CONSUMERS, INFORMATION, AND MARKETING EFFICIENCY AT GM, 1921-1940

Abstract

It is common knowledge that by 1940 General Motors served as an outstanding example of an efficient, large-scale nterprise. We know much about GM thanks to Alfred D. Chandler, Jr.'s influential work, along with that of David Hounshell, Richard Tedlow, Daniel Raft, and others [7, 8, 9, 13, 26, 27, 28, 37, 43]. They addressed the role of mass production and industrial research, GM's marketing network, and Alfred P. Sloan, Jr.'s remarkable organizational innovations. Yet they did not examine the firm's ties to consumers, except for Chandler's analysis of the steps GM took to adjust output o fluctuations in demand. Nor was it their intent. Other scholars have studied consumers, notably the content of marketing. But I want to relate consumers to business historians' traditional focus: the firm's efficient operations. I have asked: what did GM managers want to know about consumers? How did this information relate to their drive for efficiency? I see this as an intellectual problem; namely, how managers thought about efficiency in marketing. I identify two concerns: first, the optimal distribution of dealers within individual markets; second, the effect of consumer patterns for car sales. GM managers were in the process of discovering the dimensions ofmarketing during the 1920s and 1930s; as they focused on problems of efficiency, I argue, they faced questions about consumers [9, pp. 525-6]. What was consumer purchasing power and thus the potential to sell cars in any given territory? How did consumer loyalty to a manufacturer affect new car sales? What were buyers' apprehensions about new features? Could they stall sales? Given these sorts of questions, officials gathered information about and from consumers. This should not surprise us. Alfred Sloan and Donaldson Brown, an architect of organizational changes, collected ata in order to control operations [8]. Sloan had shown his interest in consumers with his early visits to dealers [41, p. 282-3]. The firm investigated many topics. GMAC related buyers' incomes to cars' prices [50]. The Art and Colour Section tracked the popularity of colors across regions of the U.S. [1; 24, 6/7/27]. During the 1920s, the Sales Section studied how consumer loyalty, consumers' preferences, and dealers' service affected sales. And after 1932, Henry G. Weaver ran a new unit, the Customer Research Staff, which administered many past studies and started new ones.

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