Ford and General Motors Will Continue to Lose Market Share

By Rudy Socha

Lorain, OH - I recently had the occasion to talk to marketing executives at GM and Ford about advertising, sponsorships, and market focus. To be honest, I was shocked to hear that unproductive areas being focused on in past years will continue to be pursued. The biggest sticking point for both companies seems to be the mindset that they need to continue launching large (expensive) measureable campaigns.

What Ford and GM have not yet realized is how they lost their market share. The foreign imports did not arrive in the United States and decide to outbid them for NFL or Olympic sponsorships. They arrived with small advertising budgets and looked for inexpensive venues to reach the demographics they were seeking. In most cases, smaller market advertising and sponsorships can not and do not provide the measurement analytics that can be found via Google and large sports venues.

The best example of blowing an opportunity is Ford’s environmentally responsible image. The company has a Chairman, Bill Ford, who has been very active on environmental issues and was able in the 80s and early 90s to promote the Ford brand as an environmentally responsible company. Unfortunately, Ford’s marketing, advertising and vehicle development departments all let Bill Ford down. They were unable and unwilling to adjust their campaigns and vehicles to take advantage of the goodwill that Bill had generated for Ford in the market.

At the same time General Motors followed a similar path. Most consumers still are not aware that in the eighties GM spent billions of dollars to make their manufacturing facilities environmentally friendly. They were working to operate as a “green” company long before it became fashionable or to obtain the “tag” consumers looked for in a brand before buying. Just like Ford, the marketing, advertising and vehicle development groups at GM were unable and unwilling to take advantage of the company’s environmental accomplishments.

Before I tell you what happened, let me explain the difference in demographics between where they were advertising and where they should have been advertising to present an environmental message. Ford and GM spent the majority of their advertising and sponsorship dollars in the sports marketplace. In 2008, 75 million people in the United States purchased hunting and fishing licenses, 78 million attended Major League Baseball games, 21 million attended NBA games, 21 million attended NHL matches, 18 million attended NFL games, equating to a total combined audience of 213 million.

National parks, botanical gardens, and animal attractions all represent venues with audiences receptive to environmentally sound and responsible brands. In 2008, more than 26 million Americans attended botanical gardens, 278 million visited national parks, and 305 million attended animal attractions in the United States, equating to a total combined audience of 609 million. GM does buy an ad in the national park’s guide book. Unfortunately, in previous years GM’s national park ads were focused on their large gas guzzling vehicles.

What has occurred is the foreign brands arriving had smaller fuel efficient vehicles and relatively small budgets. They went looking for Americans who wanted to save money, were willing to help the environment and wanting to set an example for their children. They understood and conceded that there was a segment of the American market who still needed large vehicles to work their farms, tow other vehicles and trailers, and haul supplies and equipment. What they quickly found was that most of the big vehicle demographics were men working construction and rural Americans. The small vehicle demographics were the inner-city single women and mothers with children.

As they went looking for these women they quickly realized that unlike the large vehicle demographics, the female market demographic they were seeking was fragmented and interested in environmental and social causes and events. Creating nationwide visibility in these markets requires small expenditures at numerous events with minimum measurement statistics available for feedback. Instead of daily measurements such as Nielsen ratings for TV, or click through counts from Google, they had to wait for end of the month or quarterly sales figures to see if their campaigns were working.

In the name of efficiency, General Motors and Ford marketing staffs have long since moved away from conducting small advertising campaigns and sponsorships requiring that much front end work. Instead they focus on large multi-media campaigns which provide multiple measurement statistics and perform all of their work on the back end tinkering with the statistics. Their ad agencies are also ill-equipped and hate to put in the labor necessary to cover multiple small venues nationwide.

With few exceptions, Ford and GM corporate ad campaigns and sponsorships have become phantoms in the environmental and social cause marketplace outside of Michigan. Within Michigan both companies support breast cancer research and many United Way organizations. Whenever anyone attends a green, environmental or wildlife event they are likely to see a Toyota or Honda sponsorship, regardless of venue size. Now Subaru is moving into the cause market in a clever way with its $250.00 donation to the cause of the buyer’s choice. Hyundai, Mercedes, Fiat, Nissan, and Mitsubishi are also moving towards targeting this demographic. Ford at one time owned this arena and GM had spent billions to clean up their manufacturing facilities to enter it. Both companies had marketing, advertising and vehicle development departments that were unable to translate those achievements into car sales. Today, they still have not penetrated this market to any significant or visible degree.

After my recent discussion with their marketing groups, the imports have nothing to fear because Ford and GM still are not ready to compete for a share of the green-environmental market. Both of these domestic car companies remain focused on large market measurable analytics.

Rudy Socha
rudy@zandavisitor.com
CEO
Zoo and Aquarium Visitor
http://www.zandavisitor.com