General Motors partnership with Ebay may boost sales but weaken their brand. Starting Tuesday with an pilot program in California, customers can purchase GM automobiles through the online auction site. Deborah Mitchell, Senior Marketing Lecturer at the Wisconsin School of Business, says this initiative could be the shot in the arm the bankrupt GM needs to change how consumers perceive them. She says younger people may view this as the automaker "finally getting with modern times" and those savvy to Ebay motors will find this concept familiar.
Mitchell notes GM's brand, except for Cadillac, has long suffered with perceptions of a lack of quality and diversity among their lines. She says developing a solid brand may be difficult to do in the parameters of an online auction block.
"When you want to compete on price you're basically saying there is nothing else that's special about your brand."
She adds building brand equity involves people believing there is more to your product than just how much it costs.
Bill Sepic, President of the Wisconsin Auto and Truck Dealers Association believes the program has the "possibility" of coming to the Badger State. He says when his peers first got word of the program a couple of weeks ago, they were skeptical thinking the automaker might be circumventing dealers and selling direct to the consumer.
However since learning Ebay users will still have to operate through a retailer, Sepic is watching to see how the GM/Ebay partnership does and whether it will be expanded elsewhere.