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Did GM's Marketing Department Make Out GM's CEO an Unmitigated Nincompoop?
By James B. Bleeker
In June 2005, General Motors Corporation's Chief Executive Officer told GM shareholders, "We know that you can't turn around, or be successful in our business, without great cars and trucks."
However, for June 2005, GM's marketing department restructured the company's incentives for luring in consumers. Under the June edition, all consumers paid the same discounted price that GM employees paid; at least, so it was advertised. The result was a modest increase in discounts; nonetheless, Big Three consumers took to it as a hungry fish takes to hook, line, and sinker.
GM's June sales soared 41% overall. Sale of its GMC line rose 84.8%, sales of its Cadillac line rose 63.8%, sales of its Chevrolet line rose 42.5%, sales of its Saturn line rose 33.4%, and sales of its Buick line rose 31.1%
And these fine results occurred, despite the fact that GM has not a single line with a 1996-2000 Reliability Grade above an F. The following table gives the 1996-2000 Reliability Percentrank averages, 1996-2000 Reliability Grades - High Standards, and June 2005 sales increases for the above lines of vehicles.
Reliability Percentrank Averages, Reliability Grades, and Percentage Changes in Sales for Some of June 2005's Best-Moving Lines of General Motors Corporation Line 1996-2000 Reliability Percentrank Averages 1996-2000 Reliability Grades - High Standards Percentage Change in Sales for June 2005 from June 2004 GMC .27 F 84.8% Cadillac .13 F 63.8% Chevrolet .32 F 42.5% Saturn .35 F 33.4% Buick .49 F 31.1% And the following graph depicts the gap from the Reliability Index averages of the Reliable Two - Toyota Motor Corporation and Honda Motor Company - to the Reliability Index averages of General Motors.
From the above, it seems safe to say that the success of GM's June 2005 marketing tack stands as a testament to no need for improving the quality standing of GM products, now or for the next decade to come.
For a related article, click "Did GM's Marketing Department Make Out Big Three Consumers Unmitigated Nincompoops?"
Source for General Motors sales data: "GM Reports 558,092 Deliveries in June, Up 41 Percent," July 1, 2005, accessible at http://media.gm.com
Source for Reliability Percentranks and Percentrank averages: Table I-MVRP
Source for Reliability Grades: Table I-MVRGH
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