GM bets future on money-back marketing plan
By Ken Bensinger
Los Angeles Times
Concerned that too few Americans are willing to buy a car from a bankrupt automaker with a legacy of poor quality, General Motors Co. has come up with a deal: Try one for 60 days. If you don't like it, you can get your money back.
The unusual promotion is the centerpiece of an aggressive new marketing campaign debuting next week. The automaker hopes the unusual tactic will turn around a long sales decline hastened considerably by its recent bouts with bailout and bankruptcy.
GM's U.S. sales are down 35 percent so far this year. Its market share is at an all-time low. Even the wildly successful Cash for Clunkers program did little to boost the company's fortunes.
Now, with $50 billion in federal bailout funds on the line, and in the face of what continues to be a brutal auto market, GM management appears to be taking a huge bet that innovative marketing can save the company.
"GM has everything at stake here," said Jim Hossack, an industry analyst at consultant AutoPacific Inc. "GM's very existence is in play right now."
The new campaign, company executives said, is a bid to narrow the so-called "perception gap" between GM's products and those of Asian and German automakers.
For years, GM has been watching formerly loyal consumers, turned off by poor-quality products, become customers of foreign brands. But now the automaker insists its products are as good or better as any made by Honda Motor Co. or Toyota Motor Corp., only the public doesn't realize it.
"We've got to close this monumental chasm between the reality of GM's current product lineup and the public perception of the lineup," said Bob Lutz, GM's head of marketing.
He would not disclose the total cost of the ad blitz, but characterized it as significantly greater than recent marketing campaigns. He said GM's efforts have been "vastly below" those of competitors on a relative basis. "This has been one of our big problems," Lutz said.
In a 60-second spot that debuts on Sunday, GM chairman Ed Whitacre Jr. will kick off the campaign with a TV ad that "car for car, when compared to the competition, we just win," and adds that GM is "putting our money where our mouth is."
The money back guarantee debuts the next day, allowing vehicle buyers to return cars, no questions asked, between 31 and 60 days after purchase, so long as the vehicle has fewer than 4,000 miles and the owner is current on payments.
The guarantee covers purchases through Nov. 30.
At the same time, GM will run a series of print, radio and television ads that pit GM vehicles against those of competitors, highlighting quality over cost.