Strategic Marketing is the main blood flow of any company who wants to be named as a going concern. General Motors Company, after being incorporated in July 2009, has gone through some radical changes in its marketing strategy. Ever growing pressure from environmentalist organizations and the economic meltdown has resulted in the company investing hugely in alternative fuel technologies. I report has focused on the company’s marketing strategy and how it changed over time and the factors behind it.
I was found that General Motors has invested in research and development to capture growing demand for alternative fuel vehicles. It was also observed that high pension fund investment requirements have had an impact on management of the company’s working capital hampering its high R&D expenses.
The market trends show that vehicles with alternative fuel technologies will have high demand, particularly in developed countries. The level of investments GM has planned will allow it to capture it in the most effective way. The company should, however, consider its capital restraints and consider strategies for making the company public. It could also focus on developing economical cars to attract economically strained population particularly in the recent financial market.
INTRODUCTION:
General Motors is an international company based in Detroit which laid its foundation in 1908. The company has a massive work force of 235,000 employees in over 140 countries around the globe. The leading brands include Cadillac, Wuling, Buick, GMC, Vauxhall, GM Daewoo, Holden, Opel, and Chevrolet. United States is the largest national market of GM.
General Motors (GM) Corporation will be the organization I would like to address.
STRATEGIC MARKETING PROBLEMS AND OPPURTUNITIES:
After filing for bankruptcy and failing to appeal the prospective customers, From the 1990s to the mid 2000s, GM focused in selling sports utility vehicles (SUVs) which were not only huge but also, gas guzzlers. On the other hand, they compromised on fuel economy and safety. They also could not orchestrate with the company’s marketing policy. On the other hand, for example, Toyota a Japanese car company, were very concerned about the environment and backed hybrid development. They invested lot of money in Research and Development (R&D) so that their customers don’t have to be dependent on the gasoline when they can safely utilize the other means of alternative energies. Public opinion suggests that Toyota is a green company. Neither GM nor any of its brands are taken as providing green alternatives like fuel economy, safety or environmentalism. Most of GM subsidiaries like Chevy, Buick, Pontiac, Saab and Saturn-have not had uniform marketing strategies, if any, and few members of the buying public know what point of sale GM differentiates itself from. On the other hand, Toyota, Honda, Nissan, BMW, Mazda, Porsche have a distinctive brand image. For instance the following brands have these attributes. As analysed by The Economist, Toyota as (green and quality), Honda (green, quality and great engines), Nissan (design), BMW (performance), Porsche (iconic sports cars) and Mazda (Japanese performance, fun-to-drive) have the following brand identities. GM is now reconsidering and producing some fuel efficient and environmentally friendly cars. But as I mentioned above, in consumer’s mind, it has been written that only Japanese and European car manufactures can have answer to the ever changing environment of the world. GM lost that opportunity long ago and in trying to play the catch-up with their competitors.
However, the financial meltdown and the resulting dip in demand for automobiles has had a bad impact on most, if not all, car manufactures. After the rescue from the US government and a sign of economic recovery, GM has been focusing on implementing an even effective marketing strategy to reach its corporate goals.
Since GM has lost substantial market share in automotive industry she has decided to tailor its marketing strategy keeping in mind current and future market trends. Last few years have witnessed a marked increase in demand for vehicles using alternative fuel technologies. This marketing strategy has been implemented because it seems to be the driving factor for the demand of automobiles. So there marketing strategy is to rebrand and present its self with accompany which has a strong commitment for the environment. Its seems that GM has invested Billions of Dollars in research and development of technologies which will help GM achieved her corporate objective. Extensive research and development is crucial to achieve the confidence of the market.
However, the current financial situation the company is dealing seems to be an obstacle. The research and development requires high investment which seems hard to achieved given the company’s financial situation. The company has high pension liabilities and a massive loan to be repaid to the US Government.
GM has a few advantages which gives it opportunities globally. GM is a company which has an internationally recognized brand. Extreme market penetration expenses can be avoided by the already famous GM brand. Also, GM has in international manufacturing based which has been used to manufacture its product in different part of the world. A change in manufacturing practices is not likely to have a massive impact on institutional costs.
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1b) as a consultant, examine strategic marketing alternative available and recommend a suitable marketing strategy and realistic implementation plans that are consistent with the overall objectives of the organization.
If I was to be a consultant for GM, I would recommend the following.
EXAMINE ORGANIZATION ALTERNATIVES:
Looking at the realities, I can observe that GM has long been disconnected from the brand value a company should hold. Also, there has been a case of diminished consumer loyalty hence a decrease in sales. It was observed that millions of dollars were spent on advertisement without a clear marketing strategy. This has resulted in the state GM finds itself now. The millions spent on adverts and press releases did not help create a “Brand Image” the company dearly lacks now.
I would have recommended the following strategies.
Focusing on lower market: the company can introduce cheaper cars in the market focusing on the middle and lower middle class society. This could be directly in line with the current market scenario where fiscal tightening and credit squeeze are a norm. Economically produced cars and vehicles can be in the reach of low income earners minimizing the need to car finance for many and hence increasing huge amounts of cash influx resulting in ease of the financial tension company has been experiencing of late. The company can launch itself as a company for the “commoner” and pitch it in a way that would attract the same. I would recommend advertising on radio and news channels, also on public transport and venues attracting high public inflows. This marketing strategy will introduce GM as a company offering cheaper products. Also, the already established brand name for GM will help it avoid opening marketing expenses. These cheap cars will not require a lot of research and development since public would not expect high fuel efficiency with an already economic selling price.
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Focus on developing markets: GM can also decide to focus on developing markets, producing lower to medium end vehicles. Developing markets have not been badly affected by the financial meltdown and still have high growth rates reflecting increasing buying power, particularly in South East Asia, South Asia, Middle East and South African regions. Developing nations like India and China have high demand for automobiles and are also likely not to sign any carbon emission deals in the near future allowing GM to introduce gasoline based fuel systems. This will not require much investment and also an already existent manufacturing base in those countries will allow rapid production with low initial costs. Also, the automobiles with high capacity will attract more customers in countries like India and Pakistan since the trend of larger families. This could be a possible point of sale for the manufacturer.
Middle east: middle east is a rich region, both financially and with respect to oil resources. The governments have been able to provide fuel with low prices and this will allow GM to introduce cars without spending large amounts on research and development on alternative fuel technologies. Also, the rich population would like to have cars with luxurious specifications according to their taste which can allow GM to charge premium prices generating huge profits. Marketing should be focused on the urban centers where most expatriates live as well.
Any marketing strategy should focus on the following points.
Advertisements and press releases should focus on the target market. Market research could prove to be a useful tool in order to predict reactionary factors.
Company should have a unique point of sale taking into consideration competition from other stakeholders.
Looking and commenting on the choices available I think focusing on the developing markets could be a good strategy increasing sales. This is because the shift of economic power is likely to rest in the hands of Asia in the near future. The initially low class vehicles introduced into the market can be extended to wider varieties. Marketing strategy should be to focus on the point of sale which is “The economic vehicles”.
Conclusion:
This report looks at GM market existence. The research suggests that GM seemed to fail to appreciate the changing patterns in the consumer market which has resulted in substantial decrease in the consumer market confidence. Different marketing strategies were observed including focus on developing economic vehicles, focus on developing world and Middle East. It seems that the best strategy for GM could be to focus on the developing world as it requires less initial investments and a long term economic benefit. GM is a company with an international base and the existing infrastructure which will allow the company to implement the recommended strategy without high levels of investments.
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