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Alfred Sloan

(1875—1966)


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(1875–1966)

CEO of General Motors. A pivotal figure, not just in the history of American business but also in the development of marketing. He joined General Motors in 1916 having sold his car anti-friction bearings business to them. He became president of GM in 1923 and was elected Chairman of the Board in 1937. He continued as Chief Executive Officer until 1946 and retired in 1956. His revolutionary ‘standard procedures’ concept, which is a market-oriented way of defining management effectiveness, is credited with enabling GM to overtake the hitherto dominant Henry Ford car company. Sloan's experiences, theories, and personal customer-based research inspired a new approach to marketing strategy. It also led to the separate Chevrolet, Buick, Oldsmobile, and Cadillac lines aimed at different consumer wallets and tastes. Through his customer-oriented management philosophy, Sloan's GM became a symbol of US industrial leadership. He understood that the automobile industry's salvation depended on changing consumers' attitudes. While Ford viewed the car as a low-cost form of transportation, Sloan at GM changed the perception of a car into a symbol of attainment, one that could induce consumers to continually upgrade. To that end, Sloan introduced the concept of planned obsolescence through constant changes to the overall product, many of them simple changes to design, colour, and model. To some extent Sloan pioneered an early approach to market segmentation, new channels of distribution, and brand management: providing ‘a car for every purse and purpose’. GM encouraged consumers to trade up as their circumstances improved, and provided dealers and customers with the credit tools for doing so. The car became a manifestation of conspicuous consumption. Sloan's market-centric approach triumphed over Ford's product-centric approach. GM sales overtook Ford's in 1927 and since then, Ford's sales have never been greater than those of GM. Sloan showed decisively that increased sales were not necessarily dependent upon ever-lower prices or product improvements but on more intangible factors like status, range of choice, artificial needs, and superficial change. He published My Years with General Motors in 1963.

Subjects: Marketing — Management and Management Techniques.


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