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Case Title:

The Dilemma of Discounts: GM's Bid for Market Share

Publication Year :  2010

Authors: Daksha Bhat, T. Phani Madhav

Industry: Automobile

Region:US

Case Code: MM0058

Teaching Note: Not Available

Structured Assignment: Not Available


OR





Abstract:
General Motors (GM) has been offering increasing discounts in order to gain a better market share in the US automobile market since it started its zero-percent finance scheme in 2001. Ford and Chrysler have followed GMs lead and the level of incentives has been rising steadily in the face of competition. However, the big three have been unable to match the market share gains of foreign automobile manufacturers.

Pedagogical Objective:

  • To discuss GMs pricing strategy, which is driven by its need to keep producing and selling cars in order to meet its pension obligations and fixed costs
  • To discuss the commoditisation of the automobile, and the inability of GM to create an aspirational, high quality and value for money image for its cars
  • To debate whether GM’s increased market share was at the cost of its brand image.

Keywords : Pricing strategy, Promotion, Incentives, Positioning, Marketing, Discounting, Marketing Strategies Case Study, Brand image, Aspirational brands, Product quality, Brand experience, General Motors, Zero-percent financing, Automobile industry, Market share

Contents:

  • Increasing Incentives
  • Weighing the Effect
  • Looking at Alternatives

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