To no one's surprise, the consequences of a bad marketing plan can bankrupt a company.
At least, a car brand as remembered as Pontiac.
In 2004, General Motors (GM) was involved in a marketing failure that is still remembered today for its negative consequences.
Without thinking about the risks of bad marketing (although the idea looked very good), on September 13, 20 years ago (oh wow), Oprah Winfrey would be the protagonist of one of the most historic moments on television.
Unmissable is the analysis of bad marketing courtesy of General Motors and its obvious outcome, shared with great affection by its friends at Searching Marketing.
Let's start!
1. Marketing failure: The case of General Motors and Oprah Winfrey
The company decided to give away 267 Pontiacs G6 on the Oprah Winfrey show, a car model that was expected to be a success in the market.
However, each of the 267 winners were given a paper in which they had to pay $6,000 dollars in taxes.
Only then could they receive said Pontiac, whose value was $28,000 from Uncle Sam.
This was evidently not seen on the cameras, but at the end of the program.
People's confusion at knowing that every prize comes with a dose of tax (regards to the IRS) was irreparable.
The “winners” of each of the Pontiac G6s could take 3 options:
- Accept the car and agree to pay the $6,000 USD in taxes
- Accept the car, sell it and thus pay the aforementioned tax and that people would choose to buy any car they wanted of much lower value
- Do not accept the car
This publicity stunt, which cost GM $7.7 million dollars, resulted in a marketing failure that affected the company and one of its most iconic brands.
General Motors has not been the only automotive muscle company involved in scandals, away from the Volkswagen fiasco and its very advanced but also very tricky software to "pass" pollutant emission tests, the Pontiac brand could not recover from this great, poorly planned idea.
2. Consequences of a bad marketing plan: Oprah overshadowing Pontiac
GM's marketing strategy in this case was one of the poorest seen in the history of marketing.
Although the idea of giving away cars on the Oprah Winfrey Show might seem great, lack of preparation and lack of focus on the end goal resulted in an epic marketing fail.
The press, the public, and the audience, in unison, focused entirely on the goodness of Oprah and the “villainy” on the part of General Motors.
This resulted in a loss of identity and connection with the public towards the automotive brand and its great attempt to take off in sales.
A great incentive for GM was to regain popularity among the women who week after week took over the show of the famous and controversial host.
Additionally, the company did not adequately prepare for the public response and did not have a contingency plan to handle the complaints and negative reactions that arose.
3. Bad marketing strategies: The incredible case of General Motors
Six years after spending $7.7 million dollars on this publicity stunt, General Motors decided to close the Pontiac brand.
In 2004, it went from selling 474,179 cars to only 178,300 in 2009.
The brand, which was a symbol of quality and innovation, was affected by zero sales margin and constant customer complaints about the poor performance of the vehicles.
The company was unable to recover from this marketing failure and, although the Pontiac brand was closed in 2010, the company's image was affected for years.
It was the first brand to be closed after GM experienced a crisis that led to historic bankruptcy.
4. Bad Marketing: The most expensive gift in automotive history
The case of General Motors and Oprah Winfrey is a clear example of bad marketing.
The company focused on a secondary goal and was unable to measure the impact of asking people for money in exchange for a gift.
Anyone would have reacted the same way.
Apart from this major omission, the company wanted to erase a bit of its bad image by claiming that it had put almost $1,800 USD per car to cushion the impact of the tax to be paid by each winner.
Although at Searching Marketing we believe that the idea was very good:
- taxes
- Not knowing the background of each winner
- The imposition of the company's criteria on the needs of each attendee at the show
It resulted in misuse of marketing and negative consequences for the company that continue to this day.
5. Consequences of a bad marketing plan: The case of General Motors
But since no one takes a lesson from other people's heads, Volkswagen (again) wanted to repeat the formula but corrected and increased.
Although they paid the full tax for each winner, they only bet on showing the silhouette of a car and for Oprah to announce that everyone had won a car.
But the car they gave away was a Beetle.
Walking on foot is worse, they say.
6. Conclusion
This milestone in television and automotive history caused companies to greatly question the scope of this type of exercise.
Again, the effort probably would have been extremely successful if GM had absorbed the taxes but also considered what was the best option for the women in the program.
In addition to going from heaven to hell, there were multiple reports of complaints since many of these gifted cars had electrical problems.
Of course, this ended up squandering any glimmer of hope for being able to relaunch the brand and position it in accordance with the established projections of this strategy.
Again, before saying goodbye, we reiterate that you contact us if you are thinking about launching an advertising campaign or are designing your digital marketing strategy.
Avoid the consequences of a bad marketing plan by working with the experts.
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