Network and spot TV are regarded as the big-ticket items for automotive marketers. But that's not always the case.
So what takes an even bigger bite out of marketers' budgets? Incentives, including rebates and cut-rate financing and leases.
General Motors, with the fattest marketing wallet, will spend $1.5 billion to $2 billion on TV this year, and at least triple that amount on incentives.
And GM's marketing costs aren't likely to shrink in the coming year. But the No. 1 automaker hopes to slash its spending on giveaway incentives.
At the center of GM's strategy is Michael Jackson, executive director of sales support for GM's North America vehicle sales, service & marketing group. It's a new position with the job of integrating the automaker's retail sales and national marketing initiatives across Cadillac, Chevrolet, Buick, GMC, Oldsmobile and Pontiac. Jackson, who was hired away from Coors Brewing Co. in February, also was empowered to improve GM's field and dealer communications, sales support and vehicle distribution.
His job won't be easy. Just two years ago, GM merged its marketing divisions and field organizations in an effort to better synchronize local, regional and national advertising, eliminate internal competition among divisional brands and save $250 million annually. But progress has been extremely slow.
Jackson, with 20 years of experience on the West Coast in field sales, marketing and market development while at Kraft General Foods, PepsiCo, Coca-Cola USA and Coors, brings two added dimensions to the 1998 reorganization.
1. He has set up a marketing/sales integration team that is the new platform from which GM oversees its marketing and sales efforts across all divisions and the country.
2. The promotions, the national advertising and marketing themes, and the incentives that GM will use in 2001 for all divisions and all sales regions are set in one retail planning calendar.
'As we sit here, we are talking to our dealers about what we're going to do this spring,' Jackson says. 'There are things that we can leverage geographically and demographically that ultimately we believe when you add it all up, we should be increasing our market share.'
Jackson reports to Michael Grimaldi, vice president of field sales, service and parts.
'But I'm in all the dialogue,' Jackson says of his ties to John Middlebrook, vice president of vehicle brand marketing and corporate advertising, and his division staff.
Says Middlebrook: 'We need this. We need to spend our money more efficiently, and Mike has the experience to help us do that.'
The team, which Jackson heads, is composed of one representative from each of GM's five divisions, a representative from each of the automaker's five sales regions, and a representative from corporate advertising, the incentives committee, customer service, e-GM, distribution, the legal staff and GM's ad agencies.
Jim Bunnell, the North Central regional divisional marketing manager for Chev-rolet, is a team member.
Says Bunnell: 'What we try to do is pull people out of all of the divisions and the regions who are closest to their business who can also represent their sibling brands, as opposed to having a group of people in Detroit - who are very smart, but how can they possibly know what's going on in these local markets?
'We're trying to get closer to the customer, which is ultimately through the dealers.'
The bible for this group is the promotional retail planning calendar, which the group creates and shares with all the involved parties.
The calendar's purpose: Have GM's entire U.S. sales and marketing operation - including its dealers, brand managers, advertising agencies, sales regions and divisions - operate from the same marketing plan. It also gives retailers a preview of products to be pushed, advertising and incentives that are planned, and when the program will take place so that they can order product and plan their advertising.
As the calendar is finalized by quarter, GM's advertising agencies meet at the regional and divisional level, along with R Works, GM's regional promotional arm, and plan the advertising campaigns, the themes and the promotions. All of it is now shared with dealers.
'Now we take all of the major promotions that we want to execute in our regions, lay that on top of this national calendar and we've got a framework that we can start to work with our wholesale teams and our market area teams in their appointments with their dealers,' Bunnell says.
In the past, GM's divisions were in effect operating companies, setting their own incentives, advertising campaigns and pushing their products, often in competition with each other.
'Because we thought it through as separate divisions, I don't believe we were leveraging what we could really bring to market vs. the competition,' Jackson says. 'Literally, we're making the strategic decisions on how we go to market.'
It all sounds complicated, but Jackson says it's not.
'Putting someone in charge is not the challenge,' he says. 'The challenge is putting the process in place, putting the team in place that ultimately is looking at the bigger picture and is able to translate that corporate strategy down to the dealer level. That's the goal.'
And Jackson's ultimate goal - or so he says - is to work himself out of a job.