Mike’s Points

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Courtesy of the MarketingDaily, it looks like General Motors will be relying more on marketing to push sales, rather than price incentives. The other main point of the Reuters article is GM’s focus on targeted marketing.

Whenever you sell on price vs. the benefits, value, etc., of your product or service, you commoditize your product/service and get customers who’ll quickly go elsewhere if they can find a better deal.

Now, don’t get me wrong. What GM did immediately after the Sept. 11, 2001, terrorism attacks was brilliant, revolutionary and very much needed. And, since then, other sales price-focused tactics have been enacted by GM, Ford and even DaimlerChrysler when they’ve needed a shot-in-the-arm sales increase.

However, auto sales usually slump in the months (reg. likely required) after incentives. While there are various reasons, one of those reasons has been the focus on price. For long-term customer retention, sales growth and even company survival, you need to communicate, market and sell on the ultimate values your products and services provide to customers and other decision-makers. Not on price alone.

The other good part of the GM story is its focus on specific markets — vs. national — and grouping its brands better. (Granted, the reason behind this is as much cost-cutting as it is marketing and sales.)

In addition, GM will focus on local advertising campaigns in Southern California, Florida and the Baltimore-Washington, D.C. areas this year, [Vice President of Sales for GM’s North American operations Brent] Dewar said. “To be great at the national level, we first have to be great at the local level,” he said. . . .

GM will focus on making more progress in consolidating dealerships and getting Pontiac, Buick and GMC cars to sell from the same showrooms and cut the number of overlapping models, Dewar said.

With each brand’s models at a single location, GM can reduce its offerings and solve a problem that has hurt it for years, selling one car with three or more nameplates, he said.

“As we go market to market and they are more ‘on channel’ than not, we’ll be able to build the right models,” Dewar said. “This will lead to huge efficiency of product,” he said.

GM also wants to group its Cadillac, Hummer and Saab brands together in cities where property is expensive. “In high-cost metro markets where land is scarce, you’ll see them come together in three different showrooms with common service,” Dewar said.

Just like in the fall of 2001, hopefully other (domestic) automakers will follow GM’s lead.

Point to ponder: For the most part, you didn’t hear of the Japanese automakers offering price incentives. Maybe they knew all along that sales are best achieved by smart product development and marketing?

– Mike

Technorati tags: GM, targeted marketing, marketing