18. March 2010 Saturn Corporation : A different Kind of Car company Saturn was created by General Motors chairman Roger Smith in 1985 to be a “Different Kind of Car Company” . As the single-most defining characteristic of the new company, Saturn proclaimed that sole focus was creating and maintaining a strong relationship with the customers. Saturn put significant resources into Customer research and product development. Hopes were high that GM could reach a new market area with a new line of compact vehicles.
The goal was to sell 80 percent of Saturn vehicles to people who otherwise would not have bought a GM product.
Saturn entered the market for compact cars in 1990. By 1993 they were experiencing success in the already crowded market. The next three years the numbers looked even more promising and by 1994, Saturn developed an unusually loyal customer base. Unfortunately, from 1997 to 1999, Saturn experienced a trend reversal and sales dropped dramatically.
As a reaction to this the company concentrated on pushing their newer series, which helped bring an increase over the following 3 years Much of the struggle Saturn struggled (late 90s) was attributed to the lack of diversity in their product lines.
. Manufacturers had been having some trouble consistently selling cars in a dwindling market, and that made it harder for Saturn to gain market percentage and sell more vehicles. Two points regarding Saturn was very significant :their vertical integration regarding spare parts and how they handled their customer relations.
With its production plant being located in a rural area far away from the suppliers , the company chose to produce the engine system and exterior parts inhouse . This vertical integration was significant because it enabled Saturn to avoid possible problems that might have resulted from supply logistics challenges. Focusing on customer relations , Saturn treated all its customers in a very friendly and special way, sending customized welcome letters when they buy a new Saturn car, sending technicians to repair if the cars were to break-down on the road, etc.
Through such customer orientation, the company created a very loyal customer database. In more than 10 years of operation,Saturn , built a gigantic new factory , introduced three all-new models, conducted massive ad campaigns, and cost its parent company billions of dollars. Saturn’s attempt to make low-margin small cars proved totally unworkable, and competition from Japan, and later Korea, has proved to Saturn it cannot be competitive. Thus ,GM has taken away the special status and made it into a plain division of GM, with the same centralized engineering and marketing as all the other brands.
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