“A Car for Every Purse and Purpose”
Thursday, June 4, 2009
Alfred P. Sloan’s famous quote epitomized the strategy that built GM into what was once the largest company on the planet. And while an entire laundry list of problems led to GM’s bankruptcy, the mismanagement or gross misinterpretation of Sloan’s strategy is what ultimately led to the behemoth’s demise.
Whether they were ever actually spoken or just a line carefully crafted by spinsters, Sloan’s pithy words marked the birth of one of the world’s first well-orchestrated, segmentation-based brand portfolios. Sloan’s segmentation strategy laid the foundation for a portfolio that once housed some of the most respected brands in history.
Over the decades, GM built brands like Buick, Cadillac, Chevy, Oldsmobile, Pontiac and others into clearly defined American dreams for segments of consumers ranging from truck farmers to titans of industry based on these two basic ideas. Gradually GM added ever more sophisticated lifestyle marketing strategies to the mix and -- for better or worse -- was credited with inventing “planned obsolescence.”
But as the years progressed, GM simply lost its knack for developing cars people actually wanted to buy. They “replaced” the iconic Camaro with the limited-production, El Camino-like monstrosity called the SSR:
The company let Cadillac become staid and boring. Additions to the famed nameplate’s lineup helped boost short-term sales, but arguably did little to clarify or rejuvenate the fundamental essence of the Caddy brand:
Rather than re-releasing the legendary GTO as a model that meant something, it hit the streets with all the muscle of its predecessor and looks of a run-of-the-mill Grand Prix:
Much like Ford and its Lincoln and Mercury brands, GM created virtually identical models across its Chevy, GMC and Pontiac labels. Extension after extension gradually diluted the meaning of the individual nameplates within the portfolio. It became unclear to consumers - and likely the company itself - for which purse, purpose or lifestyle each model was intended.
Saturn, one of the greatest brand launch and brand advocacy success stories of all time, is perhaps one of the saddest examples. A clearly defined brand with a specific purse and purpose was extended to include luxury models, SUVs and an incredibly stylish sports car:
The Saturn Sky sports car also had a twin sister in the Pontiac lineup called the Solstice. Even the naming structure was a parallel. Why?
Rather than treating its brands as individual containers of meaning, GM gradually eroded the meaning behind its badges. Sloan understood each brand within the portfolio needed to instantly convey something to consumers. Just as his concept of new model year changes led tail-fin size to signify social status, each nameplate needed to say something about its driver.
Somewhere that idea was lost as each badge took out a loan against its brand equity - its future - with every extension. As they stretched each brand like a rubber band. Essentially, GM over-leveraged its brand capital.
Now every single taxpayer owns a piece of that burden. And as it turns out, what was bad for GM was also bad for America.