Wagoner's Query: Will GM'S Brand Model Stay?

Brandweek, Feb 7, 2000 by Jeff Green

Rick Wagoner's ascension to the president/CEO post at General Motors and the diminished role of current chairman John Smale, will likely add up to a branding shift at the world's largest automaker.

Wagoner will take control June 1 when CEO Jack Smith retires and takes up Smale's chairman spot on the GM board. Smale, the former Procter & Gamble chief who orchestrated the boardroom coup that brought the current group of GM managers to power, will continue as a director. Under Smale, GM adopted the classic brand management approach to automaking that has drawn mixed reviews (Brandweek, Jan. 24).

For his part, Wagoner insists there will be no immediate shifts in GM'S brand strategy. "My take on it is no big changes [are] coming," he said. "I think, to be honest, we brought in brand management to GM, and frankly to the industry, in a structured way across the board. We've learned as we've done that and I think we'll keep modifying which accelerator we're pressing depending on the circumstances, but we don't have any broad scale changes planned."

Industry observers, however, are nearly unanimous in their belief that he will shift GM away from branding each vehicle toward the industry's more traditional approach of branding at the division and corporate level.

"He's a primary brand person," said one non-GM auto marketing executive. "I don't see this name-plate nonsense continuing. Frankly, I don't see it surviving John Smale."

Wagoner carefully added that he wouldn't rule out a shift toward the divisional brands. "What we want to do is leverage the family of brands--from the GM brand to the Chevrolet, Pontiac, Saturn and others--[onto] the specific product line," he said. The exact mix will "depend on the circumstances of the specific products" and general promotional initiatives that will "probably ebb and flow a little."

Still, many observers say the nameplate branding experiment has failed and blame it for some of GM's image problems and declining market share. A key complaint is that GM is attempting to devise unique platforms for cars that aren't all that different in the first place, therefore diverting resources to multiple campaigns for little gain.

"Frankly, I think it's going to go away and that's too bad," said a marketing executive for a rival automaker. "It was a competitive advantage for us because it limited GM's effectiveness."

Dealers also expect changes because they see Wagoner's rise as a return of the "car guys" at the top of GM, and thus a return to a more product-driven approach.

If Wagoner does plan a retreat from the nameplate brand management scheme, the division most immediately impacted would be Oldsmobile, said an observer. Olds has been a test bed for many of the new brand initiatives. It recently instituted a new organizational structure (Brandweek, Oct. 11) that puts one brand management staffer in charge of all marketing activities for each of the vehicles -- combining previous positions that split advertising and less traditional marketing like Internet and promotions into different responsibilities.