I think it’s great that they have repaid the loan and are showing progress, but this PR/advertising effort seems a little misplaced. Does GM think that we’ve forgotten that the taxpayers provided another $43B for which the government got stock and now owns 60% of the company?

It’ll be one thing when there’s a public offering, the government sells it’s stake and gets its investment back plus interest. That will be something to crow about. In the meantime making a big deal out of the fact that they paid us back roughly 15% of what we put in feels a bit like they’re trying to “sell” us something.

Rather than “sell” us that they’re succeeding, just get on with it, and when they’re no longer Government Motors, bring in the marketing guys.

In the meantime, marketing should be working on clearly positioning their remaining brands. That will help sales and create value for the shareholders.

That said, it’s a good time to pause and take a deep breath, because as so often is true, it’s not what you do but how you do it that matters.

Today’s New York Times has an article headlined: “With Toyota in trouble, rivals gain.” Manufacturers are offering incentives to encourage Toyota owners to come in their stores, trade-in their Toyota for a new whatever. Supposedly these incentives are not being widely advertised and dealers are being encouraged not to “try to take a predatory stance in this type of environment.”  According to GM and others, their dealers have requested incentive support.  Of course they wanted incentive support, there’s blood in the water.

There are a couple of good reasons to push back against this knee jerk reaction to offer incentives.

First, while it may be Toyota’s turn in the barrel today, next month it could be any of the competitors.  Today’s vehicles are incredibly complicated, with more computing power, millions of lines of code, electronic almost everything.  Every manufacturer will have recalls, most minor, but there’s always the possibility of something major. They’re all living in glass houses.

The second and more important reason not to immediately use incentives is that you don’t have to.  I have read article after article that has reported that Toyota values are dropping.  Dealers who have historically sold Toyota’s for $1-2,000 over invoice are selling cars at a loss.  So the customers who are now looking for an alternative to their Toyota, are people that paid full whack when they purchased it. These folks aren’t looking for the best deal, they are looking for the best car, one they can count on.  Now is the time to sell your product based on it’s merits, not the deal.

Detroit has long lamented that the need to offer incentives has crippled them financially.  Most have gone on record in 2009 saying that they were not going to use incentives as much.  So what happens when circumstances create an opportunity, they’re offering incentives!

The irony is that Ford and General Motors have really got their product act together, they are building excellent cars.  Cars that are capable of competing with Toyota. For the only time in recent memory Toyota owners might actually be “open” to another brand and the first thing we’re going to do is sell them a deal rather than selling them on the virtues of the product.

Toyota’s troubles are an opportunity for its competitors to build credibility and their stature as first tier manufacturers.  Unfortunately it seems that old habits die hard. The all consuming desire to drive volume today will prevent the companies and their dealers from behaving in a way that will build their reputations for the longer term.

That’s a missed opportunity.

This bit of understatement came from Steven Rattner and was quoted in a July 6th article in Automotive News.  He went on to say that “There’s often a lag between perception and reality.”  He was referring to the “fact” that GM’s products  and product quality would surprise many people.  Based on JD Power’s most recent IQS study where both Cadillac (#3) and Chevy (#9) were well above industry average, he seems to have point.  GMC and Buick were just a couple of notches below average.  By the way, the GM brands are ahead of many well respected marques like Audi, Volvo, Subaru, Jeep and Mini.

So, as the new GM comes out of its speedy bankruptcy there seems to be general acknowledgement that it needs to deal with this “perception problem” which means that the marketers are going to get their chance to help change the fortunes of GM.

Another Automotive News article declared:  “The New GM needs marketing blitz, experts say.”  The question that comes to mind is what is the “marketing blitz” going to consist of.  There’s a body of opinion that says that GM should lower its prices to get people in the showroom where they will see the quality of the products and be compelled to buy.  Some folks are suggesting that the message should be “Come give us a chance and see what we’ve got, because we’re going to grow.”  Others are saying that GM needs to take advantage of a growing “new nationalism” and Americans’ willingness to buy American.

This sounds to me like Detroit pulling pages from its traditional playbook.  What happened to “re-invention.”

Clearly pricing needs to be competitive.  But I sure wouldn’t make pricing the focus of the communications.  There’s no news there, show me one American who doesn’t know that this is a great time to buy a car…particularly a car from GM!  I also think it’s true that many Americans would like to buy a domestic product, Ford seems to be capitalizing on this sensibility.

Pricing and appealing to nationalism won’t close the perception problem.  Consumers need to know why they should perceive these brands differently.  GM needs to step back, do a clear-eyed assessment of their brands’ positioning, make sure they are differentiated versus their competitive set, and then use communications to clearly establish these brands in consumers’ minds.

While they’re at it, management of the new GM needs to bring outside perspective and creative thinking to this strategic discussion: outside consultants, new agencies, new marketing people.  This body of work must be done quickly, it must be done well and then it must be executed.  You only have one chance to be “new” (sort of).

Rattner et al rejected GM’s financial plan and forced the development of a new one that they thought could work.  The same principle needs to be applied to the marketing plans.  There is no reason to suspect that any “re-invention” of marketing will take place without new input.

I understand the importance of getting people into showrooms and generating sales but doing it based on price or begging people to “buy American” is not a strategy.  Short term tactics are not going to change the perception of the GM brands.  Marketing needs to differentiate these brands and establish a long term platforms on which to build a loyal following for each.

We’re still waiting for signs of “re-invention,” signs that someone recognizes the need for new thinking.  The idea that pricing and begging will lead to an appreciation of the product and a shift in perception is more of the same.  Where is the “re-invention?”