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WINTER, 2001

In the '90s, General Motors hired a slew of marketers from outside the auto industry -- gurus of selling soap, toothpaste, disposable diapers and the like. But given the blunders behind Oldsmobile's failure, perhaps GM should have taken its marketing lessons from radio instead!

For most of its 100+ year history, Olds was a stunning success. Only 15 years ago, the brand sold more than a million cars a year. But sales have declined precipitously since those Good Olds Days. By 1990, Olds was down to half a million. By 2000, it sold fewer than 300,000 -- in a record auto sales year.

How did Olds fall so far, so fast? It ignored marketing principles every savvy radio guy knows...

It's Not All About Product ...

Many auto experts think the current Olds lineup is the brand's best ever. Car and Driver's Brock Yates wrote: "Its Alero, Intrigue and Aurora sedans are excellent products that, perhaps if labeled with BMW's blue and white roundel or the Mercedes-Benz star, might be market leaders. Therefore...the collapse of Oldsmobile is more a failure of marketing and sales strategies than it is of the automobiles themselves."

We in radio know that better product isn't always enough! If a station is broken, moving spots, tightening talk and playing "better" songs may not fix it. As I've said before..."Brilliant execution of a flawed strategy will get you nowhere."

And Oldsmobile's strategy was most definitely flawed...

Choose a Realistic Target

In the early '90s, GM adopted a "brand management" strategy. Stung by a backlash against its lookalike cars of the '80s, GM set out to clearly define the character and targets for each of its brands. Not a bad idea!

But GM set a daunting task for Oldsmobile. Starting in '92, then Olds General Manager John Rock launched his multi-billion dollar "Centennial Project" -- to develop new models competing head-on with popular import brands for young, affluent buyers.

I still remember what I thought when I heard this: No Way!

Import buyers generally think that their cars are far superior to Detroit Iron. And it's an auto biz adage that you can sell an old person a young person's car, but you can't sell a young person an old person's car -- what Olds was perceived to be by the '90s.

Olds set out to change consumers' minds...

Send The Right Message

Oldsmobile's "This is not your father's Oldsmobile" campaign is of the most infamous advertising flops in recent memory. The catchphrase is memorable...it has become a bad joke! And it didn't give Olds a younger image. If anything, I suspect it reinforced Oldsmobile's image as "dad's car." (Did you overtly think of Oldsmobile as an old person's car before you saw the campaign?)

In any case, the idea of changing consumers' perceptions is usually wishful thinking. As Jack Trout stated in The New Positioning: "minds don't change."

Names Matter!

The name Oldsmobile -- dating back to 1897 -- may itself be a liabilty...a throwback to the early automotive era. It includes the word "old," after all ... hardly the way to foster a younger image! Would you call your Young Country station "Twang 101"?

"Like it or not," John Rock stated, "the name is a negative." So when he introduced the '95 Aurora -- first of the Centennial Plan cars -- "Oldsmobile" was nowhere to be found on the outside of the vehicle! This game of peek-a-boo continued with the '98 Intrigue, which left consumers intrigued about where to buy the car. Reportedly, many went to Dodge dealers (confusing Intrigue with Dodge's Intrepid).

If your brand name is a handicap, why try to save it??? John Rock wanted to rename the entire division "Aurora," but GM brass nixed the idea. I think he was right. Would Intrigue have sold better as the "Aurora A4"? I bet it would have.

We in radio know how important names are. After years of doing research, I've come to the conclusion that a format change should almost always be accompanied by a change in identity! Otherwise, the station's old image can drag it down.

Don't Abandon Your Base!

Despite all the handicaps and impediments faced by the Olds Centennial Plan, it wasn't entirely a failure. Intrigue and Alero did attract some younger, "import intenders," helping to drop Olds buyers' median age from 62 to 49. But this shift reflected not only younger buyers that Olds attracted, but also older ones it alienated.

"Not Your Father's Oldsmobile" played a role in this alienation, and recent Olds ad efforts continued it. An Olds dealer said last year's Super Bowl ad for Alero "looked like a Gap commercial (full of) kids in goofy jeans."

The new cars Olds developed also alienated its core. Some dealers pleaded with division managers to offer a "bench" seat for the Intrigue to accommodate three people in the front. Olds brass refused, saying that a bench seat (and the accompanying shifter on the column) wasn't consistent with its sportier, import-fighting mission.

But as one dealer explained: "We gave up a lot of good old customers in the change. They were older customers, but they liked the product and they let you make a profit. So now we sell Aleros to young people. The problem is I've got to find four Alero buyers to make the return I did on one Ninety-Eight."

We in radio know that its easier (and faster!) to blow off your core audience that attract a new one. Even so, we sometimes do make that choice...when our research shows that the station has a great opportunity to attract a newer, more desirable audience.

Olds had no such opportunity, just the wishful thinking of GM management! Olds was given a nearly impossible mission and not nearly enough time to achieve it. When sales predictably faltered, GM pulled the plug. Meanwhile, sister division Buick, still selling bench seats and column shifters to the 60+ crowd, soldiers on for now, because its cars are still selling.

We in radio know what happens when you abandon your base. For example, think of all the traditional AMs that have tried to attract younger (i.e., 25-54) listeners. Few have succeeded; many have alienated their core listeners.

Be Famous For Something!

That's just another way of saying that you've got to have a positioning...a clear-cut idenity in consumers' minds. We know this in radio. If listeners can't describe a station in a few words, it is in trouble.

Historically, Oldsmobile held the middle ground in GM's brand hierarchy -- once the place to be, but "Nowheresville" in today's polarized marketplace. As we wrote in '94 (about Oldsmobile's problems), "Today, the middle of the road is a good place to get run over!" Or, as Brock Yates stated: "Oldsmobile became boxed in between Pontiac, which was marketing a glitzy brand of 'excitement,' and Buick, which held a firm grip on more mature sedan buyers."

Think about it. Volvo is Safety. Lexus is Luxury. BMW is "The Ultimate Driving Machine." Subaru is Four Wheel Drive. And Oldsmobile is???

History.

As John Rock (since retired to his ranch in South Dakota) said: "I guess this old cowboy has seen it all. The world's greatest rapper is white. The greatest golfer is black. President Clinton just got back from Vietnam. And there is no Oldsmobile anymore."

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