As GM reorganizes and survives on bailout money, they are faced with the marketing challenge of how best to support the brands that will be the future of the company.
One brand that is receiving relatively heavy marketing support right now is Cadillac. They're launching a new model, called the CTS Sport Wagon. It's basically a station wagon.
There are three things fundamentally wrong with this. All of these are symptomatic of why GM is in trouble in the first place.
1. Their timing is awful: Launching a new model NOW? Right in the teeth of all the negative publicity they are receiving related to going bankrupt? Tell me how this makes any sense.
2. The new model is a STATION WAGON! Station wagons haven't been popular since SUV's took over that market niche. After working pretty successfully for years to modernize the Cadillac image and make the brand younger, they decide to go retro with a station wagon? You've got to be kidding.
3. The splashy spending is no longer perceived as GM's marketing investment but as a wasteful use of taxpayer bailout money. Our tax dollars are being spent by GM to advertise an ill-advised new model being launched at the worst possible time. A really bad way to spend our money (it's not their money anymore.)
Cadillac should probably never have conceived and launched this model in the first place. I'll be amazed if it succeeds. Cadillac and all the other GM divisions should not be doing splashy big money marketing right now. They should be using PR tactics, not advertising, to set the stage for the relaunch of the entire company once the reorganization is complete. That's when they'll need to stun us with great new advertising that makes us truly believe that there is indeed a new smarter and better General Motors.
What they're doing now just looks like "same old same old." In fact, it strikes me as even stupider than some of the moves that got them to bankruptcy court in the first place.
Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts
Thursday, June 11, 2009
Tuesday, April 14, 2009
Signs of the Times
Consumers everywhere are in a serious "recession mind frame." They're delaying purchases or deciding simply to forego things that they would ordinarily be buying. It's a scary time if you're a trying to market anything that's not pretty much an absolute necessity. If it's a "nice to have" thing but not a "must have" thing, then you are definitely feeling the impact of this recession mindset that gripping most Americans.
Here are a few things that illustrate how bad this recession mindset has become and how lasting its impact may be.
1. The Cute Puppy No One Wanted
I attended a charity event recently that I've attended for the last three years. The event includes both silent and live auctions to raise money for the charity. In prior years, the highlight of the event is the live auctioning of a cute puppy. The biding is spirited and the puppy generates a multiple thousand dollar contribution for the cause. This year, when the puppy went up for auction, no one bid. It was sad and embarrassing. The puppy was as cute as ever, but this year, no one wanted to come home with a new puppy. Another mouth to feed? Vet bills? Buying a new puppy in this economy? It was a sobering moment, because this was a relatively wealthy crowd. It really brought home how bad things have gotten.
2. Outrage at Excessive Executive Compensation
No matter how well a company is performing, it is now PR poison to grant large bonuses and multi-million dollar compensation packages to top executives. When so many are out of work, forced to cut back and losing their savings, it does seem ridiculous and unfair to read of CEO "Mr Big Shot" and his $25 million bonus. I think we've gotten to a point where this type of compensation is no longer routinely accepted. I think the press will now focus on these types of comp packages and report on them and that Board of Directors will be forced to react. Is it more important to keep a few top execs fat and happy or is it more important to protect the public reputation and image of the corporation? It will be interesting to keep an eye on this issue and see if it goes away once the economy returns to health. I suspect we may have experienced a watershed moment that could forever change the excessive compensation earned by a select few.
3. GM Headed for Chapter 11
An American Icon company looks like it is about to declare bankruptcy. Any guess on how the stock market will react to this event if it happens? Can you imagine what it must be like to be a GM Dealer these days? How many of them are about to go out of business, too? Last night a friend told me he just bought a new GM car and got $17000 off the list price. How desperate did that dealer have to be to unload a new car at that steep a discount? GM is trying hard but everything positive that they do right now is overshadowed by the mass of negative publicity they're getting.
4. Banks Only Want to Lend Money to People Who Don't Need to Borrow
Isn't one function of the banking industry supposed to be to loan money to entrepreneurs and aspiring small business owners so that they can create new businesses, employ more Americans and fuel the overall economy? This financial crisis has made banks so conservative in their lending that the only people who can get money now are those that don't need it. Banks want to make money and they want to minimize bad loans, but don't banks also have a social responsibility to help create more jobs and grow the economy?
There is a lot of ill will being created right now by many American businesses. I'm not sure that this recession will be like the other ones I've live through. The impact of this one feels like it will be more permanent. My dad grew up during the The Great Depression and his outlook on life and money and business was fixed during that era. I suspect that many Americans are being affected just as deeply now by what we are experiencing. The impact on marketing will likely be permanent and immense.
Here are a few things that illustrate how bad this recession mindset has become and how lasting its impact may be.
1. The Cute Puppy No One Wanted
I attended a charity event recently that I've attended for the last three years. The event includes both silent and live auctions to raise money for the charity. In prior years, the highlight of the event is the live auctioning of a cute puppy. The biding is spirited and the puppy generates a multiple thousand dollar contribution for the cause. This year, when the puppy went up for auction, no one bid. It was sad and embarrassing. The puppy was as cute as ever, but this year, no one wanted to come home with a new puppy. Another mouth to feed? Vet bills? Buying a new puppy in this economy? It was a sobering moment, because this was a relatively wealthy crowd. It really brought home how bad things have gotten.
2. Outrage at Excessive Executive Compensation
No matter how well a company is performing, it is now PR poison to grant large bonuses and multi-million dollar compensation packages to top executives. When so many are out of work, forced to cut back and losing their savings, it does seem ridiculous and unfair to read of CEO "Mr Big Shot" and his $25 million bonus. I think we've gotten to a point where this type of compensation is no longer routinely accepted. I think the press will now focus on these types of comp packages and report on them and that Board of Directors will be forced to react. Is it more important to keep a few top execs fat and happy or is it more important to protect the public reputation and image of the corporation? It will be interesting to keep an eye on this issue and see if it goes away once the economy returns to health. I suspect we may have experienced a watershed moment that could forever change the excessive compensation earned by a select few.
3. GM Headed for Chapter 11
An American Icon company looks like it is about to declare bankruptcy. Any guess on how the stock market will react to this event if it happens? Can you imagine what it must be like to be a GM Dealer these days? How many of them are about to go out of business, too? Last night a friend told me he just bought a new GM car and got $17000 off the list price. How desperate did that dealer have to be to unload a new car at that steep a discount? GM is trying hard but everything positive that they do right now is overshadowed by the mass of negative publicity they're getting.
4. Banks Only Want to Lend Money to People Who Don't Need to Borrow
Isn't one function of the banking industry supposed to be to loan money to entrepreneurs and aspiring small business owners so that they can create new businesses, employ more Americans and fuel the overall economy? This financial crisis has made banks so conservative in their lending that the only people who can get money now are those that don't need it. Banks want to make money and they want to minimize bad loans, but don't banks also have a social responsibility to help create more jobs and grow the economy?
There is a lot of ill will being created right now by many American businesses. I'm not sure that this recession will be like the other ones I've live through. The impact of this one feels like it will be more permanent. My dad grew up during the The Great Depression and his outlook on life and money and business was fixed during that era. I suspect that many Americans are being affected just as deeply now by what we are experiencing. The impact on marketing will likely be permanent and immense.
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