BEHIND SATURN'S STUMBLE

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It's actually somewhat amazing that this story is about to be told again. Where was everyone during class?

Here's Saturn Corp., a success story that we have chronicled in detail in our pages, suddenly, surprisingly on the defensive.

Sales have started to decline just as Chrysler Corp. gets ready for a major frontal assault on Saturn's buyer-base with the new small Neon. Teaser TV commercials are airing now, and the Neon will be unveiled before a nationwide audience on NBC-TV's Super Bowl telecast.

But Saturn should be dealing from strength, given its winning image and success. What happened to make Saturn executives squirm? An old story: The company cut advertising.

Yes, midway through 1993, when Saturn retailers were dealing with waiting lists for the popular car, headquarters decided it was safe to curtail ad spending. The powers that be wanted to move those saved (?) dollars onto the bottom line as the General Motors Corp. unit sought its first profitable year since startup.

As much as half of a $100 million advertising allocation was cut back, production was increased to meet demand and, as many experts will tell you, the sales started to slide.

So now Saturn is pumping the budget back up-in a hurry-to the level needed to sustain a car brand these days.

"Everyone at Saturn realizes that it was a mistake" to cut advertising, said the owner of four Saturn sales outlets in California.

We've always had a saying around here: "The best reason to advertise in 1993: 1994" (or whatever years). We find ourselves repeating it on these pages every now and again.

At McGraw-Hill, we note, they are currently re-running in the pages of Business Week a house ad called "Man in the Chair." The print ad, which delivers a powerful message about how advertising works, first ran more than 30 years ago.

Saturn, not just an American business success story of the '90s but one of the few such stories of the '90s, frankly has us shaking our heads in wonder.M

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