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Did
GM's Marketing Department Make Out Big Three Consumers Unmitigated Nincompoops?
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Did GM's Marketing Department Make Out Big Three Consumers Unmitigated Nincompoops?
By James B. Bleeker
In response to General Motors Corporation's Employee Prices for Everyone Campaign, Big Three consumers flocked to General Motors' dealerships in June 2005, but for what?
In a conference call to analysts and reporters, GM's head of market and industry analysis stated, reports Reuters, that consumer incentives to move GM vehicles off dealer lots were flat or increased only slightly in June 2005 over May 2005.
Nonetheless, GM sales soared 41% in June 2005 over June 2004 (versus a 5% decline in May 2005 over May 2004). And this fine success occurred despite huge gaps in the Reliability Index averages between the Quality Four and GM, as the following charts depict.
The graphs suggest that a discount in the five digits may be more appropriate than one in the meager four digits. This is buttressed by the responses to the Mini-Survey, "The True Value of a Big Three," where the average respondent indicated that a discount of 50% would be required before he or she would purchase a Big Three vehicle.
So, it appears that Big Three consumers may not be such a bright lot of folk, and devising a marketing ploy that outwitted them may confer on GM something less than bragging rights.
Source for remarks on incentives: "Ford Matches GM Discounts, Ups Price War," July 5, 2005, accessible at Yahoo! News
Source for General Motors sales data: "GM Reports 558,092 Deliveries in June, Up 41 Percent," July 1, 2005, accessible at http://media.gm.com
Source for Reliability Index averages: Table I
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