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INSIGHTS & JOY
A business newsletter with Pizzazz! "We help leaders become better marketersusing a holistic business approach!"
General Motors, for the first time in it's history, announced their GM "Employee Discount" promotion on June 1, then continued it through July. It may end on August 1. It may not! What impact has the program had on the automobile market? What has been the competitive response? Will the car buying public reap a genuine windfall? There are several marketing lessons to be learned from GM's "startling announcement." Subscribe directly by e-mail to rpmorgan@morganmarketingsolutions.com and writing "subscribe" in the subject box. Check our web site for: $ Million Marketing Tips, Insights & Joy Archive, Speaker's Bureau, and our Article Library! www.morganmarketingsolutions.comIN THIS ISSUEWhat is the impact of GM's "Employee Discount" promotion? Smiles make the day!$ Million Marketing TipsAmazing facts...Marketing Facets - The Market Focused
Guide to Company Analysis
What is the impact of GM's "employee discount" promotion? General Motors, for the first time in it's history,
announced their GM "Employee Discount" promotion last month. It may end on
August 1. It may not!
GM's stunning marketing move must have caught
Ford and Chrysler flat-footed. They waited to see whether or not the idea
produced more new car sales. Meanwhile, they, along with Nissan and other
imports continued to run their standard, inane car commercials showing shiny new
SUV's being driven through mud bogs and up rock piles and luxury sedans skidding
around wet, curving mountain roads at high speed! I've always wondered how many
thrillseeking morons dream of treating their new vehicles like that. But, alas,
all the car companies have followed the same advertising pattern for years,
hoping to demonstrate the glamour and excitement of owning their latest
whiz-bang equipped model. But, I digress.
General Motors' new employee discount for
everybody program took the place of confusing rebates and zero percent interest.
The program made it sound simple. Buy one of our cars and we'll sell it to you
at the same price our employees pay. GM did exclude Chevrolet Corvette,
Pontiac GTO, and all medium-duty trucks. Ford announced it's own "Family Plan"
within the past couple of weeks, indicating to me that GM's promotion is
working. Chrysler even brought Lee Iacocca out of retirement to promote its
new program that offers their cars at employee prices, plus an
additional special discount, topping the GM and Ford deals. I suppose
Chrysler employees will get that extra discount now also. I'm waiting to see
what Toyota, Honda, Nissan, and the other imports will do to keep their cars
moving out of dealer showrooms.
GM's highly visible offensive provides
interesting lessons in marketing:
1. It pays to know your competition. It is also
important to avoid underestimating what a key competitor might do in the face of
falling unit sales. GM reported a $1.2 billion loss in North American operations
for the second quarter of 2005. Business was 'stinko' so I'm sure the GM
marketers were pressed to "do something now!" In response, there must have been
some breakthrough brainstorming sessions. Touting quality awards wouldn't be
enough to turn things around! 2. Ford and Chrysler's programs were defensive
in nature. They will be negatively perceived as reluctant followers while GM
will be viewed more positively by buyers. GM reported that deliveries in
June 2005 were up 41% from the prior June, significantly reducing their
bloated inventory of vehicles. No wonder Ford and Chrysler
followed!
3. When all competitors meet your rebate deal,
the deal soon loses its marketing impact. It was time to change the market
rules, and GM did it. They also used a cross-section of actual GM employees in
their advertising to help make the 'employee discount' link. Smart move in my
book. Ford made a weaker linking attempt by naming their new program the "Ford
Family Plan."
4. While bold, the employee discount programs
may ultimately reduce all car manufacturer's profits if the average net yield
per unit is really below the previous deals that included large rebates and free
financing. My guess is that the actual margin per unit will come out about the
same in the end. If not, GM may have led the industry toward more future red
ink.
5. There is a good chance that some GM buyers
who defected to Ford or Chrysler will return to GM models. The other auto makers
dragged their feet in June, giving GM a
new chance to regain market share. GM's news releases indicate a recent surge in
new buyers and happy dealers. GM calls the new marketing program its
value based strategy. Could it be that U.S. car manufacturers
have finally awakened to the need to deliver true value for the prices they
ask?
6. There may be a spate of new leases
signed during July and August as drivers of two and three year-old models see a
chance for a cheaper upgrade.
7. The programs are only at
participating dealers. Evidently, some independent dealers were not so
keen on the employee discount programs. Today, many dealerships are owned by
large holding companies or the car manufacturers themselves. Consolidated dealer
ownership makes new deals more doable, because widespread distribution is
possible even if some dealers won't support them. It will be interesting to see
how the new discount programs affect the dealers who opted out.
Stay tuned. I have a feeling that GM's rule
change will spawn some more new marketing thinking among competitors. I
sure hope so, because the recent car commercials are actually more realistic and
interesting than the stale old ads filmed in swamps and on those rocky mountain
peaks! Smiles make the
day! No line at the supermarket Lying in bed, listening to it rain... Taking a nice warm shower Hearing a favorite song on the radio Getting the giggles with someone you love Finding a twenty dollar bill in your winter coat pocket Overhearing a friend saying something nice about you Waking up and realizing you still have three hours left to sleep That first sip of hot coffee in the morning Enjoying a relaxing massage Watching the expression on a loved one's face when they open your present Biting into a cookie, warm from the oven Watching a spectacular sunset Getting a nice hug Knowing for sure that you've done the right thing
$ Million Marketing Tips TIP: If nobody remarks about your
price, it is probably too low. Setting your price is like setting a screw. A
little resistance is a good sign!
TIP: If you cannot see how your
product or service is different from competitors you must look again...harder.
If the differences you find aren't meaningful to your customers, aim to create
greater differences or additional points of differentiation. Remember,
everything can be differentiated, even flour and water...consider Gold Medal and
Perrier!
Amazing facts! Coney Island isn't an island, but it used to be
at one time.
Before the American Revolution, there wasn't a single
bank in America!
Bad breath caused by onions and garlic originates in
the lungs, not the mouth!
Climax, Colorado is the town with the highest
elevation in the U.S. at 11,302 feet above sea level.
It's a state law in Kentucky - citizens must bathe at
least once each year.
90% of all tornadoes on Earth occur in the United
States!
Marketing Facets - The Market-focused Guide to Company Analysis I have recently completed Marketing Facets - The Market-focused Guide to Company Analysis. Marketing Facets is a practical resource for those involved in determining the current health of a company and gauging its future prospects. I designed my 103-page guidebook to be a supplement to other evaluation procedures and the highly detailed information normally gathered during a thorough due diligence or business valuation process. The workbook takes a holistic approach, assembling facts and management assumptions in key areas for analysis and conclusions. Marketing Facets is a valuable resource to private investment fund managers, individual investors, venture capital specialists, investment banks, and valuation specialists. Marketing Facets can also serve as a guide for C-level executives who wish to perform their own company analysis as part of normal business planning, or in advance of efforts to refinance, acquire or divest. Marketing Facets is available in electronic form via the Internet, on CD/ROM, or in print with a ring binder.> Electronic in MS Word .doc or Adobe .pdf format via the Internet @ $79.95 > CD/ROM format @ $85.95 including U.S. shipping and handling > Ring binder version and CD/ROM combo @ $99.95 including U.S. shipping and handling Consulting is also available.
Please contact me for additional information.
Telephone: 972.931.7993 Fax 972.931.0542 rpmorgan@morganmarketingsolutions.com. P.S. Ninety-five percent of our engagements originate as a referral from helpful people like you! If you know someone who:> Wants to develop a more productive
marketing program, or
> Needs help building and implementing an
effective operational business plan,
I would appreciate the opportunity to discuss the situation with you. Our ideal client is a business owner or CEO between 30 and 60+ years old. Usually with a financial, engineering, or production background. Who is often impatient, and interested in improving company performance. Comes alive when you ask, "How's business?" He, or she, is practical but also enjoys the finer things in life.So, you may see my ideal client driving a Lexus or SUV to Neiman Marcus...and to Sam's Club. Who do you know that fits this description? A client
speaks: "Thank you for all
of the hard work you did for my company. The concepts, experience, and insights
that you brought to our public warehouse organization literally turned the
company around. Now that we have a presence in the marketplace, and a proven
method for getting the message out to our prospects, I can see that our growth
will be limited only by our own desires." To unsubscribe, e-mail to rpmorgan@morganmarketingsolutions.com and write "unsubscribe" in the subject box. ©2005 Morgan Marketing Solutions, Inc. All rights reserved. Other distribution permitted with proper attribution.
Richard P. Morgan CMC Telephone 972.931.7993 fax 972.931.0542 www.morganmarketingsolutions.com Author,
Marketing Facets - The Market-focused Guide to Company
Analysis
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