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Sales slip asAs GM struggles with diminishing returns from several of its brands, the company has restructured its marketing ops, breaking its eight brands into four separate channels.
The marketing channels are now: Chevrolet; Premium, which consists of Cadillac, Hummer and Saab; Buick-Pontiac-GMC; and Saturn.
The move allows marketing dollars to go further, according to Erich Merkle of consulting firm IRN in Grand Rapids, Mich. (via Brandweek). “We will now see fewer models across these brands, which will be a big plus for GM. Instead of seven Pontiac selections, we will see maybe three. It allows [for] extended marketing as well, with products that GM can really get behind.”
GM has been criticized by some for having too many brands, but the auto maker says the eight-brand strategy works well because they’re managed across four channels, writes CNN Money.
In the past few years, GM has consolidated dealerships, moving Pontiac-Buick and GMC sellers under one roof. That effort will continue with Cadillac, Hummer and Saab dealerships.
Despite new products and ad campaigns, several GM brands have slipped in sales due to a slowing economy, high fuel prices and a shift away from trucks and SUVs. Hummer is down 24.2 percent, Chevrolet is down 12.4 percent and Buick is down 12.7 percent.GM is the largest advertiser in the auto category, spending $2.02 billion in 2007, according to Nielsen Monitor-Plus.
A recent analysis of GM’s ad spending suggests the company may not be allocating its budget wisely. Some 17.5 percent of General Motors customers say TV influences their auto purchase, but GM spent 40 percent of its ad budget on TV ads in 2006 (proportions similar to other leading automakers’), according to an analysis by BIGresearch.
The analysis comes amid reports of automakers’ reallocation of more dollars to digital advertising. But those moves may not be going far enough, suggests BIGresearch’s most recent Simultaneous Media Survey (SIMM 11, Dec. 07) of 15,727 participants.
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