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CASE STUDY
ENTIRELY COMFORTABLEWITHITSORIENTATION:
SUBARU’S SUCCESSFULHISTORYOFGAY/LESBIANINTEGRATEDMARKETINGCOMMUNICATIONS
01/05/2010
ABSTRACT:
This case study examines an integratedmarketingcommunications success story:
Subaru’s 14-year unwavering, authentic relationship with the gay and lesbian communities
during which sales have doubled. Subaru reached out to the gay and lesbian consumers in 1995,
beginning with corporate sponsorship of the Rainbow Card, followed by gay and lesbian-specific
advertising campaigns and numerous strategic sponsorships. Subaru’s corporate communication
efforts were and continue to be revolutionary considering U.S. public opinion of gays and
lesbians at the time, the potential for consumer backlash, and the media landscape. Subaru’s
activities are compared with outreach from the Ford Motor Co., including the latter’s
mishandling of a boycott by the American Family Association (AFA).
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TABLE OF CONTENTS
Overview………………………………………………………………………………………… 4
The U.S. Automotive Industry…………………………………………………………………….5
Industry Marketing Expenditures…………………………………………………………6
Brief Historyof Gay and Lesbian Marketing………….………………………………………….7
Providing Context: Gay Marketing, Circa 1996………………………………………… 9
IKEA, AT&T, and John Hancock Receive Conservative Backlash………….………….10
Gay and Lesbian Automotive Ads…………………………….…………………………10
Subaru………… ……………………………………………………………………………….11
Company History…………………………………………………………………… 11
Sales Figures…………… ……………………………………….…………………… 12
2010 Product Lineup…………… …………………………………………….……… 13
Market Research Reveals Lesbian Niche Market……… ………………………… ….13
External Communication Efforts……………………………………………………… 14
Profile of a Subaru Owner: Brand Loyalty…………………………………………… 14
Brief HistoryofSubaru’s Gay and Lesbian IMC Efforts……………….……….…… 15
Founding Sponsor of Rainbow
Card……………………………………….…….15
Progressive Advertising in Gay Media……………………………………….….15
Sponsoring Gay and Lesbian Events……………………….……………………17
TV Brand Integration: Team Eco-Subaru and The L Word…………… …… 17
Partnering for AIDS Research………………………………………………… 18
Founding Sponsor of Sirius OutQ and Logo…………………………….………18
Gay Organizations Recognize Subaru’s Efforts…………………………………… … 19
Consumer Feedback for Gay and Lesbian Outreach…………………………… …….20
Increased Sales Due to Outreach…………………………………………………… ….21
Ford Motor Company……………………………………………………………………………21
Ford’s Gay-Friendly History………………………………………………………….….21
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Gay Organizations Recognize Ford’s Efforts………………………………………… 22
Jaguar, Volvo, and Land Rover Begin Advertising in Gay Media…………………… 23
AFA Boycotts Ford for “Homosexual Agenda”……………………………………… 24
Contrasting Subaru and Ford Motor Company………………………………………………… 26
Subaru’s Current Dilemma: IMC Sustainability…………………………………………………27
Appendix I……………………………………………………………………………………….28
Appendix II………………………………………………………………………………………29
Appendix III………………………………………………………………………………….… 30
Appendix IV……………………………………….…………………………………………… 31
Appendix V………………………………………………………………………………………32
Appendix VI…………………………………………………………………………………… 34
References…………………………………………………………………………………… 35
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ENTIRELY COMFORTABLEWITHITS ORIENTATION
a
:
SUBARU’S SUCCESSFULHISTORYOFGAY/LESBIANINTEGRATEDMARKETINGCOMMUNICATIONS
Companies can’t just throw one ad at gay consumers and think they’re done.
– Mike Wilke, Founder and former Executive Director of the Commercial Closet Association
1
OVERVIEW
In 1994, Subaru’s market research team discovered a core consumer base they had not
previously identified: lesbians. Market research indicated that lesbian Subaru owners had a high
socioeconomic status and an active lifestyle, complimenting Subaru’s four existing consumer
bases,
2
and were four times as likely as their heterosexual counterparts to own a Subaru.
3
Armed
with this knowledge, in 1995 Subaru embarked on a new integratedmarketing communication
strategy designed to reach lesbians and gay men. The first step was corporate sponsorship of the
Rainbow Card, followed by gay and lesbian-specific advertising executions and numerous
strategic sponsorships.
Despite the myriad industries advertising in gay media circa 1996, relatively few
companies overall were willing to risk potential consumer backlash, particularly traditionally
conservative automotive companies. IKEA, AT&T, and John Hancock all received intense
consumer backlash for their gay and lesbian marketing efforts and pulled their campaigns
immediately, causing other companies to avoid the market altogether. To understand the risk
involved in Subaru’s decision, a brief historyof gay and lesbian marketing is included, with
special emphasis placed on the automotive industry.
During Subaru’s 14-year historywith the gay and lesbian communities, the company has
cultivated an unwavering, authentic relationship with key external stakeholders. While Ford
Motor Company has also partnered with the gay and lesbian communities for over a decade, its
track record is troubled. Ford was entangled in a 2005-06 battle over gay advertising with two
opposing stakeholders: the conservative American Family Association (AFA) and numerous gay
organizations. Despite its gay-friendly outreach, Ford handled the boycott in a secretive, indirect
manner that led to many questions – from both stakeholder groups.
To understand why Ford was the target of a boycott while Subaru was not, four factors
should be considered: 1) sizes of the Japanese and American auto manufacturers; 2) sales; 3)
target markets; and 4) ad spending.
As competition increases and more automotive companies are developing relationships
with gay and lesbian stakeholders, Subaru will need to retain its competitive advantage using
corporate communication tactics. In the highly competitive automotive industry, it is necessary
for Subaru to prove that its IMC strategy is sustainable into the next decade as well. Furthermore,
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a
This phrase is a tagline used in a 1998 Subaru print advertisement. See Appendix I."
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Subaru needs to grow its consumer base by pursuing other niche markets without damaging the
relationships it has cultivated thus far.
THE U.S. AUTOMOTIVE INDUSTRY
According to JD Power and Associates, there are over 40 automotive makers selling
vehicles in the United States today.
4
The United States, the largest market for light vehicles in
the world, saw sales of over 13.2 million vehicles in 2008. One year prior, sales exceeded 16.1
million vehicles.
5
See Table I for a breakdown of 2008 U.S. sales by company:
Source: Ward’s Automotive
6
The automotive industry, one of the largest manufacturing industries in the United States
today, has been in turmoil for the past few years due to factors such as the economic recession,
increased oil prices, and poor management decisions. By February 2009, U.S. automotive sales
were the lowest they had been in the past 25 years.
7
American-owned General Motors and
Chrysler received a combined $17.4 billion bailout from the U.S. government in December
2008.
8
A few months later, Chrysler filed for Chapter 11 bankruptcy on April 30, 2009;
9
General
Motors followed suit on June 1, 2009.
10
In 2008, Japanese auto manufacturers led U.S. sales, comprising 47.5% of the market.
American manufacturers comprised 34.8% of total U.S. sales, followed by other foreign imports
(primarily European) at 17.7%.
11
To stimulate sales, the U.S. government initiated the car allowance rebate system
(CARS) on July 1, 2009,
12
commonly referred to as “cash for clunkers.” Under the program, in
exchange for trading in a drivable vehicle 25 years old or newer that received 18 miles per gallon
or fewer, consumers could receive a credit of between $3,500-$4,500 on the purchase of a new,
more fuel efficient vehicle.
13
The program lasted until August 25, 2009; 700,000 vehicles were
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traded in for government rebates totaling $2.9 billion.
14
Japanese manufacturers accounted for 7
of the top 10 models purchased under the stimulus program.
15
INDUSTRY MARKETING EXPENDITURES
Automotive companies typically devote approximately 10% of their total sales revenues
to marketing efforts, of which advertising comprises just one portion. However, due to the
economic recession and rising fuel costs, both of which have significantly reduced new auto
sales in the latter part of the decade, automotive companies have spent an average of 14% of
their total sales revenues on marketing efforts.
16
The automotive industry is the leader in total ad spending,
17
allocating nearly $10.1
billion to advertising in 2008. Despite a decrease of 15.5% over 2007’s expenditures, the
industry continues to lead ad spending even in its current economic state.
18
Ad spending for the
top 10 product categories is shown in Chart I:
Chart I:
2007-08 Top 10 Advertiser’s, By Product Category
Product Category
2008
(millions)
2007
(millions)
Automotive (Factory & Dealer Assoc.)
$10,016.1
$11,854.4
Pharmaceuticals
$4,344.1
$5,325.3
Local Auto Dealerships
$4,198.3
$4,604.6
Quick Service Restaurants
$4,080.5
$3,932.8
Department Stores
$3,809.9
$3,994.2
Wireless Telephone Services
$3,431.4
$3,731.6
Motion Pictures
$3,322.1
$3,750.6
Direct Response Products
$2,576.9
$2,358.9
Restaurants
$1,618.6
$1,619.4
Furniture Stores
$1,580.8
$1,636.2
Total: Top 10 Product Categories
$39,060.0
$42,808.1
Source: The Nielsen Company
19
Five automotive companies made it onto Nielsen’s 2008 list of top advertisers, across all
industries – GM, Toyota, Ford, Honda, and Chrysler. See Chart II for a complete breakdown of
top 10 companies’ 2007-08 ad spending, in millions:
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Chart II:
2007-08 Top 10 Advertiser’s, By Parent Company
Parent Company
2008
(millions)
2007
(millions)
Proctor & Gamble Co.
$2,848.2
$3,531.1
General Motors Corp.
$2,117.7
$2,488.6
AT&T Inc.
$1,662.7
$1,792.1
Verizon Communications Inc.
$1,614.8
$1,636.3
Toyota Motor Corp.
$1,555.0
$1,665.0
Ford Motor Co.
$1,416.1
$1,981.6
Johnson & Johnson
$1,211.0
$1,280.1
Time Warner Inc.
$1,077.4
$1,411.4
Honda Motor Co.
$1,016.6
$1,045.9
Cerberus Capital Management
$1,002.6
$1,456.7
Average Ad Spending
$1,552.2
$1,828.8
Source: The Nielsen Company
20
BRIEF HISTORYOF GAY AND LESBIAN MARKETING
To reach niche markets efficiently and cost-effectively, marketers run ads in niche media
and/or sponsor events unique to that market. When companies began reaching out to gay men
and lesbians in the 1980s, they ran ads in gay print media and sponsored gay/lesbian pride
events.
21
Later, “gay marketing” expanded into mainstream media by including gay and/or
lesbian spokespersons in ads,
b
without necessarily targeting the niche markets.
22
As will be
discussed later in the study, while Subaru has largely tailored its efforts to gay and lesbian media,
Subaru has crossed over into mainstream media, most notably by using a lesbian spokeswoman:
tennis champion Martina Navratilova.
23
Financial data about ads featured in gay and lesbian media was first collected in 1994,
through the joint efforts of New York-based multicultural advertising agency Prime Access and
New Jersey-based media placement firm Rivendell Media, Inc. Titled The Gay Press Report, the
firms jointly publish an annual “state of the industry” report with breakdowns of ad spending in
gay media.
As illustrated in Table II, ad spending more than tripled between 1994 and 2007 from $53
million to $182 million, respectively. As with mainstream media, gay and lesbian media felt the
financial impact of September 11, 2001, as companies poured less money into advertising, and
again from 2007 to the present, as the U.S. battles an economic recession. Prior to the recession,
2006 saw record-breaking revenues of $223.3 million, no doubt impacted by MTV Networks’
introduction of Logo, a cable television channel that provided marketers with direct access to
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b
"An example of this type of mainstream advertising is the 2009 CoverGirl Simply Ageless campaign; Ellen, an out
lesbian, is featured in the campaign, but lesbians are not the primary market.
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millions of gay men and lesbians. See Table II for a historical overview of ad spending in gay
and lesbian media:
Source: Prime Access, Inc.
24
Table III illustrates the percentage change in ad revenue between each year. 1997 and
2000 both saw large increases, upwards of 36%, illustrating the pre-9/11 boom:
Source: Prime Access, Inc.
25
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PROVIDING CONTEXT: GAY MARKETING, CIRCA 1996
Around 1996, when Subaru began advertising to the gay and lesbian communities,
companies in several industries were targeting gay and lesbian consumers, namely:
• Alcohol:
o Absolut Vodka (1987)
26
o Miller Brewing (1987)
27
o Tuaca (1995)
28
o Bud Light (1996)
29
o Sauza Tequila (1998)
30
o Beefeater Gin (1998)
31
o Johnnie Walker Red Label Scotch (1999)
32
• Financial:
o Wells Fargo (1980s)
33
o AMEX (1992)
34
o Aetna (1998)
35
o Chase Manhattan Corporation (1998)
36
o Citibank (1998)
37
o Merrill Lynch & Company (1998)
38
• Furniture:
o IKEA (1994)
39
• Telecommunications:
o AT&T (1994)
40
• Apparel:
o Diesel jeans (1995)
41
o 2(x)ist underwear (1996)
42
o Levi’s (1999)
43
• Airline:
o Virgin Atlantic (1995)
44
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o United Airlines (1997)
45
• Tobacco:
o R.J. Reynolds Tobacco Co. (1996)
46
o Philip Morris (1999)
47
• Computer:
o IBM (1997)
48
• Pharmaceuticals:
o Merck (1997)
49
o SmithKline Beecham and Abbott Laboratories (1997)
50
o Bristol-Myers Squibb Co. (1997)
51
• Insurance:
o The Hartford (1998)
52
o John Hancock (2000)
53
Despite the wide array of industries advertising in gay media, relatively few companies
overall were willing to risk potential consumer backlash, particularly automotive companies.
Harry Taylor, publisher of leading gay magazine Out, explained that automotive companies
“politely declined” Out’s request for ads in 1996.
54
IKEA, AT&T, AND JOHN HANCOCK RECEIVE CONSERVATIVE BACKLASH
Marketers may have been reluctant to advertise in gay media based on the backlash
experienced by IKEA, AT&T, and John Hancock. After running a mainstream television
commercial featuring a gay couple in 1994, IKEA received a bomb threat at one ofits stores.
Kathy Delaney, President/Chief Creative Officer of Deutsch (IKEA’s ad agency) explained, “We
knew it was going to be a polarizing decision but we thought it was the right one.” IKEA ceased
using same-sex couples in its television advertising until 2006 when the company debuted a
second commercial featuring a gay couple, this time with a child in tow.
55
Also in 1994, AT&T sent direct mail pieces with tailored messaging to gay and lesbian
consumers for the first time. Conservative organizations learned of the telecom company’s
marketing activities and protested. AT&T pulled the campaign after mailing one piece of
collateral,
56
steering clear of the market until 1999.
57
[...]... “Never follow.”75 SUBARU After providing an overview of the U.S automotive industry and a brief history of gay and lesbian marketing, the focus now shifts to Subaru COMPANY HISTORY Fuji Heavy Industries, Ltd (FHI), is the parent company of Subaru FHI’s roots extend back to 1917 with the founding of Nakajima Aircraft Co., Ltd., a manufacturer and distributor of aerospace equipment.76 Nakajima Aircraft Co... savvy customers are part of the “New Economic Order (NEO),” consumers who value quality over low prices alone and continue to spend during recessions.119 BRIEF HISTORY OF SUBARU’S GAY AND LESBIAN IMC EFFORTS 15 As a result of the market research findings, Subaru embarked on a new marketing path in 1995 to reach lesbians and gay men, beginning with corporate sponsorship of the Rainbow Card, followed... Sherman, Senior VP and General Manager of Logo proclaimed, “We are proud to partner with Subaru, a company that has truly raised the bar with the work they have done with and for the community to offer this meaningful campaign to our viewers.”167 GAY ORGANIZATIONS RECOGNIZE SUBARU’S EFFORTS Gay organizations began formally recognizing Subaru’s efforts in 2002, starting with the Human Rights Campaign (HRC)... loose.”228 Offering a different opinion, Spencer Moore, Manager of Corporate Communications for PlanetOut, Inc., owner of gay.com, argued, “Based on what Ford has said, it’s a business decision and some of their brands are still advertising.”229 After meeting with AFA members twice and subsequently announcing the ad pulls, Ford agreed to meet with 19 gay organization leaders on December 10, 2005.230 Ford offered... tie-in To promote sales of the Season 1 DVD set, Subaru ran a sweepstakes offering a vehicle as the grand prize.155 Further extending their support of gay television, Subaru executives served on The Ad Club’s November 2005 panel “The Queer Eye and What They Buy: Advertising to the Gay Market.” Few companies could rival Subaru’s expertise, given the company’s 10 year history of marketing to the communities... is a play on words, referencing Subaru’s launch of the 2010 Legacy model and the legacy of gay and lesbian entertainers The interstitials once again feature real-life gay men and lesbians discussing their lives, with Subaru branding appearing at the beginning only Viewers are guided to LogoOnline.com for more information about Subaru’s products as well as a showcase ofSubaru’s previous gay and lesbian... handling Subaru’s advertising, media planning, and media buying.107 Subaru had previously partnered with DDB Worldwide but decided to change shops on October 17, 2007, based on CMO Mahoney’s previous success in working with Carmichael Lynch while serving as Porsche’s VP ofMarketing For gay and lesbian-specific marketing efforts, Subaru had used Mulryan-Nash until the shop closed in 1999;108 as of 2000,... our employees work with pride Together we hope to create a reputation of distinction, service and respect.”170 The company’s rankings from 2002-2010 are featured in Table VI: Source: HRC171 In conjunction with HRC recognition, Subaru has been honored by various gay organizations for its efforts On November 21, 2005, the Commercial Closet Association honored Subaru’s Tim Bennett withits first Visionary... purchase a Subaru than other brands.176 Further research showed that as Subaru expanded itsmarketing efforts and changed the design of its vehicles over time, by 2002 gay men exceeded lesbians in number of Subarus purchased.177 For its outreach, Subaru affectionately became known as “gaybaru”178 and “lesbaru”179 by those within the communities; while the media first reported these nicknames in 2002, it... number of cars sold Although the increase to Subaru’s bottom line is not directly caused by its relationship with the gay and lesbian communities alone, Bennett definitively acknowledged the fact that Subaru’s relationship cultivation played a role in the upswing.181 FORD MOTOR COMPANY Like Subaru, Ford Motor Company has partnered with the gay and lesbian communities for over a decade However, despite its .
CASE STUDY
ENTIRELY COMFORTABLE WITH ITS ORIENTATION:
SUBARU’S SUCCESSFUL HISTORY OF GAY/LESBIAN INTEGRATED MARKETING COMMUNICATIONS
01/05/2010.
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ENTIRELY COMFORTABLE WITH ITS ORIENTATION
a
:
SUBARU’S SUCCESSFUL HISTORY OF GAY/LESBIAN INTEGRATED MARKETING COMMUNICATIONS
Companies