6 - Building a Brand Saturn Copy

8/3/2019 6 - Building a Brand Saturn Copy

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Brand Management

Building a Brand:

THE SATURN STORY


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THE 1980s

The American auto industry was underattack

from all directions. That is why I came here.Itwas a chance to turn things around. A

chance to

help build a car that would go up againsttheimports and best of all to have a say in

the

way it was done


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January 7, 1985: GM Chairman, Roger Smith,announced creation of the Saturn Corporation,described as the key to GMs long-termcompetitiveness, survival & success as a

domestic producer of autos.

New company mission:

Produce & market compact vehiclesdeveloped & manufactured in the US.


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Saturn an ambitious undertaking for GM ata time when imported compact cars weresweeping across the US market;

Pessimism about US manufacturerscapacity to make world-class compact cars

GM had aborted attempts in the past.


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Spring Hill - New Saturn plant located inthe middle of nowhere i.e. away fromDetroit, to emerge as a new kind of

American company.Starting from scratch, doing things right.

Middle of nowhere caption of print ad implieda breath of fresh air.


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In 4 years, Saturn became one of the strongestbrands in the US of the stature of:

1906s: Ford Mustang,

19870s: Ford Pinto, and

1980s: Ford Taurus.

The first Saturn roll out


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Questions!

1. What is a strong brand?


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Why was Saturn considered a strongbrand?

EXCELLENT TRACK RECORD:

Sales 1991: 74,000

Sales 1992: 196,000

Sales 1993: 229,000

Sales 1994: 286,000 8th highest sellingbrand.

More cars sold per dealer than Honda orToyota.

Results achieved despite capacity limitations.


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Why was Saturn considered a strongbrand?

Sticker price comparable to competition, butno haggling, dealer discounts or rebate

applicable a norm in the business;

1992: 60% of Ford Taurus sales made on thebasis of cash discounts;

Saturn most valued franchise in the industry,second only to Lexus.


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Evidence of perceived quality ofSaturn?

1992: J. D. Power Sales Satisfaction Indexbased on customer response indicated Saturn 4thin terms of perceived quality;

1992: J.D. Power Customer Satisfaction Index, measuring product quality and data serviceafter one year of ownership, indicated Saturn #3,

trailing Lexus and Infiniti.

Performance maintained in 1993, 1994, 1995with some improvements in ranking.


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Evidence of perceived quality ofSaturn?

1993: Suggested retail price of 1991 Saturn

5% above original list price, whereas 5%

below for Toyota and Nissan;

Market research indicated showroom visitors

estimated Saturns price at $3-5,000 more

than actual price.


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Evidence of Loyalty for Saturn?

1995 in-house customer survey revealed that87% of Saturn buyers said they woulddefinitely recommend the dealer ( 1994 figure

80%);

Customer loyalty confirmed by Polaroidpicture campaign at dealer showrooms.

A couple got married inside a Saturn car.

Formation of Saturn Groupies.


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What Awareness level did Saturnreach?

40% within months of launch, 79% a yearlater, 100% in fourth year.

Recall?

14% in 1992 ( behind Dodge and Pontiac, and

ahead of Mazda, Mitsubishi & Geo; 17% in 1994.


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Associations of Saturn?

Above Japanese brands on the friendlydimension;

Associated with customer care by over 60%customers (twice the average of 6competitors);

Strong on quality of Dealers, on being a

company like you, on safety, on providinggood value & offering intelligent approach.


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In conclusion

Saturn became a strong brand within

TWO years;

Not profitable during first two years, butWITH HIGH PROFIT POTENTIAL.


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How did Saturn build the brand?


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Selling Company not Car

Q. How could Saturn convince customers,

it had created a world-class car?

Focus on the car?

Features?

Design and finish?

Economy?

Acceleration Performance? Comfort?

Endorsements?


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What was Saturns Mission?

World-class compact car to match imports.

HOW?

Match Price & Quality, measured in terms of:

Reliability

Safety

Feel

Appearance

Overall excellence Assumption: Product drives the

image!


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-product?

Mistakes made by Ford Edsel or VW Rabbit, interms of product quality not repeated.

Road & Track calledSaturn a major stepforward in 1991, and best value in 1992;

J. D. Powers indices delivered a morepersuasive endorsement.

3rd party reviews in car magazinesacknowledged car was well-designed & well-

built. Money back guarantee: offer to return carwithin first 30 days or 1,500 miles -reassurance for customers.


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The 1993 recall!

350,000 cars recalled in 1993 to ensure a wirewas properly grounded.

Initial negative publicity, later positive. WHY?1. Recall was voluntary2. Problem handled quickly3. 50% cars repaired in two weeks4. Retailers handled activity well: Baseball, BBQ

& theatre tickets!5. Tracking indicated Saturn took care!


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What made Saturn a different kindof company?

Free from UAW labor union contract;

Non-confrontational relationship between labor &

management;

New organization not only to create a product but

also face the broader challenge of creating a

new brand and a new identity;

Organizational focus on creating a brand

communicating a unique identity.


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The 99 CLUB!

99 persons The 99 Club drawn from

amongst the management and labor at GM,

authorized to decide, what kind of company

Saturn should be.

HOW DID THEY START THEIR WORK?

Team visited 60 benchmark companies tolearn from their experiences and use it at

Saturn.


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Saturn: what else was different?

Cross-functional teams created to stimulate

change, maintain standards. Teams

empowered. Incentives/ rewards based on team and

organizational goals.

20% compensation, in manufacturing,emphasis on quality & productively.


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Creating perceptions:Selling company not car

Customer perception matters: Audi andVolkswagen Rabbit experience.

ANY CAVEATS?

Tall claims fail to attract customers.Logic and mind-numbing facts not the right

approach.

Fords motto: Quality is Job 1. Buick the symbol of quality.

Chrysler as good as Japanese cars.


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Creating perceptions:Selling company not car, BUT HOW?

Sell the company its values and culture, itsemployees and its customers rather than the

car.

EXAMPLE: Initial Print advertising copy:

I remember standing in the middle ofnowhere, no sign of an automobile plant,thinking what the heck am I doing here?


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Creating perceptions:Selling company not car

Year 2: Focus on customers, their experiencewith the car and Saturn dealer;

1995: story of the redesigned car through the

eyes of employees and members of theSaturn family.

Storyline: role of cars in their childhood;moving to a new area, a new company;pride in seeing first car come off the line.

Visual imagery of Spring Hill plant reinforcedconcept of a new kind of company


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Two important decisions

Distancing Saturn from GM -reinforcing concept of a fresh start;

Using Saturn as the brand name not

creating multiple brand names e.g.Civic, Prelude etc.


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Creating a relationship withcustomers

Strong brands move beyond productattributes to a brand identity based upon

brand personality and relationship withcustomers.

Saturns corporate culture rested on the

quality imperative and team orientation.


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Creating a relationship withcustomers

Customer relationship is built on the

personification of brands e.g.

Volvo as dependable and reliable

Mercedes as being elegant, successful

and a bit stuffy and aloof.


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Saturn personified!

Saturn personified as young (at heart),genuine, honest, friendly, and down-to-earth

someone competent & reliable who cares

and treats customers as a friend.

Someone without a foreign accent and notcondescending. Someone with a sense of

pride, at being American. Someone with charisma, like Apple, Harley-

Davidson or VW Beetle.


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Retailer strategy

Retailers trained to deliver a buyingexperience quite unlike any other;

No haggling no bargaining;

Deal conveying Saturns interest in not justselling a car;

No high-pressure salesman forcing customer

to go on a test drive; Saturn salesman more like a consultant;

Emulating selling style at Nordstrom.


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Saturn retailers as Brand builders

Creating retail experience with comfortable,relaxed surroundings;

Customer following activities: BBQ, ice creamsocial, Singles Social, local homecomings;

100,000 miles club started by a Detroit retailer membership certificate and gift package;

Charitable activities.


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Saturn retailers as Brand builders

Saturn Kids Kingdoms playgrounds forchildren casting $ 35,000 each in NewYork/New Jersey;

Columbus Saturn dealer certainty at thisproperty;

Search and Safari for 30,000 children;

Fundraiser events for the Zoo.


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A Different Kind of Company,A Different Kind of Car

Slogan captured the essence of the brand likethe Avis slogan Were number 2, we try

harder; Slogan addressed employees and customers reflected values and culture;

Separated out Saturn from Detroit carss andJapanese imports.


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Integrated communication

Automobile industry characterized bylookalike, product-focused, Detroit advertising;

Different approach adopted by Saturn agencyincluding brochures, regional advertising,

retail showroom designing; Films/documentaries ran at dealer showrooms

to events and customers waiting to beattended to;

Spring in Spring Hill, a 26-minutedocumentary of the company captured thespirit of Saturn shown to employees,suppliers, press, general public as

infomercial.


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Integrated communication

Print ad designed for retailers differentfrom usual pattern less clutter, witty

headlines like Gosh, what if yourecame back as cars?

Promotion designed for dealers:

Winner to go to Spring Hill toparticipate in building their car.


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1. Why did GM decide to launchSaturn a new brand, a newcompany and a new car?

Questions


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2. How did Saturn fare against thefour dimensions of brand equity?

Questions


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3. In what way was Saturn different

from GM? What differentiatedstrategies adopted by Saturn ledto its success?

Questions


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4. How did Saturn help GM garnera larger share of the US automarket?

Questions


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5. What was so unique about

Saturns advertising strategy?How did it convince customersthat Saturn was the worlds bestcar?

Questions


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6. How did events like TheHomecoming help Saturn buildits brand equity?

Questions


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7. What was the role that Saturndealers played in its success?

Questions


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8. What problems did the successof Saturn itself create for thebrand?

Questions


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9. Why did Saturn have to recall itsvehicles in 1993? How did theaction affect its image? Why?

Questions


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10.Would Saturn benefit by bringingitself closer to GM in operationalterms?

Questions


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6 - Building a Brand Saturn Copy

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