Building a Brand: THE SATURN STORY

Brand Management

THE 1980s

The American auto industry was under attack

from all directions. That is why I came here. It was a chance to turn things around. A chance to help build a car that would go up against the imports and best of all to have a say in the way it was done

January 7, 1985: GM Chairman, Roger Smith, announced creation of the Saturn Corporation, described as the key to GMs long-term competitiveness, survival & success as a domestic producer of autos.

New company mission: Produce & market compact vehicles developed & manufactured in the US.

Saturn an ambitious undertaking for GM at a time when imported compact cars were sweeping across the US market;
Pessimism about US manufacturers capacity to make world-class compact cars GM had aborted attempts in the past.

Starting from scratch, doing things right.

Spring Hill - New Saturn plant located in the middle of nowhere i.e. away from Detroit, to emerge as a new kind of American company.

Middle of nowhere caption of print ad implied a breath of fresh air.

The first Saturn roll out

In 4 years, Saturn became one of the strongest brands in the US of the stature of: 1906s: Ford Mustang, 19870s: Ford Pinto, and 1980s: Ford Taurus.

Questions!

1. What is a strong brand?

Why was Saturn considered a strong brand?

EXCELLENT TRACK RECORD: Sales 1991: 74,000 Sales 1992: 196,000 Sales 1993: 229,000 Sales 1994: 286,000 8th highest selling brand. More cars sold per dealer than Honda or Toyota. Results achieved despite capacity limitations.

Why was Saturn considered a strong brand?

Sticker price comparable to competition, but

no haggling, dealer discounts or rebate applicable a norm in the business;

1992: 60% of Ford Taurus sales made on the

basis of cash discounts;

Saturn most valued franchise in the industry,

second only to Lexus.

Evidence of perceived quality of Saturn?

1992: J. D. Power Sales Satisfaction Index

based on customer response indicated Saturn 4th in terms of perceived quality;

1992: J.D. Power Customer Satisfaction Index

, measuring product quality and data service after one year of ownership, indicated Saturn #3, trailing Lexus and Infiniti.
Performance maintained in 1993, 1994, 1995

with some improvements in ranking.

Evidence of perceived quality of Saturn?

1993: Suggested retail price of 1991 Saturn

5% above original list price, whereas 5% below for Toyota and Nissan;
Market research indicated showroom visitors

estimated Saturns price at $3-5,000 more than actual price.

Evidence of Loyalty for Saturn?

1995 in-house customer survey revealed that

87% of Saturn buyers said they would definitely recommend the dealer ( 1994 figure 80%);
Customer loyalty confirmed by Polaroid

picture campaign at dealer showrooms.

A couple got married inside a Saturn car. Formation of Saturn Groupies.

What Awareness level did Saturn reach?

40% within months of launch, 79% a year

later, 100% in fourth year.

Recall? 14% in 1992 ( behind Dodge and Pontiac, and

ahead of Mazda, Mitsubishi & Geo;

17% in 1994.

Associations of Saturn?
Above Japanese brands on the friendly

dimension;
Associated with customer care by over 60%

customers (twice the average of 6 competitors);

Strong on quality of Dealers, on being a

company like you, on safety, on providing good value & offering intelligent approach.

In conclusion

Saturn became a strong brand within

TWO years;
Not profitable during first two years, but

WITH HIGH PROFIT POTENTIAL.

How did Saturn build the brand?

Selling Company not Car

Q. How could Saturn convince customers,

it had created a world-class car? Focus on the car? Features? Design and finish? Economy? Acceleration Performance? Comfort? Endorsements?

What was Saturns Mission?

World-class compact car to match imports.

HOW? Match Price & Quality, measured in terms of: Reliability Safety Feel Appearance Overall excellence

Assumption: Product drives the image!

The Mission: A world-class product?

Mistakes made by Ford Edsel or VW Rabbit, in

terms of product quality not repeated. 3rd party reviews in car magazines acknowledged car was well-designed & wellbuilt. Money back guarantee: offer to return car within first 30 days or 1,500 miles reassurance for customers. Road & Track called Saturn a major step forward in 1991, and best value in 1992; J. D. Powers indices delivered a more persuasive endorsement.

The 1993 recall!

350,000 cars recalled in 1993 to ensure a wire

was properly grounded. Initial negative publicity, later positive. WHY? 1. Recall was voluntary 2. Problem handled quickly 3. 50% cars repaired in two weeks 4. Retailers handled activity well: Baseball, BBQ & theatre tickets! 5. Tracking indicated Saturn took care!

What made Saturn a different kind of company?

Free from UAW labor union contract; Non-confrontational relationship between labor & management; New organization not only to create a product but also face the broader challenge of creating a new brand and a new identity; Organizational focus on creating a brand communicating a unique identity.

The 99 CLUB!
99 persons The 99 Club drawn from

amongst the management and labor at GM, authorized to decide, what kind of company Saturn should be.
HOW DID THEY START THEIR WORK? Team visited 60 benchmark companies to

learn from their experiences and use it at Saturn.

Saturn: what else was different?

Cross-functional teams created to stimulate

change, maintain standards. Teams empowered.

Incentives/ rewards based on team and

organizational goals.
20% compensation, in manufacturing,

emphasis on quality & productively.

Creating perceptions: Selling company not car

Customer perception matters: Audi and

Volkswagen Rabbit experience. ANY CAVEATS? Tall claims fail to attract customers. Logic and mind-numbing facts not the right approach. Fords motto: Quality is Job 1. Buick the symbol of quality. Chrysler as good as Japanese cars.

Creating perceptions: Selling company not car, BUT HOW?

Sell the company its values and culture, its

employees and its customers rather than the car.

EXAMPLE: Initial Print advertising copy:
I remember standing in the middle of

nowhere, no sign of an automobile plant, thinking what the heck am I doing here?

Creating perceptions: Selling company not car

Year 2: Focus on customers, their experience

with the car and Saturn dealer;

1995: story of the redesigned car through the

eyes of employees and members of the Saturn family.

Storyline: role of cars in their childhood;

moving to a new area, a new company; pride in seeing first car come off the line. Visual imagery of Spring Hill plant reinforced concept of a new kind of company

Two important decisions

Distancing Saturn from GM -

reinforcing concept of a fresh start;

Using Saturn as the brand name not

creating multiple brand names e.g. Civic, Prelude etc.

Creating a relationship with customers

Strong brands move beyond product

attributes to a brand identity based upon brand personality and relationship with customers.
Saturns corporate culture rested on the

quality imperative and team orientation.

Creating a relationship with customers

Customer relationship is built on the

personification of brands e.g.

Volvo as

dependable and reliable

Mercedes as being

elegant, successful and a bit stuffy and aloof.

Saturn personified!
Saturn personified as young (at heart),

genuine, honest, friendly, and down-to-earth someone competent & reliable who cares and treats customers as a friend.
Someone without a foreign accent and not

condescending. Someone with a sense of pride, at being American.

Someone with charisma, like Apple, Harley-

Davidson or VW Beetle.

Retailer strategy
Retailers trained to deliver a buying

experience quite unlike any other;

No haggling no bargaining; Deal conveying Saturns interest in not just

selling a car;
No high-pressure salesman forcing customer

to go on a test drive;
Saturn salesman more like a consultant; Emulating selling style at Nordstrom.

Saturn retailers as Brand builders

Creating retail experience with comfortable,

relaxed surroundings;
Customer following activities: BBQ, ice cream

social, Singles Social, local homecomings;

100,000 miles club started by a Detroit retailer

membership certificate and gift package;

Charitable activities.

Saturn retailers as Brand builders

Saturn Kids Kingdoms playgrounds for

children casting $ 35,000 each in New York/New Jersey;

Columbus Saturn dealer certainty at this

property;
Search and Safari for 30,000 children; Fundraiser events for the Zoo.

A Different Kind of Company, A Different Kind of Car

Slogan captured the essence of the brand like

the Avis slogan Were number 2, we try harder;

Slogan addressed employees and customers

reflected values and culture;

Separated out Saturn from Detroit carss and

Japanese imports.

Integrated communication
Automobile industry characterized by

lookalike, product-focused, Detroit advertising; Different approach adopted by Saturn agency including brochures, regional advertising, retail showroom designing; Films/documentaries ran at dealer showrooms to events and customers waiting to be attended to; Spring in Spring Hill, a 26-minute documentary of the company captured the spirit of Saturn shown to employees, suppliers, press, general public as infomercial.

Integrated communication
Print ad designed for retailers different

from usual pattern less clutter, witty headlines like Gosh, what if youre came back as cars?
Promotion designed for dealers:

Winner to go to Spring Hill to participate in building their car.

Questions

1. Why did GM decide to launch

Saturn a new brand, a new company and a new car?

Questions

2. How did Saturn fare against the

four dimensions of brand equity?

Questions
3. In what way was Saturn different

from GM? What differentiated strategies adopted by Saturn led to its success?

Questions

4. How did Saturn help GM garner

a larger share of the US auto market?

Questions

5. What was so unique about

Saturns advertising strategy? How did it convince customers that Saturn was the worlds best car?

Questions

6. How did events like The

Homecoming help Saturn build its brand equity?

Questions

7. What was the role that Saturn

dealers played in its success?

Questions

8. What problems did the success

of Saturn itself create for the brand?

Questions

9. Why did Saturn have to recall its

vehicles in 1993? How did the action affect its image? Why?

Questions

10.Would Saturn benefit by bringing

itself closer to GM in operational terms?