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June 21, 2003

The Death of Oldsmobile

High-Priced Advertising and Marketing Gurus Doom a Division

Sometimes people take for granted that a large company knows what the heck it's doing when it comes to building, marketing, and selling products. You think that with the millions of dollars being thrown around by top-level management and big-name marketing and advertising companies, they must know what they're doing.  

Oftentimes this is not true on a massive scale. Take for example the Oldsmobile division of General Motors Corporation, run by extremely high-paid marketing VPs, and utilizing the strategic advice of hot-shot Madison Avenue advertising gurus. Yet this company had its collective head up its butt for 15 years, as customers like myself looked on in disbelief as the division ran itself into non-existence.

And the consequence of this is mostly nothing. Not counting the hundreds of thousands of Oldsmobile employees who lost their jobs. For the rest of us, we just have to choose another car to buy. No big deal. 

But if you're in the marketing or advertising field, or in some way involved in the design and production and selling of a product, there are important lessons to be learned. You can live your career by the lessons learned from the death of Oldsmobile. 

Lesson #1 -- Power and Performance Are Good Things to Live By 

Oldsmobile spent its glory years of the fifties and sixties advancing itself as a brand that meant power and performance, topped off with non-ostentatious luxury.

In the 50's, the Olds 88 and 98 were the epitome of non- ostentatious power, performance, and class. The Olds rocket V8 motor was legendary.

In the 60's, there was no more exciting car on the road than the Cutlass 442.

But as the 70's plied into the 80's and then the 90's, Oldsmobile's power and performance heritage was replaced with carbon copy, cookie cutter, front-wheel drive vehicles.

Ad for 1958 Olds 88 -- back in the day when Olds was known for performance and style. [Click on image to enlarge]

Lesson #2 -- Product Is Everything, and If Your Product Is Selling, Don't Change It Into a Different Product ! 

Even as recently as the mid 1980's, Oldsmobile's Cutlass dominated the market as the world's top-selling auto. 

The top selling auto! 

It sold more than Honda Accords and Toyota Camry's and anything else Japan or Europe had to offer. 

Oldsmobile then undertook an "if it ain't broke, fix it" philosophy. By 1988, Oldsmobile turned the top-selling, rear-wheel drive, V8 Cutlass sedan into a front-wheel drive, 6-cylinder car with nothing-special horsepower and acceleration numbers. The Cutlass was not the only car demasculinised -- other top products in the line met a similar fate simultaneously -- the 88 and the 98 were turned to front-wheel drive mush as well.  

Lesson #3 --  Market Your Product Based on What Excites People; Don't Rely on Focus Groups   

Demasculinisation of the product line happened across the GM line, not just at Oldsmobile. Buick Regals and Chevy Monte Carlo's met similar fates. But unlike those other brands, the Oldsmobile division took out its .45-caliber marketing gun and pointed it to its head and pulled the trigger. "Good Olds Guys" and "This is not your father's Oldsmobile" commercials drove almost everyone away from the brand. To buy an Oldsmobile you had to identify with advertisements that showed a table of the ugly faces of all the Olds dealers in the area. These were the people you would want to run away from. I'm going to buy a car because the people who will sell it to me are friendly? I don't think so. What makes this harder to digest is that the people who came up with that strategy, were people at one of the biggest advertising companies in the world. Oldsmobile was a 100-million dollar account. 

And then came the panic. Unable to figure out what formula had been so successful for them in the past -- all they had to do was look at their old ads, not talk to cookie-cutter focus groups -- management panicked. Olds introduced SUV's (the Bravada) and minivans (the Silhouette) and all kinds of new product names (Aurora, Aero, Intrigue) of cars that were geared towards any kind of buyer except anyone who cared about power and performance. 

Lesson #4 -- Never Throw Away Years of Brand Recognition

The final stupidity was the decision to shutter the brand. GM had over 100 years worth of advertising and brand recognition of a car that still, in many people's minds, meant performance and class. GM's decision was to throw it all away. All the while, under their feet, the Japanese auto manufacturers built up a reputation of making automobiles that were quick, and fast, and powerful. GM could have taken a lesson from Harley Davidson -- don't throw away the Oldsmobile name; bring back the power and performance and even the old ads, and make the car a classic that every American would want to buy. 

I hear Buick is in trouble now.

-- LouV

 

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