Rick Wainschel at JD Power and Associate Automotive Internet Roundtable

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Rick Wainschel at JD Power and Associate Automotive Internet Roundtable

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Rick Wainschel at JD Power and Associate Automotive Internet Roundtable

  1. 1. Consumer Attitude On Pricing Presented by Rick Wainschel Kelley Blue Book VP, Marketing Research & Brand Communications October 18, 2007
  2. 2. Source: Recruited From Kbb.com New Car Pricing Reports Why Kelley Blue Book?
  3. 3. Consumers Are Split Regarding Best Price/ Dealer Relationship Source: Kelley Blue Book Survey (October 2007) Q: Which statement below best describes your feelings about the vehicle purchase process? I am seeking the absolute lowest price and will buy my next vehicle from any dealer who can give me the best deal 52% I am seeking a dealer who I can trust and have a relationship with, even if it means paying a little more than the absolute lowest price for my next vehicle 48%
  4. 4. Important Drivers & Attitudes In Choosing A Dealer Less important… <ul><li>Trustworthiness, good customer service, and honest repair people / service are important factors to shoppers. </li></ul>Source: Dealer Evaluation Study (February 2007) Q: Assuming that prices were the same at all dealerships, how important are each of the following factors in your decision to purchase a vehicle from a particular dealership? [4-point scale: very important, somewhat important, somewhat unimportant, very unimportant] What Factors Are Important? -- % Very Important -- Proximity from dealership location 33% Discounts on future purchases 32% Number of different services offered 27% Trustworthiness 83% Good Customer Service 81% Good reputation 72% Honest repair people/service 80% Friendliness of employees 67% Selection of vehicles available 60%
  5. 5. Majority Of Consumers Prefer A Single Set Price <ul><li>2-out-of-3 in-market shoppers prefer having a single-set price. </li></ul><ul><li>Easy processes and price predictability are key factors. </li></ul>Source: Dealer Evaluation Study (February 2007) Q: Which statement below best describes your feelings about the vehicle purchase process? Q: You mentioned that you prefer to have a single set price for a vehicle, how important are the following factors to ensure a haggle-free / negotiation free buying experience? [4-Point Scale: Very important, Somewhat important, Somewhat unimportant, Very unimportant] Ease in obtaining price quote Ease of obtaining pre-approval Quicker buying process Clear costs, no surprises
  6. 6. Factors Important In Negotiating Price <ul><li>1-out-of-3 prefer negotiating. </li></ul><ul><li>Key reasons are control in negotiating a better price. </li></ul>Source: Dealer Evaluation Study (February 2007) Q: Which statement below best describes your feelings about the vehicle purchase process? Q: How important are the following factors to help you negotiate the best deal? [4-point scale: very important, somewhat important, somewhat unimportant, very unimportant] Being in control Better price
  7. 7. Consumers Prefer to Work Their Way Up From Invoice Price Source: Automotive Purchasing and Pricing Attitude Study (September 2006) Q: When you purchase or lease your next new vehicle, are you more likely to negotiate...? <ul><li>When negotiating, consumers prefer to know the invoice price and work their way up </li></ul>
  8. 8. Consumers Acknowledge Need for Dealer Profits Source: Automotive Purchasing and Pricing Attitude Study (September 2006) Q: Recognizing that dealers have to make money to stay in business, what do you feel is a fair profit for them to make per vehicle? <ul><li>Almost half of consumers believe dealers should make between $500 and $1,000 of profit per (new) vehicle </li></ul>
  9. 9. Consumer Decisions Go Beyond Pure Price Source: Automotive Purchasing and Pricing Attitude Study (September 2006) Q: When you purchase or lease your next new vehicle, which of the following offers is most appealing to you? <ul><li>The largest percentage of consumers are driven by financing offers rather than pure price. </li></ul>
  10. 10. Types of Online Information Sought Source: Dealer Best Practices Survey (August 2007) Q: While shopping for your vehicle online, please select which of the following you used in your research? <ul><li>Information most sought by consumers: pricing </li></ul><ul><li>Other important information: photos/360s, ratings/reviews, comparisons </li></ul>Expected selling price 81% Price with options 83% Vehicle photos/360s 70% Consumer reviews/ratings 70% Expert reviews 69%% Side-by-side comparisons 63%
  11. 11. <ul><li>Price is important, but consumers also want: </li></ul><ul><ul><li>A relationship with a dealer they can trust </li></ul></ul><ul><ul><li>An easy process with a minimum of surprises </li></ul></ul><ul><ul><li>Other information (e.g., reviews/ratings, photos/360s) to help make a decision </li></ul></ul><ul><li>Other aspects of purchasing process (e.g., financing) are also taken into consideration </li></ul><ul><li>Consumers are realistic about need for dealer profits </li></ul>Key Takeaways
  12. 12. <ul><li>Thank you! </li></ul>

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