| Controlling your image Handling negative perceptions Do you get as upset as I do about people that continue to purvey old worn-out arguments? It seems like every expert panel on television and radio business programs is loaded with all sorts of pontificators exposing “expert knowledge” about the automotive industry. These wizards keep repeating a four decade old chant. It goes something to the effect of, “well if Detroit would build what people wanted it would not be in this problem.” This has been particularly disappointing lately has it overlooks the fact that in April, 2009, the world's last major independent automaker, the Ford Motor Company, sold 201,000 vehicles. During the same month, Toyota USA, widely acclaimed for selling what people do want, only sold 126,540 units according to Auto Observer. The problem is not what the Ford Motor Company is building. They are falling prey to an age- old industry problem -- dealing with perception. Earning a reputation were making a big push into the American marketplace. Although most would say it was because of the fuel efficiency, a good argument can be made that it was more about alternative to Detroit's big three. New products often win quick favor with consumers -- particularly if they receive favorable media attention. The imported automobiles definitely caught the consumer's eyes and sales grew quickly. The thought process of experts was that people bought the vehicles simply because the fuel efficiency had enough evidence to stick. In today's automotive marketplace the new products are the hybrid models. With high gas prices one would expect these fuel efficient vehicles to catch on the same way the imports exploded in popularity. However they haven't. In fact, most imported automobiles are matching or exceeding the drop in sales compared to the domestic manufacturers. Ford’s problem with publicity The problem with Ford's negative commentary is an age-old problem in the business world. Any company that cannot overcome an incorrect or unfavorable public perception will experience problems at the bank. During my days at Kmart, we were perceived to have higher diaper prices than Toys "R" Us. Survey after survey showed the consumer perception was our prices were $1-$2 higher on this item purchased weekly by most mothers. The reality was the Kmart prices were actually a few cents less per package from those of the toy giant. Kmart made no attempt to change that perception so lost a significant amount of diaper business along with the toy, clothing, and baby furniture sales that occurred in the same market basket. The misguided consumer perception cost Kmart hundreds of millions of dollars in profits. How to handle the situation Ford has been fortunate to have enough liquidity to be one of the only automobile companies in the world that has not had to, or opted to, seek financial help from their government. This has resulted in a tremendous amount of consumer confidence in the future of this automobile manufacture. While hearing headlines about dealer closures of the two American counterparts, many Ford dealers are actually hiring more help. Seldom does someone get such a unique opportunity to overcome bad publicity. There are some steps though that any company can take:
For example, ads touting high placements on the JD Powers list. This will get people to look at your product.
across the land Sam had his Walmart stores put “Made in the USA " signs over virtually every product that was made in America. Although Kmart had more American-made products in their stores they did not call attention to it -- allowing Walmart to win the patriotic consumer.
At Kmart it became evident the consumer perception was based on the fact that Toys "R" Us only carried double packs of diapers. At Kmart single packs of diapers, containing half of what the double pack had, were only about 25% less in retail. People saw the prices on single packs and knew they could get twice as many diapers for just a little bit more money at Toys "R" Us. The consumer did not start to believe Kmart had lower prices until these single packs were discontinued. Summary The bottom line to protect your bottom line is to be aware of the perception consumers have for your products and services. You do not have to be the cheapest or the highest quality. You simply have to have the best value -- and a way to get the message to the people. |
| ©2009 Max Impact Corporation Rochester Hills, Michigan, USA www.getmaximact.com. |
| ©2002, 2011 Max Impact, Rochester Hills, Michigan, USA |
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