General Motors has always had a reputation of diluted products. They had many vehicle lines with many differend brands. This idea was to offer a product that appealed to many different target markets. They have since simplified their product lines by selling off certain brands. Oldsmobile, Saturn, Saab, Hummer, and Pontiac have been disbanded and the new General Motors is a tighter more organized business as a result. Cadillac and Buick have seen steady growth within their sector and have been marketed very well to date. Cadillac is seen as prestigue symbol and has a larger pricetag than any of the other models.
Buick is showing phenominal growth with an introduction of new products that is taking the focus of the old Buick car as a retirement ride and putting it on styling, design and quality. We feel that if General Motors takes a further step to segmenting Chevrolet and re-marketing GMC, that they could see a big percentage of customer winback. People in North America have a particular taste for domestic products. General Motors has more plants in North and south America than all other car manufacturer’s combined ( I need a source for this one).
The main focus for us is to re-introduce the Chevrolet line and market it towards our chosen target markets, as well to take the GMC logo and create a new perception of it in terms of how it seen in the market. The GMC nameplate will be geared more towards the domestic competition and the chevrolet will be more towards imports but neither market is to be ignored with either nameplate. Chevrolet will offer eleven vehicles that are to be marketed in a similar fashion to each other, but geared towards different buyers.
The Aveo, Cobalt and HHR will make up our small car division and the Malibu and Impala will be our midsized car division. The Camaro and Corvette will be our sports cars with our final group of cross-overs and trucks being comprised of the Colorodo, Silverado, Traverse and Equinox. The GMC division is to be made up into one segment and that is; Suburban, Yukon, Tahoe, Avelanche, Sierra, Canyon, Acadia, Terrain and the Express/Savanna cargo vans. There is a vertain level of repetition in these models and General Motors has left these vehicle in their production for a reason.
The equinox and Terrain are essentially the same vehicle but have seen a growth of 194% and 245%( need that source) respectively year to date. The Acadia and Traverse as well are essentially the same vehicle but in 2010 to date, sales of all cross-overs are up 100% (need that source). This means that even though there is repetion in our lines, there is a desire for the different designs in each brand that we offer. General Motors as a company has shown total growth of 36% currently in comparison to last year at the same time. Pricing Strategy Pricing is a big part of our plan to increase General Motors market share.
The reason for this is because the industry itself is price volatile. If a proper price to the proper market is not promoted reasonably, then the whole company is in jeopardy of losing customers to their competitors. The Pricing strategy that we have is to bring back some of General Motors past practices. They employ a variety of pricing strategies that we believe we can utilize when segmenting the Chevrolet line. Not all buyers will respond to the same type of pricing strategy and that is why this section needs to be carfully calculated and coordinated with our promotional strategy.
Because the auto industry is so highly competitive with a variety of prices for similar products, we have to be careful that our prices do not appear to be higher than the competition. When referring to the appearance of pricing, we mean that all advertisements can be drastically different to reflect the same selling figure when it comes to cars. This is because there is a high number of different additional costs on top of just the purchase price of a vehicle (freight, air tax, gas tax, administration), as well as the numerous discounts offered by manufacturers.
General Motors employs a competitive pricing strategy out of necessity in the current marketplace and they always work from a list price. The list price is located in the window of every single vehicle on a car lot. There is a stigma in the auto industry with consumers believing that nobody ever pays sticker price. This theory is being tested with the new Terrain and Equinox models, as they do not offer any cash discounts and the only discount available to the consumer comes from the dealerships themselves.
A variety of different pricing strategies exist in the market for vehicles and they include cash discounts, rebates, quantity discounts for businesses (aka fleet), trade-ins, loss-leaders or rebates. The customer always feels the best when they can employ all of these strategies, as implausible as that seems. The current 2010 buyer is more educated than ever before and because of this the pricing strategy needs to be clear and concise throughout all promotional mediums. We are going to change the avenue that General Motors is using for price by reintroducing 0% financing and bringing back leasing.
Because of the current economic conditions, the general population has become very price sensitive and as a result General Motors has created large cash discounts on most vehicles. These large discounts are in response to low interest rates offered by banks on lines of credit and the surprisingly high level of availability. We are not suggesting the removal of these discounts in whole but a reduction in part and in some certain cases entirely. The addition of the leasing section is so important to General Motors in terms of creating more frequent buyers because a lease term is shorter than a finance term.
By gaining finance control over the customer you are able to guide them in a way you are not able to do if they finance externally or pay cash for their vehicle. Finance control keeps the company in constant contact with the customer and also keeps them informed of any upcoming incentives and rebates available to them. This is important because if General Motors comes out with programs that reward current owners with a cash rebate, or offer cash rebates for current lease customers, they are then able to turn prospective shoppers into prospective buyers.
The advantage for this is the customer remains a General Motors customer. More than ever before it is direly important to retain our current customers so we can capture market share by bringing in new customers. If our current customers are not re-buying our product, it is hard to imagine a new customer buying it and being satisfied. With a reintroduction of 0% financing we can appeal to a larger group of people who are in the market to finance a vehicle.
Most of the people in the market right now who have access to lines of credit and unsecured loans that beat current car loan rates through the dealership are established in life and of an older demographic. These cash incentives appeal to them, but with 0% we can try to compete with import manufacturers and at the same time try to lure in younger buyers. Promotional Strategy Because of the size of General Motors, we have to be so careful that all of our marketing efforts are coordinated and integrated for one unified message in each of our Chevrolet segments and in the new GMC logo.