Lousy Marketing -- Not Lousy Cars -- Killed Detroit
Long before the CEOs of the Big Three hopped aboard their private jets, they presided over the biggest marketing failure in American history.
Many miles ago, long before Detroit started losing billions a month, it lost something even more important: its roadmap to the American unconscious.
So while we've heard all the arguments for the impending demise, it's high time we took Detroit's slow-motion suicide for what it is: a marketing failure, probably the biggest one in history. It takes years of monumental incompetence to squander the biggest, deepest love affair the American consumer has ever had.
I wasn't surprised when Detroit's million-dollar men cranked up their corporate jets on Friday, popping warm nuts while strategizing about how to land some cold cash.
That 360-horsepower blunder--which may very well have sealed the fate of the Big Three--capped off decades of marketing incompetence.
Car companies have so many levels of creative approval that even a crash dummy would have trouble surviving the process.
The image destruction started when their brands began to exhibit the worst kind of corporatist behavior, summoning up dark memories of the tobacco industry. They battled against every safety initiative, starting with mandatory seat belts. They tried to beat back higher CAFE standards. They lobbied against electric cars and alternative fuel.
As consumers were increasingly making purchase decisions based on the practices of the company behind the product, the domestic auto industry became a loathsome choice.
Detroit's bad actions hurt it with a huge part of the market--the more than 30 million people in Richard Florida's "Creative Class" who work with ideas, live in urban areas, and are more progressive. Even the more traditional consumers who stuck with American cars felt abandoned.
The jerks running the companies didn't help. Your CEO is a marketing statement, and in an era of visionary leaders celebrated by the media--other than Lee Iacocca, who retired in 1979--the guys running the show were overcompensated, colorless zeroes.
From 1974 through 2000, GM was piloted by Tom Murphy, Roger Smith, Bob Stempel, and John Smith, failures whose names are recalled only as poster guys for deck-chair rearrangement.
As these weak-kneed leaders came under pressure for their practices and products, they turned psychologically inward. It all culminated with Michael Moore's Roger and Me in 1989, a national display of corporate paranoia. An industry whose birthright was independence came to represent villainous bureaucracy.
And in a colossal marketing mistake that scraped away any chance for individuality, Detroit's legions of PR firms continued to let its brands be bundled as the Big Three. Can you imagine Apple permitting itself to be bundled with Dell and HP this way?
Ironically, though, as its reputation plummeted, Detroit's cars actually improved. The Detroit Free Press notes that Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." And J.D. Power ranked Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac, and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, and Volvo.
This is an epic advertising failure, attributable to Detroit's stubbornness and arrogance. The Big Three kept working with a small group of the biggest and most boring ad agencies, refusing, until recently, to work with anyone who didn't have car experience. Leo Burnett has worked with GM since the 1930s; J. Walter Thompson has worked with Ford for more than 60 years.
I've worked in advertising for a while--thankfully, never on a car account. And I will tell you that it's well-known in the industry that working with Detroit is torture. The Big Three's demand for mediocrity is legendary. They have formulaic rules--the "running shot" of the car has to be a certain length in every commercial--and they have so many levels of creative approval that even a crash dummy would have trouble surviving the process intact.
That's why, even though GM, Ford, and Chrysler spend more than $6 billion a year in advertising, it's tough to conjure up a single memorable spot. Their uninspiring advertising speaks to an America that barely exists anymore. We're more diverse, more urban, more media savvy. We appreciate irony and obliqueness, we demand that our sensibilities be respected and indulged. Detroit insults us.
Take this 2008 commercial for the Dodge Grand Caravan. (The way Detroit names its cars--with all the originality of meeting rooms at a Westin--is another story.) Here, some reluctant participants at a family reunion are transformed in a beatific bunch by a ride in the Caravan. (Not exactly the imagination worthy of a bailout.)
Detroit should have sought the best talent in the world. It needed to open up to smaller, independent agencies that are the idea factories for the industry. And it should have commissioned film directors, not car hacks, to direct its spots. It happens in Europe all the time. Turn Judd Apatow, Spike Lee, Spike Jonze, and Michael Gondry loose and see what happens.
I've also believed that smart marketing could have turned Detroit's union hurt into an emotional benefit. It's absolutely amazing to me that for decades, Detroit took the heat for paying decent wages and providing health care and pensions. Hey, isn't that what big companies are supposed to do? Hasn't Wal-Mart been pilloried for precisely the opposite?
Imagine if Detroit had created compelling advertising that showed its workers living the American dream, and had gotten the UAW to pitch in? The sweet stroke of marketing would have made everyone who drives a domestic car feel virtuous, ennobled. Think how much credit Starbucks gets for paying its coffee growers a few measly cents extra.
Finally, Detroit's marketing failure extends all the way to your neighborhood: the dealership network. The retail industry knows that to survive, it needs to amp up the experience and add entertainment. But car dealerships look like post-apocalyptic empty shells that survived a neutron bomb.
Why didn't Detroit push its fat and rich dealers to leverage the power of architecture and hire Frank Gehry to create a new paradigm? Think about the branding statement that would be.
The services leave something to be desired, too, falling alarmingly short of what you get in comparable imported dealerships. Quick example: I checked the hours of my local Buick and VW dealers. Buick's service department is closed on Saturday; how thoughtful of them. VW is open on Saturday, and also opens earlier and closes later during the week.
Seems like a basic marketing equation to me: If you're not going to be there for your customer, your customers won't be there for you.
Adam Hanft is a decoder of the consumer culture and our branded planet. He blogs for The Huffington Post and FastCompany.com, and has been published extensively, including in The Wall Street Journal, Slate, Civilization, Radar, and the back-page column for Inc. He has appeared on CNN, the Today show, and many other media outlets. He is also the co-author of Dictionary of the Future. Adam also decodes the culture as founder and CEO of the marketing and branding firm Hanft Raboy.
This piece appeared in the Daily Beast on November 24th, 2008.
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Boy, is this article right on track! I can't believe how contemptuous the "Big Three" are of their customers. I once took my Lincoln in because the security alarm kep going off and the Ford dealership told me they coudn't help me as the car wasn't smart enough. You heard it right "ther car wasn't smart enough". After spending $4500 on repairing my Oldsmobile it still wasn't working so I traded it in on my first Mercedes. When my new Chrysler had to be towed in 11 times because it wouldn't start, the dealership tired to tell me they weren't responsible (I won that one) but I lost when I found out that my newly delivered car had been damaged in transit and hastily repaired before delivering it to me. I had noticed that the finish on the hood was fading fast and since the car was brand new I asked if the dealership could polish it. They said no and later the head office told me it had been damaged but they wouldn't pay to have it properly repainted. That was actually the last time I ever purchased a US built vehicle. I and my family now drive a Jaguar,a BMW, a Porsche and a Range Rover and we will never buyt another American car. You don't have to treat me like dirt too often for me to finally get the point.
Isn't Jaguar owned by Ford? Or, did they sell it again.
Archie55
We noticed a few days after talking delivery that our new Dodge Grand Caravan (aka "Minivan From Hell") also had spotting all over the surface, to the point headlights dangerously glared off the windshield at night.
Turned out to be acid rain etching, which the dealership said wasn't their problem and blamed on local industrial pollution. We happened to know that at that time, there was no area plant producing effluent which would etch glass, called their bluff, pitched a screaming fit in the parking lot, and threatened to call the police unless they fixed it. They fixed it at their expense.
Did the same for the transmission, which went out a few months later. Same for the next transmission, just as the warranty expired.
And the next one.
When it needed its fifth transmission, I told my husband I was just hissy-fitted out. Just didn't have a fifth "free" transmission in me.
So we sold it real cheap, as is, nothing hidden, and still felt bad for the person who bought it.
Adam, your points are well made and I agree with most of them.
But I have to seriously disagree with one major one: quality. There really is no comparison in quality between Ford/GM/Chrysler and the Japanese makers. I know you quote Consumer Reports, but I question their observations. They aren't a good source anymore like they used to be 15 years ago or so. Also, many of those ratings are in subjective categories like "initial quality" or some satisfaction survey.
The reality is that I know of many proud, patriotic (Rep and Dem) Americans that don't ever purchase cars made by the big3. The reliability is simply not the same. People who buy cars for under $30k, need the most for what they spend. They don't have much disposable income. When a Nissan lasts over 200k miles without any major expenditures and you see your wife's GM and your daughter's Ford cost you $$$$ even at a 100k miles, then you stop buying those brands. It is especially strikingly bad for cars under $15k. If you buy a $12k Ford, you better sell it before the warranty runs out.
I'll believe cars from the big3 are equal to Toyota or Nissan when I see actual evidence. Consumer Reports or any other organization can say whatever it wants, I don't believe it. We've seen how easy it is to mess with statistics (unemployment rate, inflation).
"But I have to seriously disagree with one major one: quality. There really is no comparison in quality between Ford/GM/Chrysler and the Japanese makers."
I agree.
Most of the japanese automakers quality has gone to crap over the past 5 years. There really is no comparison anymore; japanese cars are so inferior on the whole Convincing the sheeple of the truth though is a different story.
That was funny! Baaaah!
They can chisel that into GM's tombstone and take cold comfort from thinking they used to make the best quality automobile that used to be sold in the American market.
Your right about the marketing but they still made lousy cars, every damn one of them.
I couple of years back, GM ran the most brilliant television commercial I have ever seen on the Superbowl. It showed a robot drop a bolt -- immediately he is fired. The robot goes from one low-paying job to another, as Eric Carmen's "All by Myself" plays, becoming more and more depressed as he watchs the GM cars he used to build drive by. Finally, he jumps from a bridge. As he hits the water he awakes from his bad dream. The tag: "The GM hundred-thousand mile warranty. It's got everyone at GM obsessed with quality."
The empathy created by the robot is tremendous. The subplot, of course, is real people work for GM and if you don't buy the cars they build, they will be hurt.
You can find it at http://www
Read recently about Detroit's handling of future CAFE standards. They have/had been fighting tooth and nail to prevent any changes. Finally Congress had enough and mandated a modest increase but put the date targets years into the future. Detroit cried and said well to meet those 2020 standards, you will need to pay us $$$$ and we will 'try' to get there in time, but don't really think we can. Toyota/Subaru/etc said no problem we will re-design and meet the 2020 by 2015 at least, maybe sooner. Wonder which automaker survives (or should survive)? Doesn't sound like Detroit wants to does it
See, it's morons like GrizDave that illustrate teh problem perfectly. Toyota said no porblem? Really? Was that right before or right after they introduced the new FKCruiser that year? Or the Tundra? Or the 2009 Sequioa and Landcruiser. Or maybe the LX series? Or Tacom. Or the newly elongated 7 seater Highlander?
What you say is true - but there is more to it. I bought GM cars for years, and loved them. They were comfortable, & easy to drive. Three years ago, I wanted to buy a new station wagon - not an SUV. GM offered absolutely nothing. I bought a Volvo. Last year, my husband was ready for a new car - but he wanted a back up camera, navigation system, and blue tooth. Not one GM car had all three options - not even the most expensive Cadillac. He bought a Lexus - but these options are available on a Toyota. The "big three" didn't keep up with fuel efficiency, or technology. The best ad campaign could not over come that deficit.
Foreign manufacturers passed up the big3 years ago. Their arrogance and greed prevented them from taking their competition seriously. Their arrogance still shows today. They produce junk, with gimmicky features, and think the public will buy.
All they do is complain about the unions, as if the unions designed the cars. I would love to hear from someone who knows what it is like for older Japanese workers and their retired former employees. I'm going to guess that they have pensions and health insurance. Even if it is provided by the state, it would be paid for by higher taxes.
The fact remains that the management of the big3 is simply inept. They lack intelligence, and intellectual honesty. They have been so incredibly wealthy (family wealth) for so long that they think they are above everything and nothing can touch them. Their showing at congress a couple of weeks ago was the perfect example. When chided by the committee, they didn't even budge on their salaries, bonuses, and perks.
They need to all loose their ownership.
If our government wants to do something, bail out the retired workers. Take over the pensions of all the former employees (which management claims adds $2k to each car).
"Three years ago, I wanted to buy a new station wagon - not an SUV. GM offered absolutely nothing. I bought a Volvo."
So you bought a Ford instead. What's your point?
LOL
No, it's the cars.
They're gas guzzling monstrosities for the most part. Even though they've seen the Japanese and Korean "green" cars success (with the companies foregoing profit for YEARS in order to attract consumers on price and quality).
Times have changed and continue to change. Detroit has a couple of over-priced, under-produced "ad" cars to show they are going green. It is PURE PR.
They have stuck to the old formulas--of what cars should look like...run on...cost.
The Detroit car production is as antiquated as the fossil fuels they insist on using.
Toyota sells fourteen models of SUVs in the US and six hybrids, two of them SUVs. Honda sells five SUVs and one hybrid (they also sell a natural gas vehicle). My daughter lives in an upscale area where the parking lots are full of Lexus, Acura, and Mercedes SUVs. They get worse gas mileage than their American cousins, require premium fuel and cost more.
GM produces lots and lots of E-85 ethanol cars. They are stupid, but that was the decision that the government made. It has something to do with Iowa having veto power over presidential candidates. Obama has been a staunch supporter of corn ethanol. McCain has been an opponent and had to overcome a distant third finish in the Iowa caucuses.
"Times have changed and continue to change. Detroit has a couple of over-priced, under-produced "ad" cars to show they are going green. It is PURE PR."
You mean like teh Prius? The ultimate fig leaf for the FJCruiser, Tundra, Sequioa, LX Series, RX Series, GX Series, Tacoma, Highlander, and Landcruiser?
2007 Total Fleet CAFE standards for car companies. Even with Toyota's bloated SUV's they beat GM.
Toyota averaged 29.69 mpg with its lineup of Priuses, Camrys, Corollas and Tundras. The no. 1 brand edged out Honda and Hyundai, which got 29.47 and 29.39 respectively. The Detroit based automakers? Well, not so good. GM, Ford and the then DaimlerChrysler brought up the rear with 25.16, 25.15 and 23.97
http://www
You can check the NHSTA website, link at the end of the article, for more specific data such as volume which is nearly identical between GM and Toyota for 2007.
There is so much wrong with the American car companies, I find it hard to complain when you point out something which might be valid, although many people here do. I think educating the consumer away from the SUV and as one of the commenters here put it DOMINANT looking road warrior vehicles would have been advertising budget well spent. If they had prepared the American public for the coming melt down after a huge run up in oil pricing, they would be sitting pretty now, assuming they built people friendly vehicles. But instead they (still) try to push the dominance theme. Bullies suck. We all know that. Why would anyone want to be one? Somehow it turns out that the only time they seem to realize that being a bully sucks is when the bullies in their big dominant vehicles have to pay too much in gasoline or diesel bills to afford to drive. For my money, I say let's make them pay more for the priviledge of taking up more space on the road and more weight. If we taxed cars by weight and size, bullies would have to really be rich to use these things. Then we would have something else to complain about.
My Mother was in the hospital i Fla. for a week in April.
With no onstreet parking nearby and only 3 levels inthe parking garage, there were afternoons when OI circled round & round in despair...
And if you had mass transit to pay the visit, there would be less need for more parking too.
My initial reaction was to provide a contra to your position. But, after reading it, you convinnced me of your position. But here ar my two-cents.
Detroit has built some of the most ugliest cars on the road: Aztek, Cimarron, Pinto, Gremlin, and the plethora of bland "rental" agency vehicles that come out of GM in droves every year.
In addition, one other thing that can't be shaken, Detroit builds cars that Middle America likes. It does not build cars for the coasts where Richard Florida speaks to (except Ford F-150). So, my inital belief has be slightly altered, the marketing deparments at the Big 3 work hard on selling cars to the Mid-west. Places like Hobbs, New Mexico and Beaver Falls, Iowa or Gilbert, Arizona. These Big 3 are not too far off in their marketing research. They were tyring to sell cars to places that no longer had money to buy them.
Sorry, but you've got this all wrong. I have 20 plus years marketing experience and I know that a creative marketing campaign cannot make up or overcome a bad product. Remember New Coke? People rejected that brand because of the taste. It was a bad product. Period.
Actually, New Coke was a brilliant marketing ploy. Coca-Cola had wanted for years to switch from sugar to high fructose corn syrup (at the time much cheaper) but the taste was too familiar for them to get away with it. So they took their flag-ship product off the market for about three months, then reintroduced it, now sweetened with corn syrup, as Coca-Cola Classic. It didn't taste like the old Coca-Cola, but it tasted more like it than New Coke did. In the end they lost no market share.
Sorry, YOU are wrong; people rejected "New Coke" because "old" Coke isan icon which you DARE NOT touch! Nothing to do with "New" being a "bad" product at all.
WRONG. Did you taste the product. It was horrible. I lived in Atlanta at the time it was launched. And if the product had been launched under a different brand name, it still would have flunked the taste test. It was a horrible product.
NEXT!
The reasons in this article might be valid to a point... but the reason detroit is hurting is again, middle class incomes have been eroding for seven years ... people who buy the cars have no money. I don't know why this is so darn hard for the movers and shakers to understand
And then our jobs keep going away, our income levels are falling to match the countries our jobs are going to... and then sometime in the near future when we are all getting twenty dollars a week, we can all ride bikes or rickshaws and we can all cry about the demise of the great car age ... and our grandchildren will still be paying our debts cause we sure as hell won't be able to.
HuffPost's Pick
A couple of years ago, probably 2006, I saw Bill Ford being interviewed about his company's difficulties. He told me everything I needed to know about what was wrong at Ford. He said something to the effect that, We're no longer just competing with the other American car companies, you know. As if that were news. In 2006! My father bought his first Toyota in 1969! You've been competing against Japan for 40 years! And it's like you just noticed? These Detroit types whine about how much they're paying in health insurance for their employees and retirees, and how Japan doesn't have that problem. Well start using some of your clout to push for national health care! And wake up! The world doesn't owe you a living, even if your name if Ford and your grandfather single-handedly created the 20th century in America.
Is Detroit's blandness rubbing off on Honda and Toyota?
There styling is getting very boring, very generic. In the case of Honda and Toyota, the Civic and Corolla are now bigger than the Accord and Camray used to be.
As a friend said, they all look like bubbles now. The styling was sleeker just 3 years ago. And even the normally more stylish European cars are adopting this bubble look.
Honda does not make one single small car, except the Fit, which is not a sedan.
And gas mileage is less than it was 10 years ago on the standard engine cars.
And there really isnt a single sporty smaller hybrid car on the market in any brand. The Prius just plain falls down on styling. And they stopped making a sedan a long time age.
You are conpletely right. The "new" Japanese design has become cartoonish, anime-like in its approach. Bulbous and balloon sheetmetal along with angular creases near the A and B pillars of the new Lexus and Acura models. On the flip-side, VW has been coming out with some exciting designs like the VW CC, the upscale Passat. It's real nice.
Like all things from shoes to architecture styling has movements. Anime-like appeals to the youth, and bulbous with a reduction of lines suggests "aerodynamic" to the environmentally conscious. It is about selling to the particular market segment.
On "Top Gear" they showed a Honda Element to an elderly group, they all said they would never by such an ugly car. (Most drove Civics.) I have an Element and it is interesting to see the people driving them. It makes me feel a little out of place with the tribe of the outdoorsy who seem to drive them. Yet every owned I ask loves the car.
The very best car I've ever driven was the VW Passat Wagon I leased for 4 years in 2000. Even as a larger vehicle with a 2.8L V6 I still averaged 28 miles to the gallon. It was fast, handled like a sports car, super comfy and soooo quiet. My boss would call me when I was on the road and I'd have to roll down the window so he'd believe I wasn't at home. I put 120,000 miles on it before I turned it in and never once had a major problem or repair. Just one change of tires, oil changes, and tune-ups.
Most arguments about Ford and GM "not knowing" what the market wanted are all missing an obvious point.
Toyota, which derives almost half of its entire profits from America, succeeded because of their TRUCKS. That's right. They build trucks. So does Honda. BMW. Mercedes. Nissan. Even Volkswagen and Audi. Porsche likely would have gone into bankruptcy a few years back if it hadn't conceded that its sports car "purist" segment need the Cayenne, and now the Cayenne is Porsche's biggest seller.
Every manufacturer in the world (maybe not Subaru - to be fair) jumped on the small truck/ SUV bandwagon during the 1990's. So, if Ford and GM shut down, who will we buy our light trucks from? That's right, the same manufacturers we've been buying them from all along. Just not the American-owned ones.
"Every manufacturer in the world (maybe not Subaru - to be fair) jumped on the small truck/ SUV bandwagon during the 1990's."
Ummm. Redseigned Forester? Tribecca?
Subaru did, it's called The Forester. Easily has been around the last 10 or so years because a friend of mine has had the same one that long.
Um, dude, the REASON that service department is closed (not to mention every singe car lot in the state of Michigan) is closed on Sundays and holidays and close promptly at 6pm is BECAUSE of the union. I'm all for workers making a decent wage but I can speak from experience as an ex member of the UAW....the
What they negotiated was so ridiculously low ( I was finished by 10am Monday morning) Then I was told to "stall" the rest of the week. My division went bankrupt a year later. Duh.
Its time to call the UAW what they are.......
PS: What do mean bad marketing? Other than Zoom Zoom, the only cool comericials on TV are Cadillac and GM----dug that 'like a rock' tune...
The service department is UAW? Really? I'm not sure you're right.
"Like a rock" I think you just proved the writers point.
Al the European car manufacturers' workers are members of unions. It's almost compulsory to be a member of an auto workers union in Europe to work in a auto factory, and they're thriving. Stop blaming the unions, and start manufacturing non military vehicles (Hummers) for the masses. LOL!
I have to totally disagree with your post-script. VW by far has had the most clever commercials of any car manufacturer the last 10 years. The Mr. Roboto one? The guy diving to block shopping carts from hitting his Jetta? The Un-Pimp your ride one has got to be my favorite:
http://www
The rest of what you say definitely has some truth to it. It is clear that both the unions and Big 3 need to take a look at what they've become. The difference between the folks working at Toyota and Ford are huge, even though they both make a decent wage and get healthcare. Toyota allows workers to be involved in the company and mfg process, they have meetings with management to improve efficiency and quality. They aren't adversaries, they're partners.
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