The New York Times published an article the other day, commending Japanese auto-manufacturer Honda for sticking to its guns while everyone else was was living by the mantra bigger is better. With outrageous gas prices and rising customer concerns about the environment, companies are expected to make a serious investment in more eco-friendly solutions. More importantly, Honda committed to a noble brand message and stuck to it — now it’s reaping the rewards.
While industry sales drop 3 percent, Honda is seeing a 7 percent increase in sales for the first seven months. Online automotive resource Edmunds.com released its forecast for auto sales this month. Compared to August 2007, Honda will see a 0.9 percent increase in sales, while Chrysler, Ford, and GM sales are expected to decline 34, 16.3, and 27.5 percent respectively.
Honda, the author writes, “never veered from its mission of building fuel-efficient, environmentally friendly cars.” Since the 1960s, the company has been manufacturing cars under the philosophy, “blue skies for our children.” The article failed to mention, however, that it wasn’t always clear skies for Honda. When sports utility vehicles (SUV) became popular in the 1990s and early 2000s, sales of smaller cars took a hit. An article in the LA Times from 2001 reported on a study by J.D. Powers and Associates, which revealed:
Upper-mid-size sedan (Camry, Accord and Taurus) consumers are about seven times more likely to switch to an SUV [in 2001] than they were in 1999;
2 percent of customers shopping for upper-mid-size cars in 1999 switched and bought SUVs. In 2001, that number reached 15 percent;
the market had one “crossover” vehicle in 1997; by 2001, there were 18.
In response to consumer demand, Honda came out with its own crossover vehicle — the Honda CR-V — in 1996. But even so, the company stuck to its green-roots, and delivered a vehicle that looked like an SUV, but was built with the economic efficiency of the Honda Civic in mind. Motortorque.com cites CR-V sales increases of 28 percent from 2006 to 2007 (but notes that 2006 numbers were for the previous generation CR-V), compared to the overall SUV sector, which dropped 4 percent.
It’s interesting how companies are always after that customer loyalty, and yet, one of the problems industry experts often bring up is the fact that companies aren’t always loyal to their brand. McDonald’s, for instance, went through a difficult time when the company “took [its] eyes off the fries” . The fast food restaurant boasts fast, friendly service, but for a period, focused on building more locations rather than the interest of its customers (e.g., health and nutrition).
Even a mere tagline can reveal a lot about what you are — or aren’t. I interviewed Steve Cone, author of Powerlines, who spoke to the fact that if companies are consistently changing their brand message, how can they possibly expect customers to identify? Facelift after facelift may be more new and exciting, but in the end, the customer won’t know what you really look like.
Branding, however, is an elusive concept — marketers want something fresh, but it needs to be consistent. Even more challenging is seeing whether the premise of your brand is actually resonating with the consumer. Honda probably went through a period of doubt, but building a business requires passion and commitment. Look at how well that’s paying off now.
