Sorry if this is off topic. But I was wondering if anyone could fill me in on all the decisions that Zarella made that looking at them now were major missteps? Ordinarily I'd wait for Red's book (I'm sure he'll devote an entire chapter to it.) But my curiosity wants to be satisfied now. Anyone?

 

The coupe market is dead?

 

Ron wanted Caddy and Corvette to be the only RWD GM products. He saw more money in parts sharing various FWD components among all the mainstream cars than building exciting RWD cars. St. Therease was also a big hurdle to Camaro. It could build like 400k cars a year but was only doing like 170 tops! Also Ron's previous career was pharmacuticals and so he wasn't a car guy but thought if you know business you can run one of the largest on the planet. Basically he didn't know enough about cars to do the job properly AND he didn't bring in the right people to tell him what cars should be, like Wags did with Lutz.

 

well....without giving away anything in 'the book'......(looks like I have a retirement project now!!).........

Zarella aided by one board member --past chairman of Proctor and Gamble -- whose name escapes me at the moment, was able to convince some of the powers-to-be that great branding can overcome marketing obstacles. The theory, as I understood it was if you create enough image around a good product, people will pay a premium for it. At first glance, that probably isn't a bad idea for some products. In fact, it could be argued that in the stratosphere of the automobile industry, that probably is true.

However, there are some real inherent problems with that theory. MANY of them. I will give an overview of a couple of them.

First...."the brand" as he defined it was not Chevrolet or Pontiac. It was Impala or Grand Prix or Firebird. Thus, you would not combine 'brands' into a single ad. With ads costing what they do, my first reaction was "here comes chapter 11!" ( I remember making that remark immediately after his first teleconference.....I was standing outside a GM facility ...made 'said' remark...and and was criticized for being negative.) (something that I've been told many times in my life...)
So......you see an "Alero" ad. Where does one go to BUY an Alero? An Alero dealership? Moreover, what other alternatives might there be to an Alero? Is it a sedan? Are there other "Alero" Sedans that perhaps are larger or smaller?? Under Brand Management, you NEVER saw an ad for, say, Chevrolet's family of SUVs.......you would NEVER see a Camaro and a Corvette in the same ad. I remember wanting to do an ad in an NHRA publication where, at the time, Camaro and S-10 competed in different classes....I suggested we do an ad about "from the track to the street" featuring the Camaro and the S-10 and the Monte Carlo.......I was nearly beheaded! The BRAND never competed with another BRAND in advertising. Again, with advertising costs what they are, I believe that hundreds of millions......billions, no doubt, were ineffectively spent.

Second.....when someone goes to purchase, say, a tube of toothpaste, price has somewhat of an impact. But unless the purchaser is in a very low income bracket, most are likely to try something new. After all, if it doesn't work any better than 'brand X'....you've only wasted, perhaps 50 cents. If the branding is such that "this wonderful new toothpaste will not only prevent cavities, but give you a sparkling new smile, fresh breath, and have every babe in 15 miles climbing onto you".....I guarantee that people (mostly guys!) will pay a premium. The problem is that automobiles are the second largest purchase that most people will make. It involves monthly payments from anywhere around 12 months up to 72 months! It's payment, people! So while you may have a great product and brand it well, it does not necessarily mean that people are going to buy it..because they may not be able to afford it......they can wish all they want, but in the final analysis, it comes down to 'can I afford it?' ..and setting an image can take forever. (this site has several posts about the 'image' of the Camaro owner) Finally, while every auto exec. in the industry WANTS to get away from 'monthly payment' and rebates, the fact is that the largest segments rely on affordability in terms of monthly payment. All the branding in the world won't change that.

There WERE good disciplines brought forth under 'brand management'.....one that used to drive me up the wall...yet kept everyone focused...was an annual "Brand Plan"......a 30 plus page document that was a 'blueprint' for all aspects of going to market with the car or truck. It's very easy to get off-track in a business that seems to live by the 30 day sales report. The 'Brand Plan' kept a discipline. The problem then became that it was too rigid. Further, Mr. Z brought many brand professionals into the corp. who were very successful in other fields......soft drinks, snacks, luggage, durable goods, etc. They were smart people......the problem is that they could have worked for General Foods, General Mills, General Electric, or General Motors. I submit that in order to be truly successful, the majority of the people within the Divisional Organization had better be car or truck oriented.....AND UNDERSTAND THE CUSTOMER. We;d spend stupid amounts of time on this 'brand plan'....STUPID amounts of time.......then present to every man woman and child.....and of course, it was all in the presentation......Color Slides! Powerpoint Presentations! Overhead Projectors! (at the time).....Dog and Pony Show! And while the Brand Plan was a good idea, it suddenly became to some as a 'yardstick' of sorts to determine who could do great presentations. "Yup...our sales suck, but WHAT A PRESENTATION."

Thank God that era is over.....and we have some great people in place that are doing everything in their power to turn GM around. I have a huge amount of respect to people like Mark LaNeve. (yeah...BM hates him, but it seems he hates just about everyone in GM!) (Sorry, that wasn't kind...) (but he beats on me, so I'll beat on him!)

More in the following months...........

 

Wow, who else has been talking about how much good a well laid out "Marketing" plan could do? Maybe they are wishing for Zarella times to come back?

 

WOW!!!! Hadn't thought about that!!!!

I know exactly who you are referring to!

I don't doubt that he truly believes in 'the plan'...and that he truly believes it will save GM. However, it's easy to sit on the outside...never having worked from within....and "know" how to fix it. It's another thing, altogether, to get inside and then see just how much you DIDN'T know.....how much you DON'T know....and realize how much there is to really learn!

Further, I have some real problems with the guerilla tactics that he's using....now it's becoming a 'name calling' game.....and I'm appalled that he's sunk that far. I'd support him more if he'd only listen to those who can help him. But that, I'm afraid, is not to be.

The final straw was when he called upon the UAW to strike. That's just terroristic in my humble 'lil opinion.

 

I can't wait for your book Scoot.

 

"Brand Marketing" - isn't that a strategy to divert money away from core areas like engineering/manufacturing ... and blow the money against the wall?

 

Scoot? Who's Scoot?

 

"It's the product, stupid"........

 

Wow...with marketing tactics like that it's no wonder GM is where it's at. The best Chevy ads of recent times are the car hauler ones. It attracts people to Chevy as a brand and all their different models. It was great seeing the loaded semi cruising Woodward a few years ago when the commercial first aired. Trying a make each model it's own brand seems ludicris. At the same time though if you build a great product it will sell itself and word of mouth advertising can't be bought!

 

yup....

 

PLEASE do not even think of bringing Zarella back. His expertise was in creating new markets which he did in toothpaste industry. All that dental care stuff is a market that is created. Nobody knows they need it unless you tell them they need it.

Getting rid of Ron was one of the smartest moves GM has made in the past few years. Now they can focus on the products people want, instead of telling people what they need and hoping they will buy it.

-Geoff

 

Actually, Zarella worked at Bausch and Lomb before GM and that's where he's at now. He's in the eyecare industry, not dental.

There is ZERO chance of him going back to GM. Especially with the stellar [sarcasm] job he's doing at B&L.

 

He WHAT???!!!