GM Gains, But Weaknesses Remain – BusinessWeek

Business Week:

GM Gains, But Weaknesses Remain – BusinessWeek.

GM has also been crowing about its newest models, especially its important family-oriented sedans and SUVs. Crossover SUVs like the Chevrolet Equinox and Cadillac SRX both sell for at least $4,000 a vehicle more than the models they replaced. The Buick LaCrosse sedan sells for $9,400 more than the old model.  Docherty says GM has added third shifts to the plants that build the Chevy Malibu, LaCrosse, and Equinox and GMC Terrain SUVs. When the company gets up to full production for those new vehicles, “we can get market-share increases,” Docherty said.

Apparently GM is at 53% of plant capacity overall, which is bad.  However, they have burned off a ton of inventory and taken a deep breath toward holding the right number of days of inventory in the system instead of thousands of cars in float.  I am cautiously optimistic that these are good signs that GM is headed into profitable territory.

Cadillac SRX is NOT the Saturn Vue

I hear some chatter on the social networks that the Cadillac SRX seems the same as the Saturn Vue.   They are not the same, and I would like to explain how they differ:

1) Chassis:  The new Cadillac SRX is on an evolved Theta platform, sometimes referred to as a  premium Theta-Epsilon Chassis, and has a 110.5″ wheelbase.  The Vue is on the original Theta chassis and has a 106″ wheelbase.

Differences:  more premium components in the Cadillac, Cadillac is longer wheelbase for better ride and more interior space.

Cadillac SRX 2010 Chassis

Cadillac SRX 2010 Chassis

2) Powertrain: The new Cadillac SRX offers either a 3L Direct Injected DOHV VVT LF1 V6, or a 2.8L Turbo DI V6. The Vue offers a variety of engines, the 2.4L LE5 I4, 2.4L LAT I4, 3.5L LZ4 V6, 3.6L LY7 V6, or 3.6L LCS V6. 

Differences:  The two vehicles have different engine choices available; both of the Cadillac choices are more powerful, premium engines.

Cadillac SRX 3L V6

Cadillac SRX 3L V6

3) Exterior:  Visually the Cadillac SRX and the Saturn Vue share the same configuration of any mid-size SUV, or CUV. 

Differences:  The Cadillac SRX clearly shows modern Cadillac styling with sharper features, and a more formal, elegant appearance.

Cadillac SRX 2010

Cadillac SRX 2010

2009 Saturn Vue Red Line

2009 Saturn Vue Red Line

Conclusion:  The Cadillac SRX is on a different, premium chassis, offers different, more powerful engines, and looks visually different — more appealing than a Saturn Vue.

Next article:  “How Beyoncé is different from Bon Jovi” (kidding)

Selling the Steaks, not the Sizzle

Elmer Wheeler, an early marketing & branding guru, and public speaker.  “Sell the Sizzle, not the Steak” was one of his trademark expressions, and the chapter title for one of the chapters in his book, “Tested Sentences that Sell”.

The expression “Sell the Sizzle, not the Steak” means that people don’t really care about the features of your product, they care about the benefits to themselves as buyers.  Quote:

“WHAT WE MEAN by the “sizzle” is the BIGGEST selling point in your proposition – the MAIN reasons why your prospects will want to buy. The sizzling of the steak starts the sale more than the cow ever did, though the cow is, of course, very necessary!

Hidden in everything you sell, whether a tangible or an intangible, are “sizzles.” Find them and use them to start the sale. Then, after desire has been established in the prospect’s thinking, you can bring in the necessary technical points.

The good waiter realizes he must sell the bubbles – not the champagne. The grocery clerk sells the pucker – not the pickles, the whiff – not the coffee. It is the tang in the cheese that sells it!

The insurance man sells PROTECTION, not cost per week. Only the butcher sells the cow and not the sizzle, yet even he knows that the promise of the sizzle brings him more sales of his better cuts.”

Recently GM VP Bob Lutz said he didn’t want to see another marketing campaign that sells the sizzle and not the steak.

In a September interview with Automotive News, Bob Lutz, GM’s head of marketing and Nesbitt’s boss, said Modernista and Cadillac have done enough visually edgy ads with attention-getting music.
Now Cadillac will run more ads that explain the value of the brand’s products compared to the imports.
“I won’t sit here and permit ads that keep simply emphasizing the sizzle and never talk about the steak,” Lutz said. “We’re going to start selling the steak.”

I think by that he means that he doesn’t want to see commercials that are purely about lifestyle or impressions without actually focusing on the product itself, or on comparisons of GM products with competitors.  So, how can the next set of Cadillac marketing follow the philosophy proven successful by Elmer Wheeler and still ace the intent that Bob Lutz wants to see?

Actually, the two are not as different as you might think.  What Elmer Wheeler advocated was to bring in customers based on the tangible and intangible benefits to the customer, then to highlight the technical details that validate their interest in your product.  That does NOT have to be in contrast to Mr. Lutz’ point about the advertisements.

Let’s take the new 2010 Cadillac SRX:

Benefits — Technical details

Elegant — Leather interior, Luxury accessories, state of the art entertainment

Efficient — nimble, fuel efficient, family-friendly, easy to park, great visibility, versatility in load carrying

Sporty — good power, great handling, nimble, responsive

And at an even deeper level of detail are specifications:

Specifications: custom Theta/Epsilon Cadillac SUV suspension, 3L VVT DI V6 or 2.8L VVT Turbo V6, Bose stereo, available Navigation, ONSTAR, wood trim, leather

So which of these are the steak and which are the sizzle?  One is inclined to say that the Benefits are the sizzle, and the technical details are the steak, right?  The Cadillac websites do a good job of bringing out these benefits, and the technical detail behind them.

Unfortunately, a lot of the current advertising does not get into the ‘benefits’ as described above — current commercials may only show Cadillac vehicles, with a voice over that never mentions these benefits at all.

Example 2010 SRX Commercial on YouTube

Conclusions?

  • Cadillac is NOT a commodity product, but is a premium product that can sell itself if the ads will focus on the product
  • Cadillac needs to start directly addressing the benefits of Cadillac products in their marketing, and bringing in the technical details to close the deal.
  • If Cadillac can level the playing field, so that comparisons with competitors are done based on facts, Cadillac wins.