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Will GM Survive Even After Bankruptcy?June 2009 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"Marketing is 90 percent strategy and 10 percent execution. With the right product, the right name, the right target audience, the right position, and the right timing, most marketing programs are bound to work. The difficult part is the 90 percent. The easy part is the 10 percent." This quote is from a recent book by Al & Laura Ries, "War in the Boardroom," Why Left-Brain Management and Right-Brain Marketing Don't See Eye-to-Eye - and What to Do About it. Harper Collins 2009. |
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Product-Driven? In corporate America, most strategies are designed by top management. That is as it should be - except that most CEOs and Board members do not have much marketing experience. A great number of C-Level executives come out of finance and manufacturing, which probably explains why their focuses are on financial issues and production. It also explains why most American companies, large, medium and small, are product-driven rather than market-driven.
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Non-Market Performance. The almost endless succession of failed marketing strategies of both major and minor US companies should tell us something about American Management and Boards of Directors, and that is - they think they understand marketing, but their performance proves otherwise. It also suggests that management is focusing on the wrong issues, and consequently coming up with the wrong solutions, because there is no right solution for the wrong problem.
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General Motors Again. You are probably tired of hearing about General Motors and its many mistakes, but the fact is that GM is an example of so many things that were done wrong. We are now seeing GM entering bankruptcy, and adopting measures that hurt employees, distributors, and suppliers. For example, they are shutting down a large number of plants. Why? Because for years they have had excess capacity, which led them to focus on keeping plants running instead of concentrating on designing cars that met customer expectations.
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Do Managers Know More Than Customers? What are customer expectations? Customers tend to be value-driven; they want to get attractive, reliable products they can be proud of, and purchase them at reasonable prices. When managers think they know more than their customers, they always make mistakes. Is it so hard to ask, and then listen?
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Automotive Business Culture. For decades, the Detroit automotive business culture has been a very isolated, out-of-touch one. As you dealt with automotive executives in Detroit, it quickly became apparent that many of them lived in a separate world, spoke a different language, and had an unrealistic perspective of markets and customers. Given that disconnect, how could they possibly hope to succeed in the marketplace where, as Al and Laura Ries say in the quote at the beginning of this newsletter, "Marketing is 90 percent strategy"?
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10 Percent Execution? Even the part about "and 10 percent execution" is valid, because it doesn't matter if you perform flawlessly - and General Motors certainly didn't, you can't get the right results with the wrong strategy.
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How about "the right product"? General Motors products weren't bad; they just weren't good enough compared to the competition, especially Japanese cars. Even the Saturn, which in many ways started out as the right car in terms of small and fuel efficient, couldn't compare to the quality of the foreign competition. Not only that, because Saturn was produced in Spring Hill, Tennessee and not Detroit, it was looked down upon by the rest of GM employees and executives. So what did GM do to come out with the "right" product? It launched the Hummer, a huge, expensive, gas-guzzler.
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How about "the right name?" Ion, the Buick Enclave, the Cadillac CTS, SRX, and Escalade, and the Chevy Aveo? How meaningful are these names in terms of what they say, offer, and promise to customers? Is there anything compelling about any of these names? GM is not alone in this category; the Japanese and the Koreans also come up with some really weird ones.
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How about "the right target audience?" Who is the right target audience? Logic says you don't generate a product and then look for the right customer. Nevertheless, this is still being done today. Obviously, the right target customers for Cadillac and Chevrolet are different, and have been for years. The question, however, now becomes who are the right target customers for the new products that GM should be generating? Or, will they go back to the same old target customers? Remember the old commercial, "This is not your father's Oldsmobile"? Maybe tomorrow's customers won't be the same ones who bought Cadillac and Chevrolet.
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How about "the right position?" Positioning is about identifying the specific perception of your product or service that you wish to create in the customer's mind. Customers do not buy products or services; they buy expectations of value and results. When you position a product or service the right way, it will create a desirable image in the customer's mind. Originally, Cadillac was a premium brand, that is, it was until GM itself destroyed that image by inadequate quality and by offering cheap versions of the brand. Chevrolet was "America's Car," that is until GM created too many versions of the Chevy that ended up diluting the brand.
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How about "the right timing?" This is a critical question for GM. GM is going into bankruptcy after having dropped from having almost 50 percent of the American market to about 13 percent; will the brand name still deserve respect? Timing will be most critical in the introduction of new models, new designs, new innovations, and new brand names.
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Does GM have a chance? Given GMs penchant for designing unsuccessful strategies in the best of times, it seems unlikely that it will have much chance of success in the worst of times. Nevertheless, if GM management and its unions are scared enough, it is amazing what pressure and a sense of urgency can do for the human mind and spirit. It is a long shot, but GM does have a chance, that is, if it stops being the GM it has become!
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"Just as good" is not good enough. As for "the easy part is the 10 percent;" it may not be easy if GM does not raise its quality standards above those of the entire global automotive industry level. GM cannot afford to be "just as good" as the others; it has to be better to re-earn its once proud reputation.
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Questions Your Company Should Be Asking Itself.
Hint: If you don't have satisfactory answers to the above questions, contact Michael Wynne at (630) 420 2605 or mykwyn@aol.com. He will help you find the right product, develop the right name and brand, select the right markets, improve your timing, and find the right positioning. Michael will help you get both the 90 percent and the 10 percent right!
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Contact Information ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
email:
mykwyn@aol.com
phone:
(630) 420 2605
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