GM shifts branding strategies

[SaabKen]

Sounds to me that Saturn will become the "poor man's Saab", while Saab remains the Euro-flavored brand, but with Caddy also positioned to go mano-a-mano against M-B, BMW etc. While Saab may fare better in other parts of the world, I see GM's positioning of Saab and Caddy within North America a conflict But thank god Saab won't be lumped in with Pontiac/Buick/GMC



http://www.detnews.com/2005/autosins...A01-187008.htm

GM shifts strategy for brands Pontiac, Buick and GMC will be sold at single dealerships to create options.

Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity.

The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.

The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup.

"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."

GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share.

Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM.

"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said.

LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup.

In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios.

That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles.

Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated.

GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars.

"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused."

A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options.

About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said.

The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted.

"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said.

LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity.

The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles.

"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader."

That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles."

Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs.

A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays."

He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice."

"All of GM is being asked to think out of the box," Richer said.

Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy.

"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said.

Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile.

GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005.

Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate.

"It tells me I still sell the right franchises and the future is very bright for us," Shelton said.

By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said.

The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products.

"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic."

Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage.

"They're thinking: If GM wants to stay in business, they better cut me a deal," he said.

Springfield, Mo., dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps."

Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon.

"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way."


By Ed Garsten / The Detroit News

[saabfan]

Makes sense to me...

[saab9x]

gm's new strategy of bolstering brand identity and
focusing on a brand's core products is wonderful news.
i hope it can carry out that plan sooner rather than later.
this "stop-gap" approach just doesn't seem right.

In my mind, people who would consider buying a Cadillac won't consider a Saab. That's why I don't think Cadillac should sell anything smaller than the CTS. GM has the 9-3 to compete against the BMW 3-series and Audi A4, and if they work on the 9-5, they have a good 5-series competetor. There are also some people who won't buy an American nameplate, and a Saab is a perfect alternative, since it's still to some extent perceived as a yuppie car. If Saab uses Cadillac's dealer network, Saab's sales could benefit from Cadillac's younger customers. Just don't alienate Saab's core buyers.

[Mag-X]

"All of GM is being asked to think out of the box."

This is going to be hard for GM. I really hope this works.

[Swade]

I'm a little concerned by this. if Caddy is being aimed aquarely at BMW/Merc/Audit, then where is Saab going to aim at? VW? Whatever happened to the "global premium brand"?

[Krg05-9-3]

Originally Posted by Swade

I'm a little concerned by this. if Caddy is being aimed aquarely at BMW/Merc/Audit, then where is Saab going to aim at? VW? Whatever happened to the "global premium brand"?

Saab was never as prestigious as BMW, Mercedes, or even Cadillac in it's current form.

It's more of a "quirky, dare to be different" type of brand that appeals to a limited number of consumers. GM has to work hard to figure out how to make a brand with limited appeal ( like Saturn) profitable.

[timmehhhhhh]

damn that guy looks like a CREEEEEPY *** christopher walken

[SaabKen]

I was thinking of Al Bundy (Ed O'Neil) from Married With Children

Originally Posted by timmehhhhhh

damn that guy looks like a CREEEEEPY *** christopher walken

[eggsngrits]

Originally Posted by Krg05-9-3

Saab was never as prestigious as BMW, Mercedes, or even Cadillac in it's current form.

It's more of a "quirky, dare to be different" type of brand that appeals to a limited number of consumers. GM has to work hard to figure out how to make a brand with limited appeal ( like Saturn) profitable.

Yes, I agree. Saab is not about prestige, it's about difference.

Saturn, if you recall, was about mass market in the beginning. I'm not sure that it will do well as an upscale marque. That is a stretch.

I think that this realignment is long overdue. From the late 1970's until perhaps 1995 or so aesthetics was the only compelling reason to buy anything other than the Chevrolet version of a GM car. The Chevy was always cheaper and could be ordered with virtually identical options as any other brand. So, if you liked those ridged lower body panels you bought a Pontiac, if you wanted bland styling you bought the Buick, if you didn't want people to think you were cheap you bought that Oldsmobile at a $300 premium. All the same car, frivolous reasons to have them all. And the marketing and dealer network costs! Oy!

Many small towns here have just one GM dealer that usually carries everything except Cadillac and Chevrolet anyway -- another reason that this strategy makes some sense.

Brand 'focus' would, I hope, get Saab out of the SUV business when sales pick up and get those Swedish engineers working out plans for Sonett IV or tweaking the 9-3 V-6 turbo .

[squishmann]

Saab is more of a direct competitor with Audi they just don't have the cars to be competitive.

until sales really get up there it'll be a long time before saab get to the performance luxury level w/ BMW and Merc.

[Hornet11586]

Welcome to the State of Independence

Saab is about being different, thats why I love the company, keep it Eurofied GM, or I will be angry

[SaabKen]

Uh oh ..... the marketing mavens are at it again

How about this ad line for SAAB: "Ya shoor, you betcha !" ?


http://www.adweek.com/aw/national/ar..._id=1000936318



GM Engineers Brand Strategy Overhaul
May 25, 2005
By Kevin Ransom

DETROIT As part of a new image strategy, General Motors plans to accentuate certain words or phrases in describing each of its vehicle brands, said Betzy Lazar, GM's general director of advertising and media operations.

"With Chevy, we're using 'expressive value,' for Cadillac it's 'performance luxury,' Hummer is 'daring,' Saab is 'intelligently inspired,' Saturn is 'engaging,' GMC is 'professional grade' and Pontiac is 'seductive performance,'" said Lazar.

The automaker spends about $3.2 billion annually on U.S. brand and dealer advertising, per Nielsen Monitor-Plus. GM last month following a review consolidated its media business with GM Planworks (a unit of Publicis Groupe's Starcom MediaVest). Interpublic Group's GM Mediaworks and LCI were the losers in that shootout.

GM last week said it would beef up brand identity for its various divisions by stressing differentiation among models, a policy that could lead to the elimination of some nameplates that are too similar to vehicles in other divisions.

At a speech to the International Motor Press Association in New York, Mark LaNeve, GM's North American vice president of vehicle sales, service and marketing, said, "Strong brands win, weak brands lose—end of story. Like we did at Cadillac, we have to make every one of our brands more relevant, more competitive, and more profitable. Each brand has to stand for something very clear in the consumer's mind, consistently."

LaNeve also said, "I'd rather have four great Pontiacs that really stand for athletic design than eight ... Pontiacs that fail to really deliver on the brand's promise."

Lazar concurred: "We'll be carving out more distinctive positions for our brands and how they go to market. Basically we have Cadillac continuing to be our luxury brand, and Chevy has to be our broad, high-volume foundational brand, and we'll get our other six divisions to be more focused than they have been."

The change in strategy would likely drive shifts in media spending, she said. "We adjust our spending for every division annually, and a lot of that is driven by new-vehicle launches, so, as we become more focused on differentiating our brands, you will see that play out in the media plans as well. The better we are at differentiating between the brands, and the targets we're going after, the more different the media plans will become."

Lazar declined to comment on the amount of the shift in media spending. "I really can't quantify that, due to the sensitivities of the upfront," she said. When asked what specific brands or models would be most impacted by the shift in media spending, Lazar said. "Some of the brands are already moving to their new positioning.

"Pontiac is a good example of a brand that is in transition, with a lot of new products," she said. "So the positioning of the brands are reflective of those changes. The new Pontiac Solstice work is the result of the new positioning, and a brand like Saturn will be evolving into their new positioning with the new products as they come into the portfolio, like the Sky and the Aura."

[Swade]

Originally Posted by Krg05-9-3

Saab was never as prestigious as BMW, Mercedes, or even Cadillac in it's current form.

It's more of a "quirky, dare to be different" type of brand that appeals to a limited number of consumers. GM has to work hard to figure out how to make a brand with limited appeal ( like Saturn) profitable.

It's taken me a little while, but I've finally managed to address this.

Never a competitor with BMW??

Come on!

[saab9x]

Originally Posted by Swade

It's taken me a little while, but I've finally managed to address this.

Never a competitor with BMW??

Come on!

i agree with swade.

(originally posted in trollhattansaab.net)

saab is a premium european brand, just like merc, porsche, and bmw. it just doesn't seem to "beg" for that distinction, which is another reason i love saab. its "class" is understated and reserved. it's for the sophisticated "palate," one who doesn't aspire to "class" by a cliche presumption.

ultimately, i think what hurts saab's stature is twofold:

1. the rushed 9-2x--having an awd saab is a wonderful idea, but gm went at it the wrong way (by rebadging a subaru); and

2. the media (television and movies) using saab or "comic relief." "seinfeld" and, more recently, "sideways" gave saab a wider audience but at the expense of ridicule and/or abuse. who in one's right mind buys an expensive premium european car just to treat it like dirt? i'd much rather see them tear up a merc or bmw. (even the t-mobile commerical, where the college-aged kids manage
to get a 900-convertible stuck under _moving_ semi-tractor trailer, is comical but displays the wrong way to treat a beautiful, "premium" car.) this only shows the public that a "saab" is pompous and, thus, needs to be "debunked," _or_ that "saab" is for the moneyed goofballs and putzs of the world that are too stupid to buy a "real" premium-brand car. either way, it doesn't help saab's
"street cred." (i'd love to see seinfeld's face if someone ragged out a prized porsche. i don't think he'd find it all that "pfunny.")