Thursday, October 27, 2005

#3 Badge engineering

Originally posted AOL Hometown: InfinityReversed.
24 October, 2005, 10:35:11 BST

#3 Badge engineering

Well, something happened to my internet connection between 8pm and 11.30pm last night causing it to deny its own existence – and I'm only just able to get online. So, this is a little late, for which I can only apologise.

As an aside, I also had to edit 300 words out of this entry to get it down to 800; that's probably not important, but I wanted to mention it.

Badge engineering?

I got into a bit of an argument last week over platform sharing. Not the most interesting topic for verbal chop-socky, you may be thinking, but the context is the key.

Us lowly auto journalism students share a lectures with the Automotive Design MAs. These guys are the future hotshot creative types of car companies everywhere…and while that might sound like I’m wringing-out the waste juices, the design course at CU is for real – a proven success story – and the reason I’m studying here. I may have mentioned this already. Eh-hem, anyway, these lectures, The Automotive Industry in Context, one of the most important aspects of our education, are being given by an eclectic accumulation of industry related types.

“Consumer Quality Perception: Emotional quality and branding in cars” was the first session. Snaggy title but fascinating concept; you know how sometimes you discover something by accident – serendipitously for those poetic types – you’re not expecting much, and it turns out to be really great? Tweak that a notch, and think about your expectations of specific things – products, services, people, whatever. You presume characteristics or levels of satisfaction by previous experience/reputation/cost, and this – you guessed it – is what forms the basis of quality perception. The significant part is the difference between perception and what you actually get – quality as a gap. The bigger the difference, the bigger the impact, both positive and negative.

Take Skoda. They’ve been extremely clever. All the advertisements they ran post-VAG takeover daring you to believe the badge served the fantastically strategic purpose of keeping owner – and press – expectations low. Low expectations + good product = favourable response. Neat. Then throw in the reasonable cost. No coincidence that Skoda now does exceedingly well in the JD Power survey – ranking second for two years running.

Contrast this with Mercedes, cars that are often bought on an aspirational basis. When they fail to meet their owners’ expectations their reputation is such that regardless of the true physical comparison between the two “brands”, JD Power ranked Mercedes 21st in 2005 – 19 places behind the Czechs and four places below the industry average. Given the motoring press has berated Mercedes over falling quality levels for several years, you have to wonder how long they’ll continue to get away with it – it’s like a monster confidence trick. (I even threw in the potential impact of the very public failures of their Formula 1 engines, but the consensus amongst my fellows was that it’ll be a while yet before the big three-pointed star stops being the stuff that dreams are made of.*)

But Skoda is interesting because if you’re harsh they’re not really Skodas at all: they’re entry-level VAG group, with modified appearance and characteristics supposedly standing them on their own. An example we were given was the Golf GTi; there’s four versions of this car – Audi A3, VW, Seat Cupra, and Octavia vRS, with about £10,000 difference between the Audi and the Skoda. So the Skoda’s a bargain, but the Audi is the premium product that everyone’s supposed to wet their knickers over… I see no problem with this. It’s clever marketing and good strategy – they aim to cover everybody. And VAG are hardly alone with this badge-juggling trick.

Some of the design MAs, however, throw a hissy-fit. They say this is deceiving the consumer, and that the average car buyer is led to believe they are getting an entirely unique-to-brand product. Even if that is the case, does it really matter? If consumers are naïve enough to approach such an important purchase without doing their research, then surely it’s their own lookout – but for many it’s the badge they’re driving, not the car. For these people it won’t matter that they’d have saved ten grand – what matters is they can afford an Audi, and that the purchase shows other people they can. This is how it works for Audi – and it’s how it works for Mercedes. And the shrewd ones who go for the “Czech-made” stickers – they have the right to look contented.

Maybe I’m being unfair, but I suspect the designers’ problem has little to do with concerns over the consumer. I suspect it’s more to do with stylistic integrity. They feel that unless the vehicle is ground-up for the brand then some essence is lost, that somehow the design is compromised. But that’s modern living, baby – “conspicuous consumption” in the mass-production world. People want choice, but they also want value they can afford – meaning compromises; better they come in the conception than the quality. More power to VAG, I say, for pulling it off in such an integrated manner, and giving us that choice. Next step? Developing viable structures that allow further increases in individuality, for the brand and the consumer – surely that’s a project that’ll keep the hotshots happy?

* Speaking of which, does anyone remember the fake film ad that Merc ran for a while a few years ago? Supposedly called Lucky Star, the contrivance was that Benicio Del Toro's central character was so fortunate and so successful that he was under investigation by a government agency, presumed crooked and up to no good. It was even directed by Michael Mann. I wonder how many people thought that their new 500SL was able to change all the traffic lights to green as a result?

The lecture in question was given on 14tth October 2005 by Alonso Blanco-Vero.

For a trip down memory lane, you can see some Skoda jokes here: (provided by a two second search on Google).

For more on the Mercedes advert, start with this article from the Guardian newspaper:,4120,752100,00.html

Picture: Skoda UK


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