Saab, a small Swedish luxury car brand was - as far as the media and many industry analysts were concerned - about to take its rightful place as a historical footnote at the end of 2009. At the eleventh hour, Saab's owners (General Motors since the year 2000) found a buyer just as they were winding the operation down.
Since then, the brand has gradually begun to right itself, with a fresh take on its niche brand strategy.
Saab's brand heritage
Saab's brand heritage boil down to two major factors: contrarian engineering and relatively low sales figures. Saab has never sold more than 140 000 units in any one year of its entire existence.2 The fact that it is only popular among a small niche of buyers seems to be itself attractive to the niche.5
Brand equity is an intangible asset; it only exists in the minds of the consumers. Saab's particular form of brand equity was reputed to result in a loyal, almost fanatical customer base - conquest sales were not the way the brand survived.
Whether or not that was entirely true is debatable, given the available data. However, what is clear is that Saab's repeat-purchase rates dropped during the GM years and especially during the credit crunch: 35.5%, 33.4% and 9% in 2004, 2006 and 2009 respectively (source: JD Powers).
Yet, even though repeat-purchase loyalty wavered, the emotional attachment continued - even going as far as a global protest action in 2009 in response to GM's initial decision to shut down the brand. Many brand advocates don't even own Saab's anymore - but wait on the sidelines for a revival.
What needs to be done?
What needs to be done to strengthen the Saab brand within its niche?
According to imminent brand theorist David Aaker3, there are four major processes that build a strong brand:
A major failing of GM's management was not ensuring that someone senior enough championed the brand. Under new ownership, circumstances couldn't be more different. The new CEO, Dutchman Victor Muller, has returned the 'small' feel to the brand - going as far as driving the cars in races and personally taking motoring journalists on test drives.
In the past this was poorly managed - evidence of this being the media's constant confusion over whether Saabs were Saabs or just badge-engineered Opels. Saab risks a similar blurring in its relationship with BMW.
Saab's strengths were and still are poorly communicated. Therefore, consumers often don't include these strengths in their mental positioning of Saab.
Saab needs to ensure it has the right target positioning. Saab needs to invest in marketing research to determine which brand positioning will produce the most brand equity within its target niche. Saab then needs to work to communicate this positioning by spending the required advertising and PR money.
How is the 'new' Saab performing so far?
On the 1 November 2010, Acentric completed a small exploratory survey of 112 UK respondents (Saab's most lucrative European market outside of Sweden). The survey was demographically representative of the general public. The largest relative gaps are interior quality (relative to Audi) and safety leadership relative to Volvo (in spite of injury statistics to the contrary).
What can be done to build Saab's brand equity?
Building brand equity costs money. Balancing financial viability with engineering and brand-building investment will continue to be a challenge.
For this partnership to work, Saab needs to avoid making the same mistakes again. Off-the shelf components must be invisible or modified to take on Saabish qualities. Most essentially, Saab needs to ensure that perceived quality is balanced against price perceptions.
So far, if the new 95 is anything to go by, Saab still seems only vaguely aware of how critical quality perceptions are.
Action steps:
