reveries - dan chasins

SEPTEMBER 2002

To double sales across America is the goal, says Dan Chasins, president and COO of Saab USA. To spend $450 million on product development and expanded production -- and another $70 million on a marketing blitz -- is the plan.

Dan readily admits that Saab has been slower with product development and has offered a smaller array of cars as compared to its competitors. But he also points out that Saab is now out-performing its competitors in terms of year-over-year performance, as well as the market overall.

"Given our aggressive schedule of new product introductions, doubling our sales is very realistic," he says.

Realistic -- yes -- but just a little bit radical too, at least for Saab. Eager to shake its image as "the official car of the pipe-smoking Dartmouth professor," Saab is introducing a whole new look for its 9-3 sports sedan, set to go on sale in October '02.

Still farther out on the edge is the Saab 9X, a hybrid concept car, which Dan says can be a roadster, a pick-up truck or a sports car. It was honored recently as "concept car of the year" in a poll of European automotive designers, and Dan says it is the inspiration for the kinds of cars Saab will bring to market in the years ahead.

The marketing plan is no less ambitious, combining as it does a new ad campaign from Lowe Worldwide, direct marketing via The Martin Agency, and promotions from Carlson Marketing. Also in place are new retail environments that exude Swedish cool, as well as innovative showrooms set on busy streets in major cities -- "Brand Centers," designed to showcase the new Saab as well as "City Centers," intended to move the metal.

The big plans build on Dan's recent past with Saab. Actually, it's been an 11-year run with the company, beginning as a director of marketing in early 1992, for about three years. Then it was off to Sweden for a four-year tour, during which he spearheaded development of what eventually became the Saab 9-5 wagon -- a product for which Dan says he has "a very strong sense of paternity."

As soon as Dan got back to the USA, the first thing he did was launch the 9-5 wagon in America. Well, that and shepherd Saab's J.D. Power customer satisfaction ranking to #8 out of 35 nameplates -- up from the middle of the pack.

The message could not be much clearer: Pull over, BMW, Mercedes and Audi -- hot Swedes coming through!

Who exactly drives a Saab and why?

It's an open-minded, well-educated, very active, somewhat individualistic and "modern" type of person who drives this car. Typically, the age is in a range, 35-55, and 50-50 men and women.

Our customer tends to be a professional person, generally a very well educated buyer. We have the highest percentage of college and post-graduate degrees in our population of any brand in the U.S. market.

It's a pretty thoughtful, discriminating audience. It also tends to be fairly high in household income, well over $100,000 median household income.

Are there any new consumer segments that you're targeting in particular?

Yes, I would say so, particularly with the new 9-3 sports sedan that's being launched this fall. That car, by its design and concept is targeted to a slightly younger audience and a slightly earlier life stage than what we have had with the current generation 9-3, which has been a hatchback in three-door or five-door configuration.

Once people drive a Saab it gets under their skin and it's kind of hard to be happy with other cars.

The first variant on our new platform is a four-door sedan configuration. We believe that will skew a bit younger, perhaps closer to what the entry-level models for Audi and BMW are penetrating. And that would be, again, probably a reasonable balance between men and women, but skewing probably from the high 20's to the early 40's let's say, people moving into their first premium European sedan.

You're spending much more money on mass media advertising relative to local marketing. Why are you taking that approach?

We have done a lot of work over several years in trying to clarify the key elements of the brand and what we want to express to our audience. Last year we made an agency change to Lowe Worldwide out of New York. Again, it's all elements coming together, in that we have a good message, a clear way of communicating the Saab brand, and so we want to expand the number of people who are aware of our brand.

Once we finished laying that groundwork, we began looking at our challenge of building awareness and consideration for our brand. We have to invest in the market. We have, in years past, probably under-invested in taking that message out. But we are not into what I would term traditional mass marketing. We need to talk to approximately ten million households in the US. So you will never see Saab buying time on the Super Bowl, for example.

What we try to do is use advertising and other means of broad communication, such as interactive, in very targeted ways. We might buy time on network programming, but we would be buying that on a spot basis, for example, in major metro markets, which is where the target audience for vehicles in this category tend to be located. So we would not typically buy national network television.

Because we know a lot about the media consumption of our audience, we might buy national cable, such as A&E, The History Channel, Discovery -- those that have a very efficient reach against our target audience. So those are ways that we try to use -- what some people consider to be mass marketing -- but in a very targeted and efficient way to get good reach and frequency against the audience that we need to speak to, those ten million households or so.

So we will be investing more heavily in targeted marketing, as well as other ways that we think are highly efficient. One of those is interactive. We have very active opt-in digital direct activity going on. We are active with focused Web-based activity. We're using traditional direct, as well, and at an increased level with a stronger investment than we've had before.

In terms of promotions, any special thrust there?

We try to be active promotionally, to generate as much exposure for the physical product, in particular with test drives, as we possibly can. One of the things that we've observed is that because we have a start point of relatively low awareness, people's exposure to the vehicle tends to be somewhat of a revelation.

You know, they see the car, they take a drive, and their reaction is --wow, I had no idea! So we have a program that's very active right now, our lead promotion program, which is called "The Real-Life Test Drive." And it's a program where we will essentially do a blitz of a certain market for a period of time.

I had a 1968 Saab Sonett when I moved to Sweden, which I took over there with me. That's just a fun car.

It could be a couple of weeks or three weeks, where we will be there with product specialists and a fleet of cars, and support from our dealers locally. We will be at venues like theatres, or other arts venues, museums -- you know premium shopping locations -- whether it's a downtown retail area, or it might be the right quality of shopping mall, it might be a corporate facility.

In fact, we've done very well arranging test drive days with large corporations that might have a lot of professional staff who would be interested in the vehicle. Usually, we'll have something like a charity tie-in, where we support a local charity based on the number of test drives that we generate.

It's met with a lot of success, not only from the standpoint of expanding the awareness and having cars on the street that people see as part of an event happening locally, but actually in conversion to sales. So it's a guerilla marketing effort, if you will, but one that seems to be very effective and to be a good fit for us in our marketing challenges.

You've set up small, satellite showrooms in major cities around the world.

You might be referring to what we call Brand Centers and City Centers. They're not satellites, per se. They're actually two different concepts. The Brand Center concept is really a brand showroom.

It's not a selling location. It, of course, has vehicles on display and product specialists, but it's another way to build awareness and consideration by giving some presence to the brand in high traffic, downtown prime retail environment -- to intercept people in an environment where they might not expect an automotive manufacturer to be, and to show not only the products but also the brand as we want it to be perceived.

And, of course, any active interest or contact information is sent out to the dealers in that area. That's something that is really targeted at major metropolitan markets where you have an opportunity to reach a lot of people, but where it's normally prohibitively expensive for a Saab retailer to locate its dealership.

A related concept is what we call the City Center, which is jointly operated by a Saab dealer with support from the corporation. They have a similar in-town premier showroom representing the brand at its best, and typically those may be a selling location -- or the selling activity would be supported by the dealer who's in partnership with us in this City Center.

We, as Saab, are clearly not in the retail business and we have no intention of getting in the retail business. That is something that is strictly the realm of our retail partners. So with the City Center it can be a selling location, whereas in the case of a Brand Center, it's more or less like a three-dimensional marketing and advertising program that refers all interest in the brand out to the dealers who support that market.

How important is having the ignition between the seats to the brand image?

That particular feature, in and of itself, is not in my opinion critically important. The importance lies in what it stands for in terms of the way Saab thinks about some of these issues. The original reason for having the key located there -- there were really two. One is that it's ergonomic. It literally falls very readily to hand when you get in the car and you want to go to start the car.

I've always been a bit of a hobbyist. I'm pretty good in the garage.

But possibly even more important, it was located there to remove the key and lock mechanism from the steering column area where real-life crash experience showed that the keys and the lock mechanism and whatever might be hanging on the key chain was actually a source of knee injury in frontal crashes.

So where many in the industry label that with the "Q-word" as we call it -- quirky -- it's really a well thought out and logical decision from a Saab point of view. I don't want to downplay it as an important element, but I do downplay it a little bit from the standpoint that it has become the most cited feature that distinguishes Saab as thinking outside the mainstream.

It's not the actual fact of it being there that I think is important, it's that it indicates the way Saab takes an independent mind and well engineered approach to some of these decisions.

How will Saab's image five years from now compare to what it is today?

I'm not sure that our image will be a lot different because the things that we stand for today will be the same things we stand for then. If we're successful in everything that we're doing today -- we're on a very aggressive growth path right now -- we will be better known, the awareness and consideration for Saab among the premium sedan segment, in particular, will be a lot higher than what it is today.

That's really our main objective and biggest challenge. The things that we hold to be true at Saab start with the driving performance of the vehicle. We've been very dedicated to the concept of turbo-charged engines, both for efficiency and performance reasons. But the way a Saab drives is a little bit unique and that's all about the performance.

The second issue that we feel is so important is that the driver is in control. It's that reassuring sense of steering precision, reassuring braking performance, good handling -- those are the things that make up "driver in control. "

The third issue -- and these are not ranked in order of importance -- is safety. You know Saab is, if not the safest, certainly one of the safest cars on the road anywhere. Our belief is in a concept we call real-life safety. This means not only maximizing performance in laboratory crash tests, but actually minimizing injury experience in the wide variety of different types of crash modes you have in real life. So that's been a hallmark for Saab, and we vie for best ranking in safety with one or two other brands. We don't give away anything at all, to any of the other brands in the area of safety.

Then the fourth area that's very important to us is our design. We believe that Saabs historically have had a unique design, a little bit more individualistic, and that's something that we certainly intend to continue.

So I wouldn't see those elements -- the things that we're promoting as our image -- being substantially different. In fact we would anticipate accelerating on those aspects. The main thing is that we really believe that Saab is a brand on the move. We're getting excellent growth right now, and we have a lot of great new products coming.