Alan®
11-24-2008, 06:33 PM
DAMN
Nov. 24 (Bloomberg) -- General Motors Corp. agreed to discontinue a marketing accord with Tiger Woods, the world’s top-ranked golfer, at year’s end as plummeting sales spur cost cuts at the automaker.
Woods, 32, endorsed GM products including Buick for the past 9 years. He had been under contract through 2009, Pete Ternes, a spokesman for the Detroit-based automaker, said today.
The need for “budget efficiencies during a difficult economy” contributed to the decision, according to a statement from GM, which is seeking to cut U.S. marketing expenses by 20 percent. Sales of Buick vehicles dropped 24 percent through the first 10 months of this year, outpacing the 20 percent decline for all of GM’s cars and light trucks.
“This is something you kind of expected that they had to do,” Bob Dorfman, executive creative director at Baker Street Partners advertising agency in San Francisco, said in an interview.
Sales of Buick vehicles in the U.S. plunged 58 percent to 185,791 units from 1999 to 2007, more than any other GM brand in the period. Sales of the 105-year-old Buick brand peaked in 1984 at 941,611, according to trade publication Automotive News.
Woods made $122.7 million in on-course earnings and endorsements last year, according to Golf Digest magazine. GM posted almost $73 billion in losses since 2004.
‘Marketing Savings’
“We began speaking with Woods earlier this year,” Ternes said in an interview. “He expressed an interest in growing his own Tiger brand and we have been looking for marketing savings.”
Woods’s agent, Mark Steinberg, wouldn’t comment on the golfer’s future endorsements. “We’ve put together a plan, but it’s nothing that I’m going to discuss at this time,” Steinberg said in a telephone interview. Ternes and Steinberg declined to disclose financial details of Woods’s contract with GM.
GM’s partnership with Woods hasn’t helped boost Buick’s appeal to younger buyers, according to a study by Strategic Vision Inc., an industry consultant.
The median age of new Buick retail buyers in 2008 was 68 in the U.S., the same as in 1997, said Alexander Edwards, head of the auto research division at the San Diego-based firm. Only about 1 percent of the Buicks sold at retail in 1997 went to consumers 34 or younger, and that share fell to less than half a percent for those sold in 2008, Edwards said.
Overcoming Hurdles
“Overall, the message never fully connected,” Edwards said in a telephone interview. “Even if they did a good job, the consumer never really felt convinced. I don’t think it was a bad move, it was just difficult to overcome the hurdles.”
The golfer wasn’t available for comment, said Steinberg.
GM is cutting jobs and production and selling assets, part of a plan to improve liquidity by $20 billion by the end of 2009. The automaker, which hasn’t recorded an annual profit since 2004, has asked Congress to approve $25 billion in loans for the U.S. auto industry.
A weakening economy that’s taken a toll on demand is prompting GM’s Chevrolet brand to “significantly” reduce spending on sports sponsorships, the company said last month.
GM will continue sponsoring the Buick Invitational in California and Buick Open in Michigan indefinitely, said Ternes. The company is the largest and original PGA Tour sponsor, according to Buick’s Web site.
Woods is “the mostly uniquely positioned athlete ever in terms of his global clout, talent and longevity,” Dorfman said. “There really isn’t anybody else out there that has that kind of marketing potential.”
GM gained 53 cents, or 17 percent, to $3.59 at 4:01 p.m. in New York Stock Exchange composite trading. That was GM’s biggest percentage increase since Oct. 13.
Nov. 24 (Bloomberg) -- General Motors Corp. agreed to discontinue a marketing accord with Tiger Woods, the world’s top-ranked golfer, at year’s end as plummeting sales spur cost cuts at the automaker.
Woods, 32, endorsed GM products including Buick for the past 9 years. He had been under contract through 2009, Pete Ternes, a spokesman for the Detroit-based automaker, said today.
The need for “budget efficiencies during a difficult economy” contributed to the decision, according to a statement from GM, which is seeking to cut U.S. marketing expenses by 20 percent. Sales of Buick vehicles dropped 24 percent through the first 10 months of this year, outpacing the 20 percent decline for all of GM’s cars and light trucks.
“This is something you kind of expected that they had to do,” Bob Dorfman, executive creative director at Baker Street Partners advertising agency in San Francisco, said in an interview.
Sales of Buick vehicles in the U.S. plunged 58 percent to 185,791 units from 1999 to 2007, more than any other GM brand in the period. Sales of the 105-year-old Buick brand peaked in 1984 at 941,611, according to trade publication Automotive News.
Woods made $122.7 million in on-course earnings and endorsements last year, according to Golf Digest magazine. GM posted almost $73 billion in losses since 2004.
‘Marketing Savings’
“We began speaking with Woods earlier this year,” Ternes said in an interview. “He expressed an interest in growing his own Tiger brand and we have been looking for marketing savings.”
Woods’s agent, Mark Steinberg, wouldn’t comment on the golfer’s future endorsements. “We’ve put together a plan, but it’s nothing that I’m going to discuss at this time,” Steinberg said in a telephone interview. Ternes and Steinberg declined to disclose financial details of Woods’s contract with GM.
GM’s partnership with Woods hasn’t helped boost Buick’s appeal to younger buyers, according to a study by Strategic Vision Inc., an industry consultant.
The median age of new Buick retail buyers in 2008 was 68 in the U.S., the same as in 1997, said Alexander Edwards, head of the auto research division at the San Diego-based firm. Only about 1 percent of the Buicks sold at retail in 1997 went to consumers 34 or younger, and that share fell to less than half a percent for those sold in 2008, Edwards said.
Overcoming Hurdles
“Overall, the message never fully connected,” Edwards said in a telephone interview. “Even if they did a good job, the consumer never really felt convinced. I don’t think it was a bad move, it was just difficult to overcome the hurdles.”
The golfer wasn’t available for comment, said Steinberg.
GM is cutting jobs and production and selling assets, part of a plan to improve liquidity by $20 billion by the end of 2009. The automaker, which hasn’t recorded an annual profit since 2004, has asked Congress to approve $25 billion in loans for the U.S. auto industry.
A weakening economy that’s taken a toll on demand is prompting GM’s Chevrolet brand to “significantly” reduce spending on sports sponsorships, the company said last month.
GM will continue sponsoring the Buick Invitational in California and Buick Open in Michigan indefinitely, said Ternes. The company is the largest and original PGA Tour sponsor, according to Buick’s Web site.
Woods is “the mostly uniquely positioned athlete ever in terms of his global clout, talent and longevity,” Dorfman said. “There really isn’t anybody else out there that has that kind of marketing potential.”
GM gained 53 cents, or 17 percent, to $3.59 at 4:01 p.m. in New York Stock Exchange composite trading. That was GM’s biggest percentage increase since Oct. 13.