GM Marketing

[Guest elk93001]

From TheCarconnection.com 5/20/05

LaNeve: GM Wants MINI Marketing

GM's sales and marketing chief Mark LaNeve said Thursday he is trying to make the struggling Pontiac and Buick brands more like MINI and Porsche.

What's that?

LaNeve doesn't want dealers to get nervous thinking he is going to take Buick and Pontiac down to one model like MINI. But what he does aim to do is focus the two brands like MINI and Porsche by limiting them in the future to maybe four models apiece. "In a few years, MINI will have three or four models and that's where Porsche is now. Nobody doesn't understand what those brands are about," says LaNeve. Dealers shouldn't be too worried, he says, because over 80 percent of GMC and Pontiac dealers are dualed now, and 50 percent of Buick dealerships are teamed with GMC-Pontiac stores. That will go above 90 percent over the next few years.

"We aren't going to grow market share with Buick and Pontiac, but we can increase profitability by focusing each on a smaller number of models that truly reflect the brand images we are creating, and that frees us up to channel engineering resources to Cadillac and Chevrolet where we think we can grow share. GMC, Buick, and Pontiac will be treated as one product portfolio going forward without the costly overlaps the brands have now.

"We'd never approve the Buick Rainier going now," said LaNeve, addressing the International Motor Press Association in New York. He added that Cadillac and Chevrolet need to be able to better compete against Toyota and Lexus. "If we have $900 million to spend on four barely differentiated models or on two segment breaking models we will choose the two models - that's where we are going."

"We think our eight brands are an asset we can leverage, but we have to manage it better," said LaNeve. "What I am talking about is Marketing 101, but we have to keep learning it over and over again." -Jim Burt

"Channel engineering resources to Chevrolet and Cadillac" You've got the basic bottom of the wrung cars with Chevrolet all the way up to the Corvette....How much more does Chevy need? Now we see where the priorites are..... Any guesses on how long after the merger of all Buick and Pontiac delaers will both brands disappear?

[Charles2]

To me it sounds as though GM management has a death wish.

[jscheib]

Do you suppose the GM spokeperson forgot they also own Saturn? I guess that would carry on. Do me that brand should be merged with Chevy if they really want to streamline. Seems like too many low end choices.

John

[Guest my3buicks]

I heard a blurb on the news this eve about it and Saturn was lumped with GMC Saab, Hummer, Pontiac, and Buick

[NTX5467]

With all due respect, those remarks sound reasonable on the surface. From the way GM operatives and contractors have been implementing "Marketing 101" in more recent times, it makes me wonder if they got that class "by fee" from some bogus online "university". What has not been mentioned, but more important, is "Corp Finance 085".

For Buick to have a minivan and a utility type vehicle in the lineup makes as much sense as Toyota having utility/crossover vehicles and TRUCKS in their lineup. In the case of Toyota, their "threat" of really infiltrating the sacred light truck market of the home teams has not really materialized. This is because Toyota expanded into those areas to keep their existing and LOYAL Toyota owners buying Toyota vehicles rather than having to go to other makes for their utility and light truck needs and desires. If they left Toyota for those (other brand) vehicles, then "somebody else" would have a chance to also get their vehicle business (away from Toyota). So, those products keep them "in the fold" with Toyota. Similar can be the situation with Buick and Pontiac, etc. -- plus GM.

To me, the hidden message is that new projects need to be prioritized more than ever in the future. Yet if those fewer products do not result in greater per model sales, then it could affect the productivity index/break even point for the assembly plants. In other words, if the plant has the capacity to add a Buick model into an existing Trailblazer, Envoy production mix AND needs that extra product to help "pay for the plant", then what's to really lose if you keep the plant more fully utilized AND open up new product areas AND additional corporate sales in the process? The sales figures plainly indicate that when Olds models started to "not sell" after the fatal announcement, GM's total corporate sales similarly declined (and did not recover). As always, TWO ways to look at the product mix and opportunities that greater product diversity and numbers can offer.

Might this whole speech orientation be a set-up to prove that GM's resources might be more limited than anyone might desire to admit? A further orientation of "cutting expenses to prosperity" rather than better using existing products to grow the market? Is that glass half full or half empty? And can it be used to get more water in the glass in the future? Or just watch it evaporate away . . .

The Detroit News has a CyberSurvey on LaNeve's speech. One responder noted that in prior times, when almost every division (other than Cadillac) had "one of everything" in their lineup (i.e., compact, mid-size, full size), GM controlled about 60% of the total vehicle market in North America--which makes a good case for more product than less product in order to regain sales leadership.

With all due respect, there can be many hidden messages in LaNeve's comments. Getting more brand identity for the GM divisions (NOT brands!!!!) can be a good thing, even if there are price overlaps or "similar products".

Just some thoughts,

NTX5467

[Reatta Man]

NTX,

Thanks for noticing that letter to the Detroit News. I wrote it. And, more importantly, I still think this is a terrible step for GM.

If you use current examples, Toyota takes their larger cars, adds a few bells and whistles, and suddenly Lexus is born. Same for Chrysler; the Crossfire is basically a Mercedes model. And, lest we forget, the new Cadillac roadster is being built in the grossly underutilized Corvette factory. Yeah, I know Corvette production is high now, but historically, the plant's production schedule has ridden a roller coaster, based upon the popularity and sales of one make and model. With the Cadillac, the plant will be utilized and GM will produce a profitable hot rod at relaitvely little design and preproduction cost.

So, why, then is it a bad idea for GM to make the Gran Prix and other models such as the Lacrosse in the same plant, if other factors allow it?

Just remember, GM's recent market slide and plant closings starte AFTER they put the ax to Oldsmobile. Car buyers smelled blood in the water, and that was stacked on top of the bad press GM often gets from biased media like Consumers Reports. And so, the slide in market share started, and it appears, it isn't over.

Joe

[Guest bkazmer]

Toyota and Lexus share a platform only at the low end of Lexus - the Camry, ES, Avalon,Solara are kissing cousins. The other Lexus models are rear wheel drive.

(Yes, I know the Altezza - IS, but you can't get an Altezza here).

So how about Buicks are RWD and Pontiacs FWD?

[Guest imported_Thriller]

Buick was pretty successful with 4 models...in the '50s and early 60s. Of course, each model had a number of configurations (sedan, HT, 2/4 doors, conv., wagon). Perhaps simplifying the brand makeup is good, but I won't be buying modern Buicks then (mid-size four door cars don't cut it for a family of 5). Even what is now called full-size really isn't - rear leg room and overall width don't cut it (when I got my driver's license we had a '77 Mercury Marquis).

So right now, my best bet for buying a Buick is a Rainier. I have a good relationship with my Pontiac / Buick / GMC dealer. I don't have the same relationship with a Chev dealership, so to me, if I can't get a Pontiac / Buick / GMC model that meets my needs, I'll be starting over and not necessarily going to a GM dealer.

I don't know about elsewhere, but where I live, auto parks have sprung up - the owners of a variety of dealers buy a bunch of land in one spot and move all their dealerships there. So, if you don't like what the GM dealer has, you go a hundred yards over to the Ford dealer, the Honda dealer, etc. The same folks own them all, so to them a sale is a sale, regardless of the brand.

I still like to come back to the concept of building what people need. Years back, I was looking at full size vans to give me towing capacity and passenger space - nobody had any on the lots. GM was the first to offer an 8 passenger minivan, which I liked, but again, hardly any on the lots - one of the two I leased had to be ordered. I wanted a fairly loaded 2 wheel drive pickup - had to be ordered since everything on the lot was 4wd. I think you get my drift. Perhaps I have unusual needs / wants in vehicles, but I think I am fairly pragmatic about it.

Well, that's about enough blathering. I don't really get marketing in general...build something that meets my needs first, then worry about the finer details.

[JohnD1956]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> We aren't going to grow market share with Buick and Pontiac, but we can increase profitability by focusing each on a smaller number of models that truly reflect the brand images we are creating, and that frees us up to channel engineering resources to Cadillac and Chevrolet where we think we can grow share. GMC, Buick, and Pontiac will be treated as one product portfolio going forward without the costly overlaps the brands have now.

</div></div>

Sounds like we'll be able to buy a GMC Buick, or GMC Pontiac, etc. to me. Lack of product overlap? Lets see, the Saturn will get the equivalent of a Caviler/Cobalt, the Pontiac will get the equivalent of a Grand Prix/Lacrosse, The Buick will get the equivalent of a Lesabre/Lucerne, and the GMC will be all trucks.

Hopefully the cars will enjoy some engineering progress from their richer siblings in due time, but once the numbers aren't there for the one Buick or Pontiac etc member, the marketing 101 plan turns to chpt 7.

I only hope that raises the collectibility prospective of the few toys I have.

Sad, sad, sad!

JD

[NTX5467]

Some great comments in that DetNews.com posting, ReattaMan!

I ran across an article in some automtive design magazine (online version) a few weeks ago. It was on Holden and how they had become so succesful with few resources "down there". One basic vehicle with two wheelbases, from which the whole product line is built. Kind of like, in concept, Chevrolet and Pontiac in the 1960s era timeframe, or Buick in the same time frame (junior and senior models), or even Oldsmobile too.

Somewhere, back in the early 1980s, the "purpose built" architecture orientation was put in place in Detroit (or at GM). Hence, when a Camaro body was built, it knew THEN whether it would be a 4 cylinder or a Z-28 as it would get things added to it (body wise) that would define the body shell for that particular model. From that first start, we now have a proliferation of about THREE chassis styles underpinning the current light truck C/K trucks, with different steering systems and suspension systems too. Used to be that there was a 2wd platform and a 4wd version and that was it. Not sure why the Suburban and the long wheelbase light truck have always been different wheelbases either, yet I'm sure there must be a valid reason somewhere.

I strongly concur that as long as factory capacity is available, adding different products into the mix is a good thing. I highly suspect that that is why we ended up with the last gen Buick Roadmaster, built in Arlington, as when certain parts of the B-car production went to other plants, there was a need for another product in Arlington to keep it profitable. I highly suspect that those who seem to constantly close assembly plants might not be fully aware that a certain minimum number of vehicles need to be produced by that plan to keep the financial end of things running as they need to, plant-wise.

Seems that many financial operatives are in the mind-set that "We can't do that . . . (for whatever reason)" as they typically are looking at things to increase profits and cut costs (which is THEIR area of finesse). Marginal operations are considered "bad" rather than "underutilized", hence they need to be cut to (allegdly) free up resources for other more profitable areas. Now, put these comments into historical perspective over the past 20 years at General Motors.

In order to have "hits", marketing researchers went "in search of truth" of what the customer really wanted. A good orientation but one that, as implemented, just served to slow product flow down. No investment in product, compared to what Ford (for example, with the Mustang) was doing further made the "marginal" look "increasingly bad". Rather than energizing and refocusing marketing activities, programs were put on the chopping block for future deletion. Add in, somewhat possibly, some hidden agendas of "management" and things tend to fall into place (as they have happened).

GM has had some really good successes in the past, but it appears that the "old is dead" or "old is bad, we need something NEW" orientations kept those past successes from being built upon for future products. It appears, by observation, that if there was something that worked well, when that program ended, it ended and somebody else was brought in to run the later programs (who most probably might not have been involved in the earlier programs and did not know what made them work as well as they did). Then, there was (seemingly) the "parade" through the head positions of Oldsmobile (most notably), which further eroded continuity. Not to mention the various "combination" orientations going on at the same time.

End result, each "marketing" division seemed to have few people "running things" that really had a psychological contract (with the particular division) to make it the best it could be -- or knew WHAT it should be -- as it was, most probably, "just a job" to them. When the people that knew what each division "was about" seemed to retire, by observation, they typically were replaced with "short timers" that were more beholden to their bosses than doing what was really correct and right to do with the product lines they were in charge of.

Then, at the area "competition", the Ford operatives seemed to have one hit after another (in varying degrees) and made very good plays on the Ford design and marketing heritage and the Chrysler operatives (of the 1990s) did their product research, saw the opportunities, took some chances, trusted their instincts, and had one hit after another back then. Clearly, the Chrysler operatives "caught the wave" and fully utilized it for what it was worth, knowing that the cycle would downturn in the future. Even lofty General Motors had to change some of their designs to keep up!

There are lots of "car people" that work for the car companies in Michigan, but it seems that at GM, they are not as high up as they need to be in the decision-making processes. The Chrysler operatives seem to have more "motor oil" in their veins, especially back then, than many GM upper managers do, and at Ford, it can be about "family pride" as they hit the sweet spot with products that allude to past "good products" as they move into the future.

We would all like for GM to get reinvigorated as it need to be and CAN be, but when so much effort is seemingly spent on "crisis situations", the ability to see past the next crisis tends to go away. Finances are important in any large (or small) corporate entity, but when "finances" seem to be the main focus rather than what generates profits in the first place, something needs to stop and be re-evaluated from an operational and opportunity basis.

It's acknowledged that GM needs some neat products, but I might add that they need to originate "up here", with all due respect. Globalism is good from a manufacturing standpoint, but it should not be a particularly overpowering situation in North America. In other words, what's sold "here" should be designed "here", not particularly just a rehash or "rebadge" of something from across the water. I highly suspect that if the GTO had been part of the Sigma program, yet a less expensive version, with some Genuine Pontiac styling cues from prior GTOs, that it would have been a much better selling product. There's no disputing that the Holden "GTO" is a mechanically great vehicle in so many respects, but it lacks that "Made In The U.S.A." orientation as the original Pontiac GTOs did. Not to mention lacking that "gotta have" styling that made the '66 era GTOs look so great.

GM might build Chevrolet/GMC light truck vehicles in Mexico and cars in Canada, but these vehicles' heritage and orientation is "U.S.A". Vehicles that are sought after in other regions of the world too!

Remember the Ford Probe? That was (by accounts back then) secretly going to be the "next Mustang" . . . until Mustang loyalists found out about it and let Ford know what their feelings were. Too late to stop building the plant at that point in time, so the Mexican-built "Probe" was born and Ford listened to the Mustang loyalists and then produced more "hot selling" Mustangs with the Mustang loyalists' suggestions incorporated in the later designs. Ford seemed to make improvements in the existing Mustangs right up until the end of that Fox platform, while GM seeming tried to forget about the Camaro during the same timeframe. Another "poor sales = no product investment = future product deletion" situation.

There are bunches of "outsiders" and "insiders" in and around GM that could seemingly make better decisions that some that have been made in the past decades (regarding products and orientations). People that care more about the product than just doing a job, per se, and would be willing to fight for it. Or find better ways to do things with limited resources (as Holden as done). Not to say that there might be some "just a job" people at GM or elsewhere and that they don't do a good job at what they do, but just that sometimes, when there's a psychological connection with the ultimate product that "better things" can happen--a psychological connection that seemingly retired with many former individuals of the GM car line divisions.

Perhaps . . . with the knowledge base we have here, GM ought to turn some of their existing advertising agencies into "media buyers" and let US design the advertising campaigns in our spare time. WE make the decisions, they implement them as we oversee their production, and then they put them in the market at the best placements. I suspect that we'll work less expensively and produce better results. Obviously, many of the people working on those advertising accounts are "less vintage" and might not fully understand some things relating to "heritage" and how important they can be. Again, not that they might not be focused on their jobs, but just that they might not have observed and understood "heritage" prior to 1980. All a matter of focus and knowing what came before . . . Just a matter of directing their boundless energy and drive in the better directions.

Even with all of the "focus" (short term, that is) on the many alleged problems at GM, with the necessary time interval between plan and implementation thereof, the sales cycles will probably head upward about the same time that GM's fortunes improve (with current intitiatives operative). As it's been said, "Nothing that a few more car sales won't fix". This just happens to be a "down cycle" for GM and some of the wolves are hungry.

Yet in the process of "fixing things", some "higher profile" things are focused on rather than some underlying issues which can contribute to higher profile situations. GM has the opportunities to do great things, but not with the existing mind-set that "We can't do that . . ." rather than seeing opportunities and grabbing onto them. Oh, that's right, China was an "global opportunity situation". Globalization might be "the rage", but there has to be a certain focus on the home market organization in the process too--the home market from which all other things have "sprung". In other words, don't forget to "Dance with the one that brung ya", even if there is another good looking opportunity across the dance floor (that might share a later dance).

Maybe larger corporations go from one crisis to another, as a normal matter of course? I would hope that corporate "excitement" is about future products and the successes of current products rather than "putting out fires".

Just some thoughts,

NTX5467