Marketing Automotive

About 10 years ago, General Motors initiated a program to reverse the direction of its market share, which was decreasing sharply.
It set an ambitious goal of 29%, which it had not realized in several years. It started by offering strong discounts to buyers, and it kept the share of market goal in the hearts of employees by issuing gold lapel pins with the numeral 29.

The old GM was buying market share. And it didn’t reach the 29 % target. It came quite close in 2002 with 28,3 %.

But as good as goals may be for keeping people focused on a target, they can also backfire. In this case, General Motors itself seems to regret that it unleashed the incentive wars in the first place. “There’s lots of things I’d like to be a leader in,” says Susan Docherty, GM’s new Vice-President of Sales for North America, “and it certainly isn’t in incentives.” Lowering prices to sell a certain number of cars, she says, took employees’ focus away from profitability, customer service and product quality. “I’m not going to say that that goal was the origin of the entire downfall of GM,” says Lisa Ordonez, management professor at University of Arizona, who studied the case. « But obviously strict adherence to goals can cause these kinds of problems.”

Today GM claims another ambitious goal : « To make, build and sell the world’s best than anybody else ».

What is interesting with such a goal is that if they can do that, the market will grown and will reach high levels by itself and also that the real measure of success will be given by those who have the right do to it : the customers.