kansaiwalker1

by Peter M. DeLorenzo



How Cadillac has become a Microcosm for the Future of the Detroit-based Automakers.

Detroit. After observing the various car companies over the years (some closer than others, admittedly), it's clear to me that the Motor City-based automakers in particular have one immediate and recurring problem (culled from a long list, I might add). And that is that the perception "out there" in the real world hasn't caught up with the reality in terms of what people believe to be the strengths and/or weaknesses of American cars and trucks.

It's no secret that the Detroit-based automakers have made huge strides in the quality, performance, dynamic capabilities and overall goodness of their cars and trucks. No secret, that is, except to the majority of American consumers out there who still hold strong opinions that the domestic products offer less than their import competitors - and who steadfastly refuse to even consider the Detroit-based products because of past grievances and accumulated transgressions. And that legacy is, for the most part, richly deserved on the part of the American automakers.

But it's also old news too.

"Detroit" is finding out just how tremendously difficult it is to change perceptions - even if it's only by a fraction. At this point, even if DaimlerChrysler, Ford and GM each built a "best" car in a segment (and in some instances, they already have), it will take years for the public's perception to change - even with voluminous praise from the media. Not months, not quarters, but years.

A perfect example of this is the Cadillac brand. Over the last few years, Cadillac has made tremendous progress in turning its brand around and getting itself headed down the right road. But in the real world "out there," the public's perception is just starting to shift from "Cadillac = Old-time American luxury" to "Cadillac = Well, I do notice them on the street now, maybe there's something going on there."

Note there's nothing in there about "Cadillac = It's a brand worth considering." That hasn't happened yet, at least not at the kind of level Cadillac ultimately needs in order to really succeed. Cadillac has "buzz" about it for the first time in decades, there's no doubt about that. But having "buzz" and getting people to talk about Cadillac in the same sentence with BMW, Lexus and Mercedes-Benz is an entirely different challenge altogether.

In order to achieve that, Cadillac has had to start over in building its brand up from scratch, model by model, and most important, customer by customer. Cadillac started with the premise that building competitive products has to be a given, which is the only way a car company can hope to survive in this, the most competitive market in automotive history. And from there, Cadillac set out to gradually change consumer perceptions about its brand - through its communications, its advertising, its relationship marketing and even with a new motorsports program based around the ultra-high-performance CTS-V.

In Cadillac's case, its brand transformation won't happen because of the people buying the CTS, the SRX, the Escalade and the XLR right now, but it will happen when those people come back in three or four years to buy another Cadillac - if they were happy with their ownership experience. And if the ownership experiences of those returning customers were pleasant, they will have had the occasion to talk about their satisfaction with their Cadillacs with friends, family and coworkers - and then the all-important and still ultimately powerful "word-of-mouth" advertising will come into play.

That's when Cadillac will know, and that's when the needle will finally visibly begin to move.

But think about this: Here is Cadillac - with all of the high-powered financial ($4 billion by some estimates), engineering and marketing resources that GM can muster (which is considerable, any way you look at it) - and yet still, after four long years of concentrated effort, the brand is just now showing real strength.

In the course of reinventing itself, Cadillac has become a microcosm for what "Detroit" needs to do with every single brand that's worth salvaging. It means a long, tedious process of building up brands, step by excruciating step - with every possible detail thoroughly finessed. There are no shortcuts, no quick fixes and no "overnight" success stories in this game.

And ironically, having great product is only the beginning.

Thanks for listening, see you next Wednesday.