Gm Saturn Case Study

GM Saturn Case Study
Ron Rubinstein
Strategic Marketing Management course
NYU SCPS – Fall 2005
Key Issues
 How (whether) to revive a faltering brand after impressive initial success in early 90s.
 How to regain competitive advantage after loss of momentum, and failure of initial business strategies to sustain long-term sales growth.
 How to penetrate wider demographics (younger, male)
 How (whether) to penetrate foreign market
Key findings: Environmental/General
 Saturn developed by GM as a separate brand and independent subsidiary in the late ‘80s, to deal with shrinking domestic market share for passenger cars:
• from 44% to 33% between '85 and '90
• 42% of buyers didn't even consider buying GM
• Main competition were compact Japanese cars, due to perceived higher quality and value.
 Factory was established in Spring Hill, TN, to isolate from Detroit mentality
 Key strategy to ensure quality: maintain good labor/management relations through cooperation with UAW in all aspects of business.
Key findings: Product Strategy
 Initial concept: Compact, high-quality cars:
• SC1, SC2 coupes
• SL1, SL2 sedans
 Technology innovation, e.g. plastic bodies
 Target Market:
• Demographics: baby boomers, college educated, 25-49
• Sell 80% to "Converts" (wouldn't otherwise buy GM)
 Larger vehicles were added later:
• SW1, SW2 station wagons (1993)
• L-Series mid-size sedan and station-wagon (1999)
• VUE SUV (2001)
Key findings: Promotion Strategy
 Unique, "folksy", "straight-talk", $100M+ consumer ad campaign, building a focused brand image, using themes such as:
• Saturn employees' enthusiasm, and dedication to building cars "in a brand new way" with US can-do spirit.
• Saturn buyers' lifestyles, playing up baby boomer themes of utility, value and safety.
 Brand focus strengthened by using model numbers (not names), and calling dealerships