The Organic Marketer


Chrysler’s Gas Price Lock: Strategy for Other Businesses?

Posted in Innovative Strategies by Jim Tome on May 7, 2008
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Some companies are actively searching for the silver lining in depressing economic news and turning American consumer’s frustrations and doubts into an effective marketing campaign. Can other industries take a page from Chrysler’s game book and brew sweet lemonade from sour lemons?

Beginning today and lasting until June 2nd, Chrysler is promoting their newest incentive — Let’s Refuel America, a rather experimental strategy to get you to purchase one of their new automobiles, SUVs, crossovers or trucks. 

Under this plan, Chrysler guarantees the price you’ll pay for a gallon of gas at $2.99. Anything above that, they pay for it (within limits and terms, of course). The price guarantee covers an annual allotment of gallons based on 12,000 miles divided by the average mileage per gallon of the vehicle purchased. Thus, as the price of gas increases, so do your savings.

According to Jesse Toprak, executive director of industry analysis for Edmunds.com, “[any topic] that has gas in it gets attention nowadays from consumers, so it’s a smart strategy.”  Chrysler executives were quoted last week as saying that the nation needs high gas prices to encourage consumers to buy more fuel-efficient vehicles, and Jim Press, Chrysler’s president and vice chairman stated that the program “puts money in your pocket today, and allows our customers to better manage their fuel expenses.”

Some might say that Chrysler is making lemonade from lemons by taking advantage of consumer’s growing aggravation with now skyrocketing gas prices. That oil prices at the wellhead are increasing at an even higher rate than pump prices can only bode ill for the future — should a barrel of oil be priced at $200 within the next two years as some analysts say, that $2.99 per gallon price lock will look very attractive.

So how can other industries take advantage of bad news and work it to their advantage? Chrysler did it by acknowledging that gas prices are rapidly increasing and that there’s nothing anyone can do about it. There tact in subsidizing this cost is a great market ploy and they’ve smartly put some controls in to limit their exposure (in fact, some analysts are saying the cost for this incentive could be lower than their typical rebates and interest rate buy-downs).

The challenge is to find a way to make a new, better tasting lemonade from the lemons the current economic state is giving us. Smart marketers need to embrace bad news and look for that silver lining — who would have thought an automobile manufacturer would use the bad news of increasing gas prices as a positive marketing message?

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