J.D. Power and Associates recently released its Vehicle Performance Study, the fourth of its five-phase owner satisfaction program. Other studies that comprise this program are the companyâs well-known Customer Satisfaction with Dealer Service and Product Quality Study (CSI), and the Vehicle Dependability Study (VDI), Initial Quality Study (IQS) and Sales Satisfaction Study (SSI). The Vehicle Performance Study looks beyond the other studies' satisfaction ratings to examine vehicle owner expectations with respect to product performance, eighty-eight specific features and operating systems are evaluated for each model. To hep summarize overall performance, an index was developed â the Vehicle perfomance Index or VPI. While most of the public focus for J.D. Power and Associates studies is on the indices and their respective rankings, most of the Vehicle Performance syudy's value is in the underlying information. This specific information provides the means for manufacturers to target improvement. In the paper presented, specific examples are given to illustrate some of the findings, including an in-depth review o t e impact on customer expectations on one major automobile maker's manufacturing and design process. During the closing remarks, an overview is given of industry trends in the United States Consolidation of dealerships as an immediate economic measure is examine, as we what that trend portends for the rest of the industry worldwide.
Vehicle manufacturers, their dealers, who they should regard as their customers, and the individuals or organisations who buy vehicles (who should be regarded as the dealer's customers) have an inter-dependent relationship. The manufacturer needs dealers to sell his vehicles. The dealer requires a manufacturer to provide a long term viable business opportunity. Both need customers willing to buy vehicles and to have them maintained. There is therefore a need for three 'satisfaction indices'. The first, 'Customer Satisfaction Index' should measure the satisfaction of the end user with the vehicle provided by the manufacturer, and the way it was sold and maintained by the dealer. The second, a 'Dealer Satisfaction Index' should measure the satisfaction of the dealer with his or her vehicle manufacturer. This report deals with the way in which one such survey was launched by Sewells International, and the results of the first survey. One of the conclusions of the report was that the relationship between the manufacturer and the dealer should be assessed independently and not, as at present, complicate the survey which manufacturers carry out on 'customer satisfaction'.
In today's high-speed markets companies are having to learn new ways of handling the process of innovation. This paper examines the reasons for this change, and the ways that some automobile companies are introducing their own forms of high-speed innovation. The paper is divided into three parts. The first part discusses why the process of innovation in some automobile companies may now resemble the processes in other consumer "temp-tech" durable goods firms. Many car firms operate in ways that are quite different from those suggested by proponents of the "classical" approach to marketing. At issue is the question: "Should companies be market-led or technology-driven?" Today, companies have no choice but to balance both these approaches and, as a result, they are working to a different set of "rules" from the "classical" ones. The second part examines what some of these possible new "rules" are, whilst acknowledging that many of them are in a state of constant change: -1 Set impossible targets; -2 Start from a position of strength - the firmâs core competencies; -3 Think new Products quickly, and again and again; -4 Think "experimental marketing - even in the marketplace; -5 "Fuse" technologies; -6 "Manage" the process of innovation; -7 Leverage global R&D facilities and expertise - but market locally; -8 When stuck, collaborate; -9 Harness the potential of lean and flexible manufacturing; -10 Connect information technologies to form the "wired" corporation and a "seamless" R&D process; and -11 "Manage" shorter model life cycles in order to complement the shorter R&D cycle times. Since these approaches are likely to challenge the conventional wisdom about how marketing is currently practiced, the third part raises some strategic and structural implications for automobile companies.
The paper provides a view of the real impact of the European Single Market on the car industry. It contrasts the political ambitions to achieve an open market with the divisions and differences that still exist in the environment for selling and marketing cars. In car manufacturing, the Single Market has largely reinforced changes that were set in progress during the 1960s. In practice, car manufacturers are well ahead of political structures in creating an integrated production system encompassing the former EFTA countries and Eastern Europe. The political weight given to the creation of a large barrier free Market has encouraged major Japanese investment in European car manufacturing. This has, however, stimulated new pan European trade restrictions rather than a move to "one Europe". Although technical regulations had achieved a high level of harmony several years ago, it will take until 1993 to achieve single type approval. On a critical area of harmonisation, emission controls, Europe has lost a major opportunity to introduce standards designed for European cars and motoring conditions. There are little signs of the political initiatives needed to create a European environmental framework for the motor car in the next century. In the field of taxation, much remains to be done. Cars are subject to a widely differing range of special sales taxes, with no consistent treatment for the growth areas of multipurpose vehicles and minivans. Fuel tax differentials between petrol and diesel, usage taxes and the tax treatment of company owned cars all differ widely. There is no integrated approach to resolving fiscal structures for cars. The franchised dealer system continues to be regulated by provisions predating the Single Market initiative and is coming under close scrutiny. There are political pressures to blame the franchise system for perceived price differences between markets, whereas the main causes are lack of action to remove market barriers. The report argues that a lack of real achievement can be attributed to a low political profile for the car industry. It suggests that all stakeholders in the industry should be more active in political lobbying and understanding the decision making process. They may need to establish a new forum, representing interested parties, from manufacturers through to dealers, to help the industry promote policy solutions to the European Commission.
Following the pattern established at the first ESOMAR Automotive Conference in Paris in 1990 at Geneva we set out to explore a wide range of marketing topics and their practical implications. The papers in this book, therefore, rarely deal with the methodologies and techniques of market research. Instead, their subjects range from the political arena of the European Community, through the practicalities of how car designers and marketers work together to the economics of survival as a car dealer. Just as important as the programme content is the quality of the speakers themselves. While not all of our speakers would claim to be seasoned presenters, their contributions were founded on a wealth of hands-on management experience. Two-thirds of the speakers and session chairmen are currently, or have recently been, directly engaged in the auto industry. Unlike some other auto industry conferences, which can parade famous heads of car companies (there was one such conference also at Geneva), none of our presenters was confined to selling the company line - this was a working conference. The 108 delegates, drawn from across Europe, represented a variety of viewpoints. Naturally, for an ESOMAR conference, there was a strong representation from the research community, from both agencies and car companies. Delegates from the 12 car make represented at the conference also included many with general marketing and dealer development responsibilities.
The following paper is a âliveâ transcript of the panel discussion which concluded the New Products session. Although the discussion touches on some important areas of theory, the main emphasis is on the practical issues faced by designers, marketers and market researchers. It tackles, head on, some of the raw issues affecting the development of new car designs and this should make it especially valuable to everyone involved in this process.
The collapse of communist control in Eastern Europe and the former Soviet Union and the ensuing transition to market based economies has opened the door to a consumer market of 409 Million people. This paper discusses recent developments in the region and presents a view of likely car market and industry developments.
The quality of the products and the level of the creative being more or less equal in the highly competitive automotive marketplace, it is essential to figure out a way to break through the media and advertising clutter today's consumer is exposed to. We propose to use tactical Total Communications mixes in the typical cyclic pattern of European car selling seasons. With Total Communications mixes, we at least reach the target consumer to deliver the message. To ensure the most impact in the most purchase prone target group we have successfully used Direct Marketing as the main element in several Total Communications mixes. We propose to use mass-media advertising, public relations, sales promotion, and point-of-sale material to reinforce the message already delivered to the target prospect by direct mail.
This paper describes a research project that attempts to better understand the meaning of some words used frequently by consumers to describe automobiles. In conjunction with a leading UK motor manufacturer, the research set out to try and broaden our knowledge and sharpen our research skills by 1. Developing a methodology that would be able to record and analyze what car owners actually mean when they use words identified as having unclear or multiple meanings. 2. Employing such a methodology to compare the meaning of some specific words as used by car owners and car designers. The paper is divided into three sections. The first section describes the nature of the problem and some of the conventional wisdom used by research buyers and practitioners in attempting to overcome it. Language and the meaning of words can be variable at the best of times, but automotive research finds itself relying on the same words, used over and over again by consumers. There is much circumstantial evidence to suggest that many of these words are variable in meaning, or have multiple meanings and can be used somewhat indiscriminately by consumers in a variety of situations. The second section details the methodology developed for this project. Here it is explained that the framework of a fairly new research technique was "borrowed" and grafted onto a qualitative study. After some experimentation, it seems to work! The final section presents some of the more interesting findings from the project and discusses the benefits of putting the findings to good use. There have been a number of useful outputs from the research undertaken so far, and it is clear that the methodology can be developed in a number of directions.
At the and of 1990 FASA RENAULT requested a project from us on environmental beautification and animation of an area in a dealerâs showroom specialized in the youth segment responding to the following objectives: -Increase the penetration in the youth segment, under 30 years old; -Repositioning RENAULT as an innovative brand with cars for the fashionable youth; - To make coherent at the dealer's level, the slogan that synthesizes the positioning of RENAULT cars the pleasure of living them so that the youth can feel the pleasure of buying them. The project, however, was not implemented for company reasons not related to the project's characteristics. Nevertheless, it is presented in this seminar as an example of the integration of the different approaches to services marketing strategy at the dealer's level. The concept that guided our project was the relationship and micromarketing Point of view for competitive advantages through service quality added to a personalized car exhibition.
Car dealers depend on three main sources of income: the sale of new cars, used cars and of service and parts. They face major challenges in all three, possibly to an extent that threatens the very structure of the industry. In this paper, we review the reasons for this concern: Intensifying competition has produced an underlying fall in dealer initial gross margins. As a result, in the UK and USA at least, dealer profits on new car sales are very low. The coming recession combined with overcapacity in the world industry will put yet further pressure on profits. This margin reduction results from changing consumer behaviour, convergence in product design and quality and aspects of both dealer and manufacturer behaviour. An extended period in which dealers make little or no money from new car sales must be very dangerous for the suppliers. Dealers have opportunities in the used car market, which is often underexploited. However, in the long term, gross margins may come under pressure here as well. Improved reliability, durability and designed-in serviceability are depressing service and repair sales. A creative response is required and there are many possible remedies. The current distribution system is sub-optimised and better integration of the manufacturer and supplier systems, most notably in stock management, are essential. The only workable solution would appear to be "lean retailing" (effectively selling only to order) which should ensure that the market is not oversupplied. Retained margins should benefit both from reduced negotiation by customers and from less need to discount slow selling vehicle stocks. Dealers would also benefit in a number of ways from the freeing up of space and cash tied up in new car stocks. This would both reduce their costs and enable them to exploit profit opportunities in related areas such as used car retailing. However, such an approach is not without its risks, especially whether customers are prepared to purchase cars that they have not already seen. We consider the results of some initial research in the area.