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General Motors: Branding of Saturn Case Study


Executive Summary

Branding is one of the most valid practices of marketing management in firms. Best practices in brand management result in the attainment of high volumes of sales by the company. This paper presents a case of branding and its impact on Saturn, which is one of the key brands of the General Motors Company.

The paper is subdivided into three major parts. The first part of the paper is the background, which gives an overview of the case. The second part of the paper is the situational analysis, which explores the issue of brands and branding that are brought out in the case. The third part of the paper is the analysis of alternatives, in which suggestions to the issues of brand management identified in the case are given.

Introduction

Marketing is one of the most critical practices of firms amidst the competition that prevails in the market in which firms operate. Each company keeps coming up with marketing strategies as a way of improving the capacity of the firm to ease the competitive pressure that emanate from the practices of other firms in the market. Firms often develop a number of strategies, some of which favor the company while other marketing strategies result in complications and impact negatively on market sustenance (Ferrell & Hartline, 2011).

The General Motors Company is one of the world’s most renowned companies in the global automotive industry. This implies that the company has managed to produce brands that have ensured its competitiveness in the industry. It should be observed that the automotive industry is a technical industry, which makes it one of the most competitive industries in the world. For any firm in the industry to thrive in the market, it has to continuously embrace innovation and creativity.

There are a number of other established companies in the industry. These include Ford, Nissan and Toyota. This paper presents a case analysis of marketing practices in General Motors. The case presented in the paper focuses on Saturn, one of the brands of the General Motors Company. The paper begins by expounding the problem in the case, after which an analysis of marketing issues that comes out of the case is done.

Background of the case

General Motors has managed to sustain its operational competitiveness in the industry and the market at large through the production and positioning of different brands in the market. Therefore, this case centers on the marketing initiatives and practices that appertain to one of the General Motors Company brands in the market.

The case revolves around the marketing decision by Saturn to produce and market other brands of cars. Since its establishment, Saturn has emerged to be a strong and independent brand, irrespective of the fact that the brand still lies under the umbrella of General Motors Company.

This was an aggressive development basing on the fact that General Motors had only relied on three brands in the 1990 decade. While this was seen as a step of bringing about a revolution in Saturn, a number of concerns were raised over the influence of this development of the company and its position in the market. The main concern came from the fact that the company had been dwelling on a narrow line of production, which captured a certain line of customers.

The introduction of diverse brands implies the enlargement of the target market and the expansion of the market segments of Saturn, an exercise that may be quite daunting for Saturn and General Motors. The decision to develop diverse brands is welcome, but at the same time lots of doubts are raised about how the diverse numbers of products are to be managed in the market.

Saturn set out its operations back in the year 1990 with the rolling out of three brands of cars in the market. These three brands are: a sedan, a wagon and a coupe, thrived the market due to their features. Innovative and marketing management attracted an extended number of customers.

These features attracted a new set of customers who could not have been captured by the General Motors Company. Five years into its operations, Saturn had attained a higher level of recognition in the market, making the company to be nominated for diverse awards basing on its score on satisfaction index.

This performance implied that Saturn defied most of the odds of the industry, which is often deemed to be highly competitive and hard to penetrate. However, the sudden mushrooming of the company in the market began to be bound by the shrinking in sales, even with the introduction of a series of other new brands of cars in the market. The company also saw a number of newer brands like the L-series vanish from the market within a short time.

The question that ought to be posed here is why the company was witnessing a reduction in the amount of sales, in spite of increasing the number of car brands in the market. Irrespective of the reduction in sales, General Motors has kept banking on Saturn to raise its performance.

General Motors banks heavily on the capacity of Saturn, which lays in a number of things, among them the loyal base of Saturn customers. The central question in the case is the dynamic focus of Saturn and the implications that it has on raising the performance of the company in the market. With the adoption of diversity in production, several concerns are raised in the segment of the market, which will be central to the company.

The effects of production diversification on the customers of the company are also issues of concern. The impact of diversification of the company’s production leaves a lot of pending questions on the interactions between the company and its customers. The General Motors’ hope of market expansion through investment in Saturn lies in a number of things that have shown up in the brand. These are innovation, employee focus, social responsibility, and customer sustainability.

Situational Analysis

Overview of the environment

The General Motors Company is ranked among the leading producers of cars in the world. However, the global automotive industry has volatile competition, which necessitates the application of competitive strategies by companies that are operating in the industry.

One trend that is common in the competitive landscape in the global automotive industry is the innovative practice that results in the production of different car brands. However, attraction and sustenance of customers through the brands, remains to be a key challenge to a substantial number of firms operating in the industry, General Motors, being among the challenged companies.

Companies in the industry have nonetheless kept inventing strategies that are geared at helping them access and gain significant control of customers in the market. Competition remains to be a fundamental guiding force in the industry that keeps steering the struggle for market and the subsequent sustenance of firms in the market. Branding is one of the key characteristic of marketing that is used by a substantial number of firms in the automotive industry (Wiedmann et al., 2011).

The General Motors Company has been on the forefront in terms of developing brands as one of its competitive strategies in the market. One critical thing that has been observed in the case is that the General Motors Company has leveraged a substantial number of individual car brands in the market.

However, the most critical thing that denotes the internal development of the company is the development of the Saturn brand. Saturn produced is the first brand of cars in the year 1990. The brand accessed the market quickly, enabling the brand to quickly attain a respectable position in the market. According to George (2004), Saturn can be considered to be one of the key heritage brands of the General Motors Company.

The three types of cars that were rolled into the market by Saturn in 1990 gained wide acceptance from a certain segment of customers in the market. This can be attributed to market research by Saturn, which enabled it to come up with brands that were appealing to customers. The pace at which a given product gains access and acceptance in the market is dependent on a number of factors. The most compelling factors are the ability of the products to meet the consumption demands of the customers.

The consumption needs are based on prices, the level of utility of the product and the tastes and preferences of the customers. It can be said that the features of the three products that were rolled out by Saturn in 1990 met the needs of the customers. From the case, it has been noted that Saturn went further to produce another set of car brands later. These brands did not attain the level of sales that was attained by the first of their key brands that were unleashed earlier.

The marketing mix

Competing in the market through the nature of products is a complicated exercise as it involves a change in the nature of products in the market. One main thing that has been noted in the global automotive industry is that firms in the industry often compete through branding.

As one of the main brands of the General Motors Company, Saturn has given a lot of attention to the development of diverse brands of products. While the first three brands gained a quicker access in the market, a series of other car brands that were produced as part of expanding the presence of the company in the market.

A substantial number of market researchers have argued that the release of many brands in the market by firms can be an undoing factor for the company. At the same time, firms can use the deployment of several brands in the market as one of the tactics of dominating the market. While competing with products, one critical thing that a firm ought to observe is the entry point in the market.

In the case under study, it was observed that that Saturn entered the market with a smaller range of products in the market, which made it gain fame in the market. The introduction of other brands by Saturn resulted in the complication of managing a wide range of products in the market. New products imply the expansion of the marketing segment of the company, which increases the task of managing a wider number of products in the market (Pride & Ferrell, 2012).

Pricing plays a vital role in shaping the performance of products in the market due to the changing conditions of the economy that affect the buying behavior of customers. The change in the number of products in the company that were introduced by Saturn in the market denotes a change in pricing.

Pricing was one of the key attributes of marketing that attracted customers to the Saturn products. Saturn has not paid much attention to pricing, but rather to the broadening of the range of products in the market. The factors of production and the channels of procuring materials are part of the key considerations in the establishment of prices in an industry that is labor intensive (Biller et al., 2005).

The market where a company operates in acts as a guiding factor in the establishment of marketing strategies. As noted in the earlier analysis conducted in the paper, Saturn produces brands that compete with numerous other car brands that are produced by other companies in the market like. The General Motors Company poses competitive threat to other giant companies in the market like Toyota and Ford.

Saturn targets a wider segment of the market, which is the reason why the company decided to expand its brands by venturing into the production of other brands apart from the first three brands. With the new car models, it can be said that the company wants to extend its brands to the young generation across the global market. However, the performance of the brands in the market raises questions about whether targeting the youths more can help to attain a desirable number of sales for the company as it is echoed out in the case.

Spahi (2008) observed that the strategy of conquering the market through the enlargement of brands can result in the problem of managing customers. It denotes the expansion of the market, which could jeopardize the attractive aspect of the prevailing brands to the segment of customers already captured by the brands.

Promotion is done through several means, one of which is the production of brands with features that are appealing to a certain segment of customers. It should also be noted that the promotion of Saturn brands in the market is enhanced by the fact that the company has established itself as a brand in itself, an aspect that de-links it from the other long established brands of the General Motors Company like Chevrolet.

The other promotional factor for the company in the market is the customer centric approaches that are held by the management of the company. This concurs with the argument that was advanced by Nadeem (2007), who noted that customer centric approaches are critical to the attainment of customer loyalty and, by extension promoting the brand in the market.

Analysis of Alternatives

While gaining customers is easily attainable, the sustenance of customers through brands is a whole complicated exercise because of the dynamics in brands and branding practices of firms in the market. The loyalty of customers is often attained through the brands that are released by firms in the market and the supportive mating management practices that accompany the brands (Kerr & Balakrishnan, 2012).

The problem in the case presented in this paper revolves around the issue of brand management in the market by Saturn. The question that ought to be asked is whether it was worthwhile for Saturn to introduce a series of other brands in the market, bearing in mind that the brands that already prevailed in the market had a remarkable performance.

Arguing from the perspective of commanding the market through brands, it can be said that a substantial number of companies often opt for using the tactic of flooding the market with their brands as one way of controlling their competitiveness in the market.

However, Saturn ought to introduce new brands on a one-by-one basis since it operates in a highly competitive market. This is a desirable exercise as it gives firms time to monitor and ensure that a given brand has attained the desired level of acceptance and commands loyalty from the customers.

This is backed by the finding of a research that was conducted by Bowman and Gatignon (1996), who sought to know the impact of the multiple brand introductions to the management of product mix. Brown and Gatignon concluded that it is quite daunting to manage multiple brands in the market, especially when they are introduced at the same time by the company in the market.

From their observation, they argued that firms need to prioritize the entry of brands in the market as this helps to ease the pressure of managing brands in the market. A reasonable gap needs to be given in order to ensure that customers gain familiarity with a give brand before another brand is presented to them by the company (Bowman & Gatignon, 1996).

The other key alternative of marketing management in this case entails the utilization of other aspects of marketing management as a way of catching and managing the attention of customers on the brands released by Saturn in the market. It should be noted that the marketing function in firms is comprised of diverse practices, all of which help the company to gain and sustain customers.

Brand positioning is often attained not by the nature of the brand itself, but through the nature of marketing practices that are deployed by the company in its quest to familiarize the brand in the market.

As observed in the case, the earlier key brands of Saturn were able to gain a wider acceptance from the customers through the practices that were deployed in releasing them to the customers. This reiterates the need to embrace diversity in marketing practices if at all the General Motors Company wants to boost its presence in the market through Saturn. Such practices are elusive and begin with the exercise of motivating the marketing team of the company.

They denote the deployment of aggressive marketing tactics that aim at ensuring that a substantial number of brands have gained the desired level of attention in the market. Promotion of each individual brand in the market through pricing and other marketing offers is essential for differentiating the brands in the market (Morris & Martin, 2000). Saturn needs to be creative so that it does not deploy similar tactics in promoting the different bands in the market.

Conclusion and recommendations

Brand management is a critical yet a complex exercise. From the case, it has been noted that managing multiple brands in the market is quite daunting and can result in market loss by a given company. Saturn had a good command of the market when it introduced a few brands in the market.

However, its sales declined amidst its decision to introduce a series of other brands in the market. Several arguments arose, among them the issue of differentiating brands in the market segments. As noted in the analysis of alternatives, Saturn needs to pay attention to two critical issues in order to avert the problems of branding that are facing it.

First of all, Saturn should recognize the need to manage the pace at which it introduces brands in the market. The most desirable way to do is by marketing each brand at its own time. This is critical in differentiating the brands in the market. The company can also focus each brand on a given market segment. This is one way of avoiding the generation of conflict of interest among the customers already attained by the preceding brands.

The second critical point that should be considered by Saturn is the deployment of different strategies of marketing management for each of the new brands that are released by the company in the market. This can greatly aid in maintaining the difference between the brands and sustenance of the brands in diverse market segments.

References

Biller, S., Chan, L. M. A., Simchi-Levi, D., & Swann, J. (2005). Pricing and the direct-to-customer model in the automotive industry. Electronic Commerce Research, 5(2), 309-334.

Bowman, D., & Gatignon, H. (1996). Order of entry as a moderator of the effect of the marketing mix on market share. Marketing Science (1986-1998), 15(3), 222-222.

Ferrell, O. C., & Hartline, M. D. (2011). Marketing strategy. New South Wales: South-Western Cengage Learning.

George, M. (2004). Heritage branding helps in global markets. Marketing News, 4(13), 1.

Kerr, G., & Balakrishnan, M. S. (2012). Challenges in managing place brands: The case of Sydney. Place Branding and Public Diplomacy, 8(1), 6-16.

Morris, R. J., & Martin, C. L. (2000). Beanie babies: A case study in the engineering of a high-involvement/relationship-prone brand. The Journal of Product and Brand Management, 9(2), 78-98.

Nadeem, M. M. (2007). Emergence of customer-centric branding: From boardroom leadership to self-broadcasting. Journal of American Academy of Business, 12(1), 44-49.

Pride, W. M., & Ferrell, O. C. (2012). Marketing. Mason, OH: South-Western Cengage Learning.

Spahi, S. S. (2008). Optimizing the level of customization for products in mass customization systems. University of Central Florida. ProQuest Dissertations and Thesis, 219. Web.

Wiedmann, K., Hennigs, N., Schmidt, S., & Wuestefeld, T. (2011). Drivers and outcomes of brand heritage: Consumers’ perception of heritage brands in the automotive industry. Journal of Marketing Theory and Practice, 19(2), 205-220.

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IvyPanda. 2019. "General Motors: Branding of Saturn." May 31, 2019. https://ivypanda.com/essays/general-motors/.

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