec Ford Mondeo (with which the X-Type shares a number of major parts), admirable though the Mondeo is in its own class.

Blame the accountants if you like, but this is fundamentally a failure of marketing. Even so, it’s hard not to sympathise with Ford’s frustration. Despite a succès d’estime with the new XK launch, it finds itself in an increasingly expensive impasse. For strip away the entry-vehicle strategy, and what have you got? A poor man’s Aston Martin, more or less.

Stuart Smith, editor – Marketing Week

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