Reference no: EM132214152

Global Motors

Nick Thomas has been considering some of the issues identified in Case 3.2. He is considering different directions to take. First, he is a little concerned that most of the information on which Global Motors has based its decisions thus far is derived from either industry reports or opinions of company managers, designers, and engineers. Granted, these persons are quite knowledgeable of the automobile industry. But Nick is concerned that neither he nor the company have input from consumers. First, Nick wants some consumer feedback on the different models proposed. He would like to have some consumer input on what prospective customers think of the proposed models. Will they think they are too radically different or embrace them as the future in autos? Will they think the fuel-efficient cars are too light and less safe? Will they miss the luxury options? Nick wants a little input from consumers to give him confidence the company is on the right track with these proposed models. Second, assuming consumers believe the proposed models are appropriate, Nick wants to know the level of desirability among the U.S. car-buying public for each of the models. For the model or models Global Motors may produce, how can he determine which types of consumers will want them? For example, will higher, middle, or lower income consumers have different model preferences? Will gender, age, or education explain differences in preferences for the different models? With access to this information, Nick knows he can develop a good description of the target market for the proposed models, and this data will be invaluable in helping Global Motors market the model(s) efficiently. Also, Nick wants to know the media preferences of consumers. If he can determine that consumers who desire a particular model have preferences for types of TV programs, radio stations, magazines, or newspaper sections, this information will facilitate more efficient marketing. Finally, Nick is interested in a study that will help determine how much consumers will be willing to pay for each 5 mpg increase in fuel economy. He knows consumers will be willing to pay more for more fuel-efficient vehicles, but he hopes to be able to quantify the connection between lower fuel consumption and model price.

1. To deal with the first set of issues—determining how consumers feel about the proposed models—what research design would you suggest? Why?

2. Consider the second set of issues in the case. Nick needs to know the level of desirability among U.S. car buyers for each of the proposed models. He also needs to know the demographic characteristics of car buyers as well as their media habits. What research design would you suggest? Why?

3. The final issue concerns determining how much more consumers will be willing to pay for each 5 mpg incremental increase in fuel economy Global Motors can offer. What research design would you suggest? Why?