Toyota passed General Motors' seven-decade reign earlier this year as the world's largest car producer by volume. Today, Toyota has America’s best selling car, and GM is struggling to make decreasing brands, such as Buick and Pontiac, mean something to consumers. GM had no guiding policy for the marketing of its many brands. The company's only objective was to sell the cars. The brands stole volume from each other and all lost money. GM had too many models and too much duplication and lacked a product policy. In one of the earliest examples of market segmentation, GM reduced offerings to five models, separated them by price grades and emphasized individual brand image to entice customers into the GM family and move them up. These distinct and strong brands allowed GM to capture more than 57% of the U.S. market by 1955. Aware that pursuing more market share could lead to antitrust actions and the threat of a breakup, GM significantly shifted its strategy from making better cars to making more and more money from a relatively stable number of sales.
But the more brands it has, the more costly it becomes. Each brand needs its own marketing, product development and infrastructure, and in many cases these cars compete with other brands from the GM stable. Perceived value is the relationship between a product and its cost. Customers usually determine the offering value in relationship to that of its close competitions. While GM needs its 15 brands to ensure continued sales success, it is certainly also a key factor in its inability to drive profits. In contrast, Toyota only has three brands and sells 80% of its cars using the Toyota brand name. Like BMW, Toyota pushed one brand in many forms. All of these cars benefited by sharing in one powerful differentiating idea: reliability. And when they went up into the super-premium category, it became a Lexus with all of the "Toyota" identity carefully eliminated. Also, they are quick to invest in new innovations such as the hybrid Prius.
There are some reasons that the Toyota cars sells better than GM cars most probably due to:
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has more customer brand equity than GM. Customer brand equity focuses on the individual customer's willingness to pay a price more than some benchmark for the branded product.
- Toyota provides more organizational brand equity than GM. Total organizational brand equity is concerned with the number of customers willing to pay that price.
- Toyota has a very good reputation than GM. as a result, they enjoy lower costs, can charge higher prices, and experience greater growth in sale and returns relative to actual quality.
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The consumers’ perception on the real brand value of Toyota which has been credited to their particular , their skilled workers and their management techniques although for both Toyota and GM are manufactured from the same production line in this case.
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The consumers perceive Toyota as the highest quality products (low , low maintenance) and superior service although actual quality and service for both Toyota and GM is equal in this case.
A successful brand has to stand for something. And the more variations to attach to it, the more you risk standing for nothing. This is especially true when you add actually conflicts with your perception. If Coca-Cola is the company that invented cola and the owner of that special formula, how can it be the "Real Thing" when the company offers a display of new things including one called "Zero"? Why change that unique formula? Should Wal-Mart Stores try to sell more up-market products to compete with Target? No, that's not its market. Should Dell try to sell home electronics to compete with the Japanese and Koreans in this category? No, it sells computers directly to businesses.
Until companies come to holds with the simple fact that they don’t really have an unreasonable need to grow. However, they have an unreasonable desire to grow (because of Wall Street). Bad things will continue to happen. Slowly but surely, GM brands will lose their meaning as they try to become more. What is happening to General Motors should be a lesson to all companies no matter how big and powerful they are. You cannot be everything for everybody, and the more you try, the more you risk dropping the ship.
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