Presented byTiemoko Diarra, Bret Haney,

Adam Pinson, and Elizabeth C. Wong

MKTG 600March 8, 2007

Quality Redefined

Overview

• Situational Analysis• Product/Brand Business Structure • Marketing• Marketing Mix and CRM• Global and Holistic Marketing

History of GM• 1897 – “Olds Motor Vehicle Company, Inc.”

founded• 1902 – Cadillac Introduced• 1903 – Buick Introduced under W. Durant• 1907 – “Oakland Motor Car Co.” (Pontiac)

introduced• 1908 – GM organized, incorporates Buick

– Later incorporates Oldsmobile• 1909 – Pontiac, Cadillac incorporated

– Acquires Rapid Motor Vehicle Co. (GMC)

History of GM

• 1909 - Bankers reject Durant’s prop. to buy Ford• 1911 – Chevrolet founded

– Incorporated in 1915• 1985 – Saturn created (first model 1990)• 1989 – GM buys 50% of SAAB• 1999 – GM acquires rights to Hummer (H2 in

2001)• 2000 – GM announces end of Olds (last in 2004)

Other notables in GM History

• 1971 – Alliance w/ Suzuki• 1972 – Daewoo founded in joint venture• 1988 – Geo introduced (later merged w/

Chevy) • 1993 – EV1• 1994 – Daytime Running Lights• 1997 – OnStar introduced in Cadillac• 1999 – Deal w/ XM Satellite Radio

SWOT Analysis• Strengths

– Market Leader• 23+% of market share

– Name Recognition• GM Goodwrench =

Quality– Size

• Distribution Network

• Weaknesses– Legacy Costs

• UAW labor costs– Poor Forecasting

• Big SUV vs. High Gas Prices

– Perceived Quality• Cadillac Tops at 34%• Saturn Bottom at 7%

– Brand Dilution• Too Many brands under

GM umbrella

SWOT Analysis• Opportunities

– Alliance/Merger w/ Chrysler

• Add. Technologies and style

– Foreign Car Markets• China, India

– Mass Customization• Experiment w/ Saturn

line– Underserved Markets

• Busses, Motorcycles

• Threats– Rising Fuel Costs– Rapidly Advancing

Technologies being Developed by Comp.

– Substitutes• Telecommuting, High-

Speed Rail, Alternate Personal Transports (Segway, etc.)

– Infrastructure• Limits alternate fuels

Environment TrendsShaping Target Market

• Rising Fuel Prices– Fuel Efficiency

• Hybrid Technology• Alternative Fuel

– Smaller Cars• Environmental Health

– Emissions

Increased Safety– New government

regulations– Demand for added

safety features• Unique Styling

– Consumer wants individuality in vehicle

What do these lead to?

Target Market(s)

• GM must first target young, new-to-market consumers– Establish relationship, create loyalty

• GM must target brand-deserters– Re-establish perception of quality, fuel-

efficiency, style• GM must target brand loyalists

– Must maintain brand image with current customers to keep them loyal

Environment TrendsFraming Competitive Patterns

• Competitors developing Hybrid Technologies– Fuel efficiency and lower emissions

• Alternate Fuels being developed– E85, Air-propulsion

• Smaller Vehicles rather than SUV/Trucks• Tailoring vehicles for changing customer

wants/needs– Customization (enhanced features and style)

US Market Share, 2006

Other, 12.8%n/a ppms

Toyota, 15.4%20,798 ppms

Honda, 9.1%24,757 ppms

Ford, 17.5%35,700 ppms

DaimlerChrysler, 14.4%

3,7392 ppms

GM, 24.6%41,820 ppms

Nissan, 6.2%39,062 ppms

PPMS = per percentage of market shareSource: WSJ

GM Products

• Good– Durable goods: “tangible goods that

normally survive many uses” - Kotler et. All, 374

• Service: GM Goodwrench Parts & Service

• Experience: dealership experience, warm and friendly

• Idea: Chevy Trucks “Like a Rock”

PRO

DU

CT

LEN

GTH

LIN

EPRODUCT MIX LINE

Five Product Levels• Core Benefit: Transportation• Basic Product: Engine, seats, headlights,

trunk, wheels, windows• Expected Product: working car, service,

financing options • Augmented Product: excellent customer

service, standard options, • Potential Product: fuel-efficient, uniquely

designed cars, with excellent customer service

GM Product Classifications• Durability & Tangibility

– Durable– Services

• Consumer-Goods– Shopping goods

• Homogeneous (price): Saturn, Chevy• Heterogeneous (product features/service) SAAB, Pontiac

– Specialty goods: Cadillac, Buick• Industrial-Goods

– Capital Items • Installation: manufacturing factories, robots• Equipment: hand tools etc.

GM Life Cycle

• Industry & Company in maturity stage

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are needed to see this picture.

GM Customer / Brand Value• Image Value:

– Increase Customer Perceived Value by producing attractive cars

• Product Value:– Focus on quality (total features & characteristics) and

add value to GM by augmenting customer expectations

• Services Value– Through outsourcing GM Goodwrench services,

expectations on great service can be achieved everywhere

GM Brand Concepts

• Brand Resonance– “Intensity or depth of the psychological bond

customers have with the brand”• Brand Equity

– “creating brand knowledge structures with the right customers”

GM Brand Concepts

Salience

Performance Imagery

Judgments Feelings

Resonance

Identity

Meaning

Response

Relationships

Broad Awareness

Points of Parity

Positive Reactions

Intense loyalty

Brand Development Branding

Objective

http://www.jdpower.com/corporate/news/releases/pdf/2006133.pdf

Structure & Strategies

• Mission: sustain, grow, and preserve leadership in the market.

• Value delivery process in an era of abundant choices.

Board of Directors

President Executive Committee

Financial Staff

Legal Department

General Advisory Staff

GM Acceptance Corporation

Chevrolet Division

SheridanDivision

Canadian Division

Oldsmobile Division

GM Truck Division

GM Export Company

Cadillac Division

Buick Division

Inter-company

Parts Division

Oakland Division

Samson Tractor Division

Scripps Booth Corp.

General Motors’ Organization Structure, before

Board of Directors

President’s Council Corporate Functions

North American Operations

International Operations

GM Acceptance Corporation

Midsize & Luxury Car Group

Small Car Group

GM Power Train Group

Vehicle Sales, & Marketing Group

Development & Technical Cooperation Group

GM Europe

Asian & Pacific Operations

Latin American, African, & Middle East Operation

General Motors’ Organization Structure, Now

Hierarchy Vs Self Organizing Teams

Used to be Vs Now

POP Vs POD

• POP: – quality factor of fuel efficiency– restore image by comparison to the exemplar

Toyota• POD:

– focus on the "GM" company brand– leverage its plan for streamlined and value-

focused models– being “American”

Marketing Mix & CRM

• Price• Place• Promotions• CRM

Price• “Keep America

Rolling”– Problem w/ interest

rate change• Lease deals• Employee Pricing

– 0% financing, 36 mo. For pick-up trucks in TX, CA, FL

• More generous financing deals

• Stats– Aug. 1-20, 2006

(Power Info. Network)• GM – 84 day to sell a

car• Ford – 83• DC – 90• Honda – 37• Industry avg – 64

• Retain value– Pontiac Solstice (made

in low qtys)

Place

• Channels– Dealerships– Used-car stores– Online

• GM• CarsDirect

• Partnerships• Suppliers

Promotions• Theme: Quality Redefined• Ads

– Chevrolet• This is our Country• Ain’t We Got Love

– Cadillac– Pontiac (Español)– Hummer– Contest

• Sales– Rebates: $500-8000– Cash back– Low-interest financing

• Sweepstakes• Events

– LA Auto shows, etc.– NASCAR

• PR– TiVo, YouTube– Mass customization ads– Awards

• 10 awards for “Best Overall Value of the Year”

• Personal Selling– Dealerships, sales reps– P2P technology

• Videos/info to sales force• Sales force automation system• Data mining; tagging codes

– GM “feel” to all brand ads; distinct “American” and quality feel to individual ads

• Direct Marketing• COMMUNICATING VALUE

Familiarity-Attitude-PRBuick/Cadillac – premium

elegance; special woods, fabrics, lighting + Architectural, frosted glass, stainless steel, high-tech

Chevrolet – “Chevy moments”; Chevy for everyone

Hummer – Go anywhere, do anything, glass floor panels

Pontiac – energy; hip; laser images; fuel efficent

Saab – Clean, open, crisp; glass flooring, LED screens

Saturn – architectural; hybrid; esoteric

Favorable Attitude

Unfavorable Attitude

Low

Fam

iliar

ity

Hig

h Fa

mili

arity

Note: Values are subjective

CRM

• Sales force MIS• Customize a car

– Chevrolet– Cadillac

• Customer input– Commercial contest– Blogs– Customer panel/task

force

Global & Holistic Marketing

• Global Marketing– Asia-Pacific– Value-chain

• Holistic, Ethical, and community responsibility– In-Kind donations:

$13.4m– Philippines– MLK National

Memorial– Educational

partnerships

GM of the future?

• Brand Contraction– Eliminate GMC, merge Buick/Cadillac

• Outsource majority of service– Maintain service at Cadillac/ select Chevy

dealers• GM/Chrysler?

– Further contraction in the long-run