Saab Cars USA, Inc.

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Saab Cars USA, Inc.

4405-A International Boulevard
Norcross, Georgia 30093
USA
Telephone: 770-279-0100
Fax: 770-279-6499
Web site: www.saabusa.com

LIFE IS NOT A SPECTATOR SPORT CAMPAIGN

OVERVIEW

Saab Cars USA, Inc., was the American affiliate of the Swedish company Saab Automobile AB, which was in turn owned by the General Motors Corporation, a Detroit-based corporation that was the largest automaker in the world. Saab was in a difficult financial situation in 2002; it lost $504 million worldwide that year alone. This came on the heels of mediocre sales throughout the early 2000s, both worldwide and in the United States, Saab's biggest market. Saab hoped that the introduction of its new 9-3 Sport Sedan would help it turn things around. The company was prepared to spend $70 million on marketing all of its lines in the United States, with the desire of sparking a rise in sales that could help the company become profitable again.

Boosting sales would be a significant challenge for the Lowe Group, whose Swedish affiliate Lowe Brindfors (Saab's longtime European agency) was assigned Saab's U.S. portfolio in 2001, giving the Lowe Group full responsibility for all of Saab's marketing. Lowe introduced the new 9-3 Sport Sedan to the U.S. market with a commercial that had already run in Europe. Set during the World Cup, it featured a young man joyriding through Barcelona, and it closed with the tagline "Life Is Not a Spectator Sport." This was followed by a series of other television, print, and radio initiatives that ran throughout 2003.

The 9-3 Sport Sedan helped Saab post its best sales year in 47 years of doing business in the U.S. market. The company moved 47,914 units of its automobile line, up from only 35,062 units sold the year before. This took Saab closer to its stated goal of doubling its U.S. sales within five years.

HISTORICAL CONTEXT

Saab's name began as an acronym, SAAB, for Svenska Aeroplan Aktiebolaget (Swedish Aircraft Company). As the name indicated, the company began by manufacturing aircraft. In 1946 it started exploring the possibility of manufacturing cars as well. In 1949 the Saab 92 became the first Saab automobile available to the public. The aircraft portion of Saab, Saab AB, later separated from the automotive manufacturer to form a second, fully independent company.

On December 15, 1989, Saab-Scania AB and General Motors announced an agreement to form Saab Automobile AB as a joint venture. This led to the creation of Saab Cars USA, Inc. Prior to GM's investment the brand had spent little on marketing in the United States, leading Saab to develop a reputation as a niche brand. Following the agreement Saab achieved modest but consistent U.S. sales. By the late 1990s, however, sales seemed to be picking up. In 1999 Saab sold 39,366 units in the United States, making that country the company's largest single market, even larger than that of its native Sweden. This was a significant improvement from the 30,516 units the automaker sold in the U.S. in 1998. In 2000 GM took complete control of the Swedish automaker, hoping to build on those gains.

In 2002, however, Saab's development costs were getting out of hand, and a weak dollar kept Saab prices (which were pegged to the stronger Swedish kronor currency) high in the United States, creating a drag on sales. The company was expected to lose $504 million in 2002 alone. One problem was the decision to construct expensive brand centers, owned outright by Saab, which would serve as high-class showrooms for its vehicles. These showrooms, designated for major cities such as San Francisco and Chicago, had to be canceled by Saab's parent, GM, after costs spiraled out of control.

Saab's international sales division was organized into two regions: one was Europe and the Americas, and the other handled Asian/Pacific markets. The company saw itself as an international organization. And internationally, sales were weak. By November 2002 the company was only on pace to move about 125,000 units for the year, well short of the 140,000—unit goal set by the automaker.

Saab CEO Peter Augustsson began to design an 18-month recovery plan to pare down costs and boost sales. Despite the major gains seen in 1999, U.S. sales in the first couple years of the 2000s were flat, with only about 37,000 units sold for 2001. The company wanted to turn things around in a hurry. Much of its hopes were pinned on the new 9-3 Sport Sedan, a high-performance vehicle that featured a smaller engine. The 9-3 had a sleeker, more "American" look than many other Saab vehicles. The company hoped that the 9-3 Sport Sedan would help lead the way to a doubling of U.S. sales within only five years.

TARGET MARKET

Saab's cars were high-performance luxury vehicles, and the 9-3 Sport Sedan was no exception. Although the car was priced competitively at about $30,000, it was aimed at young premium-car buyers. The driver's seat had a cockpit feel to appeal to these consumers. The company viewed its cosmopolitan, European reputation—which was enhanced in part by the fact that the company was not ubiquitous in the United States—as an important asset. With such features as Saab Active Head Restraints (seat-based restraints that protected the driver in a crash) and side airbags, Saab also appealed to safety-conscious consumers.

COMPETITION

Saab's primary competition came from other European automakers, including Mercedes-Benz, BMW, and Audi. Its biggest competitor was Volkswagen. Volkswagen was Europe's largest automaker and was the parent of Audi. There were several other sport sedans on the market in 2003. The entry-level luxury sport sedan segment was crowded with established stars, such as the BMW 3-Series and the Mercedes C-Class. These fellow European automakers were making vehicles that offered a similarly high-performance ride. Saab needed to distinguish itself in order to succeed. The Acura 3.2 TL was another strong contender in this segment.

THE (ADVERTISING) PROFESSIONAL

Saab Cars USA, Inc., had a lot riding on the introduction of its 2003 9-3 Sport Sedan. The company's advertising agency, Lowe Brindfors, had a secret weapon to help the vehicle crack the U.S. market, however: a Saab spot called "Big Match" that had already aired to acclaim in Europe. Befitting an international campaign, the spot was directed by international director Luc Besson.

Besson was a French director who had made the rare transition from the French film industry to blockbuster Hollywood action films. He achieved success in his homeland with the international hit La Femme Nikita, which eventually inspired a U.S. television series. He came to the attention of American cinephiles with his first English-language film, The Professional (1994; also known outside the United States as Léon), which featured the debut of Natalie Portman.

Later he directed the major science-fiction picture The Fifth Element (1997). The film starred Bruce Willis and Chris Tucker and was admired for its unique visual palette. After his ambitious 1999 film The Messenger: The Story of Joan of Arc failed to find a wide audience, Besson stepped away from directing films for a time, turning his attention to writing and producing movies and directing commercials such as "Big Match."

One thing that helped Saab stand out from these competitors was its customer service. Saab's customer-service record also attracted buyers. In 2003 the influential marketing-information firm JD Power and Associates ranked Saab seventh in its Customer Service Index, making it the highest-ranking European automaker, ahead of competitors BMW (number 10) and Volvo (number 11).

MARKETING STRATEGY

In May 2001, not long before the 9-3 Sport Sedan campaign began, Saab hired a new advertising agency, Sweden's Lowe Brindfors, part of the Lowe Group, to develop and implement its marketing campaigns. Lowe also operated a U.S. division based in New York, which would handle the U.S. component of Saab's campaigns. The Martin Agency, Saab's previous U.S. advertising agency, was retained to handle direct advertising in that country. Saab consolidated its worldwide advertising with one organization as part of an effort to make its marketing efforts more efficient. Lowe was already handling Saab's non-American campaigns, and it was becoming too complicated and costly to coordinate the efforts of two different agencies.

Saab was having trouble in the U.S. market, in part because of the Swedish krona's strong standing against the dollar, which raised Saab prices in the United States. To help shore up its sagging prospect, Saab earmarked a massive $70 million dollars for media advertising, nearly doubling its previous expenditures. The 9-3 would be a major focus of this advertising. In January 2002 Saab kicked off the year by introducing the new vehicle. It would close the year by touting the 9-3 to American car buyers in a new advertising campaign.

It was decided to import a successful Lowe Brindfors spot from Europe to be the center of the campaign, which began in the fall of 2002 to coincide with the introduction of the 2003 9-3 Sport Sedan. Called "Big Match," the spot had premiered in Europe in the summer of 2002, during the World Cup soccer tournament, the world's biggest sporting event. It was directed by Luc Besson, a French director known to American audiences for Hollywood films such as The Fifth Element. The commercial was set in Barcelona, Spain, during the World Cup. While everyone was at home watching the day's big soccer match on TV, a man snuck out and took his Saab 9-3 on a joyride through the city's empty streets. But he still got back in time to see the game's big goal. The spot closed with the tagline "Life is Not a Spectator Sport," before urging viewers to "Experience the All New Saab 9-3 Sport Sedan."

"Big Match" was a vivid demonstration of why Saab wanted to consolidate its worldwide marketing effort. The commercial had already been well received in Europe, so it was less of a risk bringing it into the United States. While the spot was edited for the U.S. market, most of the work was already done on the original spot, meaning that it cost far less than developing an all-new television campaign. For a company struggling with costs, this was especially appealing. Also, the European streetscape reinforced the company's sophisticated, cosmopolitan image.

Throughout 2003 Saab built on the "Big Match" spot through a print campaign geared at upscale readers, using publications such as GQ, Gourmet, and Condé Nast Traveler. Ads also ran in major newspapers, including the Wall Street Journal and the New York Times. Finally, the company reached out to its target market by becoming an official sponsor of National Public Radio.

Lowe developed a series of television campaigns to run throughout 2003. They mainly aired on national cable stations such as ESPN, Bravo, A&E, and CNN. Beginning in May 2003 Saab ran five spots featuring the tagline "Welcome to the State of Independence." These spots also primarily focused on the 9-3, though some featured other vehicles as well. One spot purported to show the behind-the-scenes process of designing new Saabs. As the 2003 line of Saab cars was shown, a series of rhetorical questions was asked, such as "What if innovation were the official currency?" Each spot closed with the new tagline. The idea was to capitalize on Scandinavia's reputation as a freethinking, open-minded society, implying that the Saab 9-3 was a car for free-thinking, open-minded drivers.

OUTCOME

The campaign to launch the 9-3 Sport Sedan was a success. By January 2003 sales were increasing across the board at Saab. Saab USA moved 2,551 units that month, up 62 percent from January 2002. The 9-3 Sport Sedan was a major component of that success, selling 1,427 units. That meant that more than half of all Saabs sold in January 2003 were 9-3 Sport Sedans. As the campaign continued, Saab's sales numbers kept growing. Saab Cars USA's first quarter in 2003 saw the company move 10,885 units. This was the best sales quarter in Saab's 47 years selling vehicles in the United States and constituted a 19 percent sales increase over the previous year's first quarter.

Saab moved 4,967 units in April 2003, for the best single month to that point in terms of U.S. sales. Once again, the 9-3 Sport Sedan was primarily responsible, selling 2,768 units that month. The previous monthly sales record had held since 1986. Saab's momentum continued after the second phase of the campaign—featuring the "Welcome to the State of Independence" spots—began in May. By November Saab had already posted its best yearly sales record in 16 years. The company had broken the 40,000—unit threshold, something it had not done since 1987. By the time the year was over, Saab had broken its yearly sales record by moving a total of 47,914 units, a significant improvement over the 35,062 units the company sold in 2002.