General Motors has 8 brands, but what does the GM brand actually represent? "How Detroit drove into a ditch" is the headline of an article in the Oct. 25 issue of The Wall Street Journal. When the most respected business publication in the world writes a 2,000-word article on the problems of the U.S. automobile industry, you have to assume it knows what it's writing about. Especially since the author of the article is the Journal's former Detroit bureau chief and a man who is writing a book about America's car culture.
Gotta make you wonder...
Noticeably missing from the Wall Street Journal's article is any mention of GM's failure to build profitable, high value automotive brands. Instead, the Wall Street Journal places most of the blame on problems in General Motors factories. Here's an excerpt from the WSJ automotive article from October 25, 2008:
"Detroit failed to grasp -- or at least to address -- the fundamental nature of its Japanese competition. Japan's car companies, and more recently the Germans and Koreans, gained a competitive advantage largely by forging an alliance with American workers."
Does anybody actually believe that crap?!?!? That's why Japan's car companies are successful?!?!?! Because they forged an alliance with American workers
? Look, I will be the first to admit that having happy, intelligent, and productive employees is very beneficial to any company... But, to credit a non-union, Kaizen-in-America factory environment with Toyota's success in the USA is not only naive, but is insulting to the work done by the Japanese and Amercian managers of Toyota, Honda and Nissan over the past 30 years. My recommendation? The Wall Street Journal's author needs to get into some car dealerships and see how and why people are buying what they are buying... A lesson he will not be able to learn inside of a GM assembly plant!
GM Lacks Brand Identity
It seems that one of the fundamental skill sets of the Japanese automotive competition is their ability to build brands. Toyota represents reliability. Scion is for youth (or young at heart). Prius is now synonymous for hybrid. In America Lexus means luxury. Tell me, what does Saturn stand for? I sold Chevys for a couple year, and The only thing I can think of the "Heartbeat of America" for the Chevrolet brand, and GM through that branding out more than 5 years ago... What does Pontiac represent? ... Excitement? Yeah, right... What does Buick represent? Old, but too poor for a Cadillac? And what does Cadillac mean? I am not sure, but my wife had to get a CTS when she started asking herself if her Chevy was returning the favor when she turned it on... I actually think Cadillac has some life to the brand with a little bit of carefully orchestrated support.
GM's abysmal failure at marketing and brand building does not originate from a lack of funding. In 2007, the U.S. automobile industry spent $4.6 billion on advertising. That's 3.3% of total U.S advertising spending and 5.9% of total U.S. network TV spending.
For all that money, you might think that GM and the rest of U.S. automobile industry would have done a lot of brand building.
Gotta make you wonder...
Take a recent 12-page Saturn Sunday newspaper insert with the headline "Rethink." Each of Saturn's five models encouraged automobile prospects to doing a little cogitating.
* Saturn Aura: "Rethink responsible"
* Saturn Vue: "Rethink safe"
* Saturn Outlook: "Rethink big"
* Saturn Sky: "Rethink adrenaline."
* Saturn Astra: "Rethink amusement"
So why should you buy a Saturn? What's the sum-up thought that encompasses the Saturn lineup? Heck if I know,.. I studied that Sunday insert for over an hour and cannot figure out who Saturn is... do you know?
And while i am on Saturn's case, what the hell does "rethink" mean anyways? It doesn't make any sense. Are they saying that whatever you thought of in the past about Saturn is WRONG? Are they saying that the people who worked on Saturn's marketing over the past 20 years were idiots, so we need to forget all the information they spent hundreds of millions of dollars delivering to us?!?!?!? Saturn's new marketers seem to be borrowing branding keywords from other brands. Volvos are "safe."... Cadillacs are "big."... Porsches are "adrenaline."... And I are they trying to say that a Saturn can be like a Prius when they say we should think of Saturn as a "responsible" car?. And, how do you reconcile "responsible" cars also being a source of "amusement"? Am I just too hyper senstive to GM marketing idiocy or does it appear that the new Saturn approach is something along the lines of "Hey, whatever it is you think a brand should be, well, that's us!"... Is this the automotive marketing equivalent of throwing lots of crap against the wall and seeing what will stick?. Is this the automotive marketing equivalent of a "Hail Mary" pass attempt?
Oddly enough, if Saturn were already a recognized and dominant automobile brand, this shotgun approach might be slightly justifiable. But in the first 10 months of this year, Saturn's share of the U.S. automobile market was just 1.4%, about the same as RC Cola's share of the cola market. (Just because Coca-Cola can successfully market 14 different flavors doesn't necessarily mean that RC Cola should also market 14 different flavors.)
GM Equals Vague Promises
Saturn is the least of General Motors' problems. None of the corporation's other major brands stand for much of anything either. Chevrolet is "An American revolution." (did the revolution cause the current economic crisis?) Pontiac is "Action." (drive one into your city's red light district!) Buick is the "beautiful" car to drive. (what the hell does THAT mean... All others are ugly?) And Cadillac is "Life. Liberty. And the pursuit." (ask my wife, she knows what that brand means).
How can you build an automotive brand around some vague slogan that can be interpreted to mean almost anything?
But marketing and brands, according to the wisdom of the October 25th Wall Street Journal article, are not really Detroit's problem. In the WSJ's entire 2,000-word anti-manufacturing spewing soliloquy, there was only one reference to the concept of "brand." It was a repetition of the conventional wisdom that General Motors has too many (eight). What makes the WSJ think 8 brands for the largest manufacturer in America is too many? Heck, Proctor and Gamble must have a zillion brands... With more launched on a daily basis... Are too many brands REALLY General Motor's problem? If they had 10 profitable, highly regarded brands, who would be calling for the reduction on number of GM brands? Keep in mind that GM generated more revenue than all but 3 other American companies in 2007... How can 8 brands be such a burden?
Gotta make you wonder...
Take Toyota, which over the years has marketed more than 8 different brands, here's a few examples:
* Corolla (reliable economy)
* Camry (reliable and roomy sedan)
* 4Runner (reliable, tough 4x4 SUV)
* Tacoma (reliable compact ruck)
* Tundra (Toyota tough full size truck)
* Highlander (reliable crossover)
* RAV4 (reliable small SUV)
* Avalon (reliable and high quality sedan)
* Celica (Gone, but still stands for reliable sports coupe)
* Corona Mark II (hey, I took my driver's license test in this cockroach-reliable chartreuse colored station wagon)
Toyota has an astounding 91% brand recognition in the world's various automotive markets, and multiple models with multiple brands, all tainted with the Toyota reputation for "reliability" are the primary reason (IMHO).
The difference between Toyota and General Motors is that each of the 8 Toyota brands above (except maybe the Corona Mark II) stands for something specific and each of the eight General Motors brands does not.
GM brands could
stand for something... A lot of car guys divide the market into eight separate categories:
I used to think that General Motors invented the vehicle-for-each-category strategy that Toyota has successfully followed by creating a model and brand for each vehicle category. But maybe I am confusing that with Alfred Sloan's brand for each socio-economic level strategy...
General Motors invented automotive marketing in the 1920's and forced Ford to learn it. Some people would say that Proctor and Gamble invented branding. Ford invented the mass production assembly line, which made the automobile affordable for the majority of the American population, and gave many American's a job so they could eventually afford to buy one. BTW, those same jobs count in today's economy!
The Value of a Brand
Of the 100 most valuable brands in the world for 2008, according to Interbrand, 52 are owned by U.S. companies. I wonder how many of those 52 are U.S. automotive brands?
Guess what... Just ONE... Uno. And, I am proud to note that is is Detroit's own Big Blue Oval...Ford
Ford may be the traditionally fuddy duddy car company of the Detroit 3... Yet, Ford has maintained a singular focus on their identity to become the ONLY
American Automotive Brand on Interbrand's list of the world's 100 most valuable brands. Oh, in case you were wondering, Coca Cola is the world's most valuable brand of any kind, and Toyota is the most valuable automotive brand... I placed the entire list at the bottom of this article.
GM is not on the Interbrand list of the 100 most valuable brands in the world, and neither are any of the GM brands... None... NOT ONE of General Motors' eight automotive brands made the list of top 100 brands.
But wait... There's more... There were 11 automotive brands on the top 100 brands list (Yes, ELEVEN) and 10 of them were from car companies outside the U.S. Here's a summary of the world's 100 most valuable automotive brands:
* Toyota (Japan)
* Mercedes-Benz (Germany)
* BMW (Germany)
* Honda (Japan)
* Ford (USA)
* Volkswagen (Germany)
* Audi (Germany)
* Hyundai (Korea)
* Porsche (Germany)
* Lexus (Japan)
* Ferrari (Italy)
* NO GM BRANDS ON THE LIST
Gotta make you wonder...
It is obvious to all who watch the American auto industry that there's a growing disconnect between General Motors management and what works in automotive marketing. GM Management wants to save their business. GM Marketing wants to (figure out how to) build brands. These two objectives are often strategically and budgetarily opposed. To build GM's business volume, there is a tendancy to "expand" the brand, as in Hummers of all shapes and sizes... To build an automotive brand's value, OEM's generally need to "contract" the brand... As in the exclusivity of a Porsche or a Ferrari
Automotive Brands, Does Big Equal Better?
General Motors already had a big business, and even in decline GM is still a monstrosity of a manufacturing, marketing and sales organization. Last year GM rang up $181.1 billion in sales, which made it's revenue stream the fourth-largest company of all American companies OF ANY KIND. How does a GM bring in more cash than all but 3 oil companies and still lose money?
Gotta make you wonder...
What General Motors is missing is a portfolio of PROFITABLE BRANDS
OK, so here we got the largest cash cow in American manufacturing and there's a prevailing consensus that General Motors has too many dealers. I was at a local Chevy dealer yesterday, and they certainly agreed that a few less Chevy dealers in Phoenix would be great news... So, saying that GM is "over-dealered" is probably true... But, not when you look at total revenue for all GM brands! And, certainly not from GM's point of view. Even a money-losing GM dealer will continue to sell GM vehicles to keep from losing even more money.
In the absence of successful OEM driven brand-building (tier 1), it has been the individual local level automotive marketing and sales efforts of GM dealers (tier 3) that have accumulated enough marketing horsepower to move 2,581,385 GM vehicles in the U.S. during the first 10 months of 2008. It seems to me that common sense dictates that killing GM brands and firing more GM dealers would only further depress GM sales.
The problem that GM and their dealer network faces is that most of the GM brands are practically worthless. In fact, because sound accounting practices dictate that publicly held companies recognize this elimination of brand value, two big national enterprise dealership groups (Group 1 Automotive and Sonic Automotive ) have both elected to write down the book value of their domestic franchises by $51 million. Group 1 CEO Earl Hesterburg said the company has essentially written off any remaining brand or franchise value for its GM dealerships.
Since GM is obviously a branding disaster, you might think that top management at General Motors would renew their focus on creating value within the various GM brands. However, recent actions by GM management suggest that GM is more focused on selling, than on building any brand value... In this blogger's humble opinion, GM should leave the selling to the resources they already have which are PROVEN at being able to sell ice cubes to Eskimos... Their dealer network!
Return of Cimarron or "How To Ruin A Brand"
How can any intelligent car guy explain Cadillac's ridiculous decision to offer a four-cylinder sedan as a new 2010 model? John Teahen, the renowned and ancient senior editor at Automotive News, commented on Cadillac's bent-for-brand-destruction announcement by saying "A four-cylinder Cadillac is not a Cadillac. I'm not quite sure what it is, but it certainly isn't a Cadillac."
Teahen recommended that the new four-cylinder Cadillac be named: Cimarron II.
It is painful to note that the U.S. automotive industry is not the only industry that seems to be ruining their brands. A depressing bit of news on the branding front comes from the Association of National Advertisers. A recent survey polled 118 Chief Marketing Officers (CMO) and senior marketing executives at ANA companies. 64 percent stated that they believed the value and consideration of their brands do not influence decisions made within their organizations... Another point in making the case that American CEO's are grossly overpaid and under-qualified!
So, maybe that's why the boy genius Rick Wagoner, who can't even tell a congressman what he will do with billions of dollars in taxpayer money has allowed his people to invest in, build, launch and introduce expensive Saturns and cheap Cadillacs. (what the $#*@!) In addition to a litany of other brand-destruction bone-head decisions and mistakes made by the General Motors Corporation. Who the heck put that guy in charge? With a brand value of ZERO, it seems like somebodyu who knows marketing and brand building should be running GM... Or, maybe what we really need at GM is a dismantler to take it apart and sell the physical assets, because the brand equity is ZERO... Think about it... 100 years of General Motors brand building management has resulted in brands that are worth NOTHING... Gotta make you wonder...
The ironic part of all this... Either somebody somehow figures out a way to keep General Motors in business, or all of us in the car business are doomed to experience an even higher level of GM Generated Misery.
Gotta make you wonder...
EDITOR NOTE #1:
The text above is a highly edited blog posting by Ralph Paglia that was inspired by and sourced from an article written by Al Ries titled "If GM Has a Brand, It's General Misery - Company Has Eight Brands, ...
" Published by Advertising Age on December 02, 2008
EDITOR NOTE #2:
Interbrand's Best Global Brands
2008 Rank 2007 Rank Brand Country of Origin Sector 2008 Brand Value ($m) Change in Brand Value
1 1 Coca-Cola United States Beverages 66,667 2%
2 3 IBM United States Computer Services 59,031 3%
3 2 Microsoft United States Computer Software 59,007 1%
4 4 GE United States Diversified 53,086 3%
5 5 Nokia Finland Consumer Electronics 35,942 7%
6 6 Toyota Japan Automotive 34,050 6%
7 7 Intel United States Computer Hardware 31,261 1%
8 8 McDonald's United States Restaurants 31,049 6%
9 9 Disney United States Media 29,251 0%
10 20 Google United States Internet Services 25,590 43%
11 10 Mercedes Germany Automotive 25,577 9%
12 12 Hewlett-Packard United States Computer Hardware 23,509 6%
13 13 BMW Germany Automotive 23,298 8%
14 16 Gillette United States Personal Care 22,689 8%
15 15 American United States Financial Services 21,940 5%
16 17 Louis France Luxury 21,602 6%
17 18 Cisco United States Computer Services 21,306 12%
18 14 Marlboro United States Tobacco 21,300 0%
19 11 Citi United States Financial Services 20,174 -14%
20 19 Honda Japan Automotive 19,079 6%
21 21 Samsung Republic of Korea Consumer Electronics 17,689 5%
22 New H Sweden Apparel 13,840 New
23 27 Oracle United States Computer Software 13,831 11%
24 33 Apple United States Computer Hardware 13,724 24%
25 25 Sony Japan Consumer Electronics 13,583 5%
26 26 Pepsi United States Beverages 13,249 3%
27 23 HSBC United Kingdom Financial Services 13,143 -3%
28 24 Nescafe Switzerland Beverages 13,056 1%
29 29 Nike United States Sporting Goods 12,672 6%
30 28 UPS United States Transportation 12,621 5%
31 34 SAP Germany Computer Software 12,228 13%
32 31 Dell United States Computer Hardware 11,695 1%
33 30 Budweiser United States Alcohol 11,438 -2%
34 22 Merrill United States Financial Services 11,399 -21%
35 38 Ikea Sweden Home Furnishings 10,913 8%
36 36 Canon Japan Computer Hardware 10,876 3%
37 32 J.P. United States Financial Services 10,773 -6%
38 35 Goldman United States Financial Services 10,331 -3%
39 40 Kellogg's United States Food 9,710 4%
40 44 Nintendo Japan Consumer Electronics 8,772 13%
41 39 UBS Switzerland Financial Services 8,740 -11%
42 37 Morgan United States Financial Services 8,696 -16%
43 42 Philips Netherlands Diversified 8,325 8%
44 New Thomson Canada Media 8,313 New
45 46 Gucci Italy Luxury 8,254 7%
46 48 eBay United States Internet Services 7,991 7%
47 50 Accenture United States Computer Services 7,948 9%
48 43 Siemens Germany Diversified 7,943 3%
49 41 Ford United States Automotive 7,896 -12%
50 45 Harley-Davidson United States Automotive 7,609 -1%
51 51 L'Oreal France Personal Care 7,508 7%
52 52 MTV United States Media 7,193 4%
53 54 Volkswagen Germany Automotive 7,047 8%
54 47 AIG United States Financial Services 7,022 -6%
55 49 AXA France Financial Services 7,001 -4%
56 53 Heinz United States Food 6,646 2%
57 57 Colgate United States Personal Care 6,437 7%
58 62 amazon.com United States Internet Services 6,434 19%
59 56 Xerox United States Computer Hardware 6,393 6%
60 58 Chanel France Luxury 6,355 9%
61 59 Wrigley's United States Food 6,105 6%
62 64 Zara Spain Apparel 5,955 15%
63 63 Nestle Switzerland Food 5,592 5%
64 60 KFC United States Restaurants 5,582 -2%
65 55 Yahoo! United States Internet Services 5,496 -9%
66 67 Danone France Food 5,408 8%
67 68 Audi Germany Automotive 5,407 11%
68 66 Caterpillar United States Diversified 5,288 5%
69 65 Avon United States Personal Care 5,264 3%
70 69 adidas Germany Sporting Goods 5,072 6%
71 71 Rolex Switzerland Luxury 4,956 8%
72 72 Hyundai Republic of Korea Automotive 4,846 9%
73 New BlackBerry Canada Consumer Electronics 4,802 New
74 70 Kleenex United States Personal Care 4,636 1%
75 75 Porsche Germany Automotive 4,603 9%
76 73 Hermes France Luxury 4,575 8%
77 61 Gap United States Apparel 4,357 -20%
78 78 Panasonic Japan Consumer Electronics 4,281 4%
79 83 Cartier Switzerland Luxury 4,236 10%
80 79 Tiffany United States Luxury 4,208 5%
81 74 Pizza United States Restaurants 4,097 -4%
82 80 Allianz Germany Financial Services 4,033 2%
83 85 Moet France Alcohol 3,951 6%
84 84 BP United Kingdom Energy 3,911 3%
85 88 Starbucks United States Restaurants 3,879 7%
86 81 ING Netherlands Financial Services 3,768 -3%
87 77 Motorola United States Consumer Electronics 3,721 -10%
88 89 Duracell United States Consumer Electronics 3,682 2%
89 91 Smirnoff United Kingdom Alcohol 3,590 6%
90 92 Lexus Japan Automotive 3,588 7%
91 94 Prada Italy Luxury 3,585 9%
92 90 Johnson United States Personal Care 3,582 4%
93 New Ferrari Italy Automotive 3,527 New
94 New Armani Italy Luxury 3,526 New
95 87 Hennessy France Alcohol 3,513 -3%
96 New Marriott United States Hospitality 3,502 New
97 93 Shell Netherlands Energy 3,471 4%
98 96 Nivea Germany Personal Care 3,401 9%
99 New FedEx United States Transportation 3,359 New
100 New Visa United States Financial Services 3,338 New
Download the Top 100 Brands List in PDF:
Interbrand-Best Global Brands 2008.pdf
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