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Brand Perceptions

Neglected Brands Face Costly Brand Perceptions

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2016 Chevrolet Malibu Brand Perceptions

Chevrolet has redesigned its 2016 Malibu and by most accounts the new model is significantly better than previous versions.

As a way to show how much improved the new model is, Chevrolet invited “Real people. Not actors” to take a look at it and give their well-edited opinions that you can watch here. The twist is that all the badging and logos have been removed so that they give their honest opinion of the car, not biased by brand perceptions.

They are indeed effusive in their praise for the car commending it for its styling and cool features. The moderator asks them to guess what brand it is and they come up with a range of luxury brands like Audi, Lexus and BMW. He also asks them to guess the price, and their guesses range from $50,000 to $80,000. Then, the big reveal: “What if I told you it’s a 2016 Chevy Malibu?” Not surprisingly, they are surprised “No way,” “Holy Cow”, “a Malibu?” and then even more surprised that the starting price point is only $22,500, some $57,500 lower than the top range of their guesses. “This has completely changed my mindset,” “It’s a game-changer,” “I want one,” the real people conclude.

“More than you expect, for less than you imagined.” ~ Chevrolet

As an ad, it follows a formula also used with the “It’s not your father’s Oldsmobile and “I thought you bought a Buick” ads, trying to get people to give their previously-undesirable cars another look. But this version was interesting in what it reveals about the value of the Chevrolet and Malibu brands. There was a huge gap between the real Chevy pricing and what these real people thought that the unbadged car was worth. They were guessing prices, on average, more than twice as high as the actual price, more than $30,000 higher.

Based on these numbers, the Chevy and Malibu brands are costing GM at least $6 billion per year (200,000 Malibus sold annually x $30K). That’s a hefty price to pay for years of neglect and shows the cost of many years of poor product delivery. Once expectations are low and people have set opinions about your brand, it can be very difficult and very expensive to get them to change their minds.

Clearly, making better cars and letting people know that you’ve done that is part of the solution but it takes time. Otherwise you have to do something dramatic, something like what Domino’s did with its pizza, to really break people’s perceptions down.

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