When #3 Is the Best Place to Be


I have written a great deal about technology breakout programs here, but today I want to talk about breakout marketing.  Let’s take a look at how smart positioning is helping one automotive company gain on its competitors.

Automotive brands occupy some of the highest-priced brand real estate in the market. Billions are poured into strategy and positioning. The battle between Audi and Mercedes has been brewing for a long time, and Audi’s breakout marketing strategy may possibly be shifting the balance between the two competitors.

Bravery and Brand Equity

In case you missed it, you can find the Super Bowl ad for Audi here. The gist: a young man is going to the high school prom by himself, and to bolster his self-esteem, his dad gives him the key to the Audi. His confidence gets such a boost from driving it that he walks into the prom, walks up to the homecoming queen and plants a passionate kiss. We see him driving home with an ear-to-ear grin and a black eye — clearly he has had the night of his life. Tagline: Bravery – It’s what defines us.

Business schools have long taught that position is key to building brand equity. Audi is taking on stalwart Mercedes — the favorite in the aspirational brand race — by positioning themselves as the brand for those breaking away from an older, stodgy type of luxury. This approach has been particularly effective because recessions tend to move more conservative buyers to the sidelines, and those buyers are Mercedes’ core constituency.

A bit of  history: in 2012, Audi achieved new record totals in every region worldwide — this from an upstart position only a few years ago.  What is happening?  In short, a little tech plus a shrewd positioning strategy.

Audi added a swoopy little strip of LED running lights to the R8 in 2006.  This gave it a very distinctive look, and resonated quickly with younger buyers who were raised on a steady diet of Fast and the Furious movies in their teen years.

In addition to little high-tech touches like that, Audi has continued to distance themselves from Mercedes’ target demographic. In 2012, Audi ran another Super Bowl ad that positioned Mercedes as old news— it was called Good Night.  Basically, Audi has cornered Mercedes in the positioning game — if they fight back, they risk alienating the white shoe crowd that brought them to the party in the first place.  When you are in the #1 spot, as Mercedes is, the strategy is to protect the core, and that tends to leave the flank wide open.

To be complete, Mercedes has some great options.  First, battles like this tend to increase the overall attention to the niche, and raise sales for everyone.  Market share leaders get more of that sales boost, even if they aren’t driving it.  Second, they too can use the positioning tool, perhaps with something like – we’ll be here when you’re ready for real luxury – playing off the brand equity they bring.  Lastly, when Mercedes chooses to bring it, they know how – the AMG group has some amazing tech, and marketing that effectively will put them back in the game.

Curious about how the right positioning strategy could help your brand break out? Please drop me an email or tweet me.

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