On September 17, 2004, Ford Motor Company announced the details of a "revitalization plan" for its ailing Jaguar Cars subsidiary. The plan was aimed at cost savings and reducing excess capacity and overhead expenses (e.g., withdrawing from Formula One racing). In the same period, Jaguar launched a Web-based advertising campaign for its entry-level X-Type and a provocative ad series for its XJ flagship model based on themes from the Seven Deadly Sins. The case provides opportunities to discuss Jaguar's innovative ad campaign and to explore economic models that explain expenditures on non-informative advertising as a signal of product quality (handicap principle).
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