Marketplace Scratch Pad

Our little company

Scott Jagow Aug 17, 2009

Thought you might like an update on how your investment in General Motors is going. Unfortunately, our little company isn’t little enough. By the end of next year, GM still plans to be marketing four brands and selling 34 different models.

Ad Age says GM is leaner and meaner, but not by much:

“The problem isn’t that 34 is too many models; it’s the number of distinctive models,” said Maryann Keller, an auto consultant who has authored two books on the company. “It just feels like the same old GM.” She noted that several models under each of GM’s brands are butting heads with similar models at sibling brands. For example, the new Chevrolet Traverse is up against its sibling at Buick, the Enclave, and GMC’s Acadia. “The problem is they overlap and compete for the same buyer.”

And that’s not the only problem:

“GM’s strategy looks very much like the strategy it used in boom markets,” said (Susan Jacobs, president of Jacobs & Associates), who sees GM’s revival plan under design-guru-turned-CMO Bob Lutz as focused on cool-looking new products and new kinds of marketing. That approach won’t work in the current economic climate since consumers will buy new vehicles based on functionality and affordability but won’t pay a premium for styling.

Ad age consulted some experts who have these words of advice for our company’s management: don’t say the letters GM ever again.

Auto experts agreed the carmaker should quit talking about the tainted GM brand and get on with the business of promoting its vehicle brands. “They shouldn’t even identify themselves as GM. People don’t buy GM cars; they buy Cadillacs and Chevys, and that’s what they ought to be talking about,” Ms. Keller said.

“It seems like they are going back to their old ways,” said George Peterson, president of AutoPacific.

GM still has too many mouths to feed with advertising and product development and should not focus on GM as some huge super-brand, Mr. Peterson said. He said GMC’s all-truck lineup “pretty much parallels” Chevrolet’s truck portfolio, which is why he would have preferred to see GMC killed. He said he’s “saddened by the company’s announcement last week to beef up Buick’s lineup,” since it appears that brand will absorb models intended for Pontiac, which is being eliminated, and Saturn, which is being sold.

Oh yeah, that’s the other piece of advice.

Kill Buick.

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