Isuzu Motors Ltd.'s sport-utility sales in the United States have climbed 10.7% during the first 10 months of 1999, but the truck importer isn't celebrating: Its performance is the second-worst in a supercharged market that has seen sales of sport-utility vehicles soar by more than 15%.
The reason is easy to see: Except for its radical-looking but slow-selling VehiCross, Isuzu hasn't launched a new product since it redesigned the Amigo and Rodeo SUVs in 1998.
And in today's hyper-competitive SUV segment, in which 43 models are vying for attention, growth depends on keeping consumers interested with a continuous supply of new or redesigned vehicles.
Just look at the performance of a few of Isuzu's Japanese compatriots.
Thanks almost entirely to its new Xterra, Nissan Motor Co.'s SUV sales in the U.S. were up 49.7% through October; Mitsubishi Motor Corp., with a strong showing from its redesigned Montero Sport, posted a 27.8% gain; and Toyota Motor Corp.'s SUV sales rose 18.1%, in large part because of hot sales of its Lexus division's new-for-1999 RX 300.
Still, it's not gloom and doom at American Isuzu Motors Inc. headquarters in Cerritos. The company has raised its profile considerably in the last year with an effective ad campaign underscoring its position as a sport-utility specialist: "We don't make cars" and "Life's too big for cars," the ads proclaimed, promising that Isuzu's SUVs "Go farther" than the competition.
A recent brand identity study by Allison-Fisher, a Detroit-based automotive market research firm, shows that Isuzu's "no cars" campaign has almost doubled its visibility as a sport-utility maker, with 40% of respondents identifying the company when asked to name SUV specialists in the U.S. A year earlier, Isuzu showed up in less than 25% of the responses.
"I was surprised by the 'We don't make cars' line. It certainly does get your attention," said Diane Cook-Tench, an advertising professor and director of the Adcenter graduate training program at Virginia Commonwealth University. "It's a strong campaign."
Equally important, the company that defines the term "niche player" is refocusing its advertising to capitalize on its position as a purveyor of SUVs that people really can--and do--use in the pursuit of an active outdoor lifestyle. Isuzu's best-selling model, the Rodeo, is an unabashed truck-based SUV that looks better up to its hubs in the brush than plodding along on a traffic-jammed Southern California freeway.
Isuzu is adopting a niche advertising approach--something marketing specialists say will become increasingly popular among auto makers as the industry continues to emphasize highly specialized, limited-production vehicles that appeal to consumers' various lifestyles.
For Isuzu, that means scrapping an advertising plan that called for it to hit 103 million potential U.S. consumers with a general message, and replacing it with a campaign tailored to the interests of some 12 million "outdoor actives" and 27 million consumers who aspire to be outdoorsy, said Mark W. Darling, vice president of SUV marketing at American Isuzu.
Isuzu's ad budget for 2000 hasn't been approved yet, he said. (The company's $82-million media budget for 1999 represented a 40% cut from 1998 spending.)
The new campaign, which will feature ads poking fun at competitors' SUVs for not going far enough to meet the needs of active Americans, is scheduled to begin later this year, Darling said.
The passionate pursuit of leisure is an important trend among Americans in the key 25- to 49-year-old group, Darling said.
The campaign will reach this group by increasing Isuzu's exposure on cable.
Isuzu will tout its new 120,000-mile, 10-year powertrain warranty in the ads as proof of its "we go farther" promise, Darling said.
In addition to cable television, the company will advertise heavily in specialty publications such as Paddler, the magazine for canoeing and kayaking enthusiasts.
The new ads will resonate with the targeted outdoor-active readers and viewers without offending their nonathletic counterparts, Isuzu reasons, because they poke fun at other SUVs, not at their owners.
Cook-Tench described the approach as "very smart."
"Niche marketing is going to be a growing trend--you see it in a massive way already on the Internet," she said. " Isuzu is getting out in front, and it should help increase their business."
Isuzu executives say they don't intend to rely solely on ads. The company will introduce a new or redesigned product every six months for the next few years. But not all will be for the retail market, as Isuzu plans a stream of car-show concept vehicles to test styling and hardware.