Brands Cars and Consumption


When Sloan took over as president of GM in 1923, Ford was the dominant player in the U.S. auto market. Ford's Model T cost just $260 ($3,700 in today's dollars) and Ford held 60% of the U.S. car market. General Motors had 20%. Sloan realized that GM couldn't compete on price, so GM created multiple brands of cars, each with its own identity targeted at a specific economic bracket of American customers. The company set the prices for each of these brands from lowest to highest (Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac). Within each brand there were several models at different price points.

When you hear people talk about brands of cars, this is the underlying reality. Not sure how common the knowledge is.

Tying identity to particular kinds of purchases is extremely common in marketing today. Apple, for instance, targets the people with disposable wealth and an interest in status symbols, while Android phones typically target the people who are in a different bracket.

This also applies to, e.g., alcohol - top shelf vs bottom shelf. More examples exist.

From HBR, by a noted tech venture capitalist.