Two companies launched products last week. Apple Computer unveiled one laptop and a desktop that is identical to one already on the market but works faster: its shares rose by 6 per cent. General Motors revealed a bevy of new cars and sports utility vehicles: its shares fell.
There is a lesson there. Less can be more. At the Consumer Electronics Show, Howard Stringer, Sony’s chairman and chief executive, bemoaned his company’s predilection for constantly launching new products: “Apple’s market cap is $US60billion based on products that you can count on the fingers of one hand and ours is less than that based on thousands.”
If Sony has a nasty case of product proliferation, the auto industry has been suffering from an epidemic. The sickest companies are from Detroit. GM and Ford tour the world’s motor shows – Frankfurt, Tokyo, Geneva and, last week, their home town – unveiling a stream of new vehicles. Some of them are good and some of them bad but many are simply impossible to tell apart.
I’d like to hope that consumers are getting smarter. But, I’ll bet you could take whichever model GM has an unsalable surplus of — put an Oldsmobile badge on the grill — and they’d get rid of 10,000 sleds!
GM getting rid of Oldmobile really hurt a lot of people here in Lansing. I mean, we have Oldsmobile Park, the R.E. Olds freeway, and a neighborhood called REO Town. (As in REO Speedwagon – not the band.) And of course, our minor league baseball team is called the Lugnuts. Losing Oldmobile hurt a lot.
General Motors has not been kind to the people of Michigan.
Like my S10 truck. Why is there also a Sonoma version of it?
Because people will pay an extra $10,000 for leather, premium sound, and a more luxurious brand. Actually, I’m not familiar with the S10, but that’s exactly the difference between my Toyota Highlander and the Lexus RX 300. Actually, I think mine has everything but two-tone paint and a power passenger seat. Oh, and that Lexus name plate.
The problem is not sharing components and platforms. Carbon-copies of excellent products is genius. Carbon-copies of crap is, um, crap.
Steve,
It has everything to do with brand loyalty. Some people would rather buy a GMC truck than a Chevy truck, even though they may be essentially the same thing. Also, there are usually different trim options with the different brands — like a ford expedition and Lincoln Navigator are the same basic vehicle, but the Lincoln has many more high-end options.
No player hatin’ here. I was just saying that I am not familiar with the various truck models.
Here’s a link that may answer your question (eventually):
http://en.wikipedia.org/wiki/Price_discrimination
I think the short answer is: it expands the market for the S-10 to people who wouldn’t consider buying an S-10, but would consider buying something called “Sonoma”. Yikes.
US Car companies also suffer from awful naming ideas, which is starting to creep into the European market.
I mean… Sonoma? Expedition? Navigator?
They sound like like hiking accessories, not must have items.
Steve: musicians have tried that same approach before. Sorta. Remember Parliament/Funkadelic? XTC and The Dukes Of Stratosphear? Paul McCartney and The Fireman? Garth Brooks and Chris Gaines?
Wait; I think I just proved your point.