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gm & marketing. marketing? what’s that?
i’d like to preface this post with the statement that the only two cars i’ve ever owned have been GM: a ‘93 pontiac grand am (se), and my current ride, a sweet ‘98 saturn (sl2). additionally, the vast majority of the cars my family has owned through the years have been GM or from another American manufacturer. And so this post is made with love. Not hate. Love. OK:
GM’s marketing (strategy) makes me want to bang my head into a wall. Repeatedly. I put “strategy” in quotes, because I really have to question whether or not that actually exists. Here’s why.
The problem for American car manufacturers, and GM specifically as the largest, is actually very simple. You should always identify your problem first. GM’s problem is that a very large cross-section of America thinks they make really crappy cars. You say “GM” and they think of “AAA”. Any why is this? Because back in the 1980’s and early 90’s GM stopped focusing on the quality of the cars they made, and more on the marketing. After all– would Americans have the audacity to buy a foreign car? Ha-ha– unlikely! Well, that resulted in over a decade of bad cars on the road, and the expected bad customer experiences. Simultaneous to this, Toyota and Honda notably produced cars that were known for their reliability, fuel economy and design. Enter massive problem, stage right. And for the purposes of this discussion, we will ignore the massive legacy labor costs and inefficient design systems that GM was burdened with, but their newer rivals were not.
So we have the problem: everyone thinks you make a really, really crappy car. But wait, something crazy happened over this last decade. GM actually cleaned up its act and got to work making better cars! They stepped up quality control, etc and fixed many of their most notorious problems. In fact, some GM cars surpassed their foreign competitors in overall quality rankings! “Great,” you say– problem solved! Oh, but wait– more than a decade of producing less-than-quality apparently leaves a stain on people’s memories. And so you have an ENTIRE generation of car shoppers who grew up in cars that wouldn’t run properly. I kid you not. It’s actually pretty astounding– if you were to ask almost any 20-something what they think about an American car, you don’t hear nice things. It’s actually completely out of the consideration set for my most of my friends. So how do you get trial, or people to think about using your product, if their only awareness is a negative one. Hmm. I’ll give you a hint– not the way GM has done it.
So over the past few years, I’ve seen a multitude of random campaigns from GM. I’ve seen everything from a decent “keep America rolling” campaign which started after 9/11 as part of the American auto makers strategy of “let’s give the car away– that’s got to help consumers’ perception of our quality” to a Pontiac campaign that had something to do with fireworks and college basketball. I’m still confused about those bizarre Pontiac commercials. Saturn had a campaign where people replaced cars. That seemed interesting, but again, I’m not sure it meant anything to me. (And this is coming from a guy who once dreamt of attending that Saturnfest-homecoming thing they did in TN.) There is a bright spot, Cadillac. One of my favorite commercials of all time is a Caddy commercial: it’s a 60 second commercial that traces Cadillac throughout the history of America and how it’s been the car that American’s have aspired to forever. The image of Ali in his parade in a Caddy is unforgettable. It’s something that everyone can relate to– you work hard and strive for success. Cadillac is success. But anyway, my point is with the exception of Cadillac and the early (pre-folding into GM) Saturn work– GM’s marketing has been unbelievable forgettable.
Pricing. I have to come back to this. GM (and of course, their peers) chose to compete on pricing. Which is fine, I get that they were in a tough spot. No one wanted to buy their cars, and they had all these factories and employees they needed to keep humming. So they just cut and cut their prices. That’s what you call a vicious cycle, because once people start getting used to paying cost for your cars– it’s hard for them to become untrained of this little habit. OK– I’ll leave this point alone here and get to what I’d do.
GM should have chosen (and still should) a strategy of ‘mea culpa’. Start with the “we get it. we didn’t make the best cars for years and you looked elsewhere.” And funny as it is, GM went down this risky road for a brief second and then hastily abandoned it (bad test scores?). Anyway, start with that campaign. You’re guaranteed to catch people off guard. And for the first time in a long time, you’re no longer that annoying TV commercial with fireworks and other crap for a car that you would never consider purchasing. So you pause, and think “hmm…that’s interesting.” The next phase should then lay out all of the changes that GM has made in improving quality and reliability (and most recently thanks to Bob Lutz: STYLE!!!!). Use all the awards and recognition from the external world as reasons for people to believe you. Have an entire campaign that ticks off all of the third-parties who basically say “this isn’t the GM of 20 years ago.” Now you’ve got them primed, and thinking of you in a new way. Likely not in a way that they’re running out to go test-drive a car– but they’re actually thinking about you.
Now is where you bring in that crazy strategy you did. “We’re so confident that we’ve built a better GM that’s better than any car out there- we want to prove it to you. We’re going to give our most precious asset: we’ll sell you a car for the same price we sell to our employees. That’s right, we’re offering you our employee discount– the lowest price we’ve ever sold these cars. We know that once you get back in a GM, you’ll never go back.” Use these insane pricing tactics as part of a strategic push linked to improved product quality.
All this frustrates me to no end because I actually like GM’s brands. Someday I hope to drive a Cadillac (maybe when the Saturn dies), and I still have a lot of love for the Pontiac and Saturn brands. And more than anything else, I have a lot of love for the thousands of GM autoworkers and GM itself. What gets lost in all the mess, is that GM (and its peers) have afforded thousands of its employees a much better life, and allowed them to send their kids to college and a life even better than the ones they lived. It’s upward mobility at its best. They offer pensions, etc that are now a noose around its neck thanks to declining sales– but speak to a social compact between employer and employee. All of this makes me love GM and want GM to do well. Yet, I’m disappointed every time I turn on a TV, log onto the Internet, or hear a radio ad.
Come on GM. Change some minds!
7 comments to gm & marketing. marketing? what’s that?
— 02/04/07 at 5:53 am
Apparently, GM already has a new and effective marketing strategy, and that strategy is you with this post!
— 02/05/07 at 12:00 am
Funny you should mention this, Surya. On Wednesday this week my marketing class has a guest speaker from the GM Vehicle R&D department coming to talk about engineering and marketing being used together at GM. Should be interesting after reading your post
— 02/05/07 at 12:06 am
Give him hell, Ben! Just kidding– but you should tell him about my post. I’m going to send it along to a few people at GM, but I want to actually hear from them. I’ve posted about two other companies so far– Fox Searchlight and their move “The Namesake” and Amazon and have heard back from both of them. I’ll have to post about those experiences soon. I’ll be interested to hear how the talk is on Wednesday. Off to San Juan!
— 02/05/07 at 6:36 pm
It’s a she
— 02/11/07 at 1:18 pm
I think the GM story is one of positioning; to wit, Al Ries has had the most insightful comments regarding the decline of the company, particularly Saturn. He writes for Ad Age now (a pay-to-read publication), but you can get his articles without paying at Ries.com. I will try to summarize a few of his salient points here.
In a March 2006 article titled, “Contemplating the Sorry State of General Motors,” Ries examines the current slogans for eight GM brands. Surya, you allude to this problem in your post. Here they are:
* GMC: “Professional grade.”
* Saturn: “People first.”
* Chevrolet: “An American revolution.”
* Pontiac: “Action.”
* Buick: “Beyond precision.”
* Cadillac: “Break through.”
* Hummer: “Like nothing else.”
* Saab: “Born from jets.”
Ries asks, “Do these slogans position the brands in any meaningful way? Do they tell you what the target market is for a Saturn? Or a Chevrolet? Or a Buick? Or how they differ from one another? If a Buick is ‘beyond precision,’ does that mean that Saturn, Chevrolet, Pontiac and Cadillac are not precisely made?”
He prescribes: “To start a meaningful branding process, the first thing that General Motors would have to do is assign a position in the marketplace for each of its brands. Then it needs to make sure each brand stays in that position.”
Then he gives his controversial thoughts on what GM should do. They include scrapping the GMC and Hummer brands – the former because it’s confusing vis-à-vis the parent brand; the latter because it’s a niche brand that’s 1.3% of GM’s unit volume. Surya, he agrees with you on Cadillac. In his words, Cadillac must stand for “Expensive. Really expensive.”
In an earlier article from Sep. 2005 titled, “The Sad and Unnecessary Decline of Saturn,” Ries recounts the story of Saturn: “Here is a brand introduced just 15 years ago in a highly competitive category. In 1994, just four years after its introduction, Saturn hit its high-water mark, selling 286,003 cars. That year, the average Saturn dealer sold more vehicles than the average dealer of any other brand … [It] had 16% of the ‘small’ or compact car category. Out of 23 models of small cars, Saturn was second only to Ford Escort.” He goes on to examine the 1994 market share numbers. Here they are:
* Ford Escort: 19%
* Saturn: 16%
* Honda Civic: 15%
* Toyota Corolla: 12%
* Chevrolet Cavalier: 11%
* Chevrolet/Geo Prizm: 7%
* All others: 15%
Of 1994, Ries reminisces: “That was the year the ‘Saturn spirit’ was in full bloom. That was the year 44,000 owners and families attended a ‘homecoming’ at the Saturn plant in Spring Hill, Tenn.”
My dad was a long-time Saturn owner (he now drives a Crown Vic), and he attended these events with my mom and brother, who also owned Saturns. (Ironically, my mom owned a Ford Escort before she bought a Saturn.) Surya, you aspired to attend the event yourself. Think about the kind of love for a brand people must have to drive from New Jersey (where you and I lived at the time) to Tennessee to visit a factory!
Ries goes on to recount how Saturn then changed its strategy due to Wall Street pressure. The feeling was that Saturn would need to expand the brand, instead of its market share, by introducing other models to retain their customers. The rest is history. To me, Saturn officially ‘jumped the shark’ when it introduced a sports car. It looks hot, I admit. But who in their right mind is going to buy a sports car from a company with a Honda Civic brand image?
Speaking of the Civic, Ries concludes: “In 1994, the S series Saturn outsold the Civic by 7%. In 2004, the Civic outsold the S series replacement (the Ion) by 197%.” A sad story indeed.
— 03/14/07 at 6:38 pm
I think GM still has to work on the quality improvement. I will give you an example. I love (and I mean it), absolutely love their Cobalt. It’s compact, it’s stylish, it has nice torque, I was very-very impressed with this car when I was driving it for the first time.
BUT …
I was renting Cobalt for 3 weeks in a row. I was traveling on business every week, so every week I was driving different car, but the same model. All 3 were brand new, just from the plant, with some ridiculously low mileage.
First car – when I tried to wash the dust off the windshield, the water was hitting the very bottom of the window from the passenger side. Small stuff? Yeah, but annoying, though I didn’t care.
Second car – the light was not working inside the car. Probably, just the bulb, but the car was NEW!
Third car – the air conditioning was not working properly, and it was a hot summer in Virginia, and I knew the previous car of the same brand was working better.
So, here is my representative sample, ALL cars had a defect, all of them. Small defects, yes, but when you run into defect on each and every car … makes you think. I will wait for another 10 years or so. Meantime, I will drive Toyota.
— 03/15/07 at 6:03 pm
The ad that slayed me was the one tagged: “for more information google Pontiac” The results came up with Pontiac Michigan, GM.com etc. Was trying to figure out what was the point. Sending someone to a search engine for information, is like asking your wife to meet you at a Chippendale bar. She might find you, but not without a lot of distraction!
There is a better way, but this is not the forum for self promotion.