4 Steps of Successful Rebranding: Lessons learned from Volvo in Australia [Marketing Case Study #2]

(Photo from Volvo)

You've been making great products and are confident in that, but feel that people seem not as passionate about them as you are, and sales get sluggish.

It was the case for Volvo in Australia until 2017. While winning the "Car of the year" prize, the Swedish car brand failed to attract luxury car buyers due to its century-long brand image of "safety," and sales growth was stagnant. 

However, Volvo successfully rebranded itself by transforming its marketing approach and enjoyed record-high sales in Australia, 2018, despite the market slump by 5% vs. the previous year.

How did Volvo do that? What are the lessons learned from this case?

Table of Contents

• Step 1: Recognize a perception gap correctly.
• Step 2: Find your own space.
• Step 3: Leverage assets & partnership.
• Step 4: Act differently.
• Takeaways for Marketers

Step 1: Recognize a perception gap correctly.

Consistency matters for branding. It's a source of credibility. Yet, if you do not keep tuning your brand along with today's context, you will be out-of-dated sooner or later.

Volvo is such a rare company that had been maintaining its single brand identity as "safety" since its birth in 1927. As represented by a rear-facing child seat or side-impact protection, Volvo had led "safety" innovations in the industry and appealed its importance through marcomms for a long time.

(Photo from warc)

But, the strengths were not strengths anymore or rather became the weaknesses in the luxury car market. While Volvo users selected the car for "safety" as intended, many luxury car buyers did not weigh much on it in their purchase consideration. Very hard to face this, but the Swedish brand was committed to tackling it.

Like this case, the first and essential step of rebranding is to recognize such a perception gap with a target audience correctly. Without it, you will fail no matter what you do, unfortunately. So, be careful.

Step 2: Find your own space.

After identifying a perception gap, the next step is to fix it. In today's hyper-competitive markets, though, it is quite tricky.

The key to success is to find your own space, i.e., daringly taking distances from competitors, uncovering what the target audience genuinely values, and reframing your brand core to fit them.

Other luxury car brands, such as Mercedes-Benz and BMW, positioned themselves as a symbol of success, wealth, prestige, and status. For better or worse, Volvo's image was far from them, and it was not rational for the weak brand to compete over in the same field.

Instead, Volvo carefully looked at the target audiences' behaviors through ethnographic researches and found that for some people, including Volvo drivers, the meaning of owning a luxury car was an expression of ingenuity and generosity rather than a statement of wealth.

(Photo from Shutterstock)

For example, Volvo XC40 owner's favorite and pride were not showy materials but the orange interior made from recycled plastic.

The Swedish brand saw this insight as an opportunity because; 

1. Competitors like Mercedes-Benz had a somewhat arrogant image due to its message "The Best, or Nothing," meaning that Volvo could be distinctive.
2. Like a seatbelt invented by Volvo that saved millions of lives, natures of ingenuity and generosity were deeply rooted in its spirits.
3. The values were not far away from Volvo's century-long image of "safety," able to maintain brand consistency.

In short, Volvo found its own space.

Step 3: Leverage assets & partnership.

Finding your own space is, though, just halfway since authenticity is indispensable for successful rebranding.

So, how can we get authentic? The answer is to leverage your assets and explore the possibilities of partnership that helps fill in the missing pieces of your brand.

In Volvo's case, the assets were everything related to "safety," such as brand history, purpose, culture, and products. Those assets would be unshakable evidence when adequately reframed and integrated into the new concept.

However, in many cases, only using existing assets is not enough to change brand perception. People will barely notice the difference from the past image without an iconic and visible change. That's why partnership matters. 

For Volvo, it was a collaboration with the Sydney Institute of Marine Science. In Australia, plastic litter pollutes the sea and kills natural mangroves at the coastline. Volvo worked on the environmental issue by building mangrove-like seawalls made with upcycled plastic that filtered pollutants and cleaned the ocean. 

(Photo from warc)

This action, called "LIVING SEA WALL," gathered attention and helped people understand Volvo's ingenious and generous attitude.

Step 4: Act differently.

Because it's almost impossible to change people's perception overnight, rebranding should not be a one-shot campaign but a series of movements. 

Plus, for a weak brand, everything needs to be carefully coordinated in a way that differentiates itself from competitors.

In this case, Volvo built its brand platform named "Omtanke," a Swedish word meaning care, consideration, and especially rethinking. The Swedish brand reviewed itself based on the new branding concept and decided to take different ways from the past and others.

The "LIVING SEA WALL" was an example, but Volvo transformed the overall sales and marketing approach, challenging the category conventions.

In the automotive industry, new cars generate sales. Many car brands try to create people's attention through car launches and provide retail offers to stimulate car purchases. Volvo was the one.

However, people buy cars in life-changing moments like having a new family, house, or job. So, Volvo shifted its approach to being emotive and brand-based with always-on activity, focusing on storytelling audio-visual contents, PR, social and owned media-based communication, and down-to-eye level small OOH rather than mass ads.

(Photo from warc)

These actions drew an emotional response from the audience and made more people close to the brand, leading to impressive results; luxury car buyers who considered Volvo increased by 32%, sales by 38%, and share by 49%, which was 6x greater than Europe and 9x the US.

Takeaways for Marketers

To sum up, if you want to succeed in rebranding;

1. Correctly recognize a perception gap with a target audience so that you can identify the critical issue to fix. 
2. Find your own space distinctive from competitors, linked with what the target audience genuinely wants, and deeply rooted in your brand identity.
3. Leverage assets and partnership with external entities to reinforce the authenticity of the new brand concept.
4. Act differently from the past and others so that people understand your new picture.

If you want to know more details of this case, please check warc.com and Volvo Cars Australia: How redefining safety drove record sales for Volvo, the source of this article.

Thank you for reading, and bye!