GMC’s Marketing Mix
1. Introduction
General Motors Corporation (GMC) is an American multinational corporation headquartered in Detroit, Michigan, that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services. With global headquarters in Detroit’s Renaissance Center, GMC maintains production facilities in 31 countries. In 2009, GMC sold 546,686 vehicles globally under the following brands: Buick, Cadillac, Chevrolet, GMC Truck, Holden, Opel, Pontiac, Saab, Saturn, and Vauxhall.
GMC’s primary market focus is on utility vehicles (SUVs) and pickup trucks; however, it also offers a line of passenger cars such as the Acadia SUV and the Canyon midsize pickup. SUVs accounted for nearly 60% of GMC sales in 2017. The brand’s best-selling model is the Sierra 1500 full-size pickup truck; however, its crossover SUV models – the Acadia and Terrain – are consistently among its top sellers as well.
As part of its global operations, GMC follows a standard set of marketing mix principles. The company’s marketing mix strategy revolves around the 4Ps of product, price, place (distribution), and promotion. In terms of product strategy, GMC focuses on offering a wide range of vehicles that cater to the needs of different customer segments. The company’s pricing strategy is mainly based on customary pricing; however, it also employs value-based pricing and premium pricing strategies for its luxury models. GMC’s distribution strategy entails making its vehicles available through a wide network of authorized dealerships located across different countries. Lastly, GMC’s promotion mix is based on a combination of advertising, personal selling, sales promotion activities, and public relations.
2. Customary pricing
Customary pricing is the most commonly used pricing strategy in the automobile industry. Under this strategy, car prices are set based on certain industry norms and standards. This means that car prices are relatively similar across different brands and models within a particular segment. For instance, the price of a compact car will be more or less the same regardless of whether it is a Honda Civic or a Toyota Corolla. The main advantage of customary pricing is that it helps to standardize prices and makes it easier for customers to compare prices across different brands and models. This makes it easier for customers to make purchase decisions. Another advantage of this pricing strategy is that it helps to build trust between customers and car manufacturers/dealerships; customers know that they will not be overcharged if they purchase a car from a reputable dealership.
The main disadvantage of customary pricing is that it can limit profit margins for carmakers/dealerships if market conditions change (e.g., if there is an increase in production costs). This was evident during the 2008-2009 economic recession when many carmakers/dealerships had to resort to other pricing strategies (such as discounting) in order to maintain sales volumes amid falling demand from consumers.
3. Premium pricing
Premium pricing is another common pricing strategy employed in the automobile industry; under this strategy, manufacturers/dealerships set higher prices for luxury or high-end models relative to other models within their product range. The main advantage of premium pricing is that it allows manufacturers/dealerships to maximize profits on their flagship models; this is because customers are often willing to pay more for luxury/high-end models.
The main disadvantage of premium pricing is that it can make certain models unaffordable for many customers; this, in turn, can limit sales volumes and market share growth. In addition, premium pricing can also make it difficult for manufacturers/dealerships to enter new markets or segments; this is because customers in these markets/segments may not be willing to pay the high prices associated with luxury/high-end models.
4. Value pricing
Value pricing is a strategy whereby manufacturers/dealerships set prices based on the perceived value of their products/services rather than on costs or industry norms. The main advantage of value pricing is that it allows manufacturers/dealerships to charge different prices for different models/trims based on the features and benefits offered. This, in turn, can help to boost sales volumes and market share growth. In addition, value pricing can also help to build customer loyalty as customers are more likely to purchase from a brand/dealership that they perceive to offer good value for money.
The main disadvantage of value pricing is that it can be difficult to implement and manage; this is because it requires manufacturers/dealerships to have a good understanding of customer needs and wants. In addition, value pricing can also lead to price wars between competing brands/dealerships; this, in turn, can erode profit margins and impact negatively on overall financial performance.
5. Flexible pricing
Flexible pricing is a strategy whereby manufacturers/dealerships offer discounts or other types of incentives (such as freebies) to customers who purchase multiple vehicles or who purchase during off-peak periods. The main advantage of flexible pricing is that it helps to stimulate demand and increase sales volumes. In addition, flexible pricing can also help to build customer loyalty as customers who receive discounts or other types of incentives are more likely to repurchase from the same brand/dealership in the future.
The main disadvantage of flexible pricing is that it can lead to lower profits if not managed properly; this is because manufacturers/dealerships have to sell at lower prices in order to offer discounts or other types of incentives. In addition, flexible pricing can also encourage customers to wait for discounts or other types of incentives before making a purchase; this, in turn, can impact negatively on sales volumes and market share growth.
6. Leader pricing
Leader pricing is a strategy whereby manufacturers/dealerships set lower prices for certain models in order to stimulate demand and increase market share. The main advantage of leader pricing is that it helps to boost sales volumes and market share growth. In addition, leader pricing can also help to build customer loyalty as customers who purchase during periods of promotional pricing are more likely to repurchase from the same brand/dealership in the future.
The main disadvantage of leader pricing is that it can lead to lower profits if not managed properly; this is because manufacturers/dealerships have to sell at lower prices in order to offer discounts or other types of incentives. In addition, leader pricing can also encourage customers to wait for discounts or other types of incentives before making a purchase; this, in turn, can impact negatively on sales volumes and market share growth.
7. Bundle pricing
Bundle pricing is a strategy whereby manufacturers/dealerships offer discounts or other types of incentives (such as freebies) to customers who purchase multiple vehicles or who purchase during off-peak periods. The main advantage of bundle pricing is that it helps to stimulate demand and increase sales volumes. In addition, bundle pricing can also help to build customer loyalty as customers who receive discounts or other types of incentives are more likely to repurchase from the same brand/dealership in the future.
The main disadvantage of bundle pricing is that it can lead to lower profits if not managed properly; this is because manufacturers/dealerships have to sell at lower prices in order to offer discounts or other types of incentives. In addition, bundle pricing can also encourage customers to wait for discounts or other types of incentives before making a purchase; this, in turn, can impact negatively on sales volumes and market share growth.
8. Conclusion
GMC is a global automobile manufacturer with a focus on SUVs and pickup trucks. The company’s marketing mix revolves around the 4Ps of product, price, place (distribution), and promotion. In terms of product strategy, GMC focuses on offering a wide range of vehicles that cater to the needs of different customer segments. The company’s pricing strategy is mainly based on customary pricing; however, it also employs value-based pricing and premium pricing strategies for its luxury models. GMC’s distribution strategy entails making its vehicles available through a wide network of authorized dealerships located across different countries. Lastly, GMC’s promotion mix is based on a combination of advertising, personal selling, sales promotion activities, and public relations.