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Ford Flex… flopping?

October 29, 2008

The Ford Flex has been on sale in the U.S for a year now but it is slowly under-performing to Fords standards. Will a new advertising campaign change this? Or is the Flex doomed to the scrap heap? The Detroit News’ Bryce Hoffman reports:

A year ago, Ford Motor Co.’s new sales and marketing chief, Jim Farley, vowed to change the way people think about the Blue Oval. His vehicle would be the new Ford Flex, and he set about creating an edgy, unorthodox advertising campaign worthy of the eyebrow-raising crossover and his own reputation as a marketing maverick.

But with initial sales well below Farley’s expectations, some in the company are questioning his approach — including the board of directors.

During their meeting earlier this month, some directors questioned Farley’s stylized approach and wondered if a more traditional campaign touting the features and benefits of the vehicle would be more effective.

Sales of the Flex have been averaging about 2,000 units a month since it was launched this summer. If that trend continues, the automaker will sell about 24,000 in 12 months — well below Farley’s goal of 100,000.

Of course, few vehicles, new or otherwise, are meeting their maker’s expectations in today’s market. The credit crunch and broader consumer concerns about the economy are keeping shoppers out of showrooms nationwide.

But analyst Jim Hossack of AutoPacific Inc. in Tustin, Calif., said the sales decline is not enough to explain how poorly the Flex is selling. “The market is part of it, but it’s more than the market,” he said. “There is a problem. The amount of marketing is part of it — there’s too little of it — and the execution is part of it.”

Defending the lackluster launch, Farley told The Detroit News that the Flex is winning over converts from other brands at a rate well beyond Ford’s most optimistic expectations. He also noted that the market as a whole is down sharply — 13 percent through September. At the same time, he is adding more traditional ads to the mix as the rollout continues.

“What Ford needs right now is for people to really love our cars,” Farley said. “That’s frankly as important, if not more important, than the unit volume.”

It has almost been a year since Farley was hired away from rival Toyota Motor Corp. to save Ford from a long series of marketing missteps that had alienated dealers and failed to wow consumers. Just days after he was hired, he was on the floor at the Los Angeles auto show alternating between unbridled glee at the opportunities represented in cars like the Flex and unabashed terror at the magnitude of the task before him.

The best way for Ford to reconnect with consumers, Farley said then, was with polarizing designs like the Flex that — love it or hate it — the car buying public could not ignore. And he said Ford needed to match those designs with innovative marketing.

That is why the advertising for the Flex seems more MTV than Madison Avenue. Ford tapped a music video producer to do the ads, which carefully avoid showing any body in or around the vehicle.

“We did not want to limit the Flex,” said Usha Raghavachari, Ford’s crossover marketing manager. “We did not want to say, ‘It is for people like this.’ ”

Consumers are smart enough to figure out that they can fit their whole family in the Flex, she said. But if Ford showed that in the ads, it would limit the appeal to other customers who might be attracted by the design.

While Hossack agrees with Farley’s theory, he thinks Ford may have gone too far in its application.

“In today’s tough times, new car buyers are turning very conservative,” he said. “Hip styling and hip ads are not what is selling.”

Some inside Ford also are not convinced it was the right strategy. Ford Americas President Mark Fields initially favored a more straightforward approach — marketing the Flex as a sport utility vehicle and minivan replacement — according to sources familiar with the situation. So did some members of the marketing team, who doubted that a big, seven-passenger vehicle that got 24 miles to the gallon and sold for more than $30,000 would have much appeal to urban hipsters, no matter how cutting-edge its design was.

Those concerns resurfaced during the most recent meeting of Ford’s board two weeks ago.

“The board was asking me questions about the Flex,” Farley acknowledged. He told them the ads need to be viewed as part of a broader strategy to get people to look at a Ford in a different light.

Farley told the board that the Flex is about attracting new customers to Ford, not keeping the ones it already has. Other vehicles, like the Escape, the Edge and a planned redesign of the Explorer will be there for SUVs owners looking for better fuel economy and fresher styling.

“Our strategy was to use this to conquest people,” he said. “That’s the reason why the ads are more progressive. And it’s working.”

Half of all Flex buyers are trading in vehicles from other manufacturers, Farley said. That is a higher rate than any Ford model other than the Escape Hybrid. One in10 is trading in a Honda Odyssey or Toyota Sienna minivan.

And the Flex is also bringing in more affluent customers. The average transaction price is in the high $30,000s, and 46 percent of buyers are opting for the more expensive “limited” trim line. That is twice what Ford expected.

To win over more converts, Farley and his team turned to the kind of guerilla marketing techniques he became famous for during the launch of Toyota’s Scion brand.

They are putting the Flex in front of target consumers by organizing test-drive events in some of the trendiest parts of the country. Raghavachari refers to them as “intercept programs” because the events are staged in the middle of high-traffic areas, like the bustling Third Street shopping district in Santa Monica, Calif.

More than 19,000 people have already been behind the wheel. The aim of these events is not to sell cars but to change minds, she said. Research shows that these people leave with a different idea about Ford and are likely to share that with their friends and family. It is all about creating viral buzz around the Blue Oval. Ford plans to get another 11,000 consumers into the driver’s seat over the next couple of months.

“The No. 1 priority for Ford right now is that the people who buy our products become advocates to other people,” Farley said. “In that sense, Flex has been a really big home run.”

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