Quality Redefined Presented by Tiemoko Diarra Bret Haney

Quality Redefined Presented by Tiemoko Diarra, Bret Haney, Adam Pinson, and Elizabeth C. Wong MKTG 600 March 8, 2007

Overview • • • Situational Analysis Product/Brand Business Structure 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 (H 2 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 – EV 1 • 1994 – Daytime Running Lights • 1997 – On. Star 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 Trends Shaping 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, fuelefficiency, style • GM must target brand loyalists – Must maintain brand image with current customers to keep them loyal

Environment Trends Framing Competitive Patterns • Competitors developing Hybrid Technologies – Fuel efficiency and lower emissions • Alternate Fuels being developed – E 85, Air-propulsion • Smaller Vehicles rather than SUV/Trucks • Tailoring vehicles for changing customer wants/needs – Customization (enhanced features and style)

PPMS = percentage of market share Source: 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”

PRODUCT LENGTH LINE PRODUCT 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

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 Brand Development Branding Objective Relationships Intense loyalty Resonance Response Judgments Meaning Identity Performance Feelings Imagery Salience Positive Reactions Points of Parity Broad Awareness

Structure & Strategies • Mission: sustain, grow, and preserve leadership in the market. • Value delivery process in an era of abundant choices.

General Motors’ Organization Structure, before Board of Directors President GM Acceptance Corporation Financial Staff Chevrolet Division Sheridan Division GM Truck Division Canadian Division Samson Tractor Division Executive Committee Legal Department Oldsmobile Division General Advisory Staff Buick Division Oakland Division Cadillac Division Intercompany Parts Division GM Export Company Scripps Booth Corp.

General Motors’ Organization Structure, Now Board of Directors President’s Council North American Operations GM Acceptance Corporation Corporate Functions International Operations GM Europe Midsize & Luxury Car Group Small Car Group GM Power Train Group Vehicle Sales, & Marketing Group Development & Technical Cooperation Group Asian & Pacific Operations Latin American, African, & Middle East Operation

Used to be Vs Now Hierarchy Vs Self Organizing Teams

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 valuefocused 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 • Cars. Direct • Partnerships • Suppliers

Promotions • • Theme: Quality Redefined Ads • – Ti. Vo, You. Tube – Mass customization ads – Awards – Chevrolet • This is our Country • Ain’t We Got Love – – • Cadillac Pontiac (Español) Hummer Contest • • Sweepstakes Events – LA Auto shows, etc. – NASCAR 10 awards for “Best Overall Value of the Year” Personal Selling – Dealerships, sales reps – P 2 P technology • • • Sales – Rebates: $500 -8000 – Cash back – Low-interest financing PR 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-PR High Familiarity Low Familiarity Favorable Attitude Unfavorable Attitude Note: Values are subjective Buick/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

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. 4 m – 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