Brand Power

A YEAR AGO GENERAL MOTORS WAS putting the finishing touches on the Jimmy Ultimate, a luxury version of its popular sport utility vehicle. Then Jeff Cohen came to town, and he didn't like what he saw. Cohen, fresh from a job marketing Snackwell cereal bars, was hired last January to help fix GM's muddled lineup of trucks. His brand, the Jimmy, was supposed to attract upscale families, but the new Ultimate didn't have the gizmos he thinks big spenders desire. So he went to work, adding a six-disc CD changer, fancy speaker covers and the world's brightest headlights. Then there was that name, the Ultimate. ""Too downscale,'' he decided, testing alternatives like Colorado, Territory and Highlander. In the old days--say, three years ago--GM didn't much care what it named its cars. Today folks like Cohen obsess over tiny details like the stitch patterns on leather seats. After six months of focus groups Cohen found the new name: the GMC Envoy goes on sale next year.

Forget lean manufacturing. In Detroit, today's hottest buzzword is brand management. It's a concept that's bringing marketing pros like Cohen, a 37-year-old Northwestern M.B.A. who's peddled products from baby wipes to Nutter Butter granola bars, into the insular auto industry. The newcomers' goal: to rid showrooms of look-alike vehicles that aim for the same buyers. Nowhere is the effort more important than at GM. Last year its market share hit a 50-year low, and now it's launching its biggest crop of new models in years. ""I would describe 1997 as a no-excuses year,'' chairman Jack Smith told NEWSWEEK--and he's betting on the new strategy to lead the sales turnaround. Says Rick Wagoner, head of GM's auto business: ""Brand management is going to revolutionize this industry--just stay tuned.''

A year ago that kind of talk drew laughter. Industry veterans mocked Ron Zarrella, the former Bausch & Lomb president who'd become GM's new marketing chief, as a contact-lens peddler who was clueless about cars. The same sniping hit Cohen, one of six outsiders who joined 29 GM veterans as brand managers. But the laughter died down when other carmakers began taking steps to burnish their brands. To be sure, rivals like Ford brand chief James Schroer still say the grocery-store gurus' skills won't work in Detroit. And many observers think marketing footwork won't solve GM's real problem: it still sells too many kinds of cars and trucks. ""They can't afford to make that range of models,'' says a former senior strategist. But even critics concede that unless GM pares its lineup, the brand managers are its best hope.

For an inside look at their work, NEWSWEEK spent three days alongside Cohen as he worked to position the Jimmy away from GM's other midsize sport utilities, the Chevrolet Blazer and Oldsmobile Bravada. ""This is still a grand experiment,'' Cohen says. ""We're inventing a lot of this as we go along.'' At the Chicago Auto Show last month, Cohen and assistant Mike Doeden spent hours rehearsing their spiels to introduce the new Envoy to the public. The next morning they're up at 6 to tout the truck on TV shows. Drumming up publicity for new products and schmoozing dealers is nothing new--the trouble is that for years GM's sales execs, most of whom had little formal training, have thought this cheerleading was marketing. GM's dominance let it get away with that once; today, says Zarrella, ""the market is so competitive that . . . you have to create in people's minds a reason why they want the product.''

Creating those reasons is Cohen's real mission--and understanding the competition is job one. In a four-hour meeting back in Detroit, GMC's ad agency dissects ads for every other sport utility on the market. It compares rivals' demographics and ad budgets, something GM rarely did before. The numbers worry Cohen. This fall the new Dodge Durango and Mercedes-Benz ML320 come to market in pursuit of the same upscale buyers as his brand. His team has worked hard to revamp its ads. A year ago they were messageless mush; today's spots show Jimmy buyers--Barney's-shopping, country-club suburbanites--using the truck to complete a ""to do'' list of tasks like going to the hunt club. (A disclosure here: General Motors is NEWSWEEK'S largest advertiser, and Jimmy ads have appeared in these pages.) But Cohen worries that the Jimmy's message will be buried when Dodge and Mercedes launch their new wheels, and he's unhappy that his team hasn't made estimates of those rivals' ad plans. ""Nobody from GM asked those kinds of questions before,'' he says.

If you believe GM's critics, all the brand managers do is tinker with ads. The reason: they have little interest in the product. You wouldn't know it from Cohen. A car nut, he's lined one wall of his study with model cars; he even toured his first auto plant at the age of 6. At GM he meets regularly with engineer Tom Wallace to decide what features to add to future Jimmy models to differentiate them from the Blazer and the Bravada. Today the variations are small--different front ends, suspensions and interior trim--but Wallace says they can change almost anything if Cohen and his focus groups think it will boost sales enough to warrant the extra cost. It's a change from the past: analyst John Casesa, a former GM marketing staffer, says GM once redesigned its cars with ""no sense of what customers were asking for.'' Dealer Jim Muir remembers the days when GM sold two brands of trucks whose only distinguishing marks were different hoods. ""Today Jeff is there to say, "That's not an important difference--customers don't care about that','' Muir says. Not everyone is raving. When GMC put a $1,500 incentive on the Jimmy last summer, Cohen banned the word ""rebate'' from ads. The reason: he thinks it sullies the truck's upscale image. But his preferred phrase--""big cash savings''--was a tough sell with dealers. ""It makes me uncompetitive,'' gripes one.

When does this work start paying off? Zarrella hopes for a boost in market share this year, but says it will be years before the brand managers' full impact is felt. ""The end result is pretty simple,'' he says. ""Do customers like our products more than our competitors'?'' Shareholders aren't the only ones betting on the experiment. Cohen's and his peers' bonuses--up to a third of their salaries--are based on the market share and profitability of their brands. ""That bonus is his college fund,'' Cohen says, pointing to his son across the kitchen table. Chairman Smith says the system is changing a corporate culture where it's been too easy to escape blame when a car flopped. ""We haven't always had [accountability] at GM,'' Smith says.

Branding can't solve all of GM's troubles: an oversize payroll, slow product development, tense labor relations and a lineup that's overstocked with cars in a market that worships trucks. But it is a glimmer of hope. Despite all those problems--and two costly strikes--GM still earned $5 billion last year. That makes you wonder: if better marketing can help Smith & Co. restore GM's health, how high can those numbers go? ""That's a good question,'' Smith says. ""I don't know the answer.'' It's clear, though, that as GM continues shedding nonautomotive assets, tomorrow's profits will depend more on the car business. Cohen feels the pressure. At 10 one night last week, he tucked in his son and returned to the kitchen table armed with highlighters and a project binder. Tomorrow would bring another strategy meeting, and his presentation needed polish. Sleep would wait. Such is the life of the folks inventing Detroit's new way to move the metal.

GM's three sport utilities look almost identical, but folks like Jeff Cohen are packaging them to appeal to three different demographic groups of buyers.