Auto Industry

GM enlisting its work force as a sales force


By GREG KEENAN
AUTO INDUSTRY REPORTER
Friday, February 13, 2004 - Page B1

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TORONTO -- General Motors of Canada Ltd.is turning each of its 22,000 employees into sales people with a novel marketing plan aimed at pumping up sales and recapturing flagging market share.

The world's largest auto maker plans to give workers 10 coupons each worth $1,000 apiece to hand out to friends and relatives who agree to buy a new GM vehicle.

It's among a series of strategies GM Canada is using to move away from traditional advertising, which it views as increasingly ineffective.

"We have a great lineup of new cars and trucks. We've got to reach out to non-GM customers. What better way than to turn our 20,000 employees across the country into GM ambassadors?" GM Canada president Michael Grimaldi said.

GM officials are convinced that North American consumers still perceive that the quality of the company's vehicles does not match that of rivals, such as Honda Motor Co. Ltd., Toyota Motor Corp. and others, which have grabbed market share away from General Motors and its Detroit-based rivals in recent years.

To counter that view, they point to surveys by J.D. Power and Associates that rank five GM plants in North and South America in the top 10 in the consulting firm's annual vehicle quality survey, as well as the presence of an increasing number of GM vehicles in the annual Consumer Reports magazine recommended lists.

Enticing customers to get into a showroom and drive a GM vehicle -- particularly the 30 new or redesigned products being introduced this year -- will lead to sales, the thinking goes.

If "we can get people's seats into our seats and have them experience or drive our product, we have a high chance or a good probability of converting them into a sale," Mr. Grimaldi said in an interview at the Canadian International Auto Show in Toronto..

If all 220,000 coupons were used, it would cost the company a staggering $220-million. But on the flip side, another 220,000 sales would represent almost the output of an entire assembly plant and increase the company's vehicle sales in Canada by 50 per cent.

Employees will receive a product guide before they receive the coupons to hand out.

The other moves the auto maker has made include:

Mailing coupons worth $750 off the purchase of a GM vehicle to people driving competitors' products;

A 24-hour test drive program that lets potential customers take a vehicle home overnight;

Instituting "Chevrolet Day" in Quebec, where the company bought as much space as possible on television, radio, billboards and other media to advertise new Chevrolet vehicles for one day.

"On that particular day, we basically owned television, radio, newspaper, billboards -- you could not drive through the city of Montreal as well as some of the other major cities across Quebec province without seeing and hearing about the new Chevrolets," Mr. Grimaldi said.

Standard advertising media, such as television and print, are still necessary, he said, but their effectiveness is decreasing.

"We're not increasing our marketing budgets, but we're looking at ways to improve the effectiveness of every marketing dollar that we spend," he said. ". . . We are reassessing exactly where and how we go to market."

Advertising industry sources said GM Canada and its dealers spent about $390-million in advertising in 2002, the most recent figures available.

Having employees distribute coupons is a fairly typical way to discount a product and increase sales, said Ken Wong, a marketing professor at Queen's University in Kingston, Ont.

"Fundamentally, I still believe that people will buy vehicles based on the quality of the vehicle," he said. "But you've got to take your hats off to them for trying."

The 24-hour test drive program is a "fantastic" idea because it puts the emphasis back on the product, said Patrick Thoburn, co-founder of Matchstick Inc., a Toronto-based word-of-mouth advertising firm.

Companies need to adopt a variety of tools to distinguish themselves in an increasingly crowded media world, he said.








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