Executive Summary. Time Inc. Automotive Purchase Process December Page 1 of 8

Transcription

1 Executive Summary Page 1 of 8

2 Table of Contents Introduction 3 Overview 4 Concept of the Funnel 4 Research Methodology 4 Movement of Intenders through the Purchase Funnel 5-6 Sources of Information 6-7 Magazines as a source of Information 7 The Critical Middle Stage 8 Conclusions 8 Page 2 of 8

3 Introduction Time Inc. s latest wave of the Automotive Purchase Process, conducted with CNW, is the culmination of over 15 years of research examining the new vehicle purchase intender. This market study profiles these prospects and their use of media and other information sources as they move through the purchase cycle. While earlier waves focused on the buying process by segment, the information in this study focuses on tracking the differences in consumer behavior and the consumption and influence of media. The executive summary highlights the key findings of the research and serves as an excellent complement to the Wave XI study. The Automotive Purchase Process demonstrates Time Inc. s commitment to providing clients with the most thorough and insightful information about this market. Nick Plakoris Executive Director Time Inc. Business Research & Insights CNW Marketing/Research has been conducting major studies into the actual methods used by consumers to buy products and services for a number of years. The goal is to understand what issues are important at different points in time among automotive consumers and what sources are used to gain insights and information about those products. Unlike other studies of purchasing procedures, CNW Marketing/Research uses a real time methodology. Simply stated, we measure product/service intender actions over the course of time until the product is purchased or the decision is made not to buy at all. This real time study is far more accurate in determining what is important and how one product comes to the forefront while another is no longer desired or acquired. It can also indicate the size of the shopping list, sources as well as provide an assortment of other data on the automotive intender. Art Spinella President, CNW Marketing/Research Page 3 of 8

4 Overview Time Inc. s Automotive Purchase Process Study conducted with CNW was initiated in the fall of 1995 and is one of the most detailed examinations of consumer behavior in the automotive category. In collaboration with the automotive industry, the research has evolved from one wave to the next addressing issues of importance relating to the auto marketplace. The original study established that a purchase funnel exists among intenders. We have tracked the changes over time. Subsequent waves have also provided a detailed overview of the elements affecting brand consideration, and the factors that generate the highest levels of acquisition, including: brand image, quality, features and price. Our most recent study (Wave XI) was conducted during a very challenging time economically - January thru December as the country was emerging from a recession and focused on tracking the differences in consumer behavior and how it affected media consumption. The Concept of the Funnel In the funnel, intenders start out by assessing their needs, then actively seek out or are exposed to sources of information (media and non-media) leading to an eventual purchase decision. In marketing terms, this is identified as part of the complex decision process, since this acquisition involves a considerable amount of financial risk by the consumer and generally will require more time for information gathering and evaluation. Research Methodology CNW Marketing/Research has been conducting major studies into actual methods used by consumers to buy products and services for a number of years. The goal is to understand what issues are important at different points in time during the process and similarly, what sources of information are used to gain the insights and information about these products. Unlike other studies, CNW uses a real time methodology measuring product intenders over a series of stages until the purchase is made or a decision not to acquire is finalized. The Wave XI study profiles automotive intenders and acquirers during the survey period of January through December 2009, and includes over 130,000 respondents. This large sample size allows for a stable base of respondents at the brand level. Page 4 of 8

5 CNW Marketing/Research is located in Bandon, OR and utilizes telephone interviews to gather the data. This data is tracked along with consumer confidence and dealer floor traffic (other statistics measured by CNW) as an indicator of the health of the auto industry and the general national economy. The Federal Reserve Board is a major client, utilizing CNW data (among other sources) in setting monetary policy for the nation. Art Spinella a respected industry authority on automotive marketing who has been quoted numerous times in the industry and consumer press directs the research. Movement of Intenders through the Purchase Funnel The Six-Month Intender Window. Our research has shown that the purchase process typically begins within six months from the eventual acquisition. While there are intenders who start shopping farther out (7-12 months away), the study shows that the intensity of the process, when an intender is actively seeking information, tends to happen within a six-month window. Three Distinct Stages emerge as the intenders pass through the purchase process: Upper Funnel (6 months 4 months) Intenders are accessing the models that are available for basic consumer needs and desires size, space and styling. There are still almost six models on the shopping list at the end of this period. Cross-segment consideration is high during this phase and this movement between segments accounts for the initial changes in the shopping list. Middle Funnel (3 months 2 months) Intenders have narrowed their choices and are now comparing models within a single segment focusing on product features. At this point in time, the shopping list begins its final descent from 5.5 to 3.4 models. Upper Funnel Middle Funnel Shopping List Lower Funnel Page 5 of 8

6 Lower Funnel (final month) Vehicle cost becomes paramount as the intender visits dealerships (usually for the first time) and makes final comparisons that lead to purchase. In the final two weeks, buyers have less than two models on their list, and are entering the local dealership ready to negotiate the best price. As a result of a tough economy and the desire to make the best and most informed decision, many intenders are taking longer to make an acquisition. In fact, the average intender now takes over 9 months to acquire a new vehicle. Increasingly, consumers are getting stuck at some point in the process and are basically repeating a stage or month. There are a variety of factors that delayed the acquisition for many intenders, ranging from uncertainty about ones employment future to deciding to conduct additional research about a new launch to the act of securing financing which has increasingly stretched the process out as lenders have become more cautious. In tracking the research over the last few years, we have noticed an increase not just in the length of time spent shopping but also in the size of the shopping list. Throughout all stages of the process, we have seen a lift in the number of models on the shopping list. Consumers have easy access to more information now than ever before and because today s automotive intenders have a higher awareness of more models, they are considering more. The Sources of Information Multiple Sources at Work During Each Stage. The Purchase Process Study identifies the Primary Source of information (media and non-media) at each stage (months) of the purchase path. While CNW measures all sources of information, they ask intenders to pick which of the multiple sources is primary at that stage. Today, the study captures information on 32 different media and non-media sources including new sources like social networking websites as well as traditionally relied upon sources like television advertising, magazines and the recommendation of friends/relatives. What has become increasingly clear over the last few waves of research is that multiple sources are at work at the various stages. As an intender s priorities change from the Upper Funnel to the Middle Funnel stage, so does their behavior. Specifically, as they actively seek out information to understand what will satisfy their needs, an intender places the most value on the advertising on TV and in magazines. As an intender enters the Middle Funnel, they are likely to look for information from non-advertising sources such as Edmunds.com or Kelley Blue Book as well as advertising sources like magazines and finally, as an intender enters into the Lower Funnel, local dealership websites and advertising in newspapers tends to be the primary sources of information. In summary, intenders use a combination of traditional media and non-media sources to help them in their quest to find the right vehicle that satisfies their needs and preferences at a price they can afford or are willing to spend. Page 6 of 8

7 The role and influence of the sources of information that intenders use throughout the purchase process is a key part of the study. A more detailed view is provided as part of the full study though a general summary of the top five sources of information, in aggregate, for the three major stages of the purchase process is provided below. Our contention is that multiple media sources are important during the entire purchase process, and an effective mix of media not only serves to get a brand added to the shopping list, it also can maintain consideration down the purchase path. The New Multi-Platform Environment The Time Inc./ CNW Purchase Process shows that there is a handoff of information sources as intenders move from stage to stage. Brand Upper Funnel (6-5) Months Television Ads 13.7% Manufacturer s Websites 10.5% Consumer Magazine Ads 10.3% Friend/Relative 10.2% Business Associates 7.6% Primary Source of Information Top 5 Brand Middle Funnel (4-2) Months Third Party Sites 12.7% Consumer Magazine Ads 11.3% Consumer Reports 10.9% Television Advertising 10.0% Manufacturers Websites 7.8% 2009 Price Lower Funnel (1 Month- 2 Wks.) Local Newspaper Ads 13.8% Consumer Reports 11.1% Dealer Sites 8.9% Friends/ Relatives 8.4% Third Party Sites 7.6% Magazines continue to be an important source of information. Over the last several years and waves of research, digital sources and third party sites have grown in usage and influence. Consumer magazines continue to be a trusted, reliable source of information when intenders enter the market for a new car. With the influx of media and technologies where consumers or a third party controls the Consumer Reports brand message, advertising sources Friend/ Relative continue to be an outlet of influence for the manufacturers in which they control their message. Changes in Primary Source 2007 Television Advertising 11.6 Consumer Magazine Advertising Third Party Sites (Edmunds,Kelley,AOL Auto) Local Newspaper Advertising 9.6 Manufacturer Websites Note: Reflects the average of major sources across all stages of the purchase funnel Point Change 07 vs. 09 (-2.1) (-0.3) (-1.5) +1.9 Page 7 of 8

8 Critical Middle Stage. This is when the number of models on the shopping list starts its final descent. The primary goal during this time for manufacturers is to maintain intender consideration. At this stage, intenders report that magazine ads and the internet are particularly influential. As part of the study, intenders were asked to rate the influence of the major information sources in keeping a brand on the list on a scale of 1-10 (10 = most influential, 1 = least influential). As an intender is in the critical middle stage moving into the lower funnel, magazine ads and the internet actually increase in influence as illustrated at right. Conclusions... In summary, Wave XI of the Time Inc./CNW Purchase Process study indicates that: Magazines continue to be an important source of information in the new vehicle purchase path. Understanding how the sources of information are used by intenders at each stage of the purchase process maximizes advertising and marketing communications and helps maintain interest in the brand. Multi-platform communication is essential in building brand consideration as intenders use numerous sources throughout each stage. For Additional Information Contact: on the shopping list. Nick Plakoris Art Spinella Executive Director President Time Inc. Business Research & Insights CNW Marketing/Research nick_plakoris@timeinc.com AUTOCNW@aol.com Julie McKinnon Director Time Inc. Business Research & Insights julie_mckinnon@timeinc.com Page 8 of 8