Brand Management at General Motor's Europe

SEA - Practical Application of Science Volume I, Issue 1 (1), 2013

Liliana Adela ZIMA The Economic and Phisics Departament, Faculty of Sciences, North University Center of din Baia Mare, Technical Universiy of Cluj Napoca, România

BRAND MANAGEMENT AT GENERAL MOTOR’S EUROPE

Keywords Brand equity Brand manager Strategy

JEL Classification M31, M39

Abstract

Brand is a trustworthy, relevant, and distinctive promise to the consumer. The Brand Manager must understand that he is responsible for the building of long term brand equity and he must keep the brand from both a Strategic and Tactical standpoint. The strategy of Adam Opel AG is focused on brand equity because it is important to add value for customer from products and services. The total sum of all the benefits, features, and associations, both functional and non-functional that make a brand competitive and distinctive in its market is the process of Brand Positioning. I made a study at Adam Opel AG in particularly at European Business In this study are observed the main tasks and responsibilities of each member of the team. The European Business Team has a lot of influence over the company which is a Marketing lead company. Brand Management is the management of the marketing value chain to consistently build brand equity, market share and profitability. In present, it is shifting our focus to brands, which include all the five “P”s of marketing: Product, Price, Place, Promotion and People. Our vehicles will always be a critical factor to our success. We are simply going to enhance our market potential by building on our brands at both the umbrella and vehicle line levels.

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1. INTRODUCTION Federation (VDA) Opel accounts for about 300.000 direct and indirect jobs nationwide The headquarters for General Motors provided by over 6500 dealers and service Europe is in Zurich , Switzerland. This office sites.[1] has the responsibility for strategic Opel has remained faithful to its home- coordination, in providing business expertise town of Russelsheim, where all national and and in defining individual brand roles in GM’s international activities are coordinated. Besides multibrand approach. Part of the coordinating production and the central corporate divisions, responsibility is to ensure that the Opel, Russelsheim is also home for Opel’s think Vauxhall, Saab, Cadillac, Chevrolet, Hummer tank, the International Technical Development brands and their products meet varied Centre. Here, more than 8500 engineers, customer expectations in a diverse and technicians and specialized personnel meet the changing market. challenge of developing sophisticated, Today, General Motors Europe has innovative automotive solutions that deliver sales operations in over 30 countries and 23 exceptional value. The ultimate goal of all production and assembly facilities for development activities is to maintain passenger cars, commercial vehicles and environmentally responsible and affordable components in 14 countries in Western, mobility [2]. Central and Eastern Europe with major production sites in Germany, United Kingdom, 1.1. The organisational Belgium, Spain and Sweden. General Motors structure of European Europe employs nearly 9000 people. Many Business Team additional directly related jobs are provided, over 7300 by Opel Vauxhall and 1100 by The European Business Team is located in Saab independent sales and service outlets in Adam Opel AG. Its organizational set-up is more than 40 countries and by thousands of similar to a work group. There are eight teams Europe companies which supply goods and in total. Each team represents an individual car services to these operations. line such as: Adam Opel is a small part of - Corsa; Astra; Agila; Antara; Insignia; American Firm General Motors but still very LCV(Light Commercial vehicles: stable and well defined being situated in Zafira, Meriva, Combo, Astra Russelsheim (Germany built around a railway Delivery Van and others Vans); Cross line having its own railway station). The Car Line (responsible for matters company is very near to Frankfurt airport concerning the interaction between the (about 20 minutes by train or by car). In 1899, car-lines). Opel starts its automobile production in The Product communication includes Russelsheim at a rate of eleven vehicles a year. Product Update. The information regarding Today, Opel ranks among Europe’s most product Update came from many different successful automotive manufacturers, selling sources. Most of the information, however, cars all over the globe. In Europe, alone, the came from the Platform Business Team. annual number of newly registered Opel The Platform Business Team meeting vehicles (Vauxhall in the United Kingdom) takes place every three weeks. Participants totals just over 1,2 milion units. Outside include one representative from each of the Europe, products bearing the Opel Brand- following departments: including vehicles based on Opel technology- - European Brand Team; Design; are manufactured in thirteen plants on four Planning; MPCE (Material Forecast); continents. About over 40000 people work at Purchasing; Ordering& Distribution, Opel’s German locations in Russelsheim, Aftersales; Type Approval; Finance; Bochum, Kaiserslautern and Eisenach and in Marketing ; the other plants and development centres in PE( Product Engineers) seven European countries. Based on a survey conducted by German Automobile Industry

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1.1.1. System Map This System Map shows the European Business Team, its subsystem and entities in its environment

Customers

Media GME Aftersales Suppliers Product Lifecycle Director PLS

NSO’s Director PP Director SPM

Management Technology PLM EBT AMLM Teams

Corsa/Tigra Strategies MLM Astra

Vectra/GT Employees Insignia Admin.Staff Cross Line Power Car train LCV/RV Rest of Adam Opel AG

Retailers Planning Personnel

Material Government Forecasting Legislation &Purchasing TDC

ESO Finance Manufacturing Other Car PR Manufactures

Source: Internal Document European Business Team Adam Opel AG PLM – Product Line Manager Legend: AMLM – After Sales Line Manager PLS – Personal Labour Relationship MLM – Marketing Line Manager PP – Product Program ESO- European Sales Operations SPM – Strategic Director of Product PR – Public Relation Marketing TDC – Technical Design Centre

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NSO- National Sales Operations

2. THE RESEARCH OF THE - improves the value of the dealer’s BRAND MANAGEMENT business; SYSTEM VISION - enables companies to withstand short term competitive actions; A brand is created by augmenting a core - provides companies with repeated product with distinctive values that distinguish loyalty. it from competition. To understand the notion In conclusion, Brand Management creates of brand values, we first need to understand the value by building brand equity in two ways: difference between features and benefits. A - focusing on managing the promise feature is an aspect of a brand that may or may to the customer / combines not confer a customer benefit. Core benefits emotional and rational benefits; derive from the core product. Successful - generating opportunity for price brands are those to create added value that premium and/or volume growth. distinguish one brand from another. Successful The Brand Management System Vision will be brands are those which create a set of brand achieved by: values that are superior to other rival brands. - developing a common information So brand building involves a deep framework, common processes understanding of both the functional ( e.g. ease and common measures; of use) and emotional ( e.g. confidence) values - establishing a closer working that customers use when choosing between partnership between regional and brands, and the ability to combine them in a local marketing units; unique way to create an augmented product - developing umbrella/vehicle line that customers prefer. This unique, augmented brand strategies regionally and product is what marketers call the brand. executing them locally; Managing brands involves the constant search - managing product strategies for ways of achieving the full brand potential regionally and strengthening [4]. global voice of customer Brand Management is the management of the coordination. In our case, there marketing value chain to consistently build were set up groups of people who brand equity, market share and profitability. come from various disciplines and Strong brands are that brands which: organizations within General - make money and create Motors Europe and General shareholder value; Motors International Operations to - differentiate similar products from refine the vision by developing the competition; substance and detail of the Brand - add value to the actual product in Management System. the mind of the consumer; Spearheading the organization, it’s new focus - build enduring relationships with on brands is the regional vehicle line Brand customers; manager (when reference is made to - create strong platforms for new “Regional” this refers to GM Europe). This product introductions. position will be held by a senior member of It is necessary also to focus on building brand management and will be supported by a equity (the value of the brand promise) dedicated Regional Brand Team and by the because this will have the next results: local Brand Managers. This new structure - creates value for customer and for empowers and extends the current European company; Business Team. - minimizes dependence on price The Regional Brand Team will be responsible based competition and allows the for regional brand strategy and will be development of premium price accountable, in conjunction with the local positioning; Managing Directors, for long term brand - allows to achieve high levels of equity, revenue and profitability of the vehicle awareness; line brand [3].

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2.1. The Regional Team regional brand strategy can be successfully achieved; The Regional Team is formed of following - establish final targets for volume, key players: market share , profitability, brand - Regional Brand Manager equity and spending for vehicle - Assistant brand Manager - Product brand in each market; - Assistant brand Manager - - be informed of aggregate Marketing marketing budget established for - Assistant brand Manager – each country; Aftersales - reviews for consistency with - Assistant brand Manager – regional brand strategy and Finance resolves inconsistencies with - Brand Analyst assistance from Regional Brand The Regional Brand Manager has Director, Regional Sales Director responsibilities in the field of product and Regional Vice President Sales, development and execution. On the product Marketing and Aftersales; development area he has to: - approve final local and regional - orchestrate all key marketing brand plan. decisions or activities with product On the execution area the most important development ; responsibilities are: - manage Assistant Brand Manager- - assists Local Brand Manager to Product who serves both General meet marketing plan objectives Motor’s International Operations - if issue is strategic in nature or (GMIO), Vehicle Line Executive involves multiple markets, (VLE) and Regional Brand Regional Brand Manager leads management teams; resolution; - sign GMIO VLE contract; - if issue is tactical and only - lead the Regional Brand Team to involves one market, Regional develop and implement regional Brand Manager supports launch activities; resolution. - approve local market product - serves as “ internal consultant” – offer; clearinghouse for key information - analyze previous year’ s regional concerning vehicle line brand , results and performance such as target customers and competitors; market, competition, consumer, - tracks key market variables media, communications, pricing, throughout Brand Plan cycle: distribution, life cycle elements, volume, profitability, brand equity, and regional programs based on pricing, sales allowances, etc; local brand reviews; - proposes resource reallocation - develop regional strategy for all between active consultation and key marketing mix elements and input with Regional Brand include high level requirements for Director, Regional Vice President brand regionally; Sales, Marketing and Aftersales - approve positioning, product offer, and Local Managing Directors; pricing proposals, short and long – - actively promotes sharing: term forecasting, communications exchange of best practices and and aftersales’ strategies; competitive intelligence across - support Local Brand Team ( as markets; requested) to develop local brand - works with functional targets; organizations and local marketing - approve local adaptation of units to: regional brand strategy; - skill development, recruitment and - consolidate local targets and career progression of Local propose adjustments to ensure that Regional Brand Team and Local

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Regional Extended Brand Team - assists Local Brand Manager ( as members, requested) to develop local brand - appraisal of Regional Brand Team review; members, - consolidates and analyzes local - provides input to appraisal of brand reviews into regional brand Local Brand Manager review; - promotes and adheres to the use of - identifies regional consumer common brand management needs; processes. - assists in communicating results of The Assistant Brand Manager- Product has the regional brand review to local next principal responsibilities: marketing units; - assists in resolving marketing - assists Regional Brand Manager programs trade- offs; develop regional brand strategy ( - manages product decision process incorporates all key marketing mix to meet customer requirements; elements by country, includes - assists in developing VLE high- level budget requirements contract; for brand regionally); - provides key business case to VLE - supports Local Brand Team ( as Team relating to Sales, Marketing requested) to develop local vehicle and Aftersales; brand targets; - Finalizes VLE contract and - reviews targets established by specifically assists in defining local units; lifecycle volume, profitability and - assists Regional Brand Manager to brand equity objectives for region; develop regional targets and - Refines strategic brand position consolidates local targets, for new product; proposes adjustments to ensure - Manages product availability in that regional brand strategy can be close coordination with local successfully achieved , develops markets( pilot, pre-production, proposed final targets; initial product allocation); - reviews country goals, budget and - Defines product requirements plan with Regional Brand throughout lifecycle; Manager; - Optimizes product offer within - assists Local Brand Team finalize targets set in GMIO VLE contract( marketing and communications’ reduces product cost, minimizes plan and adapt regional strategy to unnecessary proliferation); fulfil local market’s requirements; - Reviews local voice of customer - reviews plan modifications to requirements; evaluate consistency with regional - Analyzes prior year’s results to brand strategy; determinate impact to voice of the - assists Regional Brand Manager customer for current and future review final plan; product requirements( especially - coordinates development of shifts in consumer needs); regional launch strategy with - Develops regional product Regional Marketing Services, requirements and incorporates Aftersales, Public Affairs and them into market segment Local Brand Team to ensure specifications; strategy can be executed and - Reviews marketing goals , budget conforms with local market and plan established by local units; requirements ( regionally - Assists Regional Brand Manager coordinate launch execution in to develop regional targets. close cooperation with local The Assistant Brand Manager- Marketing market units- press ride and drive, responsibilities are: retailer launch, motorshow, public announcement date);

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- tracks key marketing variables and - plays a leading role in the communicates results to regional development of strategy for and local marketing units; product recalls. - facilitates knowledge transfer and The Assistant Brand Manager – Finance exchange of best practices. responsibilities are: The Assistant Brand Manager – Aftersales - analyzes competitive pricing responsibilities are: strategies regionally; - supports Assistant Brand - evaluates previous year’s financial Manager- Product define performance, including requirements to meet ownership profitability, revenues and experience needs; marketing expenditures; - assists Regional Brand Manager - develops high level regional Team prepare regional brand budget requirements; review ( evaluates customer - supports Local Brand Team ownership experience, competitive prepare marketing goals, budget actions); and plan; - assists Regional Brand Manager - reviews targets established by develop regional brand strategy ( local units; identifies requirements for quality, - reviews modifications to dealership experience, cost of preliminary plan to assess ownership, after the sale service, financial feasibility and serviceability); consistency with regional brand - works with Aftersales’ Function to strategy; ensure that ownership elements ( - assists Regional Brand Manager parts, accessories and service develop regional resource offer) of strategy are complete and optimization plan( recommends competitive; adjustments to local targets to - supports Local Brand Team ensure that regional brand strategy develop ownership experience can be successfully achieved); targets; - assists Local Brand Team finalize - reviews targets established by brand plan; local units; - consolidates input for future - consolidates local ownership product pricing; experience targets into regional - monitors price competitiveness target; and recommends appropriate - informed of country final goals action for each market; and budget; - tracks vehicle line profitability for - assists Local Brand Team finalize current and future product, local vehicle marketing and including vehicle accessories; communications’ plans and adapt - tracks vehicle brand market regional strategy to fulfil local support funds by country ( market requirements for vehicle includes separate accounting for aftersales’ elements ; consumer influence and incentives - assists Regional Brand Manager or allowances); review final marketing plan - recommends resource allocation Execution ; shifts based on analyzing results. - assists Local Brand Manager The brand analyst attributions are : Team execute vehicle brand plan ( - obtains local market voice of recommends enhancements to customer input and consolidates to ownership experience during create regional voice of customer product life cycle; requirements; - tracks customer ownership - provides customer, product, experience ( quality, warranty); market and competitive information to Local Brand

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Manager or Team to prepare conjunction with Brand management. The first business review; of these is Vehicle Line Executive (VLE). The - assists Assistant Brand Manager – Vehicle Line Executive system is primarily Product collect local market voice designed to provide clear accountability and of customer input ; responsibility for program management of a - prepares and proposes annual vehicle platform throughout its life cycle market research plan; starting from concept approval. Vehicle Line - assists Local Brand Team with Executive Team is responsible for the information or forecast data to development and execution of future product establish targets; programs and the ongoing maintenance of the - assists Regional Brand Manager or current product. Through competitive Team analyze and consolidate assessments the Vehicle Line Executive Team local targets into regional targets; sets business plan objectives and goals to - maintains information or data achieve market leadership. The sources of requirements to successfully information used are regarded warranty, implement regional brand strategy quality, productivity, ergonomics and cost and assist local marketing units reduction. Based on the listed sources of meet plan objectives; information, issue originators identify or - actively communicates with discover and document within the Problem Decision Support and Marketing resolution. The system is tracking a sufficient Services Teams to monitor and number of issues and opportunities for evaluate results against plan; improvement on current product to meet the - oversees fulfilment of all business plan goals of the Vehicle Line requirements for common Executive team. The second is Project and information, processes and Production Support (PPS)., which supports our measures ; efforts towards Customer Order Fulfilment - collects key vehicle brand (COF), the changes in this plant and material performance information systems, and the urgent to improve the throughout business cycle ( organizational readiness to meet the Start of volume, pricing, sales allowances, Production (SOP) targets / including quality, etc.) using common processes and timing, cost and volume. formats. The issues and the opportunities are Regional Brand Team is supported by documented in the Problem Resolution Regional Marketing Services consisting of Tracking system , prioritized and presented to Decision Support (Market Research) and the Current Product Improvement Process. The Communications. In addition, they will intent of the Current Product Improvement continue to be supported by Distribution, Sales Process is to improve customer enthusiasm Analysis and Short Term Forecasting as well through the resolution of common cause issues as Public Affairs. for vehicles which have been produced. The These functions will be referred to as the Current Product Improvement Process engages Extended Regional Brand Team. Manufacturing, World Wide Purchasing, Local Brand Management at the country Vehicle Sales& service Marketing and marketing units will be responsible for Engineering in issue resolution. Ultimately, adapting regional brand strategy for the local shareholder enthusiasm is achieved through the market as well as local brand execution. This obtainment of business plan coals including effort will be headed up by the Local Brand cost reduction, warranty (cost & frequency), Manager who reports through the local productivity, ergonomic and quality Managing Director and is also an extended improvements. Through the identification of member of the Regional Brand Team. concerns and their root causes, solutions are developed, implemented and effectiveness is 3. CONCLUSIONS confirmed. Finally, these improvements serve as lessons learned for future product Brand Management is not a system which was development activities. A mark of brand introduced in isolation. Two other major potential is the achievement of brand organizational initiatives were implemented in leadership over a long period, in our case

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Corsa brand, Astra brand. For these brands, the creation of functional and emotional values has been so strong that customers continue to buy them over rival brands. To achieve this goal in a company, the managers must do the special trainings themselves and the specialists from the board in the field of leadership. Training leadership skills and developing emotional intelligence take place together and involve understanding our own emotional side, harmonizing with the emotional needs of others and using that knowledge to motivate them, not only to increase their effectiveness at work, in order to develop their potential[5] Darwin E Clark, Vice President Sales, Marketing and After sales General Motors Europe said that: “ Brand Management is a tool to help us gain a clearer focus on both the Umbrella and Vehicle Line brands”[6]. This is true and it was done by GM Europe very well and so the core values and the priorities of the company regarding continuous improvement, innovation, integrity, customer enthusiasm, teamwork, are possible to achieve.

References [1] http://www.opel.com/experience_company- information/facts-figures- Opel international (13.03.2013) [2] Annual Report Adam Opel AG. (1999), Adam Opel AG, ISSN 0948-7158, D-65423 Russelsheim,48-49 [3] Adam Opel AG Internal resource document European Business Team (2000) [4] Jobber, D., (1995), Principles and Practice of Marketing, ISBN 0-07-707935-3, McGraw-Hill Book Company Europe, England, 249 [5] Hahn, R.F., Sabou, S., Toader, R.M., Rădulescu C.M. ( 2012), About Emotional intelligence And Leadership, The Annals Of The University Of Oradea Economic Sciences TOM XXI, 2nd ISSUE- December , ISSN 1222-569X, 747 [6] GM Europe Product Range, General Motors Europe AG Brand Communications P.O. Box Zurich Switzerland (2004), 16-17

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