Why aren’t people buying GM cars? And a more important question… why does GM lose $4,141 on every car it sold last year?
One of my heroes, Al Ries, wrote a long detailed analysis of GM’s marketing problem for Advertising Age. Their problem is that for years now, GM’s idea of marketing is advertising. GM spent $36 billion on U.S. advertising in the past ten years. But, as Al points out, you can spend an enormous amount of money on advertising, but if you don’t have a clear understanding of your brand and brand message, then the largest advertising budget in the world won’t help.
Very few people can tell you what it means to own a Chevrolet or Buick these days. Al tells us that BMW’s story is “driving,” Toyota’s story is “reliability,” and Mercedes’ story is “prestige.” Those three are easy! You know why you’re buying one of those cars. But the reason you buy a GM vehicle is it’s sold at a discount. Remember? They lost $4,141 per car last year.
And, the idea isn’t that you have to have a foreign car. You just have to be able to love and want the brand. As Al Ries shows, Harley-Davidson had a net profit margin of 15.8% last year. A totally USA motorcycle company making lots of money– what are the odds of that? And they succeed because everything Harley-Davidson does is based around the brand… all the way to the sound the engine makes.
So, what do we learn from this? Read every branding book that Al Ries and his daughter Laura have written. And then keep in mind that advertising is not a strategy. Advertising is a tactic. It’s a tool. And without a clear understanding of your brand and your brand message, you are going to flounder, no matter how much money you can spend.
It doesn’t matter if all you think you need is a Web site or some posters. First you have to think about whom you are addressing and what is the brand message you want them to remember. Then you have to understand the proper means of distributing that message to get the call-to-action accomplished. Some times advertising takes second place to PR. Other times you’ve got to spend money on a email campaign to specific people. But, first you have to know what differentiates you from your competition and make sure your potential customers know, too!
