RENEWING THE NISSAN BRAND

Vinamrata Gandhi B14160 | Karan Chhabra B14149 | Mugdha B14157

Introduction
Nissan was a pioneer in its field. It was the first Japanese company to specifically design cars for
specifically for the North American market. But the company soon lost its advantage to other
giants like Honda and Toyota. Thus Nissan emerged as the third largest Japanese car
manufacturer in USA. Its sales were declining rapidly and it losing its ground rapidly. The company
was making a loss of almost $2000 per car and was on the verge of bankruptcy. Nissan had a
total debt of $26bn and the had slide down 6.4% global market share in 1990 to 4.9% in 1998.
In order to save the company, Nissan entered into an alliance with Renault which purchased
36.8% stakes in the company in exchange of a huge investment in the company. Carlos Ghosn
joined the company after the alliance and led the company to the path of revival from the dead.
Mark Perry distinctly describes it as a near death experience, which makes the renewal of Nissan
a class case of brand make over.

Ghosn leadership
Ghosn was a great leader who was able to communicate his thought very clearly. He made the
company adopt very aggressive path which was the need of hour. In one of the meeting he
shocked everyone by stating that of the company could not be revived in the next 3 years, it may
lead to a disaster for all the managers as the company will cease to exist. His attitude got all the
stakeholders on their toes and led to the successful make over.
He aimed for an operating margin of 4.5% as compared to the prevailing 1.5%. targets were set
for N180 and expected the margin to go beyond the estimate as well. They were actually able to
achieve zero debt and a margin of 11%.

Issues with Nissan in America

As far as the other Japanese counterpart who emphasized on quality and reliability, Nissan had a
very different outlook. They always emphasized on user experience with a better sense of design
and more powerful machinery. Still the company suffered from many shortcomings including to
distinct communication, no clear target segment and intra organization constraints. Some of the
issues identified were:

 Minimum interaction within different departments which led to mismatch among the goals
and objectives
 Extra emphasis on precision and planning with little attention to price utility of the
investment
 Minimum interaction among the middle level managers which led to limited innovation
 No clear communication strategy
 Trying to make a car for everyone which is a difficult task to do as proper segmenting is
necessary for any strategy development

Another issue with Nissan cars was that customers related more to a particular model of the
company as compared to the brand as a whole. Thus to build the brand image, they decided that
they will no longer be a car for everyone. They realized the importance of identifying who were
their customers and what was their need. This led to a simple way of innovation and assurance
that a car addressing issue for a particular segment will definitely sell for them.

Major changes introduced

They developed a brand pyramid and established Nissan as a bold and thoughtful brand. They
analyzed all the necessary and relevant elements which could communicate the same message.
They re-engineered themselves to become SHIFT_ .

Another turning point was when branding team approved the regional decision. They tried to
identify the unmet needs of the customers. Providing a solution to these unmet needs led to
innovation and led to many successful models such as Xterra. When faced with the question of
focused target group as compared to volumes, they were able to gauge customer insight to
identify an optimum class which either lived the communicated lifestyle of aspired to be one. The
extreme graphics of a guy with bugs in his teeth portrayed not what the intended customers were
but what they aspired to be. The model received great success and the car was popular in many
segments including housewives.

SHIFT_
Shift_ was a tagline familiar with the Nissan advertisement. It depicted Tackes’s analogy and
provided a connection between the new models and the prevailing marketing campaigns. Though
the concept was not limited to advertisement and communication but also found place within
the organization. They saw it as a basis for introducing new revolutionary products in the market
which will be the first of its kind as they will be addressing unique requirements of their
customers.

Brand Management
The task for the company was not limited to turn around the brand but also to maintain the new
brand image. The company still suffered from the lasting effect of the previous lurking image of
the company. The management paid attention to intricacies including dealership design and the
overall showcase of the brand. They identified the company as a huge family and tried to identify
their customers as the friends the family would like to hang out with. In essence they paid minute
attention to their precise target and went all the way to create a lasting impact on them. Their
exercise was so effective that they were also able to launch luxury brands to cater to a very niche
customer base. They were able to get away with the stigma of being a cheap economical car and
bought it almost at par with other luxury brands such as BMW. They changed their attitude as
per the new product launch. All along the path, they were able to maintain their brand pyramid.
This was very necessary as the company had earlier fallen prey to such to and fro movement.
This time the company was cautious to maintain the same brand communication and did not
confuse the customer regarding their stand point and what the company represented.
Thus they were able to drive the company from a scheme and incentive based model to a more
pull based model where their products addressed specific needs of the customer successfully and
hence earned trust and respect from them.

Benefit of the brand makeover

By 2005 Ghosn had become the president of Nissan and he returned to leadership role in Renault.
The company continued to prosper as it found new lucrative avenues in Europe. Hence the
renewal was said to be complete by 2005. The company was doing well financially, meeting its
targets and investing more in R&D for the long term benefits. The company also received various
awards and accolades for its great work. Hence Nissan is often cited as the best examples of
brand renewal where the far sightedness of a leader coupled with precise brand management
led to revival of a dying company. It not only helped them in bearing losses but also put it par
with other giants.

Way ahead
The company now faces the important task of sustaining its spree of god management and brand
success. They need to make sure that they continue their innovative methods to address
consumer needs and continue to grow on the path of market dominance. In order to do so, they
need to maintain their best practices and also keep a watch on the latest development and
consumer preferences to ensure that the success is not short lived and Nissan is able to reap on
the benefits of the efforts put by them in the past few years.