Saturday, March 16, 2013

.Benign Neglect – GM’s Marketing Program for the Corvette

 My Generation

Benign Neglect – GM’s Marketing Program for the Corvette

by Rick Tavel© 3-12-12 All Rights Reserved


Now that the hype and “hoop la” of the new C7 introduction have settled down, the other day, while recovering from some surgery, I had the opportunity to catch up on some reading that I had neglected over the past two weeks.  Since I am in the midst of writing a multi-part article on the advertising history of the Corvette, one commentary written by Peter De Lorenzo, better known as the “autoextremist”, immediately captured my attention, “Marketing the Corvette: What GM Doesn’t Get”.  For those of you who may not know, Peter De Lorenzo is the founder of, and appears with legendary automotive journalist John McElroy on the weekly TV series “Autoline Detroit”.  I try to make a point to read his “commentaries” regularly - he calls them “Rants” and is probably a more accurate description of his column.  The rants are obviously “controversial”, and controversial usually equates to “interesting”.  Though I only agree with him about fifty percent of the time, his topics almost always require consideration and provoke thought.  So if you are an enthusiast who doesn’t want to hear the regurgitated BS that manufacturers too often dole out  by journalists who have drunk a little too much of their “kool ade”, then you should put De Lorenzo on your reading list ( .   

 Anyway back on point, De Lorenzo’s article (specifically his “Rant” of January 23  Marketing the Corvette: What GM doesn’t get.”) makes some interesting observations about the way General Motors has taken for granted their most legendary car, particularly in the way they “market” the Corvette.  Though I do not agree with part of his solution which as I understand it, would require the Corvette to become its own brand, encompassing several products, and becoming a  pure “global brand”, I do agree that the Corvette has been neglected by GM;s marketing department for decades.  As I understand it, some of the marketing folks at GM were not too pleased about what De Lorenzo said, even though he was highly complementary of the new C7 Corvette and has praised it in several commentaries and interviews.  What he wasn’t complementary of was the marketing department and some other upper management executives who often “overlook” if not “ignore” their halo car except during a new generation unveiling. 

 The Corvette marketing “strategy” De Lorenzo attributes to GM’s marketing gurus reminds me of a management style that is frequently encountered when a manager is in “over their head” or unqualified for their responsibilities.  I call that management style  “BENIGN NEGLECT”.  Simply it is the technique of managing by completely ignoring the project or objective and letting the chips unpredictably fall wherever.  By very definition “Benign Neglect” means a policy or attitude of ignoring a situation instead of assuming responsibility for managing or improving it.  In thirty five years as a business executive I have found it often resulted from a lack of thorough understanding the objective, task, product or the technicalities of the job or from someone unqualified being promoted to the job, someone to whom the “Peter Principal” applied.  And for those of you generation “X” and “Y”ers unfamiliar with the “Peter Principal”, it is the theory that in any large corporation or organization several employees will rise or get promoted to his or her level of incompetence and not be qualified for their position.  If it is the result of the latter then it is also indicative of some incompetency at a higher level in the organization.   

Ousted GM Marketing Chief
Joel Ewanick

GM President Mark Reuss  
 The benign neglect strategy of marketing the Corvette is not new and has little to do with the obvious confusion and lack of direction that currently characterizes the marketing department at GM.  Certainly it is apparent that things need to change and recognizing this may be the impetus that prompted the capable GM President, Mark Reuss to shake things up and appoint a new head of Global Marketing and begin the search for new marketing firms to turn things around.  Reuss named Tim Mahoney, formerly of VW, Subaru and Porsche, to head up marketing beginning in April.  Hopefully, Mahoney will be able to “right” the badly listing marketing ship at GM.  Already new advertising  agencies are being reviewed and some have even been appointed.  After being terminated by former Marketing Chief Joel Ewanick, who himself was ousted last year, it looks like long time ad agency and partner of Chevrolet, Campbell-Ewald, will be returning to take over Buick’s advertising and former Buick GMC agency McCann Erickson will be taking on the Chevrolet account.  Ewanick seemed to have difficulty grasping and marketing the essence of the GM brand.  But the marketing department was in disarray even before Ewanick assumed the reigns.  But under his tutelage there were some marketing disasters and it appeared the job was simply too big for him.    But as mentioned above when that happens perhaps the real problem lies at a higher level.  It looks like Reuss has put the right person in place, at least from a background and results perspective. Now it is time that the Global Marketing Manager be allowed to do.  Hopefully Mahoney and Chevrolet’s new agency will recognize the opportunity that exists not only throughout the marketing department but the opportunity marketing the Corvette presents.                                   
Tim Mahoney
New Marketing Chief 
For the first two decades the Corvette was effectively advertised and marketed.  Some of the best advertising in the industry was generated by Campbell-Ewald for Chevrolet and the Corvette.  From the “Child of the Magnificent Ghosts” ads that helped introduce the new Corvette to the “Baseball, Hot Dogs, Apple Pie and Chevrolet” theme which won several awards, the sports car received its fair share of marketing.  The Corvette was not only advertised effectively in print but also subliminally.  The car appeared on TV shows and even had an entire series built around the car, “Route 66”.  But even as early as the 1960’s the seeds of “neglect” were being sewn.   In an interview with one of the key Campbell-Ewald executives that worked the GM account revealed that “they (GM executives and marketing managers) simply didn’t care about the car.  It wasn’t important to them.  In the big picture the car did not produce enough to matter.”  Sure in its infancy Chevrolet nursed the new car along.  Clearly the car received the funding to promote it, to get it “up and running” with consumers.  That same CE executive went on to say that the “competition advertisements in the mid to late fifties were successful.  Duntov had pushed for the car to compete at the track and for us to advertise their victories.  It was like the saying, Race on Sunday, Sell on Monday.  It worked.”  

So once the car became internationally recognized as a true sports car the sales quickly followed and fostered an attitude and unspoken marketing strategy that has prevailed within the marketing department for decades; why should we spend money advertising and marketing a car that “sells itself”.   Maybe that policy worked early, when the Corvette was “the only game in town”, and it is likely that it spawned the way the marketing of the Corvette has been handled ever since.   First and foremost the people responsible over at GM have to realize the Corvette marketing is not effective for promoting a world class car, the car in the line up that effectively influences the sales of many other Chevrolet models.  Every first year marketing student learns about the customer who admires and looks at the Corvette in the show room and then buys a Malibu feeling that they bought a little piece of the Corvette.   The car clearly is a “brand enhancer”.  How many other GM products are purchased because of the Corvette and what it represents?  We will never know but what we do all know is that when a product is marketed in most cases its best attributes are those promoted and marketed.  Logically it follows that through properly marketing the Corvette sales of other GM products, specifically the Chevrolet is enhanced. 

This applies not only to the American market but, as most of us are aware, GM now envisions the C7 as a “global” car.  I won’t go into how the concept of globalizing the Corvette has affected its design.  Using the C7 as a “brand enhancer” in marketing the car to an international market could have a major impact on the disastrous European market where GM loses billions of dollars.  Along with the epiphany of better utilizing the Corvette as a brand enhancer both at home and abroad the benefits are evident: “low hanging fruit” can be gathered in, not only for the Corvette but the Chevrolet brand overall. Clearly the marketing department at GM has to stop ignoring the potential of the Corvette as a marketing tool and take responsibility for building an effective marketing program around the car.  With the recent introduction of the new C7, along with the arrival of a new Global Marketing chief, there is no better time to step up and take ownership of the opportunity.
Corvette as Brand Enhancer

 This isn’t the first time the debate about “brand” advertising has come up at Chevrolet nor is it the first time using the Corvette in brand advertising has been disputed.  I was interviewing a former advertising executive (now retired) from Campbell – Ewald who was very involved in Corvette advertising in the 1950’s through the 1980’s.  When asked about why GM’s position of advertising and marketing the Corvette changed in the seventies, he replied, “The car was successful.  It was the only American sports car and it was selling. After that in terms of sales volume it was insignificant to them and it seemed like they didn’t have the time or inclination to spend on it.  In the beginning the car got plenty of advertising and money thrown at it.  But after we got the car on its feet, off and running, it certainly never got the advertising budget it deserved, especially in relation to other cars.”  He went on to explain that there were other things that caused GM to take their eye off the car.  There was a lot of dissention within the marketing department at the type of advertising to use.  Then there was the disastrous gas crisis in the early seventies which required everyone's dissention.  "I can't tell you the time and effort put into the new Vega which was being headed up by John DeLorean.  We even put together a separate group at the agency (Campbell-Ewald) to handle it. When John DeLorean moved to Chevrolet he was often “sideways” to other GM executives when it came to the marketing department at GM."  DeLorean, unlike most GM executives, favored the need for “brand advertising”.  During the seventies the marketing department was committed to individual model advertising and did not support brand advertising.  That was one reason the “Baseball, Hot Dogs, Apple Pie, and Chevrolet” was never developed into a print ad campaign.   Marketing viewed the ad as “brand advertising” and aside from using it as a “theme” that was as far as it went.   That ad theme won several awards and David Ogilvy stated that the ad, developed by Jim Hartzell, was not only the best automobile ad but the best ad he had ever seen.  But marketing was opposed to “brand advertising” and as a result they never built a complete advertising effort around the the theme, even though they had one of the best “brand” icons in the industry – the Corvette and an award winning advertising theme in “Baseball, Hot Dogs, Apple Pie and Chevrolet”.

 There is an apparent attitude within GM, whether perceived or real, that the Corvette can and does sell itself.  But the reality is that sales of the Corvette over the last few years are less than half of what they were at the start of the generation. Through 2008 annual Corvette sales were between 35 and 40 thousand cars annually, in 2012 less than 12 thousand Corvettes were sold.  So it is clear that Corvette sales are suffering and it clearly is attributable to more than the economy or the GM bankruptcy. 

 Maybe there is no better time than now, following the major introduction of a new generation of Corvette, to see the comparison of just how invisible Corvette marketing is at other times.  Recently we have actually seen a few teaser ads for the launch but ask yourself when the last time was that the car received much attention, even though the car has become one of the world’s most successful production car race teams in history.   The car has won nine American LeMans Series manufacturers and team championships and eight drivers’ championships.

 What other automobile manufacturer would not use their competition track record to their advantage to market their cars.  If you’re having trouble thinking of a comparison, look how Porsche takes publicizes their success on the track.  The old adage, “Win on Sunday, Sell on Monday”, actually is a reality but the key is those that were not at the track to see the car win need to know about the victory (re: advertising/marketing).  The Corvette won the Rolex Sports Car series early in March at the Circuit of the Americas in Austin but if you weren’t at the race or watched it on TV who would even know. 

The 2012 season marks Corvette Racing's 14th year in international road racing. Corvette Racing has become one of the world's most successful production sports car teams, winning eight consecutive ALMS GT1 manufacturers and team championships and seven ALMS GT1 drivers' titles.  This year as I watched the 12 Hours of Sebring on Speedvision®, I couldn't help contrast the marketing of the Porsche  and BMW with that of the Corvette. There is probably not a better example of what I have been talking about.   I must have seen no less than eight Porsche commercials and five BMW commercials.  Both companies capitalized on their performance background and/or racing heritage in their advertisements.  Admittedly they both have an impressive history and one to be proud of.  But so does the Corvette and neither BMW's nor Porsche's competition results over the last decade compares to Corvette's in GT racing.  To add insult to injury I even saw three SRT Viper commercials.  How many Corvette commercials were seen during this same period?  None, Zero, Zilch.  To be fair I did see a few Camaro ZL1 ads despite the fact there were no Camaro's in the race.  I even saw a Cruze commercial that was "finding new roads" but no Corvette, you know, the car that ended up winning the race in front of millions of TV viewers who were demographically Corvette;s target customer.  Driven by Milner, the Corvette staged a brilliant "comeback", after being considered all but out of the race following an electrical glitch, and in a late race run  drove the Corvette to a GT class victory.  It seems like all of the other competitors in the race understand the importance of reaching that target customer and enhancing the competition image of the car, but not the "marketing mavens" at GM.  This is a typical example of the benign neglect that has characterized, been the history and the typical management strategy inside GM's marketing department with regard to the Corvette since the mid 1970's.  And to compound the marketing department's typical "f-up", Tadge Juechter, the Corvette's chief designer, was present in the pits for the race. 
Tadge Juechter Corvette Chief Engineer

It's pretty evident that the belief does exist within GM that the Corvette sells itself.    One thing is certain though, people responsible for marketing and selling this car better wake up.  The performance car market is becoming more competitive.  Ford's has the Corvette in its sites with the development of the new Mustang GT500 due next year.  The SRT Viper is clearly out for revenge for the humiliation the Corvette has bestowed on it in almost every category.  We won't even discuss Porsche's efforts to attract that same demographic customer as Corvette.  The competition for the performance car customer is no less intense than the competition on the track and someone in GM better wake up and take ownership, take responsibility to rid itself of the neglectful way the Corvette has been marketed. GM's marketing division needs a "Milner" to drive the Corvette marketing effort and put it on the podium.










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