Reference no: EM132204993
Recall back in Case 1.2 that Nick Thomas, CEO of Auto Concepts, a new division of a large automobile manufacturer, has been slowly losing market share to other competitors. Auto Concepts was created to reclaim the manufacturer’s highly competitive level in the auto industry by developing new models that are more competitive in today’s new car market.
Auto Concepts now has five different models that are feasible in terms of engineering and production. Nick has assigned tentative model names to them.
1. “Super Cycle,” one-seat all electric, mpg-e rating 125; estimated MSRP (manufacturer’s suggested retail price) $30,000; range 200 miles.
2. “Runabout Sport,” two-seat all electric, mpg-e 99; estimated MSRP $35,000; range 150 miles.
3. “Runabout Hatchback,” two-seat gasoline hybrid, mpg-e 50; runs on battery for 50 miles and then switches to gas engine; estimated MSRP $35,000; range 250 miles.
4. “Economy Hybrid,” four-seat diesel hybrid, mpg-e 75; runs on battery for 75 miles and then switches to efficient diesel engine; estimated MSRP $38,000; range 300 miles.
5. “Economy Standard,” five-seat economy standard gasoline, mpg 36; runs on gasoline with computer control for maximum efficiency; estimated MSRP $37,000; range 350 miles.
Note: mpg-e is a measure of the average distance traveled per unit of energy used. It is the U.S. Environmental Protection Agency’s measure of efficiency when alternative fuels (e.g., electricity) are used. It allows for a comparison of new energy propulsion with the fuel efficiency.
Nick knows no single model will have universal appeal to a huge market. Rather, different models will appeal to market segments, and Auto Concepts will be sharing those segments with other able competitors that are working just as hard to develop car models that satisfy consumer needs in those segments. In other words, Auto Concepts wants to reach target markets for the models it produces without wasting promotional dollars on those who aren’t interested in the model. For example, if the company decides to produce a particular model, a decision must be made in terms of choosing among media types (TV, radio, magazine, newspaper, social media) in which to promote the product. Nick would like to know each market segment’s media habits. Which TV show types do most people in each market prefer? Radio genres? Magazine types? Sections of local newspapers? Also, the marketing department has moved to spending large sums of the budget on online promotions. Nick wants to know which market segments he can reach through blogs, content communities such as YouTube, social network sites such as Facebook, and online games and virtual worlds.
Knowing that consumers like a particular medium is not enough. For example, Nick may learn that the target market for a particular model prefers one magazine type over another, but there are many choices of magazines within that type. Knowledge of the demographic profiles of the target market segments can be helpful in selecting one newspaper, one magazine, or one social medium for a selected market. Because all media provide information to potential advertisers on the demographics they reach, Auto Concepts should have a demographic profile of each market segment it attempts to target. To make the most of that information, the carmaker needs information on the demographics of those who most desire each model: gender, age, size of hometown or city, marital status, number of people in family, education, income, and dwelling type.
In terms of positioning the cars, Nick knows fuel economy will be the key motivator. In addition, he wants to know if appealing to consumers’ concerns for global warming will have an impact on sales. Auto Concepts is making a major effort to reduce carbon emissions by moving to more efficient propulsion systems; should that effort be a prominent part of its positioning statement in promotions and, if so, for which models? Nick gets a lot of mixed information in the general information environment about global warming. He wants to know what consumers think about two issues: (1) Are consumers worried about global warming? (2) Do they believe gasoline emissions contribute to global warming?
Finally, there is the Internet of Things factor: What innovations do consumers expect and desire on their autos of the future? Do they wish for self- and/or assisted driving, types of infotainment, dashboard diagnostic features, or other smartphone driving aids?
Assume that Nick Thomas decides to conduct marketing research and that the marketing researcher agrees with the problems stated in this case.
State the problems.
Write the research objective for one of the problems defined in your answer to the first question.