COMMENT: Understanding your customer is a growing challenge – ex-Volvo Cars chief
Stefan Jacoby was this week looking well recovered from a (mild) stroke that struck him last year
Car companies are facing bigger challenges than ever before, according to ex-Volvo Cars chief Stefan Jacoby.
The economic, environmental and engineering challenges facing the automotive industry are well known. However, Jacoby told journalists at a media lunch this week that the accelerating speed of technological change in communications, alongside the rapid growth of emerging markets and the need to understand significant cultural differences that impact attitudes to car purchase, are also emerging as big challenges at the retail end of the value chain.
“The internet has changed the way many industries operate,” he said. “But the automotive industry appears relatively unchanged in terms of distribution. Wherever you go in the world, there are still dealers who sell cars, but beneath the surface much is changing and it is an increasingly complex world that carmakers face, in terms of how they communicate to customers and the marketing methods that they use. There are some big cultural differences out there and some very different behaviours by car buyers across the globe.”
Jacoby noted that in developed car markets, consumers are increasingly carrying out extensive pre-buying preparatory research through online media, car trading websites and burgeoning social networking. “That can mean that the prospective buyer at the dealership knows more about the car, the specifications, performance, the competition and its market proposition than the salesman,” he said.
However, Jacoby also pointed out that it's a complex and fragmented picture when considering customers across the world and especially in emerging markets.
“In emerging markets, it is frequently the family, rather than the individual, that buys the car,” he said. “In places like Turkey, Brazil and India, word of mouth is extremely important and the purchase decision will reflect what the whole family thinks and a consensus view, backed up by word of mouth influences. Reputation and word of mouth, what people say to each other about brands and cars, is very important.”
Jacoby also noted that social media is becoming more important than conventional online information sources in some markets. “In China, for example, there is a general mistrust of websites,” he said. “Views and opinions communicated widely by social media are much more important.”
He also pointed out that even in a market like the US, there are diverse cultural patterns that present marketeers with potential pitfalls as well as opportunities to target particular ethnic groups, with particular wants and preferences.
“Take the Hispanic population in the US,” he said. “It's a big group – thirty million people, but it is not a homogenous group. In California, for example, many of the Hispanic population came from Mexico. In Florida, many came from the Caribbean and countries in South America. There are real cultural differences, even in the way they speak Spanish. The carmaker and the dealer have to understand the differences and the mentality of the people they are selling cars to, their needs at a local level. What do they want? What do they not want? What appeals? What works? It's actually a complex picture and far from uniform across the globe or even across countries.
“You have to really understand your customer and that's never been as big a challenge as it is in the information rich and fast-moving, and yet fragmented world that we have today. There are now many diverse customer journeys to the point of purchase and you have to get your marketing right to accommodate them, market by market.”
Over 500 vehicles have been updated in our live database of current and future new passenger car product over the past week, and we've added new future models....
Despite strong developing competition, Volvo continues to lead in the car safety technologies. Continued work on the improvement of quality and reliability, and above all the safety of users makes the...
The media days for the 2013 Frankfurt Internationale Automobil-Ausstellung (IAA) are 10 & 11 September. Each of the following vehicles is a world premiere at the show....
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
General Motors has hired former Volvo CEO Stefan Jacoby to head up international operations. He replaces Tim Lee, who will take up the position of chairman, GM China....
The long awaited free trade agreement between Colombia and Europe will start on 1 August with the first group of measures....
Sales growth of 34% in the first half of this year has catapulted Suzuki into the UK top 20, ahead of Volvo and Mazda and nibbling at the heels of Renault....
- Kia K900 knocks on big brands' door
- Daimler - Q2 results insight
- Global light vehicle market developments
- VEHICLE ANALYSIS: 2015MY Mitsubishi L200 Barbarian
- THE WEEK THAT WAS: Results season again
- Jaguar Land Rover buys British classic cars hoard
- New alloy developed for new Jag
- JLR China cuts prices amid anti-trust probe
- Tata Motors to assemble in Venezuela
- Union puzzled no buyer for Unipart Automotive