Tuesday, April 7, 2009

Let GM Go?

David Kiley poses an interesting question on Brand New Day: should GM take out the “G” and the “M?” As he reports:

The talk now is that GM may go into a quickie bankruptcy in June, and be divided into two companies—a good GM made up of Chevy, Cadillac, Buick and GMC; and a bad GM made up of Hummer, Saab, Saturn and Pontiac that would be isolated and sold off or wound down.

Assuming the good GM , in this scenario, is a public company, might it not be a good idea to ditch the GM brand name and call the new entity Chevrolet Motors? Or Chevrolet-Cadillac Motors? And get a new stock ticker symbol while you are at it of maybe CHEVY or CADDY?

We’d agree with Kiley that the GM brand doesn’t do too much for anyone at this point and hasn't for some time.

We were pretty skeptical when GM announced in 2005 a major "branding" initiative to add the “GM” logo along side the other brand names and focus on safety and technologies like On-Star as the corporate brand's key points of differentiation. Explained GM’s top sales executive at the time, “our studies show that consumers place a tangible value on the General Motors name." A consultant with automotive research house CSM Worldwide corroborated GM's findings: "The GM corporate name has a stronger public image than some of the brands that make up the company." Of course, this wasn’t (and still isn’t) saying much.

We feel like we’re beating a dead horse here, but what Chevy, Cadillac, Buick, GMC and all the rest stand for, how they are different and therefore better than competitors, wasn't then and isn't now entirely clear. If we take a look at the the two brands Kiley calls out as potential replacements for the GM name, Cadillac has switched directions in terms of targeting and positioning multiple times over the past several years. Chevy is “an American Revolution,” but what does that mean?

Anyway, whether the firm sticks with GM, or becomes Chevy Motors, or changes to Chevrolet-Cadillac Motors, the name change itself will have a relatively minor impact on how successful it will ultimately be in selling cars and trucks. We aren’t saying that there aren't some solid operational and financial reasons to spin off a “bad GM” or reorganize around Chevy and Caddy. And we're not saying that brand name is completely unimportant. What we are saying, however, is that the company has problems that are much, much bigger than what it decides to call itself.

A brand name, after all, is only as powerful as the marketing strategy on which it’s based. And it's the lack of a powerful marketing strategy--not the brand name--that has undermined the performance of GM and its individual brands for years.

We can't say all the brands are exactly a blank slate, but if they are all kind of hazy in the minds of consumers, they likely all have some potential to become powerful and strong. Sure, "GM" doesn’t do too much for anyone right NOW, but it certainly could become a very strong corporate brand if developed and managed wisely. The same could be said for Chevy, Cadillac, and any of the other brands.

We just hope the firm doesn’t get so caught up in what to call itself that it forgets about the “develop” and “manage” part of building a brand.

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