NEW YORK General Motors has restructured its marketing operations, breaking its eight brands into four separate channels and hiring former Nissan marketer Mark McNabb.
The move comes as the company has struggled with diminishing returns from several underperforming brands. GM’s sales dipped almost 11 percent in the first quarter, per AutoData, Woodcliff Lake, N.J. The restructuring is seen as an attempt to right the ship.
The four new channels will include Chevrolet, headed by Chevrolet’s general manager Ed Peper; Premium — comprising of Cadillac, Hummer and Saab — will be headed by McNabb, who was most recently corporate vp for Infinity and svp, marketing at Nissan; Buick-Pontiac-GMC, headed by Susan Docherty, who served as general manager of GM’s Western region since 2006 and worked in the Cadillac division; and Saturn, headed by Jill Lajdziak, who is Saturn’s general manger.
“These changes have been designed to improve all of our brands and achieve strong profitable channels at both a wholesale and retail level,” Troy Clarke, president of GM North America, said in a statement. “We are further streamlining the organization to reduce complexity, align resources to improve the consumer experience and improve bottom line business results.”
The move will allow marketing dollars to go further and give the individual channels a smaller quantity, but better quality products, said Erich Merkle of consulting firm IRN, Grand Rapids, Mich. “We will now see fewer models across these brands, which will be a big plus for GM,” Merkle said. “Instead of seven Pontiac selections, we will see maybe three. It allows [for] extended marketing as well, with products that GM can really get behind.”
Several GM brands have dropped in sales, despite new ad campaigns and new products, such as Hummer (down 24 percent), Chevrolet (12.5 percent) and Buick (13 percent). But the company also is the biggest spender on ads in the auto category, shelling out $2 billion in 2007, per Nielsen Monitor-Plus, down 12 percent from 2006.
Some of the biggest problems plaguing the automaker include a bureaucracy that stymies performance at the marketing level. The realignment could help GM in that regard, said Wes Brown, of consultancy Iceology in Los Angeles. “These moves should give people at the head of these channels more clout,” Brown said. “In previous realignments, GM has found it pulled too much power away from the manager of a brand.”
Brown added that some of these appointees may use the opportunity to review their primary ad agencies. He said: “This is now a person in charge of this channel, this group or brand, and that’s where the agency falls. It’s something that [Mark] LaNeve [GM’s vp, sales and marketing] has had to deal with and now he won’t be as intimately involved.”