How GM's 'shampoo princess' is restoring Opel's image

With Opel posting rising car sales last year and set to break even this year after years of heavy losses, the full story of how General Motors' European division managed to reverse its fortunes would not be complete without mentioning the pivotal role played by one executive: marketing chief Tina Mueller.

Opel had become in Germany something akin to Morris in the UK or Oldsmobile in the U.S. – a domestic brand everyone grew up with, but no one wanted to be seen owning. While it was perfectly acceptable to drive a Volkswagen in the fashionable neighborhoods of Munich, Hamburg or Frankfurt, having an Opel parked in your driveway was considered socially shameful by comparison.

"There was a kind of invisible wall of prejudice between the product and those that were supposed to buy it, so the most important task was [fixing] the brand," said Julia Jaekel, CEO of German publisher Gruener + Jahr, referring to the stigma that Opel drivers are "Prolls," a derogatory word in Germany that comes closest to the term "white trash."

Enter Mueller, a marketing executive in charge of Henkel's Schwarzkopf brand of hair products. An industry outsider, she was hired in August 2013 to restore luster to the brand's signature lightning bolt logo.

Jumping to a company in such dire state as Opel at that time took a certain reckless regard for one's career, but fortunately for the GM unit Henkel barred her from joining a rival German cosmetics company – a labor conflict Mueller took all the way to court.

Headhunted then by Opel, Mueller recounted recently the words of her father after telling him she was considering taking a job as marketing boss: "Child, you can’t do that, the company is bankrupt."

Rich tradition

But she disagreed, deciding she wanted help try to turn around "a brand so rich in tradition that for such a long time was on the decline," Mueller said in Frankfurt two weeks ago.

In a way, she had her own prejudices to cope with. Working in a testosterone-filled industry like automaking, where petrolheads love to debate horsepower and torque, would be difficult for any female executive. It's doubly so, however, when you come from the beauty care industry.

On meeting the new Opel marketing chief at a supervisory board meeting, the brand's works council chairman asked: "Frau Mueller, you are the shampoo princess, what do YOU want then here?"

But consumer goods experts like Mueller bring a unique trait. Whether you sell detergent powder or shower gel, it's really the brand that makes the difference between buying one consumer good over another when walking down the shopping aisle. It's rare that buyers research their choice of toothpaste to the same extent as when purchasing a big-ticket item like a new car for tens of thousands of euros.

Marketing experts at consumer goods companies are drilled to focus on the brand, while those at car companies appeal to customers by differentiating the individual product from the competition. The latter approach however no longer worked for Opel because the brand itself repelled buyers from the get go.

Staff shake-up

Mueller switched out over half of her team, replacing many with colleagues from the branded goods industry and launched an image campaign in Germany – loosely translated as "changing parking spaces in your mind" – that challenged the preconceived notion that it's shameful to own an Opel.

Although she estimates her budget is as little as a tenth that of Volkswagen's, monthly industry statistics measuring brand perception show Opel is gaining sympathy once again in Germany, and that translates to higher transaction prices. The new Astra is even aimed at "social climbers" who rarely if ever considered buying an Opel and instead tend to drive a BMW, Audi or Mercedes.

"Opel has not yet been saved, but the prejudices are disappearing. More Germans can imagine buying an Opel again, more would like to own an Opel," Gruener + Jahr's Jaeckel said.

"And Opel drivers are no longer considered to be Prolls, rather are often seen as more likable than those of other brands," she added before handing Mueller an award on behalf of a jury from marketing trade publication Horizont.

Mueller, along with Opel CEO Karl-Thomas Neumann, were named Horizont's "Man and Woman of the Year" for 2015.

On Wednesday, GM said its European unit reduced its full-year loss by 43 percent to $800 million last year. Opel/Vauxhall vehicles sales rose by 3.3 percent last year to more than 1.1 million vehicles, the best result in four years.