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Case: General Motors

Case: General Motors. Course: TU-91.1008 Markkinoinnin perusteet Assignment: "Marketing and product development” Tuomo Eloranta 66510M Airi Lampinen 65252H. General Motors: Basic Facts and Current State. World’s largest automaker. Annual global industry sales leader for 77 years

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Case: General Motors

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  1. Case: General Motors Course: TU-91.1008 Markkinoinnin perusteet Assignment: "Marketing and product development” Tuomo Eloranta 66510M Airi Lampinen 65252H

  2. General Motors: Basic Facts and Current State • World’s largest automaker. Annual global industry sales leader for 77 years • Largest market: U.S. followed by China, Brazil, UK, Canada and Germany • GM cars and trucks are sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling • Leading vision: "provide the best cars and trucks to customers in every market around the globe" • Environmental vision: "from gas-friendly to gas-free"

  3. Automobile industry: Changes in business environment • Credit crisis • Consumers hesitate to do big investments • Banks are unwilling to give car loans for consumers • Environmental factors • Rise of gas prices • Rise in legislative acts that favor eco-friendly automobiles and in conconsumer awarenesse • Rise in consumer awareness • => Industry sales down 27% from last year. Sales of light trucks, which has been one focus point for GM are even worse. • => GM stock value is 1/6 of what it was worth 2 years ago

  4. Problem #1: The brand portfolio is currently too wide (13 brands), partially overlapping and lacks focus. • Multiple brands mean multiple expenditures for marketing, advertising and distribution. • Automobiles sold under Chevrolet brand: cheap Korean made cars, American muscle cars, basic sedans, eco-friendly hybrids and big pickups. Where’s the focus? • Divesting secondary brands enables the achievement of higher rates of growth for the ones that remain. • Toyota, one of the main competitors of GM, gets by with remarkably less brands. GM must act to keep its market position. • Solution: GM should focus the brand portfolio around its core competence and competitive advantages

  5. Problem #2: Lack of focus in social media presence • The added value of GM’s current web 2.0 services seem vague to both consumers and organization • While openness to new marketing channels is positive, they should not be adopted without a clear strategy. • "It's hard to put a specific dollar value on this, but it's something we have to do" Natalie Johnson, GM • Key questions are: • Why are these channels used? • Who are supposed to be reached through them? • Solution: Changing focus from “everyone” to people who actually use social media

  6. Problem #3: Maintaining consumer trust • The financial crisis increases the importance of trust. • It is easier to create trust for an organization than for individual products or in GM’s case brands. • Some of current problems in GM credibility? • Vague vision statements (”Provide the best cars and trucks to customers in every market around the globe” = We want to be best in everything)? • Simultaneous marketing of pickups and hybrids under same overlapping brands • Hopping on the Web 2.0 bandwagon just for the sake? • => All signs of lack of clear marketing strategy that fully utilises the strong brands and expertise that GM already has. • Solution: Effort should be put in to keeping the corporate brand strong and up-to-date.

  7. Executive Summary • Focusing the brand portfolio and concentrating on enforcing the corporate brand • Refining the social media strategy and aligning it with the brand and the products

  8. References • B. Vlasic & N. Bunkley, Hazardous Conditions for the Auto Industry, The New York Times, published: 2 October 2008 • Aaker, D. A. (2004) Leveraging the Corporate Brand. California Management Review, 46(3). • P. Valdes-Dapena, Credit Crisis is Twin Threat to Car Dealers, CNNMoney.com, 2008, Available: http://money.aol.com/news/articles/_a/bbdp/credit-crisis-is-twin-threat-to-car/199694 • Alex Taylor III, Dead Brands Walking, CNNMoney.com Fortune, 2007, Available: http://money.cnn.com/2007/04/25/news/companies/pluggedin_taylor_deadbrands.fortune/index.htm • N. Bahadur, E. Landry & S. Treppo, How to Slim Down a Brand Portfolio, Strategy+business, 2006, Available: http://www.strategy-business.com/resiliencereport/resilience/rr00038

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