CHEVROLET REVIEW AIMS TO TRIM DEALER AGENCIES;CURRENT LIST OF 86 SHOPS WILL BE PARED DOWN TO 'SELECT' FEW TO SPLIT $300 MIL

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General Motors Corp.'s Chevrolet division kicks off a review this week to significantly trim the 86-agency roster handling its dealership marketing groups.

At stake is $300 million in billings the groups spend annually and the likely chance of an undetermined amount of new incentive money from Chevy.

All 86 shops will start getting questionnaires this week. No additional shops will be invited to participate.

PICKING `SELECT' AGENCIES

Chevy is sending letters to its 4,400 dealers explaining the process and standards the agencies must comply with to qualify as a "select" agency. The standards were developed by the automaker with the help of seven dealers.

There's no predetermined number for the select roster, but "I don't think we can do it with five agencies," said John Kelley, marketing services manager at Chevy.

The division would like to pick the agencies by late August or early September, in time for the new model year, Mr. Kelley said. But some dealer groups may take as long as a year or two to make a change.

The dealership marketing groups generally lack long-term strategic planning, said Jim Brown, the Mentor, Ohio, dealer heading the dealer panel working on the review. He said the groups should use one of the eventual select agencies in order to react faster to competitors on a regional basis.

"I can't imagine anyone wanting to use an agency that's not involved with GM," he said.

INCENTIVES FOR DEALERS

Mr. Kelley said "it would make sense" for Chevy to break tradition and provide ad dollars as an incentive to the groups choosing a select shop.

Unlike other GM divisions, Chevy has never provided matching funds to dealers for advertising. Instead, Chevy had kicked in dollars to regions where it wanted to push sales of particular vehicles, said an agency executive.

Chevy hired consultant Herb Zeltner to organize the process and act as liaison between the division and the agencies.

Mr. Zeltner, also the consultant on American Honda Motor Co.'s Acura agency review, said the first round of cuts will be based on an agency's ability to handle group needs in a small or large market. The remaining agencies will be asked to submit existing creative.

Following a review by Chevy and the seven dealers, an undetermined number will be invited to "strut their stuff in person," he added.

CUTTING SOME SHOPS

An account exec at another Chevy group shop predicted the questionnaires are "probably self-evaluating surveys, which I'm sure are designed to cut some agencies out. The mom-and-pops can't compete."

When GM's GMC Division sent applications to more than 120 agencies, including all 109 of its dealership marketing group shops in 1995, only 43 responded.

Buick's survey asked shops whether they did post-buy analysis and if so, to provide copies. Buick also wanted to know how many account execs per account, whether the shops had Internet access, total billings and whether agencies had a strategist on staff.

Chevy will include its national agency, Campbell-Ewald, Warren, Mich., in the review. But Chevy dealership marketing group agency executives predicted the agency will have an uphill fight for that business due to its close ties to Chevy.

Campbell-Ewald got its first dealer groups in 1994 for an 18-month test program. It had 12, but one Chevy group insider said the agency didn't get all the big markets it wanted. Dealer groups in larger markets have bigger budgets, determined by dealers kicking into an ad budget pool of about 1.5% of the price of each car sold.

Campbell-Ewald had some trouble hiring account reps to service several accounts. The Wichita, Kan., group dropped out after only a few months, in late 1994, and returned to B.A. Advertising, Dallas. This year, the Green Bay, Wis., group opted to return to J.W. Messner Inc., Grand Rapids, Mich.

Chevy Dealer Marketing Group Manager Chuck Hipp said Chevy deemed the test program a success, based on market share and efficiencies. All the other groups extended their contracts with Campbell-Ewald.

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