Abdurrahim Musleman

Agenda•Background

•Identify Problem

•The Macro-environment situation

•The Competitive situation

•SWOT Analysis

•Marketing Research

•Project Objectives

•Alterations to the Marketing Mix

•Q & A

Background

• Multinational automobile manufacturer founded in 1908.• Was the world’s largest automaker until last year.• GM is the ninth largest publicly traded company in the World.• GM today employs about 266,000 people around the world..• With global headquarters in Detroit, GM manufactures its cars and

trucks in 35 countries and its vehicles are sold in 200 countries. • Currently, the United States holds the “largest national market” for

General Motors. China, Canada, the UK, and Germany follow the United States for GM’s largest markets.

objectives

position the company for sustained competitiveness, profitability and growth.

satisfy customers based on the design, quality, technology and value of our cars and trucks.

Continue solid growth in global vehicle sales..

Investing dedicated to improving cultural, economic, educational, environmental, and social aspects of our communities.

“G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment."

Mission Statement:

Identified Problem

Falling car sales has been a problem for GM due to increased competition from foreign manufacturers & rising oil prices.

The Economic Situation

• The combination of the sharp run-up in oil and gas prices, rapid declines in the housing/mortgage/credit sectors, and the lowest levels of

consumer confidence in nearly 30 years have all dramatically reduce both the economic and automobile industry outlooks.

• over the past few months, U.S. auto sales have declined by more than 30%.

• November 2008, GM stated that it was dangerously low on cash, and weeks away from collapse if the government refused to bail the company out.

• December 19, 2008, Congress approved $17.4 billion for the companies.

* Why didn’t the government let the company bankrupt?. A failure by GM will likely trigger catastrophic damage to the U.S.

economy, rapid failures among component and logistic suppliers, other domestic car manufacturers, raw material suppliers, technology and service providers, retailers and their suppliers, and GM creditors and financial institutions.

an estimated 3 million Americans could find themselves jobless within a year of GM’s collapse.

The Macro environment situation The Economic Crisis

• The automobile industry is highly competitive. The North American automobile industry is dominated by what’s known as the ‘Big Three’: General Motors, DaimlerChrysler, and Ford Motor Company.

• The two largest foreign competitors include both Toyota and Honda.• Since Toyota’s introduction of the Prius, an innovative gas electric

hybrid car, GM has been struggling to keep up with competition.• US auto makers lost 8% of the US auto market last year, while

Asian manufacturers gained 5% and European companies gained 3%

The Competitive Situation

Competitive Situation How Does GM compete?

$182

Billion

$230

Billion

$177

Billion

$172

Billion

266,000 316,000 274,999 245,000

2008 Sales

Revenue

EmployeesAt 2008

Year-end

GM13%

PAG1%

Other Know n6%

Chrysler1%

Mazda1%

BMW1%

Unknow n10%

Mercedes1%

KIA & Hyundai9%

Mitsubishi10%

Nissan11%

Toyota36%

The Competitive Situation

2006 GCC Market Share

Strengths Name recognition Corporate Social Responsibility Quality improvements and

perception thereof.

Opportunities Cut health-care costs and

move production overseas. Concentrating on smaller

more fuel efficient cars Expansion of their global

presence .

Weaknesses The decline of market share. High pension obligations and

health care costs. Lack of differentiated products. Unfocused product line Unresponsive corporate culture. Too much investment in SUVs

and Trucks.

Threats Intensity of rivalry among

competitors worldwide. Weak consumer confidence

and tight credit. The UAW can hurt General

Motors if unhappy. The Volatility in fuel prices. Government legislation.

S.W.O.T. analysis

Research Plan

Primary Research• Limited to Qatar university • Survey Research: Focus Group Amendment

• Simple Random Sample: 15 students

Secondary Research• Official Websites• Business Magazines• Journals• GM’s annual reports

Findings of Market Research

Primary• 60% of the sample have expressed their impression by GM design.

20% have appointed to the company’s spare parts cost , followed by 10% which have stated that they worried about the reliability of the GM cars.

Secondary

going for smaller cars is not only smart, but also trendy. And because fashion is of high importance with the upper classes, the little green

cars with luxury trimmings become quite plausible.

Marketing strategy development Project objectives

Modify the company’s U.S. product portfolio, toward more fuel-efficient cars and crossovers.

Reduction in brands, nameplates and retail outlets, to focus available resources and growth strategies on the company’s profitable operations.

Alterations to the Marketing Mix:

Product

• Close or sale up to six of GM brands:

Pontiac, Buick, Saturn, Saab, GMC, and the Hammer.

• Keep:

Cadillac

Chevrolet

* GM could save $8 billion a year by cutting back to just these two brands that represent the soul of GM..

* With fewer brands, GM would no longer have to maintain 7,000

dealerships.

• Differentiation strategy:

Cadillac:

Full-line, edgy-styled, high volume luxury brand that competes directly with BMW and Mercedes-Benz.

Chevrolet: Remain GM’s high-volume brand, mainstream-oriented, offering

vehicles in every major segment. Competes with Ford, Toyota, Dodge and Nissan.

Alterations to the Marketing Mix:

Product

Alterations to the Marketing Mix: Product

• launch predominately high-mileage, energy-efficient cars

and crossovers.

• During the 2009-2012 Plan, General Motors should invest

approximately $2.9 billion in alternative fuel technologies..

Alterations to the Marketing Mix Cont. Price

• Abandon the employee pricing discounts as they prove to be very harmful to the company and its image.

• Selling lots of vehicles doesn't necessarily translate into higher profits unless the cars and trucks are sold at the right price.

• begin pricing all the new models in a more rational way, at the actual price for which they usually sell.

• Cadillac: Very expensive Chevrolet: • Economy-priced

• reduce GM retailers to 3,000 by 2012; This will occur primarily in metropolitan and suburban areas where GM has too many dealers.

• This will lead to increase annual throughput for the remaining outlets to a more competitive level.

• GM’s distribution strength in rural areas, which is a significant competitive advantage, will be largely preserved.

Alterations to the Marketing Mix Cont. Place

Alterations to the Marketing Mix:

Promotion

• The company is perceived as a gas-guzzling company. • pursues a "green" promotion strategy that addresses global energy

and climate issues to improve its overall corporate image.• We propose a cost-effective campaign, focused on direct marketing,

publicity, and Internet web page.• We suggest that the company partner with an environmental icon

like for example Algore, and sponsor environmental awareness campaigns.

Thank You