I wouldn’t want to be an auto dealer right now.

The auto business is getting hammered by the recession. Sales have dropped for 12 consecutive months, the first time that’s happened since the recession of the early ’90s. Through October, U.S. sales were down about 15 percent, according to industry tracker Autodata – and getting rapidly worse, with October sales

Honda Puyo concept. Source: Autoincar.com

 down 32 percent from a year ago.

Dealers are having trouble securing “floor plan” financing – the money they borrow to buy cars to stock their dealerships. And consumer credit is drying up, making it harder for potential buyers to get financing.

The fix for the auto business is being debated at pay levels far higher than mine. But as a lifelong auto enthusiast, let me offer a few ideas for how the automakers can more effectively market their products.

Make small sexy. Advertising typically focuses on the high-end product lines: powerful machines that cost $40,000 or more. There’s a reason for this: by touting the upper end, you create a “halo effect” that appeals to consumers who will probably wind up buying a cheaper vehicle.

Dealers and automakers also prefer to sell larger, more-expensive vehicles because they make more money off them. At the height of the SUV craze, Ford was making a profit of more than $10,000 on each Explorer it sold, while it barely broke even on smaller cars like the Focus.

But consumers don’t have the money right now to buy those fancy vehicles. Why not spend that creative energy on marketing the more affordable vehicles? Don’t feed us ads for the car that costs more than the average annual paycheck – use all that energy, all those flashy graphics and throbbing music and delectable photographs, on making the mainstream vehicle into something aspirational.

The Chevy Beat is set to go on sale soon in Europe. Not in the U.S. -- we'll make do with the decidedly less exciting Aveo. Source: Motortopia.com

Give us something different.

Modern engineering and technology allow automakers to cover their costs with a smaller volume of production. Cars share “platforms” – the chassis, engine and other technical elements – but can be reskinned into distinctive vehicles more easily than in the past.

Carmakers need to take more chances with design. Instead of producing 500,000 Chevy Malibus (an excellent car, by the way), give us 100,000 each of five drastically different vehicles. American, Japanese and European automakers right now are selling some wildly different vehicles in Asia and Europe than they do in the States. See here and here for some unusual and interesting cars that will never be seen in the U.S. market.

There would be some regulatory hurdles in bringing some of these vehicles here, to be sure. But give Americans some crazy choices. What have you got to lose?

Create brand enthusiasts. The classic example of this is the Mini, which has been a huge success since its U.S. launch. Mini built enthusiasm for the car with promotions and online buzz. It offered buyers the chance to join clubs and meet other Mini owners. It sends them branded tchotchkes and gear.

Of course, none of this would have succeeded if the car itself had been boring and bland. And perhaps that’s at the root of the automakers’ problems.

Cars are better than ever. They’re more powerful, more economical and last longer than ever before. Today’s upscale minivan can go from 0-60 mph faster than all but a handful of muscle cars from the ’60s. And while it’s been fashionable to bash U.S. cars on quality, I don’t buy it. That may have been true 20 years ago, but now it’s no more than an urban legend.

But what today’s mainstream cars lack is personality. If the automakers could give us the performance and reliability we’ve come to expect, packaged in a shell that would make people sit up and take notice, they’d be onto a winning formula.

Again, I ask: What have they got to lose?

[Editor's note: This is John Reinan's weekly marketing column for MinnPost.com, reprinted with permission. To see the original, go to http://tinyurl.com/599f6e.]

If you believe that alcohol lubricates creativity, then it’s no surprise that Dean Phillips has quietly emerged as one of the more innovative marketers in the Twin Cities. As the fifth generation to head his family’s liquor business, Phillips has embraced and advanced some of the key tenets of 21st century marketing: be bold, be nimble and let the consumer work for you.

Dean Phillips

“Innovation for a large company is a risk. Innovation for us is a mandate,” Phillips said in an interview at Phillips Distilling Co. headquarters, an historic stone building just across the Mississippi River from downtown Minneapolis. “We can’t do things with more money or more people. Our aspiration is to find people– customers– who are discoverers and disseminators.”

That approach has yielded one of the hottest products in the distilled spirits business: UV Vodka, whose funky colors and fruity flavors have boosted sales from 7,000 cases in 2001 to a projected 700,000 cases this year.

UV’s growth, shepherded by the Minneapolis agency Olson, has come without the kind of big-money advertising that the liquor industry’s major players put behind their brands. Total sales of all Phillips products have nearly tripled in the last five years, from 600,000 cases in 2003 to 1.7 million this year. Privately held Phillips Distilling doesn’t reveal its sales, although published reports put them somewhere north of $100 million.

Impressive, but still tiny compared to worldwide competitors such as Diageo, which rang up more than $20 billion in sales last year from brands including Johnnie Walker, Guinness and Tanqueray. Phillips isn’t worried about taking on the big players; in fact, he believes the size advantage lies with his company.

“It’s not the huge companies that are the innovators,” he said. “If you look at the distilled spirits business over the last 20 years, without exception, the runaway successes have come from independent companies.”

UV and other Phillips Distilling brands have been built “one drink at a time, one bottle at a time,” Phillips said. The brands have used Web sites, events and sponsorships to build buzz, trusting to word of mouth to create product awareness among consumers– and liquor distributors, who decide whether Phillips products get shelf space in retail outlets.

“We have gone from being a marketer to being a content provider,” Phillips said, and he wasn’t referring to the contents of a cocktail glass. “Our job is to create photos and tools and content that others can use to build our brand.”

Phillips Distilling’s latest product is a different take on vodka. Where UV is brash, low-priced (about $10 a bottle) and obviously color-enhanced, Prairie Vodka is low-key, more upscale ($20-$25 a bottle) and kosher organic.

Prairie Vodka, made in Benson, Minn.Prairie is made in Benson, Minn., at the same distillery that produces Shakers Vodka. A local cooperative of about 980 farmers produces the organic corn used to make Prairie, which Phillips hopes will help redefine the organic category.

“Organic is not progressive, it’s regressive,” he said. “It’s the way we used to do things. If we can convert the definition of luxury from something made far away to something made close to home, that’s a huge shift.”

With Prairie, Phillips is taking aim at luxury vodkas such as Grey Goose and Belvedere– a brand his father, Eddie, introduced to the U.S. market before selling it to the French luxury conglomerate LVMH.

“We built Belvedere by putting it in the hands of A-list celebrities,” Phillips said. “That was top-down marketing. With Prairie, it’s bottom-up.”

In the Internet era, “people don’t discover brands because they saw George Clooney drinking it in People magazine,” Phillips said. “Now they can discover it before George Clooney.

“Ten years ago, there was no way to send a message to consumers without spending a lot of money. Now, we can go after chefs, foodies and other influencers at little cost.”

It’s hard to say whether the change has resonated with consumers. Production of California prunes — excuse me, dried plums — has varied wildly from year to year, based on agricultural conditions more than marketing efforts. There have been some good years and some bad ones.

What I find odd is that, eight years later, the branding of the fruit seems to vary as much as the production. If you go to the Web site of the California Dried Plum Board, you’ll find a press release announcing the 2008 prune crop. The media contact is Richard Peterson, executive director of the California Prune Board. There are references to the year’s prune production estimates and reports from the Prune Marketing Committee. Similar inconsistencies can be found throughout the group’s communications.

If the official marketing organization for dried plums is still calling them prunes, then I don’t see why the rest of us shouldn’t do it, too.