GM Warms Up Its Branding Iron

The Detroit behemoth rediscovers a harsh truth: Even smart new models need nameplate strength

Not long ago, the Oldsmobile Alero, Aurora, and Intrigue were extolled as shining examples of what General Motors Corp. (GM ) could do when its product developers set out to design sharp cars. The models won plaudits from the automotive press for their distinctive styling and carried the kind of mystique that lends itself to innovative marketing programs such as appearances in the hit sci-fi show X-Files. As it turned out, though, they were too little, too late. In December, GM made the painful decision to phase out the once-storied Oldsmobile brand. The sobering marketing lesson: A stale brand almost always trumps an innovative product sold under that name.

That sad truth is causing the auto maker to reexamine the way it markets cars. In the mid-1990s, General Motors unleashed a "brand-management" strategy amid much fanfare that aimed to sell cars the way Procter & Gamble Co. sells soap. In practice, that often meant focusing the marketing effort on innovative new models rather than the division that spawned them. But GM didn't get much mileage out of those launches. "They have made almost no progress in the past five years in terms of changing the perception of GM brands," says Susan Jacobs, president of automotive-marketing firm Jacobs & Associates in Rutherford, N.J.

Now, GM is tilting the focus back toward those muddied division labels. Cadillac and Chevrolet are rolling out marketing campaigns featuring splashy, emotional ads celebrating their overall brands rather than particular models. GM's other divisions are likewise conjuring up ad campaigns that more consistently market vehicles sold under the same umbrella brand. And in the next several years, GM will roll out several high-priced niche cars for Cadillac, Chevy, and possibly Buick that are designed to reinforce each brand's distinctive personality.

DIVERTED DOLLARS. New models and big sellers will still get their own budgets, but GM is shifting more of its ad budget--$2.8 billion last year--to the overall brands. "The lesson is that divisional positioning has to be king," says John G. Middlebrook, GM's vice-president and general manager for brand marketing and corporate advertising.

Cadillac may be the best example. In recent years, GM's luxury unit has mustered only a single ad for the division, says Kim Kosak, Cadillac's advertising director. So it was a bold stroke when Cadillac rolled out the glamorous "moments" ad during the Academy Awards broadcast on Mar. 25. The mission: to restore Cadillac's historic blend of hot design, a great drive, and the latest technology. About 20% of Cadillac's nearly $100 million ad budget will go toward the division's campaign, vs. zilch last year. The new ad places several classic Cadillacs against the backdrop of GM's postwar heyday, when swing ruled the pop-music charts. Then it segues into images of four new or proposed Cadillacs, including a $70,000 Cadillac roadster, which goes on sale in 2003, the newly launched Escalade sport utility, and the Imaj, a sedan concept car. Thanks to the consistent advertising message of rival brands, "luxury consumers say, `I own a BMW' or `I own a Mercedes,"' says Cadillac General Manager Michael O'Malley. "I have to get this organization focused on the Cadillac brand."

PRO TRUCKS. Chevy is taking a similar position. The division has long marketed its entire truck line successfully with Bob Seger singing Like a Rock. But the passenger-car line is just starting to get a focus. Its newest ad campaign, which pushes dependability with the "We'll be there" theme, features several Chevys. The car unit hasn't run advertising to bolster its overall image in seven years, says Chevy General Manager Kurt Ritter. "You need to more closely link the nameplates to the divisional brand," he says.

GMC is making a push, too. The all-truck division has long been seen as a slightly nicer Chevrolet truck. For the most part, the trucks aren't much more than that. But ads will present the brand as "professional-grade" trucks for entrepreneurs and particularly picky sport-utility buyers. Although the ads feature just one vehicle, they'll be tailored to a single theme rather than having each model pursue its own image, says Mark-Hans Richer, GMC's promotional director for advertising and sales.

The emphasis on the divisions doesn't stop with the ads. Several GM units are developing highly stylized niche cars to capture the overall brand image. Cadillac's sports car, based on the Evoq concept unveiled in 1999, will hit showrooms in 2003 to stress the brand's nearly forgotten performance image of old. Likewise, Chevy's retro-styled SSR--think in terms of a hot-rod pickup--is designed to invoke Chevy's fun heritage when it goes on sale in late 2002.

No one said fixing GM would be easy. But if it doesn't make the right moves to rebuild its brands, the carmaker could find itself telling the same Olds story for another of its venerable brands.

By David Welch in Detroit

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