automotive

Audi Focuses On Making Premium Leap

Audi

Audi has spent several years building brand awareness and consideration in the U.S. market. Now the company, which saw sales increase 28% in June, is hoping to join the ranks of bona fide luxury brands.

The company has focused much of its marketing muscle on vehicles like the A4, but the next phase will be a raft of premium vehicles positioned against vehicles like Mercedes-Benz S-Class and BMW 7-Series, says Loren Angelo, Audi's U.S. brand marketing manager.

"Premium is when consumers are willing to commit $60,000 to $80,000 for a vehicle," he says. He concedes that the automaker's big increases -- 58% over the last three or so years -- in consideration and awareness (or from "private prestige" to "public prestige" in Audi speak) has not translated to higher consideration in the high end of the market.

That may be because the company has focused on more near-luxury vehicles and campaigns for its TDI diesel tech engines. For model year 2010, the company launched 80 vehicles including the Q7 and A3 TDIs, the S4 and A4. That will change next year with a new TT roadster, the new A7 sedan, a new A6, R8 Spyder, and A8 w12 flagship launching at the end of 2010.

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Angelo says the company will focus marketing efforts on the A6 and A7, with advertising messages that focus on vehicle attributes like an aluminum space frame, LED lighting, MMMI touch pad and a new deal with Google for in-vehicle telematics. "We want consumers to see Audi as a premium brand that it is. A7 and A6 will play a role in that," he said.

But Angelo says Audi has a long way to go to catch up to the competitive set. "Right now, 40% and 30% percent of BMW and Mercedes-Benz consumers own their high-end vehicles. But we have a really low share of that, just 13%. We think we can change that." He says that the focus on the premium end of the market, which means a more selective buyer and more targeted marketing, won't change the automaker's media mix.

"The important thing about this shift is all premium brands have to develop a level of aspiration," he says. "So you that need a wider group; a mass audience. Audi has done tremendously well with 18- to- 24-year-olds in this regard. They embrace it. We will continue that, but social media plays a big role with that as well with advocacy programs on Facebook and Twitter."

Vehicles like the new A4 and Q5 crossover and supporting media buys that put the brand in the Super Bowl, NFL, the Beijing Olympics and even the "Iron Man" movie franchise have helped Audi turn the tide of consumer sentiment: Angelo says a consumer exodus in 2008 has turned to a net conquest of 5,000 consumers last year. The automaker's share was 5.3% of luxury in 2004; now it is 8.8%, per Angelo, who adds that share is up 28% versus a year ago.

Audi will continue the big media tactics despite its focua on a high-end region of the market, says Angelo. He says Audi will advertise during the Super Bowl next year, but will also do more targeted direct-marketing efforts to luxury buyers; experiential programs, and social media programs aimed at cultivating a community of brand advocates.

The automaker, a sibling of VW and Porsche, is also in the midst of a retail program to get more exclusive dealers, versus those combined with VW and Porsche. Those stores plus stores with separate branded Audi spaces account for 90% of Audi sales, per Angelo. The automaker has also been trying to get dealers to buy into its new store design, called "Terminal Design."

"From a design aesthetic it plays a role in demonstrating Audi's look forward," Angelo says -- adding that the stores, of which there are so far only 12 in the U.S., have an open feeling, with asymmetrical windows and a "clean look and feel versus combined stores."

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