The past two years have been extraordinary ones for Audi in the UK, with record-breaking levels of sales, market share and profit. At the same time, awareness of the brand has increased significantly, among both dealers and car buyers.
Last year, 30,790 cars were sold – a 19.5 per cent increase on the 1995 figure. And it is not only volume sales that have grown. Customers are buying greater numbers of bigger-engined, higher-specification models, which has meant Audi dealers are now making three times the profit per unit that they were 12 to 18 months ago.
These are impressive results for a company operating in a sector as fiercely contested as prestige cars. All the more since, not so long ago, Audi was floundering. A snapshot of the company in 1992 would have revealed falling sales, a lack of clarity among consumers as to what the marque stood for, a relatively weak product range and a growing challenge from BMW.
The “Vorsprung durch Technik” ad campaign, with its message of superior engineering, performance and design, was the epitome of Eighties car marketing. But the recession and the discontinuation of the company’s most popular models at the beginning of this decade hit Audi hard.
In 1993, Audi UK took a long, hard look at its products and service, with the objective of building a brand blueprint for all its marketing activities; from advertising and sponsorship, to staff training and product specification decisions. That research identified the brand’s three core properties – modernity, innovation and individuality.
Since then, Audi has introduced new models; established an Audi dealer network and business sales team separate to those of sister company
Volkswagen; revamped its after-sales service; and embarked on its biggest marketing campaign to date, which integrated high-profile ads with direct response, sponsorship and trade marketing.
A survey of car drivers found that in November 1995, 49 per cent agreed with the statement “I can see myself driving a new Audi”. A year later, that figure had increased to 57 per cent. And the percentage of drivers selecting Audi as their most likely next car purchase rose from eight per cent in 1995, to 17 per cent in 1996.
Sky TV’s management set itself some aggressive targets for 1996: a 15 per cent growth in the number of subscribers and a 25 per cent growth in operating profits.
These targets were made tougher by the marketing conditions which were anticipated in 1996: no obviously new programming, the need to overcome resistance to the pay-per-view service, and no plans to advertise the brand on terrestrial TV.
As it was, the targets were more than met. Sky achieved a 20 per cent growth in subscribers, breaking through the 5 million homes barrier, and turned in an operating profit of 317m – a growth of 30 per cent year on year.
In the seven days up to Christmas there were 45,000 new subscribers – a record exceeding the previous weekly one by 10,000 households. And Britain’s first domestic pay-per-view event, the Bruno versus Tyson fight, was bought by 660,000 homes, despite being aired at 4am.
The strategy which underlay this success was very different to that of previous years. In 1994 and 1995, Sky had focused on building its brand and promoting the generic values of Sky TV – the freedom to choose what you want to watch when you want to watch it. This had been successful, but as the brand grew, it became more difficult to convince new people to subscribe.
So BSkyB moved from a generic statement of the benefits to an aggressive demonstration of those benefits. It did so by acquiring or creating major Sky events and, month by month over ten months, building marketing campaigns around them. This generated a momentum behind Sky’s programming proposition and reinforced the exclusivity of each one.
In addition to these ten event campaigns there were 25 tactical campaigns across the year, including a spoof of the Euro 96 Nike ad (Sky’s only terrestrial TV advertising of the year), and radio and press advertising for the Duchess of York’s interview with Oprah Winfrey.
Finally, the Bruno versus Tyson fight, though accessible only to existing subscribers, was promoted through a major public campaign aimed at demonstrating Sky’s confidence in the new service and diffusing anticipated negative comments from the media.
Orange was always going to face tough challenges in 1996, the year when most of its competitive advantages – such as inclusive minutage and per-second billing – would be neutralised or significantly curtailed.
The fact that the brand managed to further eclipse its rivals is testament to the success of an imaginative marketing campaign, supported by powerful advertising from WCRS.
The main goals for the marketers were to maintain brand awareness despite a falling share of voice, to sustain a value for money advantage in a market of increasing price parity, and to enhance the brand image in the absence of significant product or service developments.
Although advertising investment from its competitors has nearly doubled, Orange is still well ahead of its nearest competitor. Spontaneous awareness is 20 per cent ahead of Cellnet and Vodafone, despite their ten-year leads in the market. And while BT has invested 111m in advertising in 1996, Orange has achieved the same advertising awareness on an equivalent budget of 14.1m.
Perhaps most importantly, Orange’s subscriber base more than doubled in 1996 to over 785,000, and its market share grew from seven per cent to 11.5 per cent. While both Cellnet and Vodafone saw their shares of annual market growth fall, Orange’s grew from 15.3 per cent to 29 per cent.
Finally, Orange was floated on the London Stock Exchange, with a market capitalisation of 2.45bn – 300m of which was due, according to sophisticated econometric modelling techniques, to the above-the-line marketing.
Orange’s success has been built on its one major advantage – it was the first network to create a fully rounded brand identity based on the idea of wire-free communication, not mobile telephony. This brand vision has allowed Orange to distance itself from the associations of the existing market, and to turn mobile phone marketing on its head.
Tesco’s transformation has been a remarkable story. In ten years, it has evolved from “pile it high, sell it cheap” to a philosophy and corporate culture built around customer service and “Every Little Helps”.
The change began in 1986, with the management’s recognition of a fundamental weakness in the company – the Tesco brand itself.
Sainsbury’s had gained a wide lead over Tesco, with a market share of 18 per cent of the packaged grocery market, compared with Tesco’s 13.4 per cent. Sainsbury’s strength lay in its distinctive and positive brand personality. In 1986 consumer research showed that Sainsbury’s not only had a better image than Tesco in terms of quality, but in value for money, reputation and customer service. At the same time, Asda was seen as having a better range than Tesco, which left the latter’s image with no major strengths.
The contrast between 1986 and 1996 is enormous. Tesco has repositioned itself with a clear personality communicated across a variety of different store formats, from superstores to Metro and Express outlets.
Today, consumers recognise that Tesco is not only committed to innovation, but that when it undertakes new projects, it will strive to do them better than its rivals.
By 1996, Tesco’s overall image among consumers was ahead of Sainsbury’s, with a clear division between them on customer service, prices, value for money and change in reputation. On quality, where Sainsbury’s had long enjoyed a lead, the two retailers were tied.
FMCG – alcoholic drinks
Just over two years from its launch in March 1994, Caffrey’s Irish Ale had become the largest selling premium ale in the UK and, in terms of consumer preference, the best-liked ale in the country.
From sales of 17m after test marketing in 1993/4, the value of the brand has grown to 135m in 1994/5 and 220m in 1995/6.
Since the UK launch, Bass has been committed to developing Caffrey’s as a leading worldwide brand with successful launches in six additional countries.
Caffrey’s success lies in its positioning as the definitive and contemporary Irish ale. It was launched to satisfy a demand for new and interesting products in a market where traditional definitions based on product type – lager, ale and stout – no longer apply, and where consumers have become repertoire drinkers, opting for different brands in different formats at different times.
Following the test market trial in the summer of 1994, Caffrey’s was supported with a below-the-line campaign aimed at raising awareness and gaining trial and acceptance. During 1995 additional invest- ment went into above-the-line advertising to cement loyalty – but this had to be curtailed when demand outstripped supply. Additional production capacity was quickly brought on line and unrestricted supply began in December 1995.
In 1996, marketing centred on broadening the brand’s franchise and increasing consumer demand.
At the beginning of 1996, Bass set a target of nine per cent of the draught premium ales market in the UK: in September, the brand’s share was at 14.5 per cent. Volume growth in 1996 of 54 per cent compares with 27 per cent growth for John Smith’s and three per cent for Guinness.
FMCG – other
Walkers Crisps won the Brand of the Year Award last year after a record 1995 – so it’s fitting that it should win the award again after an even greater performance in 1996.
This year Walkers has bagged a 17 per cent growth in sales volume against a market average of 6.3 per cent, and a 21 per cent growth in value against the market’s 11.7 per cent. Its volume share has grown by 2.7 per cent, and its value share by 2.3 per cent.
The brand moved up from third to second place in the Nielsen Checkout ranking of Britain’s biggest grocery brands by value.
While sales have increased, so too have consumer and peer regard. At the end of 1996, more than 60 per cent of adult consumers rated Walkers crisps as “great tasting” compared with around 55 per cent the year before. One in four adults named it as their favourite brand, compared with about seven per cent for Mars bar and five per cent for Kit Kat.
Much of the brand’s success can be attributed to its award-winning ad campaign featuring footballer Gary Lineker, which has helped build an irreverent image for Walkers. It has also achieved significant PR coverage for the brand, which has reinforced the ad spend.
The relationship was extended with the launch of Salt ‘n’ Lineker crisps, which, despite being a dreadful pun, expanded sales of the salt and vinegar variant by 60 per cent in the first half of 1996.
Walkers also made good use of below-the-line with the Tazos promotion which resulted in 1.1 million collector’s albums being sold. There was also the successful Walkerman promotion in Scotland.
A modern approach to marketing has resulted in success for the brand, underpinned by a commitment to quality.