HarleyEarl

Brand Management

16 posts in this topic

http://www.auto123.com/en/info/news/news,v...rtid=48858&pg=1

September 17, 2005
Industry Report: Brand Management Costing GM Too Much Money
by Trevor Hofmann , Canadian Auto Press

Does the General Really Need GMC when it already has Chevy Trucks?

What's the best selling full-size pickup truck in North America? Ford's F-150, of course! Well, maybe not. While widely reputed as not only the best selling pickup truck but also the best selling vehicle in both Canada and the U.S., Ford sells fewer F-150s than rival General Motors sells of its half-ton contender.

Say what? Yes, it's true. Ford had built and delivered 534,659 F-150s as of
Would GM sell more if it only offered its 1500 pickup under a single nameplate? (Photo: General Motors Canada)
July 2005, but between Chevy and GMC, which sold 480,134 Silverado 1500 and 158,077 Sierra 1500 models respectively, a grand total of 638,211 units, an additional 103,552 half-ton GM pickup trucks hit the road during the first seven months of the year.

But such "success" begs the question; would GM sell more if it only offered its 1500 pickup under a single nameplate? Heresy! Who would even consider dissolving one of GM's legendary brands, especially after the outcry the automaker experienced when it was announced that Oldsmobile was to be phased out? Well, GM Vice Chairman Bob Lutz mused about the possibilities during a media scrum at the New York International Auto Show in March (see automotive news section for Mar 27, 2005: Industry Report: GM's Bob Lutz Considers Dumping One Brand to Curb Losses).

Some would argue that the reason GM sells more half-ton pickups than
Tremendous costs are associated with developing unique front end styling treatments, exterior and interior trim components, and, lest I forget, two very expensive marketing/advertising programs. (Photo: Trevor Hofmann, Canadian Auto Press)
Ford is for the very reason there are two nameplates retailing them, but really, would GMC buyers actually walk across the street to their Ford dealer, or for that matter a Dodge, Toyota or Nissan dealer to purchase their next truck if Chevy were their only alternative? Not likely.

Believing then, that GM would sell just as many pickup trucks, and if the theory holds water, just as many SUVs and crossovers under the Chevy nameplate if GMC went the way of Oldsmobile (i.e. six feet under), why bother with the tremendous costs associated with developing unique front end styling treatments, two different (if only slightly different) exterior and interior trim components, and, lest I forget, two very expensive marketing/advertising programs?

(click on link for more..)
0

Share this post


Link to post
Share on other sites
Does anyone know if Chrysler sold a lot fewer minivans in Canada after they dropped the Plymouth line entirely? They had the same problem in Canada: they had the #1 selling vehicle in their minivan line, but because the Caravan and Voyager were "different" names they had to report the sales differently. ONce they dropped the Voyager, they had the #1 selling vehicle. But did their overall sales drop immediately? I personally think that brand confusion just pisses customers off. When someone comes in here looking for a new Vibe, they often get frustrated that they have to drive up the street to a Pontiac dealer. How many just move along to a Toyota instead? Don't laugh: in certain markets Chevrolet is the underdog.
0

Share this post


Link to post
Share on other sites
GMC is the LAST brand that will get cut. For minimal upgrades/differentiation from its Chevrolet counterpart, there is such a price premium on the GMC model that that division is almost pure profit. Also, some people "won't be caught dead in a Chevrolet." This article's author really doesn't have a very good grasp of the industry...
0

Share this post


Link to post
Share on other sites
It may not cost much but it's still money. A few extra dollars and the titles "America's Best Selling Truck" and "America's Best Selling Vehicle" could work for GM.
0

Share this post


Link to post
Share on other sites
Though I understand his point about making the brands too much alike, I do think that there is a spot for each GM division if GM remembers to make each product different than the next.
0

Share this post


Link to post
Share on other sites

It may not cost much but it's still money.  A few extra dollars and the titles "America's Best Selling Truck" and "America's Best Selling Vehicle" could work for GM.

[post="15737"]<{POST_SNAPBACK}>[/post]


Yet GM can already claim that (and I believe has) it sells more trucks than anyone else. Chevrolet can't, but the fact that it came awful close to despite a brand-new F-150, Ram, Titan, and Tundra and also the duplication of GMC, it says something.

There are many people who would readily take delivery of a GMC-badged vehicle over a Chevrolet and they aren't just the idiot rednecks everyone loves to think truck owners are; I'm talking upper-middle to upper-income families. Next time you drive through an upscale neighborhood, count how many GMC products you find compared to Chevy trucks. There's a noticable difference. Its likely due to the fact that, yes, Chevrolet is still cheap. Even if the products aren't, 75% of the dealerships are.

GMC has already cultivated that image of being more upscale cuncurrent with being more 'professional' than Chevy trucks; the laborers have the Chevies while the superintendent has the GMC, that sort of thing.

Call it silly, but its a minimal investment netting a pretty substantail payout. And especially in light of GM's obvious move to creating three core classes of products - entry Chevrolet, luxury Cadillac, and premium Buick/Pontiac/GMC - the time to have axed GMC is certainly not today. 12 years ago, maybe, but not today.

I expect to see continual differentiation between GMC and Chevy from this point on.

Trevor and others really just don't get it. It's not about a grade-school numbers game about what nameplate sells the most; its about cultivating the GMC image. Most people who know a little about trucks I find always place Chevy/Ford/Dodge in one group and GMC on a slightly higher plane. I know people who have bought GMCs consistantly and haven't really considered Chevy trucks, not in the "I'd never buy one" sense, but more the "Nah, I'd rather have a GMC" sense. You hear people rattle off "Oh, its a BMW thing" or "Oh, its a Jeep thing," but really, its truly a "GMC thing," and no one really does understand it.
0

Share this post


Link to post
Share on other sites

It may not cost much but it's still money.  A few extra dollars and the titles "America's Best Selling Truck" and "America's Best Selling Vehicle" could work for GM.

[post="15737"]<{POST_SNAPBACK}>[/post]


How would those titles bring in more money than keeping an entire redundant line of vehicles priced higher than their Chevrolet counterparts? I really fail to see the logic.

EDIT: Fly explained it best. Edited by Croc
0

Share this post


Link to post
Share on other sites
Oh boy, lets just call the whole thing Chevy Hows abouts everyone stop trying to rewrite history and put the effort into more eye catching and functional vehicals. Think of the money that could be saved if employees hired to ponder these stupid and foolish questions were fired, sent to China to find their rightful place in the world. Then that money could be spent on better engineers or designers, or it could be put into larger bonus's for the CEO's that have contributed so much to the betterment of mankind. GMC is not hurting anything and would be much better off had the heavy truck sector not been sold to Volvo. More of Roger Smiths doing I suppose ?
0

Share this post


Link to post
Share on other sites
but this robs GM's greatest asset... vareity... comon if you dont want a Mustang you can get a camaro, but if you dont want a camaro you could get a firebird... if you dont want a Impala, maybe a Grand Prix Really does the trick for you... if you dont want a Tahoe, maybe a Yukon would suffice? GM doesnt need to market them differently, why not have a commercial that adverstizes them together? but then you have the people that say "man the last Chevy truck I had sucked, it always broke down, i hated it, now I love my GMC..." Same year model the person doesnt even realize they are the same... :(
0

Share this post


Link to post
Share on other sites

but then you have the people that say "man the last Chevy truck I had sucked, it always broke down, i hated it, now I love my GMC..." Same year model the person doesnt even realize they are the same... :(


*chuckles*

A friend of mine did just about this very thing a few years ago. He bought a used 2000 Chevy pick-up, which gave him a bunch of problems. He turned around a month later, sold the Tahoe to an unsuspecting young kid and purchased a used 2000 GMC pick-up. The GMC has never given him problems (still has it, in fact). Thus, he swears he will never own another Chevy ... sad part is, I had to point out to him that the trucks are virtually identical....he he heh.


Cort, "Mr MC" / "Mr Road Trip", 31swm/pig valve/pacemaker
MC:family.IL.guide.future = http://www.chevyasylum.com/cort/
Models.HO = http://www.chevyasylum.com/cort/trainroom.html
"I know you can hear me" ... Martina McBride ... 'Whatever You Say'
0

Share this post


Link to post
Share on other sites
The problem with getting rid of GMC is that it really is pure profit... However this comment is completely redundant:

Also, some people "won't be caught dead in a Chevrolet."

I keep hearing this... But hello?!?!? Do you not think this applies to other GM brands? Well it does and it isn't a viable reason for this fact.
0

Share this post


Link to post
Share on other sites

The problem with getting rid of GMC is that it really is pure profit... However this comment is completely redundant:
I keep hearing this... But hello?!?!? Do you not think this applies to other GM brands? Well it does and it isn't a viable reason for this fact.

[post="16397"]<{POST_SNAPBACK}>[/post]


ACTUALLY, it is very applicable to Chevrolet because GMC is seen as upscale. If you want a fullsized SUV or pickup, Japan, Inc. really doesn't have very tough competition. Ridgeline won't tow. Nissan's Frontier and Toyota's Tundra are both outclassed by the domestics with tow capacity and durability. They have yet to come up with a viable contender to F-150/Ram/Silverado/Sierra Edited by Croc
0

Share this post


Link to post
Share on other sites
GM thought that disappointed loyal Olds owners would head to Buick or Pontiac. Well... they didn't. Those people bought an Olds because they wanted an Olds. Example? Mom loves her Aurora, used to have a Bonneville but would never consider trading back down. Buick is too blue-hair for her. She wants FWD, so there goes STS. I predict her ending up with a Montego.
0

Share this post


Link to post
Share on other sites

GM thought that disappointed loyal Olds owners would head to Buick or Pontiac.  Well... they didn't. Those people bought an Olds because they wanted an Olds.

Example? Mom loves her Aurora, used to have a Bonneville but would never consider trading back down. Buick is too blue-hair for her. She wants FWD, so there goes STS. I predict her ending up with a Montego.

[post="16728"]<{POST_SNAPBACK}>[/post]


Not only that, but GM chose to kill the alternative cars as well. If I wanted another 'Aurora,' I could've gone softer and had a Park Ave with a s/c six or less luxurious in a Bonneville GXP and retain a V8. Even a nice LeSabre Celebration would've qualified. Now, I've got nothing except one trim of Lucerne to look at.

Honestly, axing Oldsmobile would've made sense back when it was first rumored in the early 90s. At that point in time, most Olds products were duplicates of Buick cars in both vehicle and qualities (soft, plush-biased sedans). However, Olds of the late-90s was far different with real desired products like Aurora, Intrigue, and Alero. Those Olds buyers found a better home with Infiniti and Acura to be totally honest.
0

Share this post


Link to post
Share on other sites
As was shown with Oldsmobile and Plymouth, buyers won't automatically go to sister nameplates. So, closing down GMC (or Pontiac or Buick) will lower GM's overall sales, market share and profitability (in the case of GMC) and not keep it stable. There WOULD be a case for closing down a nameplate if it was consistently unprofitable. That may happen with Saturn if sales don't increase substantially after it gets a fully developed lineup.
0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

Loading...