GM Has To Focus On Its Cars To Boost Sales
Put the brakes on the apologies. Think about your brands. And give us a reason to buy your cars.
That's what marketing gurus say General Motors Co. must do as it begins a massive overhaul of advertising worth more than $2 billion a year now that it's out of bankruptcy protection.
Since emerging from bankruptcy court last month, GM is looking to revive sales as it focuses on its four remaining brands: Buick, Cadillac, Chevrolet and GMC. Experts say it has to get back to basics and tell consumers why they should choose its cars over those made by rivals like Ford, Toyota and Honda.
The company can do that, they say, by showing how its vehicles perform and by staking out stronger identities for the brands. There's no better time than now, as thousands of Americans who normally wouldn't be buying cars are lured into showrooms by the government's "cash-for-clunkers" trade-in program, promising up to $4,500 off a car if vehicles with poor gas mileage are traded in.
GM knows it has work to do, and it assigned the job to legendary auto executive Bob Lutz, not exactly known for his marketing experience but a longtime product development chief known for his blunt style.
Lutz, now in charge of the largest U.S. automaker's ad content, promised "quick" and "drastic" changes to GM's tone after he took the job last month. But the company hasn't announced its new strategy yet, other than Lutz saying he wants to position Buick as a competitor to Lexus and Cadillac to BMW.
"My top priority now is to enhance the ability of GM to let the public know about what great cars and trucks we build," Lutz said in an online chat last month. "For all the money spent in the past, this seemingly simple task has eluded us."
The company says it is reviewing accounts with its many ad agencies. Lutz told The Associated Press in an e-mail that the marketing revamp is well under way.
"The new stuff is in the works, and it's great," he wrote, though he declined to say when it would start airing.
Chances are, the company may want to do it soon so it can capitalize on "cash for clunkers," which made last month the best for auto sales in nearly a year. Sales improved from previous months for GM, but they were still down 19 percent from the same time last year, while rival Ford Motor Co. posted a 2.4 percent increase.
Marketing hasn't always been a problem for GM. After all, it created some of the world's most legendary brands.
Decades ago, GM's ads helped link America's love of cars with the Detroit automaker. A generation grew up singing "See the USA in your Chevrolet" with Dinah Shore in the 1950s. Decades later, the company used rocker Bob Seger's song "Like A Rock" to sell Chevy trucks.
But particularly in the past five years, the campaigns became more varied and incongruent. Remember the 2007 Super Bowl ad featuring a robot who killed himself in a dream sequence?
"These were all over the place," said Deborah Mitchell, a marketing professor at Wisconsin School of Business. "One might say they should be all over the place because they've got different brands. But the problem is even within the campaigns, there was a lot of jumping around."
Consumers don't know what separates the company's brands like Chevrolet and Buick from each other or competitors, experts say. That's why sales were soft even before the recession started.
In the past four years the company racked up more than $80 billion in losses, even as it spent about $10 billion on advertising from 2005 through the first quarter of this year, according to TNS Media Intelligence.
GM has at least been quick to pull ads that aren't working, like a recent one for the redesigned Buick LaCrosse. The ad was widely criticized for, among other reasons, not having much to do with the vehicle. In the ad, where the sedan is featured as though it were a model, a director says he only takes pictures of "beautiful things" as the car is attended to by crew members, rests by a pool and on the beach.
A male voice at the end says: "You've changed. And I love it."
But few people did. Some in the marketing industry panned the ad for being too light and not making enough sense. Even when asked how the ad could have aired, Lutz said in an online chat that it tested well. GM pulled the spot after a month.
So what should GM do?
First, stop apologizing. The company must distance its corporate identity from its brands, said Jim Wangers, the marketing guru behind the Pontiac GTO, GM's first muscle car in the 1960s.
The company shouldn't do any more with its "reinvention" campaign, which admits the company made mistakes but promises change, he said.
"I would like to see them forget about apologizing, get out from under that GM umbrella and start beating somebody and start talking to me about that fine line of Chevys, Caddies and Buicks," he said.
But it's not simply a matter of telling the public through advertisements, said veteran marketing strategist Al Ries. GM must define niches for its brands and let consumers know, for example, how a Chevy is different from a Toyota, Ries said.
GM has been so focused on making its cars better that its brands are confusing to consumers, and this will take years to undo, he said. Consumers don't really know what makes a car "better" but they do respond to "different," he said, citing the success of brands with unique niches like Porsche, Volkswagen and Mini Cooper.
"You won't solve the problem by making better cars," Ries said. "You'll solve the problem by making different cars that stand for something."
The company's lineup is among the best in its history, said Peter De Lorenzo, publisher of autoextremist.com, who used to work in automotive advertising and marketing. But consumers think only two words when they hear GM, he said: "bad" and "bankruptcy."
"The negativity of what happened with GM will eventually recede into the background if the products are so good that they can't be ignored," De Lorenzo said. "But that will take time."
Check out more headline news.