I preface this post with the caveat that we’re a huge GM family – both of my cars to date have been GM and almost everyone in my family buys American/GM. So this post is dripping with Love.
GM’s marketing “strategy” makes me want to bang my head into a wall. Strategy is in quotes, because I don’t think there is one.
The problem for American car manufacturers is actually pretty straightforward. 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 “care repairs”. And for good reason: 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. They couldn’t fathom a world where Americans would buy Japanese, etc. That resulted in decades of bad cars on the road, and the resulting bad customer experiences. Meanwhile, Toyota and Honda produced super-reliable cars that also gained attention for their fuel economy and design. So, that’s GM’s problem. (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 that’s the problem: everyone knows that GM makes really crappy cars. Do they? Well, something crazy happened over the 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 have now surpassed their foreign competitors in overall quality rankings. “Great,” you say– problem solved! But after decades of producing less-than-quality, it apparently leaves a stain on people’s memories. So there’s now an ENTIRE generation of car shoppers who grew up in cars that wouldn’t run properly. Ask almost any 20-something what they think about an American car and you probably won’t hear nice things. It’s actually completely out of the consideration set for my most of my friends. So how does GM get people to think about buying their products again? When all your product awareness is negative, I don’t think it’s by doing anything that they’ve done to date.
Over the past few years, there have been a multitude of random ad campaigns from GM. The post-9/11 “keep America rolling” campaign wasn’t terrible. Unfortunately, it reinforced consumers perception of a lack of quality that wasn’t worth paying for since the campaign was all about deep discounts. Then there’s the awful Pontiac campaign going on right now that has something to do with fireworks and college basketball. Cadillac, might be the lone brightspot. One of my favorite commercials of all time is a 60 second Cadillac spot that follows their various cars through memorable moments in American history. The image of Ali in a Cadillac riding in a parade, etc. It speaks to the concept of hard work, the striving for success, and the payoff. Cadillac is success. But anyway, my point is with the exception of Cadillac — GM’s marketing has been unbelievable forgettable.
A quick word on pricing. GM needed to keep their factories running due to union contracts, and so they cut and cut pricing. The downside to this is that once you train consumers to buy your products on sale, it’s tough to get them back to full-price. It’s a long-term overhang now.
GM should chose a strategy of ‘mea culpa’. Start with the “We get it. We didn’t make the best cars for years and you looked elsewhere.” You’re guaranteed to catch people off guard. For the first time in a long time, you’re no longer that annoying, irrelevant TV commercial with fireworks and other crap for a car that you would never consider purchasing. So you pause, and it gets your attention.
The next phase would then lay out all of the changes that GM has made in improving quality, reliability, and style. Use all the awards and recognition from the external world as proof — the reasons for people to believe GM. Run an entire campaign that ticks off all of the third-parties who have said “this isn’t the GM of 20 years ago.” Now GM’s got you primed, and you’re thinking — hmm, maybe there is something to that. No one’s running to the dealer to do a test-drive– but they’re maybe not dismissing GM out of hand now.
Now is where GM should bring in their crazy strategy. “We’re so confident that we’ve built a better GM. A better car than any other 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. The employe discount is the lowest price we’ve ever sold these cars for. We believe that once we get you in a GM, you’ll never go back.” Tie the insane pricing tactics into an overall strategic push back 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!
2/25/13 – Well, for about a year, I did drive a Cadillac. It was fun to drive. I still like GM and it’s crazy to think of how much they’ve been through in the 6 years since I wrote this post. Bankruptcy, etc. Their cars + advertising have improved. But I still think their advertising is mediocre at best. I guess some things never change.
Apparently, GM already has a new and effective marketing strategy, and that strategy is you with this post!
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 🙂
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!
It's a she 😉
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.
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.
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.
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.
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