General Motors’ Demise: Losing Brand Relevance

Could General Motors have managed once-great brands much worse?  With or without a bailout, nearly all of dinosaur21GM’s brands are classic examples of brands that lost their relevance with consumers.   How did the market share leader, with a portfolio of brands that delivered exceptional performance (Pontiac) and aspirational image (Cadillac) fall so far?    As always, consumers’ lifestyles and preferences changed over time; General Motors did very little to respond. 

Among the major marketing mistakes that ‘led to this fine mess’:
They lost touch with the consumer. Since their peak market share days, when the brands’ product lines and marketing messages captured consumer desires, GM listened less and less.    Their focus, tragically, was on ‘what they could make,’ rather than what the consumer wanted to buy.     For example, Toyota, Honda and others did a far better job anticipating and responding to consumers’ interests in smaller cars, better fuel-efficiency, and SUVs.
Their innovation lagged competition. Once leaders in innovative product design, they became followers, at best.   And when they actually could innovate, they were late.    Their manufacturing process became so complex and unyielding that it took them at least 2 years longer to introduce a new model, than competion.   That dooms any innovation program.
The brands’ positionings became unclear. Just a few decades ago, Pontiac was the ultimate sports car and Cadillac was the American dream for luxury.    And now?   A virtually indistinguishable array of ill-defined, overlapping brands.   And GM vascillated on managing the portfolio – sometimes focusing on nameplate brands (e.g. Buick or GMC), sometimes on the model brands (e.g. Sunfire or Escalade).   Meanwhile competitors did an infinitely better job at building compelling nameplate brands (e.g. Lexus, Toyota)
Underestimating competition. Despite years of declining market share and getting pummelled by global competitors, GM management remained steadfast in their insular assumption that the GM way was the best way.    Wake up.    The moment you lose market share your consumer is telling you;  “I don’t prefer you any more.”   That’s the warning sign to adapt and respond.

Brand Lessons:

1.  Stay relevant or say goodbye – Anticipate, intently listen to, and study consumers’ changing needs.  Brands, like people, maintain their vitality by evolving positively over time.
2.  Innovate more frequently and faster than competition – Market leaders are consistently the best, and most prolific innovators.    Constantly refine your internal innovation practices so you can innovate faster than competition.
3.   Learn and respond to competitive inroads – Don’t let internal corporate pride and ego blind you.   If your consumers are starting to buy ‘your category’ from others, figure out why and develop an action plan.


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