Lifestyle and Benefits Analysis in the Automobile Industry - Research Proposal Example

MARKETING RESEARCH PROPOSAL LIFESTYLE AND BENEFITS STUDY IN THE AUTOMOBILE INDUSTRY 1.0 Introduction Fastautodealer.com is an online car dealer. It has dealership agreements with selected major automobile manufacturing companies. Established in 1995, it currently sells well over 100,000 new cars on its websites every year. It has the fifth largest market share in the sector. In recent months however, the company has faced stiff competition, resulting in sluggish sales. It has also observed negative changes in the behavior of its customers. These developments are adversely affecting its market position. Fastautodealer.com is however bent not only on maintaining its present market position, but more importantly to increase its rankings in market share. To achieve its objectives, the company has decided to conduct a benefit and lifestyle studies with the view to identifying market segments where the emerging problems are more pronounced. It is the belief of the company that it shall be better placed to customize its market offerings more effectively if such information is gathered. This belief is founded on the observation that the drop in sales is not uniformly distributed geographically and also demographically across its present customers. It has already amassed a huge database on these parameters that can be drilled down to establish possible relationships. However, the company knows little about other aspects of the lifestyle of its customers. Sheth et. al. (1999) have pointed out that differences in lifestyles result in different customer behaviors. It is the intention of the fastautobroker.com to deepen its understanding of its customer’s lifestyles, so that it can better predict their behaviors and use that knowledge in better serving them. Quite apart from the benefits indirectly given to customers by car manufacturers, the company also provides an array of benefits to people who purchase cars directly from its website. Some of these benefits include cheap and flexible financing schemes, free delivery of purchased cars to customers’ homes, online facilitation of insurance coverage, warranty coverage, superior information and search facilities among others. Lamb et. al. (2000) have pointed out that sometimes some of the attributes and benefits considered as important to customers by marketers may not be so in reality. The work of Shruptrine (1995) was cited as a typical example. In that study, Shruptrine established that automobile warranty coverage was the least important factor customers consider when purchasing a car. This study gives fastautobroker.com good grounds to re-examine the benefits it doles out to its customers. Such an undertaking would enable the company establish which of the benefits are appreciated and accepted by its customers and those which are not. This has implications for its marketing spends for these reasons. It does not make marketing sense to spend resources on benefits that customers can best do without. Not only is such a practice a waste of resources but the same resources could have been better applied in other ways to create greater value to the customer. There is no way a company can find this out unless it makes a deliberate effort to do so. A study such as this provides that avenue. It is the intention of the fastautodealer.com to discover through this study the extent to which its benefits influence purchasing behaviors and choices among the products and brands. Lifestyles of customers are hardly static. Thus, the company also wants to find out how changes in its customers’ lifestyles are influencing their purchasing behavior. Furthermore, it hopes to leverage the knowledge it shall gain from the study in devising more effective strategies, deepen its relationship with customers, and increase its sales and overall profitability. 2.0 Research Objectives The main objective of the study is to find out the extent to which sale of cars on its websites is influenced by customers’ lifestyles and also benefits offered by the company to them. Specifically, the company shall measure (i) which of the benefits affect sales the most and (ii) the extent to which certain lifestyle changes of customers are affecting sales of the company generally and also with respect to individual products and brands. Research Methodology 3.1 Research methods Even though Fastautobroker.com has been in existence for well over ten years, this is the first time studies of this kind are being carried out. The study therefore shall employ an unstructured segmentation approach in determining the importance of the variables that influence sales. This particular study shall be a baseline one , upon which future studies of this kind shall rest. For this study, it shall use the following basis to establish segments that exist in the market it currently serves: 1. Benefits ( cheap and flexible financing schemes, free home delivery of purchased cars, freebies such a television, computer, etc given out with purchased cars, redeemable coupons for other items of interest , etc) 2. Lifestyles ( customer’s interests, activities, opinions, needs and wants) In addition, the researcher shall assemble data on demographic variables such as age, occupation, stage in the family cycle, etc). Most of these data sets under this category are already available. They shall be analyzed to draw commonalities and also be related to data variables collected. Furthermore, data on media usage variables such as television viewing habits, radio listening habits, and magazine and newspaper readerships shall be collected as part of the customer’s lifestyle studies. The latter data shall help the company’s promotional and marketing communication efforts. 3.2 Sampling procedures A randomized sample size shall be selected from the company’s database for the survey. In doing so, geographical representations shall be factored in proportionally. For example, if 50 percent of car buyers from fastautodealer.com came from a particular region or country, half of the sample size shall be drawn from this particular population. 3.3 Data Collection A questionnaire shall be developed that incorporates questions on the aforementioned factors that influences sale of cars. The questionnaire shall be administered through an online survey and also centrally administered telephone interviews (CATI). The two approaches are to complement one another, so that customers that cannot be reached online shall have the option of answering the questionnaire from a telephone. For the former, questionnaire templates provided by companies such as www.zoomerang.com (markettools.com) or www.questionpro.com shall be used. A research agency with CATI facility shall be assigned the latter component of the study for a fee. 4.0 Data Analysis Analytical procedures for market segmentation research based on lifestyles and customers’ benefits as outlined by McDaniel and Gates (1999) shall be used. Using Cluster analysis software, cluster profiles and graphs shall be developed for fastautodealer.com. 5.0 Time schedule The study shall be scheduled as follows: 1. Secondary desk research 1-3 days 2. Interview with fastautodealer.com’s management 1 day 3. Research proposal preparation 1-3 days 4. Questionnaire development 1 day 5. Pre-testing questionnaire 1 day 6. Online survey administration 1 day 7. CATI-mediated survey 1 day 8. Data preparation and analysis 1 day 9. Presentation of draft report 1 day 10. Presentation of the final report 1 day REFERENCES 1. Lamb, C.W., Hair, J.F. and Mc Daniel,C. (2000). Marketing, 5th Edition, South-Western College Publishing, Ohio, USA. 2. McDaniel, C. and Gates, R. (1999). Contemporary Marketing Research, 4th Edition, South-Western College Publishing, Ohio, USA. 3. Sheth, J.N. Mittal, B. and Newmann, B.I. (1999). Customer Behaviour and beyond, The Dryden Press, USA. Read More