The research is to find out if the firm should invest in a website for fuel-efficient cars, and if yes, how this service can later be expanded.

1. Prepared By:
Rafael Gonzalez
Neerja Bhawasinka
USC
Marshall School of Business
04/27/2012
Ecarmatch.com
Fuel Efficient Vehicles Websites
Matching customers with the right fuel efficient vehicles
MKT512 - Marketing and
Consumer Research

2. 2
Table of Contents
1. Project Summary...........................................................................................................................3
2. Problem Statement.......................................................................................................................4
2.1 Trends........................................................................................................................................4
2.2 MDP/MRP.................................................................................................................................5
3. Research Strategy Selection......................................................................................................6
4. Questionnaire Design...................................................................................................................6
5. Sample plan & Sample Size........................................................................................................8
6. Research Findings & Data analysis.........................................................................................8
6.1 Initial survey snapshot........................................................................................................8
6.2 SPSS Analysis ..........................................................................................................................9
6.2.1 Cross-tabulated data ...................................................................................................9
6.2.2 Linear Regression.........................................................................................................9
6.2.3 Factor analysis............................................................................................................10
6.2.4 Cluster Analysis..........................................................................................................10
6.2.5 General Analysis of Survey Data..........................................................................11
7. Recommendations .....................................................................................................................12
8. Timeline & Budget .....................................................................................................................13
9. Summary........................................................................................................................................15
Appendices.............................................................................................................................................16
Appendix A: Survey Flow.............................................................................................................16
Appendix B: Survey Results ........................................................................................................17
Appendix C: SPSS Results.............................................................................................................25
C.1. Cross Tabulation.................................................................................................................25
C.2: Regression............................................................................................................................25
C.3: Factor Analysis ...................................................................................................................26
C.4: Cluster Analysis..................................................................................................................27
Appendix D: Online Auto Competitors....................................................................................28
Appendix E: Ecarmatch Brochure.............................................................................................29

3. 3
1. Project Summary
Within the automobile industry the fuel efficient vehicles such as hybrid,
nitrogen, or electric cars have developed a strong momentum in recent years. Fuel
efficient vehicle is defined by our firm as vehicles rated combined average of 30mpg
in highway and city. Take for example the hybrid Toyota Prius that has reached one
million units worldwide in 2008 only to reach two million units two years later.
Despite these record sales, a large portion of the online revenues continue to come
from existing website platforms such as Autotrader.com and Motortrend.com, which
do not concentrate on purely fuel efficient vehicles. These online firms either sell
new/pre-owned vehicles on behalf of third parties and/or generate sales leads for
consumers to visit local dealerships/private owners. Even though they have
adapted their website to offer fuel efficient vehicles, a majority of their focus is still
based on non-fuel efficient vehicles.
Currently, our start-up firm is anticipating that an online website called
Ecarmatch.com, with fuel efficient vehicles information only, can provide a better
match to consumers for their choice of vehicle. The website to be developed is still
under consideration. However, we anticipate that the findings of this market
research and report will help the management team make key strategic decisions
regarding the website development.
In summary, the research will be used to directly add resources in the online
fuel efficient vehicle website while help understand the type of product/need being
delivered. The type of product(s) offered is still in question. One thing that is clear,
is the rising demand for this particular industry. We believe that as online
intermediaries, there can be a great opportunity for arbitrage within the automobile
industry.

4. 4
2. Problem Statement
2.1 Trends
According to Global Fuel Economy report, the average fuel economy vehicle
can be improved at least by 50% by 2050. The opportunity of new alternative fuel
efficient vehicles coupled with the political forces to reduce green house emissions
has increased. Recently the federal governments “National Fuel Efficiency” policy
requires models (2012-2016) to meet the average fuel efficiency standard of 35mpg.
In addition, as the price of crude oil continues to increase there is pressure for
vehicle manufacturers to be less dependent on oil consumption. Below includes a
chart that reinforces the current and projected crude oil price per barrel.
Yet, despite a trend in fuel efficient vehicles, there is still not a single online firm that
has built enough momentum in this particular niche. Our firm wants to take capture
the opportunity which lay in this untapped domain, but is skeptical of the real
demand in the online fuel efficient vehicle industry. This leads us to our MDP and
MRP selection and how it ties to the purpose of our study.

5. 5
2.2MDP/MRP
At present, the management is concerned with the question of whether the
firm should invest in a website like this, and if yes, how can this service be later
expanded. This leads us to the following management decision problems, which in
turn leads to the market research problems mentioned below:
Management Decision Problems (MDP)
1. Should the start-up firm add resources to develop a fuel-efficient vehicle
website?
2. Is this service scalable?
Marketing Research Problems (MRP):
For MDP-1: Should the start-up firm add resources to develop a fuel-efficient
vehicle website?
1.1 Do people go online to research fuel efficient vehicle types and/or to search
for vehicles?
1.2 Do consumers have a strong interest in a one stop online shop for fuel
efficient vehicles?
1.3 What percentage of consumers searching for vehicles would be interested in
fuel efficient vehicles online?
For MDP-2: Is this service scalable?
1.4 What are the drivers which motivate consumers for purchasing fuel efficient
cars?
1.5 What other products/services would you expect from an online auto
website?

6. 6
3. Research Strategy Selection
Since there is no previous study to refer to, an exploratory research needed
to be conducted to gain insights and familiarity with the problem. It also provided
direction for any further research that might be needed.
There were some secondary data available on the growing usage of fuel-
efficient cars. However, there was no concrete evidence for the need of fuel-efficient
cars websites. To base the decision of launching such a websites on facts derived
from data, Primary Data Collection method through Survey Questions was used.
The audience for this survey was chosen to be middle-income people in the
middle-age group, as these are the people who are more likely to buy cars, and cars
that provide better mileage.
4. Questionnaire Design
The survey questions were chosen to answer the 5 different Market Research
Problems as mentioned in section 2.2 above. A broad overview of the questions to
be included was designed and broken up per MDP and MRP as follows:

7. 7
Based on the breakup above, a complete list of questions was designed and flow of
the questions was decided as shown in the flow diagram in Appendix A: Survey Flow.
The rationale behind choosing the questions is described below:
- The first question was aimed at finding out whether the person already
owns a car or not, or leases it. This would give insights into the kind of
buyers who go online for such searches, which would also tie to the kind of
services they would look for at a later stage.
- It was then important to find out if the person is planning to buy a car. If
yes, whether they intend to buy a fuel-efficient car and what they
understand by a fuel-efficient car. If not, what is the reason for not
purchasing a car, and if a fuel efficient car would impact their purchase
decision.
- This was followed by more specific questions related to their trust level
with online websites, the kind of information, services, and product they
would anticipate from such websites.

8. 8
5. Sample Plan & Sample Size
Since the number of people taking the survey was only 45, and these people
were carefully chosen, there was no consideration given to choosing a sample size,
as that would have made the data less representative of the consumer segment.
However, in future we plan to expand our survey to validate different sample sizes
our results.
6. Research Findings & Data analysis
6.1 Initial survey snapshot
Based on the initial survey results (Appendix B: Survey Results), one of the
questions that surprised us was when we asked what they consider a fuel efficient
vehicle. In this case, majority of the respondents said over 40mpg rather than our
initial estimate of 30mpg (Q4). Another interesting note is that fact that nearly 25%
of respondents do not own and about 20% of them lease a vehicle (Q1), which
shows a good potential for the website. Out of those respondents that do not want
to purchase a fuel efficient vehicle, we found many planning to keep their vehicles
for longer than two years (Q5) which infers a shift in consumer purchasing habits
from past years.
In terms of fuel efficient websites, we found similarity in our assumptions in
that there is a lack of pure fuel efficient vehicle websites (Q3), and there was not
much interest in such a website either. Appendix D provides a list of our
direct/indirect competitors and merely reinforces the lack of pure fuel efficient
websites. Overall we find that there is an interest in fuel efficient ‘cars’. However,
the market size may be smaller than initially expected, if we were to go with the
over 40mpg vehicles only. Possible options to grow the business include adding to
our product line to expand service offerings.

9. 9
6.2 SPSS Analysis
6.2.1 Cross-tabulated data
Table C.1.1 in Appendix C is a cross-tabulated data showing ‘knowledge
about fuel efficient websites’ and ‘what a fuel efficient vehicles means to a person’.
The data shows those who consider fuel efficient cars with mileage more than
40mpg are the greatest in number, and these are also the people who have not
heard of fuel efficient websites either. This leads to a conclusion that there is lack of
information on both fuel efficient cars & websites, which gives us a good potential of
making a mark by launching such a website as a new entrant.
Analyzing the purchase intent of buyers from our website, as shown in table
C.1.2 in Appendix C, there are a higher number of people willing to purchase fuel
efficient cars. However, there is mixed response for using our website for the same.
This could be due to confidence level in the website, which can be improved by good
promotions.
6.2.2 Linear Regression
Based on the linear regression results in Table C.2: Regression, we see the R
Square is closer to one, which means the more explanatory power the independent
variables have. The data also showed that it passed the Significance Test of <0.05.
The t-test means if greater than 2 we can accept the coefficient is significantly
different from 0. In the table, we see question seven passed the t-test. In terms of P-
value; however, we found that question seven was the only one that passed it. Q7
asked users if the price for a fuel efficient vehicle is similar to a non fuel-efficient
one would they consider purchasing it.
In terms of the coefficient equation, it basically means for every person who
feel the price of fuel efficient cars is reasonable, the number of consumers likely to
purchase a vehicle increases by 0.366.

10. 10
Overall, the regression analysis coupled with the survey results seems to infer
some strength in consumers’ interest for fuel efficient vehicles.
6.2.3 Factor analysis
For dimension reduction, questions 4, 7, 12 and 20, related to purchase
intent and knowledge about online websites (please see Appendix B: Survey Results
for exact questions), were used as independent variables, and question 14, related
to purchase from our website, was used as the dependent variable.
Factor Analysis of the data, as provided in C.3.1 & C.3.2 in Appendix C, shows
that factors 4 & 7 collectively explain as much as 91.7% of the variance in the data.
This means, most of the people do not know about fuel efficient websites, but would
definitely like to buy a fuel efficient car if the price of the car is reasonable. This
again shows a huge potential for launching the website.
6.2.4 Cluster Analysis
To answer the second MDP (website scalability), it was important to analyze
the different segments of people within the segment that showed an interest in
purchasing fuel efficient cars. Cluster analysis was performed using Q15 & 16, and
Q14 as base, to answer this question. Resultant dendogram is shown in C.4: Cluster
Analysis. The graph clearly shows four closely grouped clusters, although some
clusters are big and some small.
Analyzing the data from the dendogram and result of survey, gave an insight
into whether the website should offer personalized services & additional products
like accessories for purchase or not. The result shows that demand for personalized
services is very small, whereas additional product offering has a better potential.

11. 11
6.2.5 General Analysis of Survey Data
It was also important to analyze the qualitative content of the survey data to
determine users’ expectations and the parameters important to them from such
websites. Q11 & Q17 offered a good perspective on this.
The most important aspects for users were found to be accuracy, reliability,
and quality of information. Price of vehicle came only next to this. This means that
the firm has to create confidence in the users regarding the data available on the
website. This could also mean that the firm has to do a good promotion for building
trust and recognition. One way to achieve this overtime is through user reviews.
Another interesting fact which came to light was that users prefer a website
which is easy to navigate and find information. Websites free of clutter and
unrelated information is what users prefer.

12. 12
7. Recommendations
In the initial MDP phase, we asked two key questions. First, whether we
should start-up the Ecarmatch firm, and second to see if the business is scalable.
Based on our findings we have obtained a closer view at the fuel efficient business
environment and users’ preferences. As such we have provided the
recommendations/findings as in list below to our executive team:
 Even though most people are unaware of online fuel efficient car websites, they
would still trust such websites.
 Since most people are still undecided about the car purchase, such websites can
be a good medium to capture this consumer segment.
 Since there is lack of information on both fuel efficient cars & websites, it
provides a good potential for launching such a website.
 Focus on the accuracy, reliability, and quality of information more than other
aspects of the websites.
 Launch a preliminary phase of website (see Time & Budget in next page), which
is free of advertisements, and provide related and useful information to users.
 Back it up with good promotion to build popularity and obtain greater reach.
 Accreditation from different authorizing bodies can be obtained to build trust
and confidence amongst users.
 The demand for additional product offerings is more than personalized services.
Hence the initial launch should focus only on products like accessories.
 Analyze existing market data to evaluate Market share of >40mpg vehicles
 Consider using free website developers (through USC) to lower start-up costs
In addition to these recommendations, we encourage the Ecarmatch
executive team to do an independent Marketing research for the distribution
channels it plans to do business with since the current survey does not offer much
on this topic. For example, current car sellers as well as local dealers may be
interested in a new solution to drive car sales.

13. 13
8. Timeline & Budget
Based on the recommendations, we have provided a budgeted forecast for
the first month of the project as well as a timeline. The budget allocates resources
for the tools and human resources needed to launch the website. The main expense,
if free web developers not considered, will most likely be the human capital for a
good programmer to support the backend of the website. We recommend a low
initial capital outlay to test the business model rather than investing hundreds of
thousands of dollars.
The Project timeline below provides a top level summary in executing the
initial 1-year launch plan. Much of the effort will be concentrated on finding the
right programmer as well as executing the project. Execution entails expanding our
distribution channels throughout southern California dealers, partnering with non-
profits to help accomplish each other’s mission, and increasing our brand presence.

14. 14
Below includes an initial pricing structure of our business for the public,
dealers and VIP customers.
0 1 2 3 4 5 6 7 8 9 101112
Plan
Distribution Survey
Bus. Plan
Talent acquisition2
Funding
Execution

15. 15
9. Summary
Overall, we have gained new insights on the entire marketing research
phases in both our class assignments and in-class learning. From developing an
objective through the MDP to analyzing our results in SPSS, we have learned a great
amount of information on the Ecarmatch marketing research. Although we still
need to incorporate our recommendations moving forward, we feel Ecarmatch.com
should be launched as it caters to both consumer interest and an increasing trend
across the auto industry for fuel efficient vehicles.

16. 16
Appendices
Appendix A: Survey Flow

17. 17
Appendix B: Survey Results
(Please note the question numbering starts with 2, and not 1)
2. Do you currently own/lease a vehicle?
# Answer Response %
1 Own 26 58%
2 Lease 8 18%
3 None 11 24%
Total 45 100%
3. Are you planning to buy a vehicle within next two years?
# Answer Response %
1 Yes 13 29%
2 Maybe 12 27%
3 No 20 44%
Total 45 100%
4. Have you ever heard of an online Fuel Efficient vehicle website?
# Answer Response %
1 Yes 4 31%
2 Maybe 1 8%
3 No 8 62%
Total 13 100%

18. 18
5. What does Fuel Efficient vehicles mean to you?
# Answer Response %
1 21-29mpg 2 15%
2 30-39mpg 3 23%
3 >40mpg 8 62%
Total 13 100%
6. Why are you unsure of or not wanting to purchase a vehicle?
# Answer Response %
1
Plan to keep current vehicle
longer than two years
15 48%
2 Because of price 3 10%
3
Unavailability of
information
3 10%
4 No Interest 10 32%
Total 31 100%

19. 19
20. Would you consider purchasing a fuel efficient vehicle that gets combined city &
highway at or above 30mpg?
# Answer Response %
1 Yes 10 50%
2 Maybe 4 20%
3 No 6 30%
Total 20 100%
7. If the price of fuel efficient cars is reasonable compared with normal cars, you
would buy it?
# Answer Response %
1 Definitely buy 12 41%
2 Probably buy 7 24%
3 Not sure 7 24%
4 Probably not buy 1 3%
5 Definitely not buy 2 7%
Total 29 100%

20. 20
8. Have you ever heard of a fuel efficient only car websites online?
# Answer Response %
1 Very Likely 1 3%
2 Likely 11 38%
3 Unlikely 11 38%
4 Very Unlikely 6 21%
Total 29 100%
10. What website do you have in mind when considering purchasing a fuel efficient
vehicle?
# Answer Response %
1
Manufacturer website
(Ex. www.chevrolet.com)
9 31%
2
Local manufacturer Dealer
(ex. www.toyotaoflongbeach.com)
3 10%
3 Local Used car dealer 1 3%
4 Autotrader.com 7 24%
5 Cars.com 4 14%
6 Other 5 17%
Total 29 100%

21. 21
11. When you choose a website to look for information on cars, please rank from
most important to least important:
# Answer 1 2 3 4 5 Responses
1
Brand recognition
of website
10 5 8 6 0 29
2
Quality of
information
11 12 4 2 0 29
3 Price 6 5 13 5 0 29
4
Availability of
vehicles
2 7 3 16 1 29
5 other 0 0 1 0 28 29
Total 29 29 29 29 29 -
12. Do you trust existing online car websites?
# Answer Response %
1 Yes 5 17%
2 Probably yes 11 38%
3 Not sure 9 31%
4 Probably no 3 10%
5 No 1 3%
Total 29 100%

22. 22
14. Currently we are interested in launching an online auto website called
Ecarmatch.com that focuses only on fuel efficient websites. Ecarmatch would
partner with private sellers and local dealers to help you choose your next fuel
efficient vehicle. How confident are you in using our website on a scale of 1 to 7?
# Answer Response %
1 Strongly Disagree 1 3%
2 Disagree 3 10%
3 Somewhat Disagree 3 10%
4 Neither Agree nor Disagree 10 34%
5 Somewhat Agree 6 21%
6 Agree 3 10%
7 Strongly Agree 3 10%
Total 29 100%
15. Would you consider personalized service from one of our agents?
# Answer Response %
1 Definitely will 2 7%
2 Probably will 7 24%
3 Don't know 9 31%
4 Probably will not 8 28%
5 Definitely will not 3 10%
Total 29 100%

23. 23
16. If you owned for example a hybrid vehicle, what accessories would you consider
purchasing?
# Answer Response %
1 Plug-in home charger 7 24%
2
Portable charger for
vehicle
11 38%
3 Battery pack 5 17%
4 Other 2 7%
5 None 4 14%
Total 29 100%
19. Gender
# Answer Response %
1 Male 27 61%
2 Female 17 39%
Total 44 100%

24. 24
17. What are the most important attributes you look for in an online car website?
Text Response
Ease of navigation, depth and reliability of information, lots of photos
Friend / family recommendations
User interface that allows me to look for a car on the home page.
Ease of finding information
easy to use
Design of site, type of info, no ads,
accurate content
Accurate information and objective reviews
MSRP
Easy price comparison
Price
availability of a lot of cars
Quality Information
Credibility, aesthetics/layout/site design, navigation, search options
Information
price
Ability to sort and filter by many sub categories.
number of cars/ brands/infors
quality
price
price
Objectivity and independence from manufacturers and dealers
Statistic Value
Total Responses 22

25. 25
Appendix C: SPSS Results
C.1. Cross Tabulation
C.1.1
Q4. Have you ever heard of an online Fuel
Efficient vehicle website?
Yes Maybe No Total
Q5. What does Fuel
Efficient vehicles mean to
you?
21-29mpg 2 0 0 2
30-39mpg 1 0 2 3
>40mpg 1 1 6 8
Total 4 1 8 13
C.1.2
Q20. Would you consider purchasing a fuel
efficient vehicle that gets combined city &
highway at or above 30mpg?
Yes Maybe No Total
Q14.Howconfidentareyouin
usingourwebsite.
Strongly Disagree 1 0 0 1
Disagree 1 1 0 2
Somewhat Disagree 1 1 0 2
Neither Agree nor
Disagree 2 1 0 3
Somewhat Agree 1 0 0 1
Agree 1 1 0 2
Strongly Agree 3 0 0 3
Total 10 4 0 14
C.2: Regression
Model Summary
b
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate Durbin-Watson
1 0.859
a
0.738 0.659 0.274 1.892
a. Predictors: (Constant), Q14, Q7, Q8
b. Dependent Variable: Q20
ANOVA
b
Model Sum of Squares df Mean Square F Sig.
1 Regression 2.109 3 0.703 9.389 0.003
a
Residual 0.749 10 0.075
Total 2.857 13

26. 26
Model Summary
b
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate Durbin-Watson
1 0.859
a
0.738 0.659 0.274 1.892
a. Predictors: (Constant), Q14, Q7, Q8
b. Dependent Variable: Q20
C.3: Factor Analysis
C.3.1
Initial Variance Explained Extraction Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative %
1 2.592 64.804 64.804 2.592 64.804 64.804
2 1.077 26.932 91.736 1.077 26.932 91.736
3 0.245 6.129 97.865
4 0.085 2.135 100
C.3.2

27. 27
C.4: Cluster Analysis

28. 28
Appendix D: Online Auto Competitors
1. www.zibe.com
2. www.lotpro.com
3. www.carsforsale.com
4. www.cargurus.com
5. www.carsales.com.au
6. www.ooyyo.com
7. www.zautos.com
8. www.carsdirect.com

29. 29
Appendix E: Ecarmatch Brochure