FROM OUR ARCHIVES: GM's marketing quarterback -- Published July 11, 2005

Mark LaNeve's risky gambit: Big incentives, then a transition to value pricing

DETROIT -- Mark LaNeve's spacious office on the 39th floor of the Renaissance Center here is strewn with sports memorabilia -- autographed footballs, racing helmets and trophies. His favorite item is a picture he bought off eBay -- a photo of his hero, Joe Namath.

LaNeve, GM North America's vice president of vehicle sales, service and marketing, draws parallels between himself and the legendary quarterback.

They both hail from Beaver Falls, Pa., where football and steel meant everything. Both came from working-class backgrounds, and football gave both a ticket out.

On March 1, LaNeve became General Motors' top marketer. For the past four months, he has played the role of GM's chief cheerleader, crisscrossing the country to meet with dealers and explain the automaker's brand strategy.

More important, LaNeve, 46, has launched two big marketing initiatives: GM's employee discount sale and its value pricing strategy for 2006.

At first glance, those two policies seem contradictory. The GM Employee Discount for Everyone program triggered one of the great blowout summer sales in GM's history, while value pricing will require GM to ease off incentives.

For the 2006 model year, GM has set sticker prices that more closely approximate the transaction prices. But value pricing won't work unless GM controls its inventory of unsold cars and trucks. So LaNeve is using the GM's employee discount sale to trim the automaker's once-huge inventory of unsold vehicles.

This fall, the transition from big incentives to value pricing will require exquisite timing and the nerves of a riverboat gambler -- in other words, an executive who fancies himself to be an automotive Joe Namath.

BIOGRAPHY
Born: March 8, 1959
Hometown: Beaver Falls, Pa.
Family: Wife, Paula; twin 13-year-old sons
Drives: Cadillac SRX
Education: B.A. in business communications from the University of Virginia
Jobs: In 1981, LaNeve joined GM as a representative on Cadillac's customer complaint line. After a number of promotions, he was named Pontiac's brand manager for the Bonneville. In 1997, he joined Volvo Cars of North America; he was named CEO and president in 2000. In 2001, he rejoined GM as chief of Cadillac, and in 2004, he was made GM's vice president of marketing and advertising. In March, LaNeve was named GM North America vice president of vehicle sales, service and marketing.

Steel town

LaNeve's blue-collar roots translate into a down-to-earth directness. He is colorful, enjoys a good joke and is sometimes brash. He sometimes walks with a limp, the result of a football injury to his right hip. In fact, LaNeve seems like he'd be comfortable in a locker room giving a pep talk or shooting the bull over a beer.

LaNeve's hometown is a steel town. Steel maker Babcock and Wilcox employed LaNeve's great grandfather, grandfather and father. All worked as hourly maintenance workers. His father, a former U.S. Marine, worked there until 1985, when the plant closed.

"What's sad is the town's never come back," LaNeve recalled in an interview. "When I go back there, it's still very depressed."

But LaNeve said it was a great place to grow up. "You could play football, baseball and basketball," he said. "All of our dads worked in the mill. It was very blue collar. It's like we were all the same."

LaNeve said his family didn't have enough money to send him to college, but his mother encouraged him to pursue it anyhow. Football allowed LaNeve to be the first in his family to earn a college degree.

Although the United States Military Academy at West Point accepted LaNeve, he chose to attend the University of Virginia on a football scholarship, where he played linebacker.

"I didn't realize anything about money until I went to college and I saw these kids driving their own cars and going to Europe in the summer," he recalled. "I thought, 'Holy moly! There's a whole other world out there.' "

Gallo Wine Co. hired LaNeve out of college for a sales position. It was the early 1980s, and LaNeve didn't like the wine business. He contemplated returning to school for an MBA or playing for the now-defunct United States Football League. As fate would have it, LaNeve met a brand manager for Cadillac.

Customer complaints

The brand manager hired LaNeve to work in Los Angeles on Cadillac's customer complaint line, and LaNeve started moving up the corporate ladder. In 1985, he met the man who would become his mentor, Pete Gerosa. At the time, LaNeve was a district sales manager in Philadelphia; Gerosa was Cadillac's general sales manager.

Gerosa, who is now GM North America's vice president of field sales, service and parts, asked his managers to identify half a dozen people in their 30s who had potential. LaNeve was one of them.

"Mark was one of my brightest stars," Gerosa says. "His leadership skills stood out. He was a quick study, and he had a good rapport with the dealers, which in our business is really important."

In 1986, Gerosa made LaNeve a marketing manager in New York and subsequently gave him additional assignments to give him more experience.

Now the two executives have reversed roles -- Gerosa reports to LaNeve.

"He's been a coach and a teacher," LaNeve said of Gerosa. "He made sure that I got exposed to the right jobs and experiences. He had a hand in every job I had until I left for Volvo."

Breakthrough

In 1997, LaNeve joined Volvo Cars of North America as vice president of marketing. LaNeve said he joined Volvo because the company was launching products and its New Jersey headquarters would allow him to stay near Beaver Falls.

At the time, Volvo was trying to remake its safe-but-stodgy brand image. Volvo had a small marketing budget, so LaNeve had to try something different to stand out from the crowd.

For the first two months of the S60 launch, LaNeve relied mostly on Internet marketing -- an innovation at the time. That was the first time an auto manufacturer used the Internet as its primary launch mechanism, claims John Maloney, vice president of communications for Volvo in Irvine, Calif.

Back to Cadillac

In 2000, LaNeve was named CEO and president of Volvo Cars of North America. It was a prestigious promotion for the 41-year-old executive, but just one year later LaNeve returned to GM as general manager of Cadillac.

Volvo wanted to base LaNeve in California -- a move he resisted. Gerosa says LaNeve was trying to balance his career with his family obligations.

LaNeve has twin 13-year-old sons who are autistic. LaNeve's parents in Beaver Falls act as a support group for his children, Gerosa says. Although LaNeve's current job requires 12-hour days, he still sets aside time for his boys.

"They need a lot of my time," LaNeve said. "They don't make friends on their own. They need the interaction. They have activities, but it's a lot of therapy."

Hip-hop ride

LaNeve's return to Cadillac in 2001 was blessed by good timing. After decades of decline, the brand was about to unleash a new generation of cars and trucks.

LaNeve's mission was to attract skeptical younger buyers to the brand without alienating older customers.

"Mark had to make sure there was a new consumer who came in," says Dennis Donlin, president of GM Planworks, GM's media planner. "It was a very big cultural shift that had to happen. He had to make sure everyone embraced it and didn't slide back to the old way."

A stroke of luck made LaNeve's task easier. After Cadillac introduced the Escalade in 1999, athletes and hip-hop musicians adopted it as their ride of choice.

The vehicle appeared in various rap videos, and Cadillac's stodgy image began to dissipate.

In one of his most important marketing moves, LaNeve decided to exploit this stroke of luck by doing … nothing.

He said he considered -- and rejected -- proposals to promote the Escalade's appeal to rappers, athletes and urban hipsters.

"We got incredibly lucky," LaNeve said. "We just stayed cool and didn't try to exploit it. Exploiting it would have been incredibly dumb. I've seen that happen with some of our competition, and the minute you do that, you're off the radar screen."

But LaNeve still had to make sure that baby boomers would embrace the sporty new CTS sedan, which debuted in 2002. To execute that shift, LaNeve's team chose Led Zeppelin's "Rock and Roll" as Cadillac's new anthem.

Then LaNeve decided to introduce the TV commercials featuring Led Zeppelin during the 2002 Super Bowl. The gamble paid off.

"Cadillac has always been about celebrities, being at primo events and being the best of the best," LaNeve said. "The Super Bowl is the ultimate celebrity event now."

Meanwhile, LaNeve traveled the country to meet with nearly every Cadillac dealer and garner support for the brand's new direction.

Cadillac's turnaround positioned LaNeve as a hot property. On Sept. 1, 2004, GM named him chief of marketing and advertising. In that role, LaNeve pushed GM to make OnStar and StabiliTrak standard on all GM vehicles.

And when GM CEO Rick Wagoner shook up his marketing operation this spring, he turned to LaNeve. On March 1, Wagoner named LaNeve chief of North American marketing. Asked whether he and LaNeve would be joined at the hip, Wagoner quipped, "like a brother."

'Damaged brands'

LaNeve's first task was to reassure nervous Pontiac and Buick dealers after Vice Chairman Robert Lutz had dubbed them "damaged brands."

Then LaNeve turned his attention to value pricing, which he calls the "total value proposition." For the 2006 model year, GM will cut sticker prices closer to the transaction prices customers pay.

LaNeve called the idea "common sense." GM wants to relinquish the role of incentive leader, he said.

"We're not going to throw a light switch and be off incentives," LaNeve said. "Every time we launch a new product, we'll make a pricing decision. We'll make adjustments as we go along."

It's not clear whether GM's value pricing plan will succeed, but LaNeve seems comfortable in his job. At public appearances with GM dealers, he has shown no signs of doubt.

But if LaNeve pulls off the transition from GM Employee Discount for Everyone to value pricing, he will go down in history as the marketing world's Houdini -- or perhaps its Joe Namath.

You may e-mail Jamie LaReau at

You can reach Jamie LaReau at jlareau@crain.com
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