General Motors
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General Motors
Introduction
General Motors Corporation, hereafter referred to as GM, has an impressive history spanning over 100 years. According to GMs website, GM is the “global industry sales leader since 1931,” and their sales are representative of such a business. GM has a responsibility to its stakeholders to remain competitive and profitable. With the decline in the economy dating back to approximately year 2000 and the impact of rising fuel prices, GM found itself in a struggle to remain profitable. Losses in profit coupled with high inventory levels, GM recognized the need for an unprecedented sales promotion to empty its dealerships of the rapidly aging current year models. In June 2005, GM announced its “Employee Discount for Everyone” sales promotion. The results were phenomenal, as sales skyrocketed to record levels. The sales promotion was, indeed, without a doubt, a success. However, the sales promotion worked on the premises of discounting – a method which deteriorates brand image. The purpose of this paper is to redesign this sales promotion in an effort to not only sell vehicles, but also promote long term branding. Elements contained within this paper include: New Targeting, New Positioning, New Goals, New Messaging, New Creative, New Media Choice, and lastly Evaluation of Plan. All of which will be discussed in greater detail in their respective sections.
New Targeting
In order for GM to over come their tarnished image, they need to adopt a new promotional strategy and opt-out of their old discounting ways. GM needs to adopt a strategy that will enhance their brand image. They can do this with the following targeting and new promotion. The new target audience is full-nest families and the new promotion is aimed at building long term brand loyalty is through a built-in maintenance program.
To begin, GMs new promotion will not be discount orientated but instead one that will add value to their image. The idea behind the new sales promotion revolves around a maintenance program. The maintenance program is designed to provide the customer with an excellent protection/warranty plan. The maintenance program is not an additional expenditure for the customer because the cost of the program will be built into the overall sales price of the vehicle. The specifications of this plan include either 100,000 miles or 7 years of protection (which ever one comes first). The protection plan covers a huge array of parts and also services. These services include but are not limited to routine oil changes, schedule check ups, fluid flushes, and tire rotations. The services will be explained to the customer upon purchasing the vehicle along with guidance for when they need to come back for all the services.
With this new sales promotion, GM needs to segment properly in order to attract full nest families, the group for which their vehicles are intended to be sold to. A full nest family refers to any household which includes at least one or more children. GM would have the most success segmenting to this group because they have similar needs and lifestyles. Generally speaking, this segments lifestyle consists of sports, traveling, or just a means of transportation for several people. With this lifestyle, families need vehicles that can support such activities. GM can provide these families with solutions to their needs and lifestyles with all the vehicles they manufacture. This new segmentation will help GM target the proper market because most of their vehicles are sold to families with similar needs and lifestyles.
This sales promotion will provide many benefits to GM and the consumer. The benefits will include convenience, quality, and a better brand image. To begin, the maintenance program will be available to the customer anywhere. Meaning that if they are away from the dealership in which they purchased the vehicle, they can still get the free maintenance performed on their vehicles at another participating GM dealership. This provides convenience for the customer which results in the customer associating a better brand image about GM. Quality is also created with this program because the customer knows that skilled factory-trained service technicians, using the latest diagnostic tools and genuine GM parts, will be maintaining their vehicles. This promotion also acts as a catalyst to enhance GMs brand image, thereby achieving the goal of building brand loyalty. As stated above, GM has unfortunately labeled its brand image with connotations of being “cheap.” They did not intend to create this image but have with the discount sales promotions that they continually provide to consumers throughout recent years. By targeting to the new segment that was outlined above, GM will enhance its brand image for the following reasons. First, the people within this segment are always looking for deals and convenience because they have children. The lifestyles of full-nest families are such that they are very busy and for that reason they look for convenience as a top priority. With this promotion, GM is providing customers with many opportunities for convenience. For example, GM will inform customers when they need their next oil change so that they are not burdened to remember themselves. Thus this equals convenience! Another way GM will enhance their brand image in the minds of consumers is with money. Since the price of the maintenance program is already built into the sales price of the vehicle, consumers will not think that they are paying more for such a deal. When the consumers go have their oil change or routine tune-up performed by GM, there is no cost associated with the work. Thus, the consumers will think they are getting a great deal. This will result in positive associations with GMs brand image. All in all, these benefits to the consumer will create a good image of GM which is precisely the purpose of the new promotion and segmentation.
New Positioning
An impressive positioning strategy is imperative to survive in corporate America. Not only does positioning help retain existing customers and help gain new customers, it paves the way for strong growth by creating and adding value to the organization. “Positioning is the process of creating a perception in the consumers mind regarding the nature of a company and its products relative to the competition. Position is created by variables such as the quality of products, prices charged, methods of distribution, image and other factors.” Creating an effective positioning strategy is certainly not the easiest task, but it can be achieved in several different ways. In specific, GMs unique selling