Under the impetus of former Procter & Gamble Co. CEO John Smale, General Motors Corp. installed brand management at its giant operations several years ago. GM, as we reported last week, says its system is successful -- despite the continued slide of its share of the U.S. auto market. Don't believe it.
In reality, this P&G-created management technique hasn't worked yet at GM. That's because it has yet to be fully absorbed by the automaker, whose structure has been undergoing change on a far broader scale. Change at GM comes slow; some aspects of its huge operations still need modification before brand management can be given the opportunity to succeed fully.
Ron Zarrella, the GM group VP responsible for marketing and sales -- and, strangely, service -- claims new models introduced under the system each were "a home run." Maybe in terms of sales and immediate objective, but such a simplistic statement also may mask a key problem: that a model launch, the DeVille, could be viewed as successful while the image and competitive positioning of the overall Cadillac brand still suffers. A larger question: What's Catera done for the brand? And sales isn't the only test. As a counterpoint, consider the branding and positioning of Toyota Motor Sales USA's Lexus brand and its models.
As one GM watcher put it, GM "over-engineered" brand management, creating as many as 36 brand manager positions -- and causing its ad agencies to add staff equally. GM may give all those brand managers input into model design and manufacturing, and a management structure that's provided better marketing plans. Yet it has a hard time coming to grips with the fact that some of its "brands" are still exactly the same vehicle (the Chevrolet Tahoe and the GMC Yukon, for example) with duplicate brand-management teams.
Dealers demand it, GM will say. Perhaps so. But Mr. Zarrella -- and, more importantly, his superiors -- need to understand that before the proven brand management technique truly will work for GM, GM needs to knows what a car brand truly is to the consumer.
It's been "one of the worst orchestrated brand efforts in history." So says the refreshingly candid Ed Colligan, VP-marketing at 3Com Corp.'s Palm Computing division. And now Bill Gates is closing in.
The product is the Palm, 3Com's electronic organizer, one of today's most coveted consumer tech devices despite an identity crisis that would send most brands into therapy: four names in two years (it's now the 3Com Palm III). We're optimistic 3Com has every chance to keep "Palm" the emerging category's dominant brand -- if it remembers the lessons of Apple Computer's Newton and Macintosh.
Newton's tale is known: Overhyped by then-CEO John Sculley, prematurely released to the market, parodied in "Doonesbury," it was nearly dead on arrival. When Apple killed it last month, an estimated 200,000 Newtons had been sold in nearly five years. Analysts predict a million Palm units will be sold in 1998 alone. Palm Computing's gizmo made no claims to change the world; with VW Beetle-like simplicity, it just did what customers wanted: track contacts, keep a calendar, e-mail.
Now Microsoft Corp. is circling, readying knockoffs dubbed the "Palm PC." Can Palm remain No. 1? Yes, if it learns from Macintosh's mistake. The Mac could have dominated its market if Apple had broadly licensed its superior software before Microsoft's Windows took hold. Palm Computing already has a deal with IBM and talks about doing more licensing. Now's the time. It set the standard; but it needs hardware partners to make the brand into the gizmo for the rest of us.