The World: Will taking the Italian out of Fiat deliver sales?

Turin's once-mighty manufacturer is hoping an international ad campaign can address its sales slump.

To say Stephen Norman has occupied a hot-seat in his move from the managing director of Fiat in France to his new role as the worldwide marketing director for the Fiat brand is a sweeping understatement.

The launch of the new Grande Punto, his first big task in his new role, simply has to work.

Over the past five years, Fiat has lurched from crisis to catastrophe with depressing regularity. Perennial losses, spiralling costs and tumbling sales have reduced a one-time industrial powerhouse to an also-ran in many markets outside Italy. And the move towards profitability signalled at the recent Frankfurt Motor Show owes more to cost-cutting and closures than it does a renewed consumer faith in Fiat's cars.

The ailing manufacturer's reputation has not been helped by a series of marketing gaffes: there was the Ted Bates-created domestic campaign urging Italians to buy Italian by suggesting that every time they bought a Volkswagen, Mercedes or Audi, the Germans said "danke".

That campaign was slammed for what the market perceived were Nazi sensibilities. Add to that the discovery by police of the dynamic young Fiat marketing manager, Lupo Elkann, in a drug-induced coma in the company of three transvestites.

If Fiat's problems at home are bad, it is the export market that really needs kicking into shape. It has gone from being a one-time market leader to an export share in Europe of just 2.2 per cent. The Grande Punto, Norman believes, will change that, and its launch campaign, one ad for Italy and another for the export market, will be key to that success.

"The difference between the domestic market and the export markets is greater in the Fiat world than anywhere else," Norman says, flagging the brand's market-leading 20 per cent domestic share and contrasting it with its tiny 2.2 per cent export share.

"The marketing has to take account of that difference," he says. "I don't think it is right to apply the same marketing methods and campaigns outside Italy as in Italy."

The launch campaign for the Grande Punto has been different from the outset. Fiat has long flagged up its Italian-ness in its advertising but in the work for the export market that is gone, to be replaced by slick visual effects and a Marilyn Manson soundtrack.

More controversial, though, is Fiat's decision to award the launch ads (there are two - one for Italy and one for the rest of Europe) not to Leo Burnett, its long-standing incumbent, but to two Italian shops more familiar with work on other Fiat brands: Saffiro Tortelli Vigotori created the Italian ad, while Armando Testa emerged from a melee of 22 agencies (including the non-roster shop Mother) to win the launch duties in France, Spain, Germany and the UK.

Norman explains that Fiat's traditional approach - "advertising that won't upset anybody" - won't achieve the step increase in sales that he wants to see in the Grande Punto. Is Fiat blaming Leo Burnett's work for its European sales graph and awarding Armando Testa the Grande Punto business as punishment?

"I wouldn't want to criticise the advertising in the past as being the main driver of the sales having declined," Norman says. "But we cannot apply the consensual approach to advertising Fiat outside Italy that is working well in the domestic market. An advertising campaign based solely on Italian-ness will not sell Italian cars outside of Italy in sufficient quantity to meet our objectives."

That said, why approach an Italian agency if you're attempting to play down the brand's nationality? German Silva, the creative director at Armando Testa, points out that he and his creative team on the business are all Spanish. "We wanted to create an international campaign for an international and multicultural market, made by an international brand," he says.

Sources close to the Fiat account say the trend for launches to be put out to pitch will continue to be a feature of the brand's marketing plan as it prepares for two key launches in the next 18 months - the brand's first compact 4x4, and the new Fiat Cinquecento.

Sergio Marchionne, Fiat's fifth chief executive in three years, is said to be demanding to see six ideas for each campaign. "Fiat has always done this, for 20 years at least. Dealing with the politics in Turin is hugely complicated and no agency's relationship with Fiat is ever safe and normal," the source says.

That said, Fiat is by no means writing off Leo Burnett. "The initial pitch for the Grande Punto campaign was very wide and there was some very good work proposed by a lot of agencies," Norman says. "Leo Burnett is our lead agency, and will always be. If it comes up with an idea as we work up the development of a future product, and we're in line with that idea, then it will do the business," he adds.

"We're more motivated, committed and engaged than we've felt for some time," Richard Pinder, the Leo Burnett president for Europe, the Middle East and Africa, says of the relationship.

Whoever wins the launch of the 4x4 and Cinquecento, Norman is adamant his advertising shake-up will remain. "We're looking for a radical boost, and the company has got the products to do the business. I'm determined that in the major markets, including the UK, we will shake up our marketing radically and dramatically."

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