Much, and I mean much, has been written about the General Motors crisis. Some claim it’s hopeless. Others say there’s a chance that things will work out in time. No one writes about the fact that success or failure will not revolve around the GM brand.
(No one walks into a car dealership and asks for a GM car.) Their future depends on how well their remaining brands are positioned and how well each strategy is executed. In some ways it is a replay of Alfred Sloan’s eliminating a number of GM brands, and building a gigantic business around five brands that became a “car for every purse and purpose”. But that was then. What’s available in today’s highly saturated and wildly competitive automobile market?
First, what drives today’s most successful brands? In a word, it’s a word. The most powerful brands stand for a word or a concept. Toyota is about reliability. BMW is about drivability. Mercedes is about engineering. Volvo built a brand around safety. The problem with the GM brands was each lacked that simple differentiating idea. This was the result of each brand trying to be everything for everybody. What’s a Chevrolet? It’s big, small, expensive, cheap, truck, van or sports car.
So the task for the post bankrupt GM is to carefully figure out what their four remaining brands should be about. What is the differentiating strategy to pursue?
Interestingly, there are some obvious ideas on the table that they can move to preempt.
Let’s start at the bottom, Chevrolet. If you look at the numbers, Chevrolet has a chance to establish a leadership position. This is always a good strategy as people buy what other people buy. What’s a Chevrolet? It’s “America’s favorite American car”. Good value, variety and heritage can be the story.
Next up is Buick. Their first move is to stop making cheap Buicks. Don’t compete with Chevrolet. What you want to do is to compete with the cheap BMW’s, Mercedes and other luxury automobiles that are trying to go down in price to sell more vehicles. This sets up the concept that a Buick is about “quality without paying for status”. That could be a very powerful value story in a world that is buying less status.
Continuing up the ladder, we have Cadillac. This can never be a prestige car. The fancy imports dominate that category. What Cadillac can stand for is “Leading edge technology” in such things as engine performance, safety or electronics. Some people love to buy the latest thing.
Finally there is GMC. I’m not sure why they want to hang on to this brand but there is an idea they could use especially with the larger vehicles that use this nameplate. The concept is that of “Rugged reliability”. It comes out of their prior “professional grade” promotion of this brand only is a lot more meaningful. Of course they would have to deliver on that promise.
There you have it. Four brands well positioned in a tough marketplace. One could say that if they execute properly and stay focused on these concepts, they have a shot at success. If not? Well, let’s not drive there.
Stay tuned to Branding Strategy Insider. Tomorrow we have a special offer for GM management.
Update: The Blake Project’s offer for GM
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7 comments
Mark Juleen
July 23, 2009 at 1:41 am
Interesting take. The other brands you mentioned, Toyota, BMW, Mercedes (i may argue with you on the brand position you chose for them), and Volvo all cater to the senses and emotion of the brand. Toyota gives a feeling of security and reliability b/c of a history of well built vehicles. BMW gives a feeling of performance, strength and power b/c of the way vehicles drive and handle. Mercedes is a feeling of status and confidence that one has “made it” or is successful (at least in the U.S.) Volvo is definitely a feeling of safety and protection, however, has always seemed to be more niche vehicles because the feeling isn’t powerful enough for the masses.
I like to ask, how does a brand make you feel, and how passionate are people about that feeling? Other than the Chevy example, I think what you have described aren’t emotional enough, or just aren’t realistic enough to become emotional and drive passionate feelings. Another issue is that Ford or Chrysler have a solid position with like feelings as well.
People are passionate about being American, but Ford is a brand that pretty much claims that as well. Can Chevy have the same brand and compete? Buick has, and always will be known, as the last vehicle people own before they die. Even Tiger Woods can’t change that emotional tie. Buick screams: I’m old, I’m OK with that, so I drive a Buick. For Cadillac, “Leading Technology” is too niche like Volvo. It’s just not powerful enough on the emotions. And with GMC, I’m with you, no reason to hold onto this one. Jeep already has the “Rugged Reliability” brand tied up.
In the end, I think GM needs to create emotion with their brands. I think a Chevy and a Ford can both be “American” brands, so stick with that and be over the top with it. Drop the Buick line and make Cadillac the “Quality w/ Status” line of vehicle. Forget technology as it is expected in this level of vehicle at this point. That brand was built off of “Quality w/ Status” and they lost sight of that. GMC needs to just become a “commercial” line of vehicles as most of their vehicles are the exact same as a Chevy model anyway. So they’re down to two lines of vehicle. They have plenty of options to use stylings from Pontiac or some other lost brands for either line, but it’s all they need.
Oh, and thin out the number of dealerships. Do some real market analysis and determine where you are going to make the most impact without creating an overly price competitive market. Ask the foreign brands how they do this as they seem to have it under control. Bottom line, make owning an American car emotional again.
ernst
July 23, 2009 at 9:52 am
Two excellent posts.
People might slice and dice any suggestions to fix the brands but perhaps the most important point is that it’s better to have a clear and compelling focus – even though it might not be the best – than to have no focus at all.
People buy based on emotion and justify their purchase with logic. So, yes, make sure the focus creates an emotional benefit. Do the research, test and re-test options but in the end of the day, GM must settle on a focus for each brand.
Finally, all of the big three car companies need to stop treating their brands as “disposable.” With the help of an American, Mr. Edward Deming, who was sent to Japan to help reconstruct their industries after World War II,, Toyota revolutionized their perspective on quality. Each and every year, Toyota strives to make the Camry better. The Camry has been in the Toyota lineup for decades. Ditto the Corolla. And I bet the Prius will be around 20 years from now.
At one time, the Taurus was the best-selling vehicle in the US. What did Ford do? It let it languish to the point where it almost became an embarrassment. A cheap, second-rate sedan that one would more often rent from Avis that buy. How long will the Ford Fusion and Milan be around? A couple of years?
Ernst
Martin Jelsema
July 24, 2009 at 11:43 am
Of all the GM nameplates, Buick seems to me to be the only one with a personality and a target market. And it’s a personality that’s stood the test of time. I’m speaking about the car for older people. And with the growing Baby Boomer generation, that’s got to be a nameplate that endures and prospers – except for one thing: most IRA’s and 401k’s depreciated by 50% over the past two years. Perhaps government stimulus programs will help?
As for Chevy, I really resonate with Tom Peter s’ comment about it: “Nobody aspires to own a Chevrolet”.
craig
July 28, 2009 at 3:15 pm
1. Buick and Cadillac are natural counterparts. Cadillac has always been the party girl with lots of bling, while Buick has been the quiet (older?) sister. But there’s a market for both: it’s the car equivalent of Versace vs. Armani. So it makes sense to position Cadillac as the aggressive performance, showy line while positioning Buick as the precise, introspective line.
2. Chevy as an “Americana” line is actively harmful; as long as people associate Chevys with rentals they wouldn’t be caught dead owning, that brand strategy implicitly devalues all American cars by association. Chevy as a value/sport line makes sense, but in order to achieve that it needs to cede the trucks and Suburbans to GMC. Thus GMC has a natural role it can fulfill, that of being a “professional-grade” line.
Jerry
July 28, 2009 at 3:25 pm
An American car fan for 49 years…Chevys have always been sleek and look fast standing still ex camaro, corvette. Fords look stodgy ex mustang, flex, escape. With Volt Chevys motto should be “New drive for a new century. Buick… From a distance Buicks haven’t changed style in forty years. Their motto, Always a Buick. Cadillac is world class and beautiful. GM needs to decide who there market is for caddy.
Fred
July 29, 2009 at 3:49 pm
Cadillac should be “luxury performance.” And they can be a prestige brand because they once were (although very long ago). The feeling that they can’t be a prestige brand is part of America’s current lack of confidence — as if anything American can’t be as good as something built overseas. GM should not concede that, and need not.
Glenn Gruber
August 5, 2009 at 12:55 am
I really liked this post, but I’m not sure if these are good positions for these brands to stake out or just the best of a bad situation.
I do think that Mark Juleen made some valid points about Ford being able to make a similar claim to your Chevy positioning, but I do believe that Chevy has always staked out a much stronger “American” positioning, hearkening back to the “Like a Rock” campaign. So it is possible to win that spot.
Caddy is in real trouble though. I just went through the process of buying a car and I REALLY wanted to like the CTS, which along with the Escalade is the only Caddy of note. I thought it was beautiful inside and out, but when I drove it I was seriously disappointed. On top of all that it was much more expensive than the alternatives I was looking at. Weak product, along with weak positioning is a tough spot to be sure.
Now with Buick, I think the issue is that keeping this brand has nothing to do with the US market. The strength of Buick is not in trying to reposition the brand in the mind of the US consumer, but in trying to stake out a brand new position in the Chinese consumer. Buick by all accounts is a hot car in China and that’s probably the sole reason why the brand survived the re-org.
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