The Cadillac of Bicycles
By George Anderson
The prestigious Cadillac logo, ducks included, is coming to a bicycle path near you.
According to a report in The Detroit News, Cadillac has entered into a special licensing deal with Kent International to produce a line of Caddy branded mid- to high-end bicycles retailing from $500 to $1,900.
Doug Schumacker, accessories manager for Cadillac, said the decision to participate in this two-wheeled venture comes down to the auto maker’s focus on reaching a younger consumer base.
“The more unexpected brand contacts we can have, the more surprising it is for the consumer and the more chances we have to break through preconceptions of what they think they know about Cadillac now,” he said.
University of Detroit Mercy marketing professor Michael Bernacchi sees the wisdom in the brand extension. “The notion of trying to introduce the name into a younger demographic, at least to get them thinking (about Cadillac), makes sense,” he said.
Cadillac, with updated designs and an advertising background track powered by Led Zeppelin’s Rock and Roll, has succeeded in recent years in lowering the average age of its buyers from 50-something to 40-something.
Prof. Bernacchi said that having brought the brand this far means Cadillac needs “to guard it very, very carefully and not permit breakdowns within the brand image itself.”
The bicycles are not in widespread distribution at this juncture, being offered for sale in select bicycle shops in the U.S. and Canada, and at some Cadillac dealerships in Canada.
Cycle Therapy sells the new Cadillac bicycle line. Owner Ernie Dell said, “The Cadillac name is selling them, especially to people who are really into Cadillac vehicles.”
Moderator’s Comment: What do you think about Cadillac licensing its brand for a line of bicycles? Will this help it achieve its goal of getting more
younger consumers thinking about Cadillac when it comes to buying/leasing a new vehicle?
Employees of General Motors are eligible for discounts on the two-wheel Cadillacs, as well as those equipped with four.
– George Anderson – Moderator
What an odd choice of a licensing deal by GM. To my mind, the core values of the Cadillac car – power, luxury, comfortable ride – translate rather poorly to a bicycle line.
On the other hand, Peugeot, Benz and other European brands have offered bikes dating back to their inception.
Perhaps GM hopes this endeavor will “seed” the brand name among younger people, making them more receptive to the car line at a younger age. I certainly do not believe the auto company will earn enough from the licensing deal to make one bit of financial difference.
Here’s a scenario: Cadillac bikes wind up primarily as promotional freebies offered to Escalade buyers. ? ? ?
GM has much better customer data than I do. Yet I wonder about the bike purchasing patterns of the core Cadillac customer.
Is there a market for a bike to deliver the kind of comfort, ride, and substance that Cadillac does (I may have missed some brand identifiers)…probably. How big? I’d have done some market research. My gut on this is that the market is not all that large, particularly if the price of the bike is significantly into the luxury level.
Using very limited data points, one of the unmet needs with regard to bikes is comfort. Many older adults have complained in my presence about the discomfort of the seat, the difficulty in getting on and off the bike, and the way the handle bar – seating arrangement stresses their bodies. If someone were to ergonomically design such a bike, and then brand it with a name consistent with that type of need fulfillment…that might be something!
It all comes down to execution. In the case of bicycles, Cadillac management is pursuing image enhancement, while the licensee has its own business objectives. It’s not clear whether the two companies have objectives that are in alignment, but my money is on a short-term program where both parties walk away disappointed.
Licensing a brand is a great idea, assuming the licensed products appeal to the target audience. The “appeal” has to be more than just a brand name. It has to be the quality and innovation level for which Cadillac aspires to be known. It would seem that a product associated with an active upscale lifestyle would be worthwhile positioning for Cadillac.
I believe that Cadillac is taking a tremendous risk in licensing their brand name in this venture. Brand names must be carefully protected to maintain image consistency and avoid negative connotations that can be associated with new products and divergent line extensions. What if this line of bikes is a failure? How does that effect brand equity? If they are viewed as overpriced, experience quality defects, have dealer issues, or poor customer service, the consumer will associate that with the brand.
The reward at the other end seems a bit of a stretch as well. The purchase of a car is a major decision that is influenced by a wide variety of factors. Can the Cadillac name sell bikes? Sure. But I don’t know that I’d be jumping at the chance to buy a car made by Schwinn, Huffy or any of the other 3085 past and present brands that are listed on www.wheelmen.org.
I typically applaud innovation. But innovation has to fit within the focus of the brand and the target market. I simply don’t see this venture as meeting either of those requirements.
BMW and Porsche have long been designing and producing ancillary products that contribute to their brands. Porsche offers their sunglasses, watches, etc.; and BMW once featured a bicycle that folded into a car trunk, just introduced a new Cruise Bike to their existing line of bicycles, and even sells a high-tech skateboard called the Street Carver. The difference between these items and Cadillac’s bicycle is that Porsche and BMW offer them as examples of their in-house technology and design capabilities. Cadillac, on the other hand, seems to be slapping their brand on a product designed elsewhere. I’d like to see some of that emerging Cadillac design and technology applied to a bike.
GM should consider taking this risk only if they believe the excitement and quality of the “New Cadillac” isn’t working.
The last result GM would want are quality issues with this new product line that undo their progress. I believe GM has done a better job of making cars and making them cool for their core consumer. Select a specific demographic of thirty something and build a relationship with them. Love/respect/feel the car that loves/respects/feels you. Cadillac is tight.
Smart move as long as the quality of the bikes remains high and the bikes are only sold through bike shops. If the bikes are sold in mass-merchandisers, the image will be destroyed as it could be perceived in the same way kid’s bikes are often times made up to look like motorcycles, etc.
With the growth in cycling, thanks to Lance Armstrong, the fact many active 20 – 40 year olds are into cycling, and the amount of money it costs to do cycling right, it would appear to be a very targeted fit.
I checked out www.cadillacbicycles.com, and IMHO the site could be a bit more robust with a bit more romancing of the product. But I don’t think it is a bad idea at all, and it seems in line with clear objectives. As has been said, it will depend greatly on execution. As an enthusiastic biker who is pushing 60, I’d need reassurance that it could be serviced lots of places, and that I wouldn’t have to wait for unique parts that are proprietary to Cadillac.
I’m willing to bet that Cadillac sees a unique niche opportunity in the African-American market. In the past several years, Black consumers have been the ones that rejuvenated the Cadillac brand–especially since the introduction of the Escalade SUV. Without them, Cadillac would be well on the way to suffering the same fate as Oldsmobile and the eventual demise of Buick–both of them with older demographics.
A Cadillac bicycle is not going to sell to consumers who are into bicycles. Those people buy Trek, Cannondale or other brands known for quality. It’s going to sell to people who like the Cadillac brand and will eventually become automobile buyers.
James Tensor has it pegged here. The Cadillac brand core values are luxury and (mechanical) power, but also carries a sense of “heavy,” and environmentally insulating. Key attributes for bikes are… light and durable for off road bikes and… light and aerodynamic for road bikes (and nothing to do with environmentally insulating). So Cadillac brand equity will fail to sell bikes in this sense.
Cadillac may well be wanting to get its name in front of the youth market so they don’t want or need brand knowledge working for them in this venture. However, these bikes are not kids bikes or entry level bikes. The price range that the Cadillac bike exist in is for emerging enthusiasts who study their bike upgrade and will go with a biking savvy “specialist” brand. Peugeot was once a dominant bicycle brand but has seen steady share erosion to brands who are exclusively bikes.
This venture will miss the target and the objective.
Cadillac is now producing excellent, technological upstream cars. Unfortunately its long-set-in image is that it is an old folks vehicle and consumers under 50 have been rejecting the Caddy. “It’s grandpa’s car!” So Cadillac has to find a way to meld its modern technology and design with the mindset of the 25 to 45 years drivers. Bicycles might not be the answer but it could be a first step … but it must be part of a new Caddy paradigm to look contemporary in the eyes of young America. To which I say, Good Luck, Cadillac.”