It appears that GM has filed for bankruptcy and will be undergoing reorganization in the very near future. While every industry is different, each is subject to the same rules of economics and the marketplace. Additionally, applying too universal of a business template to a particular product or industry results in very common problems. Those problems tend not to be restricted to any particular industry or product.
In CNN’s coverage of the impending GM bankruptcy, a summary called “GM’s junk heap” was published last week. Reading it, I could not help but see parallels between GM’s flops and a considerable number of wines in the shelves today.
Most consumers have come to view American cars as unreliable, shoddily made, having bad performance, poor fuel economy and, at best, coarse fit-and-finish (never mind styling). I wanted to select a few those examples of GM’s automotive shortfalls and explain what I see as their wine equivalents.
The CNN article quotes John DeLorean saying: “…eight miles into a test run on GM’s proving track, a Vega literally fell apart“. Talk about a limited lifespan of a product! So many of today’s wines have to be consumed immediately after opening. If you don’t finish them, you might as well pour the remainder down the sink. Few wines these days can be closed and set aside to be enjoyed the next evening, or even over the next two evenings. The Vega, in particular, reminds me of those wines that fall apart during the course of a single evening. I never get past the halfway point of a bottle. Regardless of economic climate, a bottle of wine should have the wherewithall to last – in the cellar or in the cupboard.
This attempt to exploit brand equity is the quintessential branding cautionary tale. Insert appropriate wine terminology, where appropriate, as you read the following:
“In the early 1980s, Cadillac joined other luxury brands in trying to attract more entry-level buyers with a smaller, more fuel-efficient car.
Instead of coming out with a truly new product, GM added the Cadillac crest to what was, in all important respects, a Chevrolet Cavalier. It also added thousands to the price tag.
In all, it was neither a good Cadillac nor a good value. Even GM executives will readily admit today that this was a really bad idea.“
Whether the wine is a “premium”, “reserve” or “vintner’s select” bottling, unless there is something more than a fancier label on the bottle, some wax around the cork, raisinier grapes or gobs or new oak used, the wine is the equivalent of a Cavalier with a Cadillac crest on the grill. Like the Cavalier, it offers neither value nor quality.
Besides being identified as THE car in the (original) Knight Rider TV show, Pontiac does not have much brand recognition among my generation.
“…Pontiac returned to a safer design scheme that made the cars largely indistinguishable from one another but for the size. A pavement scorching Pontiac GTO looked very much like a tame Pontiac G6. Lack of any real brand identity, aside from vague aspirations to “performance”, choked off the brand’s value.“
So much wine these days is made to the same template. It’s usually one of two templates, actually: the over-ripe, low acid, varietally indistinct wines or wines with decent vibrancy and general fruit characteristics, no raisin and maybe some amount of residual sugar. Both are just as boring as the Pontiac line up bemoaned above. Neither warrant the price – which is based on the AVA or variety (or both) on the label – because they don’t show anything that distinguishes them as “Napa” or “Paso Robles” or pinot noir or cabernet.
This example is a bit like the Cimarron story, above. It employs the same premise: fool the customer.
“GM founded Saturn in the hopes that “A different kind of car company” would bring foreign-car fans to GM. And, in that respect, it actually worked. Most Saturn buyers had never bought any GM car before. In fact, many owners didn’t even realize they had a GM product in their driveway.
The brand also earned a reputation for fuel economy and dependability, despite the fact that its cars were actually about as dependable and efficient as similar cars from other GM divisions.
For years, GM didn’t seem to know what to do with Saturn and the brand languished with cars like this one, lacking inspiration and appeal.
Finally, GM decided to make Saturns just as it made other GM models – basing them on the same underlying engineering as its other cars – but making the designs more eye-catching.“
Emulating a product is a way-in to a share of a particular market. If you make a pinot noir that is indistinguishable (to the beginner-to-intermediate wine consumer) from an over-ripe cabernet, you will attract the consumer who likes dense, heavy, low acid wines. But your pinot will be a Chevalier. Wait, or is that a Pontiac GTO… or a G6?
Never mind, your’re out of business anyway.
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