CASE: IV  The Saturn Family

IIBMS – The Saturn Family

Consumers are bombarded with advertisements and marketing hype everyday. When you log onto the Internet, watch television, listen to radio, read a newspaper, or open your mail, you are inevitably greeted with a plea to purchase brand X or visit store Y or website Z. In any given day, you are exposed to more information than you can realistically process. In the 1990s, marketers began to look fresh, innovative ways to make their companies stand out from the media clutter. Few have been as successful as General Motors’ subsidiary Saturn, whose 1994 “homecoming” of car owners has been described as “the mother of all marketing programs.”

Saturn’s mission statement emphasizes the concept of “family.” In an industry whose history is replete with labor conflict, Saturn has tried to erase the line between labor and management are somewhat taboo. Regardless of their positions in the company, all Saturn boasts that no one punches a time clock and that members of labor and management even eat in the same cafeteria! Moreover, the company expects its employees and dealers to make customers feel like a part of the Saturn family.

According to Joe Kennedy, Saturn’s corporate vice president of sales, service, and marketing, “Everything at Saturn hinges on our retail operations being enthusiastic about serving their customers.” Indeed, salespeople (or, as Saturn prefers to call them, “consultants”) have gone far out of their way to make current and potential customers happy. In one legendary story, a woman in Wyoming was interested in purchasing a Saturn only to find that the nearest dealership was hundreds of miles away in Salt Lake City, Utah. Not to worry. A salesperson from Salt Lake City flew to Wyoming, picked the woman up, flew back with her to the dealership in Utah, showed her the car, and made the sale. Saturn instituted a “no-haggle” pricing policy to reduce the traditionally antagonistic relationship between automobile salespeople and customers. Saturn’s television ads have featured employees discussing the family feeling at the company and actual customers sharing their own Saturn stories.

The “Saturn family” concept took hold with consumers. Soon delighted customers began calling and writing the company’s plant in Spring Hill, Tennessee (near Nashville), to learn how they could tour the facility and maybe meet other Saturn owners from across the country. So management decided to spend $1 million to hold its first “homecoming” of Saturn owners and their cars the weekend of June 24-25, 1994 in Spring Hill. It mailed out 650,000 invitations to Saturn owners and also purchased commercial time on CBS’s late Show with David Letterman.

The response was overwhelming. About 30,000 Saturns—and their owners—made the pilgrimage. If you were on the highway that week and saw a Saturn with an orange ball on the radio antenna, that car was probably headed home to Tennessee. Saturn owners came from as far as Taiwan and filled most of the 24,000 hotel rooms in the Nashville area. In fact, a dealer from Taiwan brought home the first Saturn ever sold in that country. That car was honored with its own tent. Throughout the weekend, car owners met members of the Saturn team, toured the plant, and shared their own Saturn stories. The homecoming had all the trappings of an old-fashioned outdoor revival with music, dancing, testimonials from celebrities (Olympic speed skater Dan Jansen), and food (everything from “southern Chinese egg rolls” to barbecued catfish).

Even though two Herculean thunderstorms blew over some tents, injured a few people, and forced the cancellation of a scheduled concert by country music star Wynonna, it didn’t seem to dampen many folks’ spirits. Mary Taylor, age 60, was part of a 22-car caravan that trekked 1,800 miles from Nevada to Tennessee to be part of the homecoming. She couldn’t stop raving about the dealer. “I couldn’t believe how much they cared,” Taylor said. “They know us when we walk in. It’s such a friendly atmosphere, I look forward to going to the dealership.” Another Saturn owner compared the weekend get-together with Woodstock: “This is another gathering in a field, except it’s about cars, not music.” Ruth Morrissey from South Dakota perhaps summed up the weekend best as she gushed, “We love our Saturns. We are all just a bunch of walking ads.” For those who couldn’t make it to Spring Hill, Saturn sponsored smaller-scale get-togethers at dealerships around the United States. An estimated 100,000 additional people attended those events.

The homecoming was just a part of Saturn’s overall strategy of making customers feel like part of a big Saturn family. Was this approach successful? Apparently it was. Company research in 1994 showed that out of the approximately 650,000 people who owned Saturns, 80 percent planned to buy another Saturn. Furthermore, Saturn reported that during the homecoming ad campaign (which ran from January through June 1994), sales were up 25 percent compared to a year earlier.

Other carmakers took notice and copied Saturn homecoming model. Daimler Chrysler’s Jeep division sponsored an event called Jeep 101 in which Jeep owners—many of whom drive exclusively on paved urban streets—took their vehicles off-road. Mercedes-Benz of North America invited 100,000 current and potential customers to Los Angeles for an unveiling of new models. The opportunity to ogle these pricey new automobiles—plus the lure of good food and wine—apparently was quite compelling. So many people showed up that they had to close down a highway. In another promotion, Mercedes invited 1 million people to “fall in love” with a new Mercedes by attending one of a variety of special customer bonding events at local dealerships.

To be sure, Saturn has had its share of problems since that first homecoming event in 1994. Some critics have sniped at Saturn’s boring styling and limited choice of models. Others believe Saturn has slipped compared to other carmakers in terms of performance and reliability. Sales of the L-series mid-size car were very disappointing, which forced production slowdowns and lay-offs in 2000. In addition, the harmonious relationship between labor and management hit a snag when Saturn’s 7,000 unionized employees began to express dissatisfaction with their special labor agreement with the carmaker. Seeing a problem, General Motors in 2000 pledged to invest $1.5 billion to expand the Spring Hill facility and provide Saturn with a SUV and a redesigned compact car in time for the 2002 model year. (To check out Saturn’s current model line and other company information, visit the company’s website at www.saturn.com.

But make no mistake, Saturn’s innovative marketing efforts have accomplished their goal. Even with the recent problems, surveys reveal that most consumers—especially younger people—still believe Saturn is, as its ad campaign declares, “a different kind of car company.” In 1999, Saturn held another large, successful homecoming and many industry experts believe that with new models in the offing, Saturn can regain the momentum it had in the mid-1990s.

 

Question:

 

1. Visit the Saturn website and try to determine the market segments the carmaker is targeting. What should Saturn do to better serve those segments? How might Saturn tailor its offerings to address the different stages of the family life cycle?
2. Other vehicles—such as Porsches, Mustangs, and Harley-Davidson motorcycles—also have “cult” followings. But these products also have very strong symbolic meanings associated with them. The Saturn is a solid and reliable, but basically unspectacular, car. Identify and discuss three reasons that you think Saturn has such a devoted following of involved customers.
3. An automobile is a high-involvement purchase. Discuss how the manufacturer of a lower-cost, lower-involvement product could generate greater personal relevance and long-term loyalty. Find and discuss an example of a company that has done so.

IIBMS – The Saturn Family

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