Chapter 12: Branding Cars

Posted on | June 2, 2009 |

By Robert Passikoff

GM’s financial quagmire and bizarre labor and bureaucratic practices notwithstanding, branding (or lack thereof) was a big part of their problem.

However many MPGs your car gets, or what quality ratings it receives, cars, like most products and services (perhaps even more so), have a large emotional component that isn’t an optional extra. Your brand either stands for something in the mind of the car buyer or they walk away from your brand and drive another home.

We’re not just jumping on a fallen giant. We’ve been saying this for years. And as loyalty metrics are leading-indicators of consumer behavior and profitability we weren’t surprised to see GM steadily lose market share, from 54% to 19%.

GM lost touch with car buyers, but that shouldn’t have been surprising to folks either. They had too many brands, many of which had neither emotional resonance nor meaning. Everyone knew them (so much for awareness ratings), but nobody knew them for anything other than “cars.” Experts have pointed out that GM practiced “launch and leave” branding, i.e., companies spend billions upfront to introduce a vehicle, but then fail to support the brand with sustained, meaningful advertising. And to complete the self-fulfilling marketing loop, with a shrinking market share GM couldn’t possibly give its multiple brands and models the individual attention they so desperately needed. That explanation’s fine as far as it goes. If you really pay attention to what GM did you’ll find that they weren’t really very good at branding or marketing. Not when they had to actually compete.

We turned to our Customer Loyalty Engagement Index to look at theemotional driver in the automotive category - “Right Car For Me” - to see how major auto brands ranked on that critical dimension, and here’s what the top-20 ranking looks like:

1. Toyota
2. Mercedes
3. BMW
4. Subaru
5. Cadillac*
6. Jeep, GMC*
7. Honda, Volkswagen
8. Hyundai
9. Nissan
10. Hummer*
11. Lincoln
12. Kia
13. Mustang
14. Chrylser
15. Mercury
16. Saturn*
17. Chevrolet*
18. Buick*
19. Volvo, Saab*
20. Pontiac*

From a brand perspective, kind of creepy, huh? Now GM’s brand lineup is being halved, with the company jettisoning divisions like Pontiac (See brandkeys.blogspot.com/2009_04_01_archive.html), but from a brand perspective the bottom line will not improve if they can’t figure out how to imbue the metal with some emotion.

The Brand Keys bottom line: Real loyalty metrics - being leading- indicators and all - might have helped them. They still could when they get around to “reorganizing” the GM brands and decide to stop talking to themselves and start looking at the category through a consumer windshield.

GM’s bottom line? The stock fell steadily from about $70 at the start of the decade. It closed at 75 cents a share on Friday.

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Robert Passikoff is the Founder and President of Brand Keys