SOCIAL MEDIA BRANDING AND STRATEGY; HOW ALFRED SLOAN OF GM USED "COOL" TO OVERCOME THE FORD MODEL T IN 1923

            To create a successful social media brand it is imperative that new material is constantly being created and shared with customers. In creating a brand, image is critical. Brand has two sides. There is a functional side, and there is a side that conveys a symbol. In branding, there is a “cool” factor. Many times it is the “cool” factor that sets a product apart. One of the first C.E.Os to understand this was Albert Sloan. Albert Sloan, though he was leader General Motors in 1923, is an excellent bench mark for contemporary social marketers.

            In 1923, Albert Sloan faced a dilemma that seemed insurmountable. The Model T Ford possessed 60% of the American car market. In terms of numbers of cars, close 9 out of 10 cars that were on the road were Fords. Only 12% of the market belonged to General Motors. Many executives at General Motors in 1923 thought the chance of overtaking Ford impossible. Albert Sloan knew that Ford could be overtaken because he understood social media.

            Albert communicated with customers much like today’s social media world. This engagement was two-fold.   As is the case today on a Facebook Page, Albert learned what customers “liked” in cars.  Times had changed drastically from 1908. There was now a middle class. There were a large group of Americans who had disposable income. The type of car that was driven was the means by which people defined success. The type of car that you had told people what income you were in.

            People wanted variety. In addition, to just supplying a nice ride people also wanted something that looked nice. Style now became important in selecting and buying a car. Sloan understood that image was a deciding factor in the marketing of cars.

            How do you show off variety and style in cars? How do you create buzz?  Albert Sloan decided upon an annual model changeover, a staple in today’s car industry, but a radical new way in 1923.

            The annual model changeover is the means by which General Motors became a social media brand in 1923. Billy Durant, the original creator of General Motors, left Alfred with 5 brands. Alfred had variety built into the GM brand. To enlarge on variety further and to emphasis stylishness and fashion, Albert decided that each brands appearance would change each year---the model change.

            This created buzz and excitement, not only among customers but also among GM personnel. There was a feeling of extreme anticipation on what the new models would look like. This anticipation created important touch points for General Motors. People started talking about the cars. This gave GM advertising that they didn’t have to pay for. The new models created 5 new touch points for GM. If a person bought an entry level Chevrolet, and an Oldsmobile went by while talking to a friend, they would say to their friend, “Look at that Oldsmobile”. Even if the Oldsmobile brand wasn’t bought by the customer, it still got their attention. General Motors wasn’t just one product; it was many products, each creating interest for General Motors.

            The models, the stylishness, the fashion, the brand image, created a new brand for General Motors. The brand of General Motors was that “GM was cool”. General Motors of 1923 became to be seen as Apple is seen today---the company of “cool”.  People wanted to be seen driving a GM car because they were “cool”, just as many people buy Apple products today because they are “cool”, and if you have them you are “cool”.

            “Cool” created a brand for GM in 1923. Ford began to be seen as “old”.

Dean Hambleton

dnhambleton@gmail.com           

SOCIAL MEDIA AND BRANDING: THE BENEFITS OF AN UMBRELLA BRAND

SOCIAL MEDIA STRATEGY AND BRANDING: THE BENEFITS OF AN UMBRELLA BRAND

                        A salient fact about social media marketing is the fact that markets move so very fast. Social media creates great scale. The scale creates the great speed that we find in contemporary markets.  The way that social media brands are created is that first a product is positioned. The scale of the market makes it evolve. This means that the product is repositioned. As the brand continues, the repositioning creates a new positioning.

            The way that the early car industry was branded is an example. Two great giants of this era were Henry Ford of the Ford Motor Company and Billy Durant who created General Motors. Both understood that the original market would depend upon low price. Durant also felt that the low price should also have variant brands to target different groups. Henry thought that price was the key and he created a world class brand in the Model T. For a time, Henry’s bet was the correct one.

            The market evolved overtime. As the decade of the 1910’s progressed a middle class developed. With more resources available, people began to want more than just a low price in a car. The variance of income created different targets for the car. This created the necessity for the car to be branded in different ways. Luckily, for GM, Billy Durant had created these different brands. In the General Motors model, Chevy was the entry level for low income people. Ponitac was the next level. This is for people who start a job, and start receiving  early career promotions. For the mature mid career there is the Oldsmobile. For those people know on the fast track there is the Buick. Finally, for the people who have made it, there is the Cadillac. I think the GM model is the model that modern social marketing should follow.  Different income groups define their products in a different manner. The brands help them define themselves. This is the beginning of what is called the “umbrella” brand. This is several brands of the same product, under the roof of one company. It is this strategy that allowed General Motors to overcome a seemingly insurmountable lead by Ford in the 1920’s to become the pre-eminent brand in cars.  What are the benefits to having an umbrella brand in relation to having just one big brand like the Model T.

                        As in the case of General Motors, a big benefit is MARKET GROWTH. There is strength in numbers.  With many brands, like the GM family, there is constant engagement with the General Motors brand, instead of the singular General Motors “car”.  As In the GM case, no one brand can control the entire market. This is the genius of Albert Sloan. It was Albert Sloan that has taught marketers the importance of targeting, segmenting, differentiation, and branding. This is in clear contrast to Mr. Ford’s assertion that you can have any color you want as long as it is black.

            Multi brands PREVENT BRAND EXTENSION. In 1923, there were many car companies, most with one brand. By having multi brands, Mr. Sloan was able to consolidate the market and to dissuade the smaller struggling companies not to extend their brand and to get out of the market, allowing General Motors to concentrate on Ford.

            Multi brands PROTECT THE BRAND IMAGE. Everyone knows that Chevy, Ponitac, Olds, Buick, and Cadillac were General Motor brands. Each of the cars contributed to the GM image. Ford singular brand in the Model T worked against Ford.  Because it had only one brand, Mr. Sloan was able to portray the Model T as a brand “built by farmers for farmers”.