"Our cars are every bit as good as Toyota's... Americans are just biased against us"
In 2004 I was attending a meeting in Detroit with the senior muckity mucks of General Motors. Bob Lutz, the King of the Island of Misfit Toys, bellowed this (with a straight face) as we began to review the lineup of 2005 introductions that were slated to "slow their share decline."
Really Bob? Really? Because if that were true that would mean that Americans are so principled they would refrain from buying the very car of their dreams just to prove a point. Now, we know that's not the reality. Americans are far more self-driven than that. If GM were to introduce a car that people actually cared about they would assuredly buy the damn thing. Heck, there are many examples of this very phenomenon coming to life in the world of cars. Was it cool to drive a Chrysler before they introduced the 300M? When that thing launched Snoop Dog himself was on the phone ordering his own personal fleet. Was it fashionable for anyone to own a Cadillac under the age of 65 before the launch of the Escalade? Was the upper middle class psyched to buy a Ford before the Explorer rolled off the assembly line? No... they weren't.
A relevant product is just that. Relevant. Which means... it fits a roll within a large enough consumer group to make it a success. Sales follow, profit follows sales, and everyone goes to bed happy.
But more important than the short term benefit of sales and profit is what a great, relevant product does to your brand. It's catalytic. It makes your brand real. It makes people give your products credit as being good before they even launch. GM has most definitely lost site of this very simple idea. They were, back in 2003/2004, the second largest advertiser in the world. In the WORLD! So, any short comings of their "brand building success" was certainly not due to a lack of investment. In the 3 years I worked on the GM business I attended five brand "relaunches." Across 3 brands. 3 years, 3 brands, 5 relaunches. How can that be? How can you reinvent your brand every 1.2 years when the average model life cycle is 4 years? How can you swap the brand veneer when nothing else has changed? "Buick is now 'American Luxury'" Really? Who says? "Pontiac is now 'Fuel for the Soul'" Hmmm... do you mind that your consumers have no idea what that means? No? Proceed. "Chevy is now... AN AMERICAN REVOLUTION!." If by revolution you mean the first auto maker to lose $2 billion a month. It reminds me of another very important branding principle my old boss liked to say... "The tough thing about consistency is you have to stick with it."
It may not seem like it but I want nothing more than to see the American car industry pull out of the violent nose dive and begin to function profitably once again. I really do. But it's going to take more than well-funded messaging campaigns (including high-dollar 'Idol' sponsorships) to change things. They need to clean house - get rid of 90% of their current offerings. They need to look at the marketplace and start fresh. If they were opening for business today, what would they build? Stop following... it's embarrassing when you show up after the party has been over for 3 hours and the hosts have gone to bed. In short, focus on the product.
Why? Because their brand is driven by, and limited by, their products. Make fresh stuff and people will buy them. Hell, even I'll drive a Ford if you give me a relevant, competitive product. But, unfortunately I have driven a Ford lately.
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ReplyDeleteLet's try that again...
ReplyDeleteWelcome to Blogland!
Great to read your two cents worth.
Now go read mine!
http://theparentingmyth.blogspot.com
Nice post, Nico.
ReplyDeleteBrand awareness is great - but the product very often IS the brand, as you eloquently say. TiVo has a great brand but if it didn't work, no one would care. The same is true for the iPod or anything else -- sure, the iPhone has faults, but it's product superiority in other areas outweighs the negatives.
Detroit has had its head on so backwards for so long that it's no wonder that consumers abandon them.
Let me throw something else out there: The biggest issue isn't that they aren't producing relevant cars (they are in some cases) or that they rebrand every 1.2 years (a 50/50 chance), their major issue is that they take their relevant car and rebadge it 7 times over rendering the "relevancy" insolvent for both the vehicle and the originating brand. This is because at their core, GM believes that a badge (brand) should be all things to all people...making the tag line the most important part of the brand rather than the relevancy of its vehicles. The GMC Acadia was a huge hit for them and brought a new segment of the buying public to GM. But within months there was a Buick Enclave, Saturn Outlook and Chevy Traverse to take all the wind out of the sails. Look at Saturn. This was a brand build upon something different and for years it was. But today? Today every vehicle they have (except Vue) is a rebadge. Why buy a Saturn (the commercial tune is catchy).
ReplyDeleteNow, as for rebranding, of the two divisions that had the longest running brand strategy, one was a success (GMC) and the other a huge failure (Saab). GMC's Professional Grade gave the brand an identity. GMC buyers were graduated Chevy buyers...upscale but still workers. It works. Saab's Born from Jets was and is ridiculous. What does that say about the brand? Hell, they could have said "European heritage and styling without the conversion rate" and sold double the vehicles every year because that is who buys Saabs.
So, is the argument that GM should shutter all its brands and just go at it with the blue box logo? Maybe that makes the most sense.
ReinsFan,
ReplyDeleteThanks so much for your thoughts. Your perspective definitely brings up an additional but inter-related point, GM's struggle with creating and maintaining defined brands within the portfolio. At one time in the past, each brand did have distinct products and reasons for being. That was lost in an effort to become "more efficient." They felt that sharing platforms would be a good way to save money. But pretty soon following they began to share the entire vehicle. This created the erosion of each specific brand, and soon no one outside of the Ren Cen had any idea why a GMC was different than a Chevy or a Buick. And in fact, the products weren't significantly different.
When I was a little kid and would get a paint set I was always thrilled at how distinct and vibrant each color was in its undisturbed, new state. Soon, however, through my own carelessness, the colors would become mixed with each other. And eventually I was left with one color... a muddy brown. Do you see the analogy here?
Lastly, GM has always struggled with building 3 brand levels - maker, brand and model. For example, do people actively credit GM (as a company and brand) for the Chevy Corvette? From the research that I have done, the majority of consumers see very little linkage from model level up to "GM" as a company.
Again, thanks so much for your thoughts. I couldn't agree more.
Well, how about this: Bankruptcy forces GM to create good, better, best buckets for their vehicles and what do they do? Center everything around Buick. They can't get out of their own way.
ReplyDeleteA core brand of Chevy and Caddy handling low-high end cars and Chevy and GMC handling low-high end Trucks/FSPUs solves the riddle and "could" make them a force to be reckoned with. But they stick with Buick because it has such traction in China. Buick's badge is diseased here beyond repair (at least in the short time frame they have to fix it) and it is unnecessary in the situation I list out above.