GM Integrated Marketing Strategy

Exerpted from My Years with General Motors, Chapter 4, “Product Policy and its Origins”
©1963, 1991 Alfred P. Sloan, Jr.

Every enterprise needs a concept of its industry. There is a logical way of doing business in accordance with the facts and circumstances of an industry, if you can figure it out. If there are different concepts among the enterprises involved, these concepts are likely to express competitive forces in their most vigorous and decisive form.

Such was the case in the automobile industry in 1921. Mr. Ford's concept of a static model at the lowest price in the car market, expressed in the Model T, dominated the big volume market then as it had for more than a decade … General Motors then had no clear-cut concept of the business … only Buick and Cadillac had clear divisional concepts …

… We were concentrated with duplication; we did not know what we were trying to do except to sell cars, which, in a sense, took volume from each other …

The core of the [new General Motors] product policy lies in its concept of mass producing a full line of cars graded upward in quality and price.

… The field for cars of the first grade … was then practically monopolized by the Ford, and we were trying to invade it. We recommended that General Motors should not attempt to build and sell a car … at the [Ford price level]. Instead the corporation should market a car … superior to the Ford, yet so near the Ford price that demand would be drawn from the Ford grade and lifted to the slightly higher price in preference to Ford's then utility design.

… it would have been suicidal to compete with [Ford] head-on. No conceivable amount of capital short of the United States Treasury could have sustained the losses required to take volume away from him at his own game. The strategy we devised was to take a bite from the top of his position, conceived as price class, and in this way build up Chevrolet volume on a profitable basis.