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Brand Watch Derrick Daye

Branding Lesson Found In GM’s Rubble

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GM General Motors Branding Lesson

GM's financial quagmire and bizarre labor and bureaucratic practices notwithstanding, branding (or lack thereof) was a big part of their problem.

However many MPGs your car gets, or what quality ratings it receives, cars, like most products and services (perhaps even more so), have a large emotional component that isn't an optional extra. Your brand either stands for something in the mind of the car buyer or they walk away from your brand and drive another home.

We're not just jumping on a fallen giant. We've been saying this for years and as loyalty metrics are leading-indicators of consumer behavior and profitability we weren't surprised to see GM steadily lose market share, from 54% to 19%.

GM lost touch with car buyers, but that shouldn't have been surprising to folks either. They had too many brands, many of which had neither emotional resonance nor meaning. Everyone knew them (so much for awareness ratings), but nobody knew them for anything other than "cars." Experts have pointed out that GM practiced "launch and leave" branding, i.e., companies spend billions upfront to introduce a vehicle, but then fail to support the brand with sustained, meaningful advertising. And to complete the self-fulfilling marketing loop, with a shrinking market share GM couldn't possibly give its multiple brands and models the individual attention they so desperately needed. That explanation's fine as far as it goes. If you really pay attention to what GM did you'll find that they weren't really very good at branding or marketing. Not when they had to actually compete.

We turned to our Customer Loyalty Engagement Index to look at the emotional driver in the automotive category – "Right Car For Me" – to see how major auto brands ranked on that critical dimension, and here's what the top-20 ranking looks like:

1. Toyota
2. Mercedes
3. BMW
4. Subaru
5. Cadillac*
6. Jeep, GMC*
7. Honda, Volkswagen
8. Hyundai
9. Nissan
10. Hummer*
11. Lincoln
12. Kia
13. Ford
14. Chrysler
15. Mercury
16. Saturn*
17. Chevrolet*
18. Buick*
19. Volvo, Saab*
20. Pontiac*

From a brand perspective, kind of creepy, huh? Now GM's brand lineup is being halved, with the company jettisoning divisions like Pontiac, but from a brand perspective the bottom line will not improve if they can't figure out how to imbue the metal with some emotion.

The Brand Keys bottom line: Real loyalty metrics – being leading- indicators and all – might have helped them. They still could when they get around to "reorganizing" the GM brands and decide to stop talking to themselves and start looking at the category through a consumer windshield.

GM's bottom line? The stock fell steadily from about $70 at the start of the decade. It closed at 75 cents a share on Friday.

Contributed by: Robert Passikoff, President, Brand Keys

Jack Trout addresses the GM saga here.

Sponsored byThe Brand Positioning Workshop 

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3 Comments

Chris Wilson on June 03rd, 2009 said

Needless to say, General Motors has made many mistakes over the years, so it’s hard to say that any of their decisions where the one that contributed most to their decline.

But I think that poor brand architecture could have been a heavy contributor to GM’s struggles over the years. They have had too many vehicles making it a challenge for them to manage and for consumers to comprehend. My opinion is that trimming the line years ago could have given consumers a starting place to get to know the GM brand in ways deeper than the metal.

Randall Beard on June 04th, 2009 said

Another branding lesson from the automotive industry is this: why do these companies take the time and effort to create and build brands like GTO or Taurus, and then kill them ? This has always mystified me, unless they were deemed to be beyond the point of resurrection. The choice to be in too many brands with too many vehicles, also resulted in a lack of critical focus on their most important brands. It’s great to see at Ford that Mr. Mullally rightly asked the obvious question: why did we kill the Taurus ? Now, the key is to really invest in product and brand building activities to make it “for someone like me.”

Randall Beard

Derrick Daye on July 25th, 2009 said

We have a branding offer for GM:

http://www.brandingstrategyinsider.com/2009/07/a-brand-consulting-offer-for-gm.html

Derrick

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