Tuesday, November 25, 2008

Detroit: Marketing Failure

I'm not sure I buy this argument, but it does raise some interesting points. The Big Three, stubbornly insisting that they would never learn a lesson from their own experience, married themselves to the dimwitted big, cheap to build, high margin SUV and light truck business. They continued to fight the labor battles of the 1930s long after the rest of the world had moved on. FYI, designers are rarely union. The managers and designers were executing the brainchild of upper-management to run these companies straight into the ground, and to do so with haste. It takes a unique brand of aloof indifference to contemplate your company's dividend while simultaneously contemplating bankruptcy as Ford did when its debt was downgraded to junk a few years back.

Non-expert observers living in suburbia could see the absurdities for years. We mocked the supposed 'soccer moms' unable to handle their land yachts in the mall parking lots back in the mid and late 90s. Short-sighted, incompetent and uninspired leadership led the companies to bloat, sloth and arrogance. It's as if they hadn't even realized that it wasn't the 1970s anymore. They no longer commanded a healthy portion of GDP, they were not one of the nation's leading exports, their home-city was a decaying pile of ubran waste long before they contemplated bankruptcy, and hell, they hired Bob Nardelli, the guy who never once returned a year over year gain at Home Depot while commanding the ship for 10 years to head up Chrysler. Really?

Nonetheless, Adam Hanft, in his article at TDB, believing that the world revolves around his industry and expertise chalks up their failures to insufficient marketing prowess. In the process, he raises a few points of interest:
  • Many miles ago, long before Detroit started losing billions a month, they lost something even more important: their 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 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.
  • The image destruction started when their brands began to exhibit the worst kinds 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.

  • And in a colossal marketing mistake that scraped away any chance for individuality, Detroit’s legions of PR firms continued to let their brands be bundled as the Big Three. Can you imagine Apple permitting itself to be bundled with Dell and HP this way?

  • 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 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.


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