Commentary by Rance Crain

GM's Real Bankruptcy is in Failing to Distinguish Brands

Automaker Considers Ad Campaign to Adress Bankruptcy Rumors

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General Motors is considering an ad campaign to dispel the widespread notion it might go bankrupt. “As much as I hate to do this, we’re probably going to have to do something proactively on the marketing
Rance Crain, editor in chief, 'Advertising Age'

side just to address that issue,” GM’s marketing boss, Mark LaNeve, told The Wall Street Journal. “How you do that, I don’t know. It’s a tough thing because you really don’t want to go there.”

GM doesn’t need to go there. What it needs to do, in a forceful and surefooted way, is trumpet the new vehicles that are coming on line, talk about how it’s lowering prices across the board to be an attractive buy without incentives, and, in general, act like a winner. And please, no more whining about how it’s got to create a level playing field to compete.

That’s pretty much what GM is doing with its new Chevrolet campaign. It’s just what’s needed to get, in Mr. LaNeve’s words, “America rooting for us again.” As our editorial last week stated, “Give credit where it’s due: Chevrolet and agency Campbell-Ewald delivered the kind of compelling marketing campaign GM needs to keep from sinking -- like a rock.”

But based on past performance, GM can’t be expected to stay the course if sales of its redesigned SUVs fail to catch fire. The problem is that GM has conditioned car buyers to expect fatter and fatter incentives, and so they know there’s no hurry to rush in and buy. columnist Al Ries has always contended that GM has more of a marketing problem than a product problem. Al believes that the eight GM brands aren’t different enough to support all those separate badges.

In The Journal interview, Mr. LaNeve seems to acknowledge the problem. He said GM is no longer going to advertise its brands on the same TV show. For example, he said, GMC and Chevrolet used to air spots on the same National Football League broadcast. Now GMC will run on Monday Night games and Chevrolet and Cadillac will run Sunday nights.

What makes Mr. LaNeve think car buyers won’t confuse Chevrolet and Cadillac? And well they could: You can buy a fancy Chevrolet for almost the same price as an “entry luxe” Cadillac (don’t you love that Detroit-speak?).

If the GM brands were distinctive, both in styling and pricing as Alfred Sloan intended, it wouldn’t matter if they were advertised on the same TV shows.

Some of the moves Mr. LaNeve is contemplating seem awfully basic for a multibillion-dollar advertiser. For instance, GM is working at better tailoring its advertising to its target customers. Saturn ads have mostly been earmarked for prime time, even though many of its buyers are women. Now Saturn will put more of its ad firepower on daytime fare like “Ellen” and “Oprah.” And here’s another stop-the-press disclosure: GM is focusing more of its marketing efforts on trend-setting areas like Southern California. “To meet the challenge, GM has been focusing on obtaining endorsements from tastemakers, such as a stylist, a record company executive or a celebrity,” The Journal stated. How’s that for cutting-edge marketing? What a daring move, to get an actual celebrity to endorse its cars!

And you won’t believe this, but GM is also setting up more events that allow prospective buyers to see and drive the cars, such as at sports events. “The strategy has worked for Cadillac, but GM’s other brands are struggling,” The Journal said. That’s probably because if they’ve test-driven a Cadillac, people think they’ve already driven all the others.

Since Mr. LaNeve seems determined to come up with a we’re-still-solvent-so-don’tâ€"worry kind of a message, how about lifting a memorable line from the marketer’s recent sales pitches: “If we go bankrupt you won’t pay a penny more.”

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