The GM Mess - A Marketing Perspective

One of my favorite pastimes was to read about the automotive business. While other kids were playing videogames or watching TV, when I was young my favorite reading was about cars and business. Fortune articles were some of my favorites. Reading the latest GM article in Fortune, "Death of an American Dream," recounted the 20+ years of trials and tribulations ending with how it has fallen to less than 2% of Toyota's market value. As a marketing guy, one thing struck me the most in how far GM strayed from some of the basics of branding. Durant and subsequently Sloan make GM a great company because they personalized the car from Ford's Model T. They may have shared components and management techniques, but each vehicle brand had a unique design and feel with differential pricing and features to distinguish it from other companies. The company rose to have over 50% market share of the US market, becoming the envy of the world.

How did things go so wrong? The list is long but I will do my best to focus on marketing. In terms of product, GM started taking each model platform and basically changed the grill slightly and then priced based on the brand. The Chevy Cavalier was the same as the Cadillac Cimarron - and it showed - based on the economy J car platform. In fact, GM would advertise the development of its platforms - J, X, A - over its brands. You would think they would hide the underlying platform owner so a Cadillac or Buick owner didn't feel like they were being ripped off with an overpriced Chevy, but GM's market dominance made it arrogant. They had strange justifications like they were simply graduating buyers as they made money. Sometimes the cars were so good like the Corvette that it would succeed in spite of Chevy's family-oriented and economy-priced positioning. But the homogenization continued. I still remember going with my parents to shop for an Oldsmobile Cutlass Wagon. The salesperson offered us a whole list of engines sourced from different GM brands and plants.

Over time, model differentiation improved, but brand communication still fell under the GM umbrella. Note the latest green advertising for E85 compatibility where GM headlines the ad with all 8 subbrand logo fall below. Then there's the bunch of hybrids under different brands and the someday to be released Chevy Volt all advertised under the GM brand. It's unclear why a Saab owner would want to know why their cool Euro sporty car is made by the maker of Pontiac. Or knowing that your import equivalent Saturn is a made by the leading domestic player. One of the reasons I bought a BMW 328i was because even though the Audi A4 was cool, it shared components with its VW equivalent - just look under the hood. I've owned VW Rabbits. Solid cars, but its not a sports luxury car like an Audi.

With its capital and rich heritage combined with the creativity of top ad agencies, it's surprising that GM took this marketing approach. When someone is spending a significant percentage of their take home pay, they are going to do some research. In the Internet age, its easy. Undifferentiated product, false tiers, uniform messaging across disparate brands - a recipe for failure. Reading Taylor's GM article, it makes sense.