In 1982, General Motors (GM) decided to counter the challenge of the Japanese car manufacturers who were continuously enjoying the lion's share in the U.S. market. The consumers had started loving and appreciating the small but high-class Japanese cars. Seeing this, General Motors aimed to change their strategies.
The story began when the General Motors produced The Chevrolet Vega as an answer to Japanese challenge in 1970. A number of problems were identified with this model. Later in 1975, they produced another small car, the Chevette which too had discouraging results. They then produced the Chevrolet Spectrum with Japanese assistance. This model was not up to the mark as well. These disappointing outcomes made people think that the General Motors do not have the capability to manufacture small and valued cars. A series of failures arose several doubts about the largest automobile makers of United States of America. They were questioned on their ability to compete with Japanese car manufacturers. However, one thing kept General Motors going; a clear vision and passion to attain their goal. They realized that they must produce a comfortable means of transportation to attract customers towards them. Their dream to manufacture a car that could vie with Japanese cars came true with the foundation of Saturn Car Company. The idea of a new company within the General Motors was pioneered by Roger B. Smith and F. James McDonalds. These two individuals were serving as the Chairman and President of General Motors respectively. They had in their mind the same dream; a modest car to give a new lease of life to General Motors. ("Saturn Corporation," fundinguniverse.com).
The new company was named 'Saturn' and was officially founded on January 7, 1985. It was in 40 years that a latest car firm was born. Saturn was introduced as a 'different kind of Car Company' with modern approaches and advanced technologies ("Saturn History, welovesaturns.com). The idea of a new company was a sensational one. The Saturn plant was chosen to be built away from the civilization in the outskirts of Nashville in Spring Hills, Tennessee. In the beginning, the company had no predetermined plan to counter Japanese challenge. Its main aim was to bring back customers and reach top-notch excellence.
Process and Relationship Benefits
Saturn was highly successful in discovering new ways of distinguishing its cars from the rest. It did so by focusing on two very important strategies. They put emphasis on process and relationship benefits. Process benefits can be described as faster and agreeable business between consumers and retailers. On the other hand, relationship benefits refer to the establishment, preservation and enrichment of relationships with clients. This strategy was employed by Saturn in order to make lifetime customers. It helped Saturn to reach heights. It knew that the customers always desire for an amalgamation of process and relationship benefits from the vendors they deal with. The Saturn customers were included in the Saturn family so that they could enjoy membership benefits. The customers were also given the access to information available on net (French, Moguire, Court, Partington 1999). While purchasing cars, customers look for everything combined together to perfection. As cars are an expensive necessity, people tend to spend their precious money on the right object. The best part about Saturn was that customers could request for the required features and color of the car. After the placement of an order by the customer, factory was notified of the required features so that a car could be manufactured according to the customer liking (Khalil, Harcar, 1999). Such benefits introduced by Saturn had an ability to attract customers. It also pioneered the idea of 'no-haggle' costs. It granted its customers the power over the trade procedure by dropping the idea of showroom visits. This approach made it possible for Saturn to sell a greater number of cars as compared with other General Motor divisions (French, Moguire, Court, Partington 1999).
Saturn regarded the dealers as its trustworthy companions. Dealers and brokers are considered as one of the most irresponsible and unreliable professions in the American society. Saturn changed this perception by giving confidence and putting faith on the dealers working for them. This strategy was a helpful one to raise the standard of Saturn from a low to high point (D. French, Moguire, 1999).
In the decade of 1980s and early 1990s, Saturn changed the concept of cooperation between the workers and administration. The Saturn owners used the strategy of increasing their production so that there could be more job opportunities for the people. Saturn involved its workers with the outside sources such as dealers and suppliers to express their ideas regarding the betterment of Saturn. This highly-effective labor-management cooperation strategy brought amazing results. "From 1992 to 1998, Saturn produced and marketed cars that achieved word-class quality and customer satisfaction unsurpassed by any other vehicle manufactured in the United States.... only the Infiniti and the Lexus, two high-priced luxury cars selling for three to five times as much as the Saturn, received higher customer satisfaction ratings" (Rubinstein, Kochan 3). This strategy of co-management utilized by General Motors and UAW (United Auto Workers) changed the scenario of U.S. market. They were ready to accept and face the challenges of their world-wide competitors.
One of the essential steps that Saturn took in order to increase its marketing was to choose an advertising agency. In 1988, they selected the Hal Riney and Patners Agency as their associates. Riney gave the idea that there should be no names given to the models manufactured at Saturn. Instead, he wanted the cars to be called "Saturn." Numbers were to be given to the different Saturn models. He advertised Saturn in such a way that it could sensitively charge the target market. Human factor was the key idea in the advertisement of Saturn.
Saturn's first print ad appeared in Automotive News in the February of 1989, a year before its availability in the market. In this ad, Saturn announced its first dealership with 26 partners.
Hal Riney also produced a documentary named "Spring, in Spring Hill." This documentary contained details to explain the Saturn to its workers, dealers and the media. Later, the documentary was telecasted as an infomercial. Infomercials are paid programs that are aired in order to motivate the consumers to purchase a particular product ("Saturn Corporation," fundinguniverse.com).
A happy and cheerful event was organized by the Saturn Company in June 1994. As Saturn had always considered its customers as its family members, more than 40,000 Saturn owners were invited along with their families. Those customers arrived in Spring Hill, Tenn. (the Saturn home) in their "Saturns." This historic event helped to strengthen the relationship between Saturn producers and Saturn consumers.
General Motors also introduced a social networking website for Saturn. This site provided current Saturn-related news. Newest photos and videos were also uploaded for its customers. The Saturn owners ano other interested people had the opportunity to join this site and communicate through it. The site was given the name "ImSaturn."
Saturn - Highs and Lows
To begin with, Saturn introduced its first model, the S-Series in 1990. It was an instant success with no-bargain prices.
In August 1991, Saturn started its production of 1992 models considering the high demand from customers. In the same year, Saturn started its sales in Canada through 70 retail services. The success of Saturn cars can be observed by the fact that it sold its 100,000th car in March 1992; only two years after its coming in the business. The series of accomplishments did not end there. There were 300 retail facilities of Saturn till July 1994 which is an evidence of its continuous efforts and victories. It is also said that it was during 1994 that Saturn was highly valued and most popular, enjoying a tremendous profit in the U.S. market. One of Saturn's greatest achievements was marked in April 1997 when it commenced its first day of retailing in Japan. It was a dream came true as they had finally attained a solid position in Japanese market. In November 1998, Saturn produced "World's First 3-Door Coupes." The 1990 era is a remarkable one for the Saturn as it was honored with innumerable awards for its techniques, designs and manufacturing. It also received several awards for customer satisfaction and customer care. CV1, Saturn's first concept vehicle was introduced in the beginning of the year 2000. In 2001, a Saturn announced its new small car line with the name of ION instead of S-Series ("Saturn History, welovesaturns.com). From the years 2003 till 2006, Saturn introduced new models like L-series, SUVs and station wagons and promised to provide the best it could give to its valued customers.
"I view Saturn as a failure," says George Magliano, director of automotive industry…