As Detroit auto sales plummeted to the lowest this month since 1992 (see sidebar), General Motors Corp. is trying to give consumers who now expect the employee discount a reason to buy-while simultaneously weaning itself off profit-killing incentives. The concept of "Total value promise" is therefore intended to convey lower sticker prices, improved warranties, reconfigured models and added standard equipment to more than 50 models across GM's eight vehicle brands.
But the phrase is vague, said experts, who argue consumers don't understand it as easily as GM's summer employee discounts.
They're not the only ones. Even GM's Steve Hill, director of retail marketing and the brains behind its wildly successful employee discount program, admitted the phrase is "a little bit confusing." When asked to define it, he said "it doesn't mean one thing to anyone person" and will differ among GM's brands. There's no mandate that every brand use the term in its messages.
Total Value Promise isn't a sales' promotion, Mr. Hill said. "This is a different way to go to market. It's a marketing umbrella communications platform." Yet the phrase isn't easily found on any of GM's main Web sites, including gm.com, gmbuypower.com and the separate vehicle brand sites.
If GM wants to get the word out on "Total value promise," it needs to explain the term and use it prominently in all messaging, said Art Spinella, president of consultant CNW Marketing Research. CNW's research found that only 2% to 3% of consumers recognize the phrase as related to GM, and noted that Hyundai Motor America has the value positioning locked up. Some of GM's 2006 model prices are equal to or less than employee discount prices but people don't know it, said Wes Brown, analyst with consultant Iceology.
GM reported last week that its U.S. sales sank 23% in October compared to a year ago, with truck sales off 30% and car sales skidding 12%. GM spent $1.42 billion in measured media in the first half of 2005, according to TNS Media Intelligence. The corporation reported a third-quarter loss of $1.1 billion, with its North American auto operations bleeding $1.6 billion in losses for the period.