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Why has General Motors’
market share been declining every year? The answer lies in the General’s
lack of retail automotive marketing savvy. Executives continue to receive
millions of dollars while plants are closed, divisions eliminated, and
tens of thousands of employees laid off. The financial wizards have
created stockholder wealth through efforts in satellites, computers, and
acquisitions and spin offs. However, our core business has suffered,
perhaps more from a lack of understanding than a lack of focus.
Although we have taken much of the cost
out of manufacturing vehicles and build reliable, fuel efficient, safe,
quality and stylish automobiles, our market share has continued to slide.
How can GM reverse the decline in market share from 50% to 40% to 30% and
headed toward 20%?
We don’t need a remake of our product
lineup. We need a remake of our image. The object of this paper is to
suggest solutions, giving constructive criticism by offering the TOP TEN
things General Motors can do to increase market share:
#10: Real
World:
The strength of General Motors is its’
dealer body. When put in charge of General Motors, Mr. Alfred P. Sloan Jr.
took a train around the country visiting the dealers. As a result of his
travels, he developed many good things, including the 10-day report and
the annual model change.
Instead of meeting in Italy or Disney
World, the top 500-1,000 salaried employees of GM should randomly be
assigned a dealership to visit for one week, unannounced, and spend the
majority of his or her time in the service department. They should meet
customers, listen to their needs, and build good will for the Corporation.
#9:
New Car Announcement:
The annual model change was established
for a reason. Traditionally, sales slow down in the fall and increase in
the spring. Announcing new models in the fall helped even out production
and gave the industry a sense of order. Today, you don’t know what is
going on, what is coming out, or when. People don’t like confusion. The
anticipation of new models arriving in the fall was always one of the most
exciting parts of the business, something you could look forward to. These
days we are selling three different model years side by side, which isn’t
good business.
#8:
Divisional Brand Images:
Buick is a brand. Oldsmobile is (was) a
brand. Regal and Century are cars. We should focus our brand marketing on
our divisional images and the cars would sell themselves.
#7: Corvette:
Corvette is one car we really do right. We’re
hitting on all cylinders. No discount, no rebate, just image. I waited 10
months for mine, paid the sticker price, and love the car. However, the
other day I was talking to Batman. He brought the Batmobile in for service
and while he was there, I offered him a Corvette to drive while his car
was being worked on. Surprisingly, he refused. On*Star is not available on
Corvette. This is an example of not matching products to the market we are
trying to reach.
#6: Catera:
Instead of offering a Catera lease with a
free 1st payment and security deposit waiver, we should offer a
manual transmission that would appeal to the market segment we are
targeting.
#5: Policy:
Eliminate requiring an employee to retain
a leased vehicle for 12 months.
#4:
Destination:
Charges should be done away with. A whole
marketing campaign could be designed around this savings for our
customers. If you want to pay freight, get a foreign car. We would receive
tremendous good will and improve our image in the marketplace.
#3:
New Car Deliveries:
Why do we call them deliveries? We don’t
deliver; the customer comes to the dealership and picks up the vehicle.
Let’s change this by working with dealers and offer home deliveries. The
customers will love it.
#2: Resale:
To have a good image, our products have to
hold their value. The reliance on fleet sales to rental companies falsely
portrays a higher market share. When the units are bought back after a
short while and dumped at auction, it destroys resale.
#1: Rebates:
Rebates are a cancer, they kill image.
They are also very confusing. Prestigious automobiles should not have
rebates. General Motors needs to break the addiction.
Often times the dealership is notified of
the rebate before the cars or brochures have even arrived. Many times
customers are alienated because a program has been cut off or missed.
If there were a problem with days supply
in the field, a better marketing program would be to increase the residual
value 2 or 3 points. Problem eliminated! The image would be that of a
great car with a good lease instead of a slow mover with a big rebate.
By making moves such as these our image
will improve, our market share will increase, profitability will rise, and
the stock price will soar.
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