BC Expert: General Motors & Consumer Confidence
Associate Professor of Marketing S. Adam Brasel
CARROLL SCHOOL OF MANAGEMENT
S. Adam Brasel specializes in visual marketing and media perception, with research in areas such as media multi-tasking, branding, consumer interfaces, and visual presentation in marketing. As co-director of the Marketing Interfaces Lab, he uses eye trackers and other advanced tools to explore how the rapidly changing media environment affects consumer perception and visual processing. His research explores issues ranging from how consumers media-multitask between computers and televisions, to how touch interfaces change online shopping experiences, to the effects of brand placement in videogames. His research has appeared in venues such as the Journal of Marketing, Journal of Consumer Psychology, The Economist, and Perception. His analysis has appeared in the Boston Globe, Wall Street Journal, Scientific American, and Fortune Magazine.
It's a company that's recalled more cars this year than it’s produced in the last two. Add in fatalities tied to faulty ignition switches and it's easy to see why General Motors has an uphill battle to win back consumer confidence.
"I think GM has a really strong image problem right now," says Stevan Adam Brasel, Ph.D., Associate Marketing Professor at Boston College’s Carroll School of Management. "It’s not fatal but I think this is a big issue."
The company that's been the butt of jokes on the late night talk shows announced another massive recall of nearly 8 million cars, bringing the total to almost 40 million recalled cars this year alone.
"All companies make mistakes and what’s really important is how the companies respond to the mistakes and actively move forward," says Dr. Brasel. "I think what GM really needs to focus on in this case is to actually make sure they’re doing the right thing by the people who are affected by this problem. They need to really lay out to the general public and consumer, 'Here’s how we’re changing the way we do business to make sure this isn’t going to happen again, and we’re going to be much more proactive about fixing these problems moving forward.’
"The more cars they recall, to some degree the more proactive they look but also the bigger the problem looks," says Brasel. "It's something they have to do, but it’s not something they want to do. It’s a blessing and curse of equal measure."
GM's constant drumbeat of problems reminds one of Firestone's recall of tires and Pepsi's product tampering scare a few years ago.
"When companies are really, really large, these things tend not to be fatal for the companies - consumer memories tend to be short," says Brasel. "The one thing that might be slightly different for GM than say Pepsi is that we buy Pepsi every week or almost every day for some people whereas cars we only buy every five years or so. The time frame might be an issue here."
To combat the negative image, GM's leadership has been stressing a new beginning from the old way of doing things. But that rhetoric may not resonate as much as GM is hoping.
"I think their message has been really, really muddy - they can be doing a much better job of articulating how things are really going to be different moving forward," says Brasel. "They’ve done a lot of lip service saying, ‘Look, this was the old management team, we’re the new management team, things are different now,’ but I don’t think people necessarily believe that. Sure, you’re the new management team, but what are you actually doing differently? What new policies do you have in place to prevent something like this from happening again? Or when problems do arise, how can they be properly escalated within the company to make sure that someone can actually do something about it before it starts to affect consumers?
"Time may soften this in the long run," says Brasel. "But GM needs to be engaging in a lot of proactive brand building behavior moving forward in order to recover from something like that."
As GM has been proactive about compensating the families of those killed - paying each family at least $1,000,000, Brasel doesn’t expect that gesture to earn much goodwill among the consumer public.
"I think the payouts are really risky," says Brasel. "For someone not personally affected by it, obviously it’s a huge amount but at the same time, it’s really easy to think that General Motors is putting a price tag on a life now. It’s good that they’re giving out that much money but it also makes GM feel slightly more cold and calculating. It’s a lot of money and giving it to the victims’ families is clearly something they had to do but by giving these cash payouts, I’m not sure that’s a message the general consumer needs to hear moving forward because those cash payouts don't mean anything to me. As a customer, those cash payouts are never going to come to me, or make the car that I’m thinking of buying any safer. So what I really want to know is, what they are doing moving forward to make sure this problem doesn’t happen again, as opposed to how they are compensating people this problem has already happened to."
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