A well-known brand of car can bring significant value to the world of automobiles. The price people expect to pay for identical vehicles can be up to $4,000, according to the car’s manufacturer. In the case of mass-market vehicles, brands determine what products buyers are looking at purchasing. Additionally, top brands make their mark on all models of cars that is part of the company. It’s not surprising that the majority of automakers consider positioning and development an important aspect of their marketing plans. However, despite the emotional attention to their importance, automobile brands are not well-understood. What makes car brands offer so much value in a market that is clearly driven by product? What are the ways brands can increase their worth? What is the reason why their value can increase or decrease in time?
Due to the significant importance that branding design and positioning play in a variety of automotive manufacturers’ business strategies and strategies, we conducted a thorough analysis and research to better know how consumers view automobile brands. Our analysis employs traditional statistical methods to distill the various brand image attributes (drawn in Allison-Fisher International LLC surveys of consumers of cars) into a limited number of key factors which offer valuable insight into the perceptions of consumers about brands. (See “Research Methodology” at the end of this article)
Our research has shown that the majority of consumers possess a basic but sophisticated understanding of what makes car brands different. In spite of automakers’ attempts to distinguish their brands based on the basis of their lifestyle or emotional imagery, consumers assess brands on the basis of their reputations for quality of their products in relation to the total cost of ownership. Their perceptions of brands reflect their experience, both directly and indirectly, with the products that make up the brands.
They aren’t completely accurate. Certain brands’ reputations are higher or aren’t up to the mark of evident product features. But generally the beliefs of consumers are reliable, stable and generally insensitive to manipulation. In contrast to the case in other consumer goods where equity is generated by advertising, perceptions of brands in the automotive sector are primarily influenced by constant and continuous changes to the product portfolio that is used to create them.
In this overall conclusion we were able discover five key concepts that are essential in understanding how and in what way, manufacturers can increase and enhance the brand’s value.
1. The vast majority of the differences in how consumers evaluate the different brands in question can be explained by their performance based on two holistic indicators that are: cost and product quality.
In the past, car companies have been trying to gauge their brands using a wide number of attributes in the image and hope to gain more insights regarding the differentiation of their brands. But, the perceptions of consumers about the brand’s image are generally similar across various metrics of value. For instance, people think that companies whose brands are known for prestige and elegance tend to create vehicles that are superior in many other areas like handling, ride as well as safety and reliability. In reality, a company’s rating on one aspect tends to be highly connected to its score on a different attribute that the scores can be taken together to form a measure of a vehicle line’s ability to produce top products.
Consumers also have an advanced knowledge of the cost of products. They are aware that cars differ not just in the purchase price at the beginning however, they also differ in the expected maintenance and operating expenses and their resale value. Together, these various kinds of expenses affect the overall cost for consumers over the life of the period of ownership. Similar to the quality of product dimension, the many factors that determine the expected costs of ownership for a particular brand can be incorporated into a single measurement of the cost of a product.
These two measures that are holistic of product quality and price of ownership are responsible for 90 percent of the variation in the way consumers view automobile brands. (See Exhibit 1.) In reality the two measurements are sufficient to be able to gauge the public’s perception of a brand with very high levels of accuracy.
The remaining variance in perceptions of consumers, about 50% (or 5-percent) of it is due to particular aspects such as “sporty.” These secondary attributes aren’t highly associated with other attributes and can’t be included in the overall evaluation of the quality of a product. There are a couple of extreme cases (for instance, BMW, whose reputation is based in large part on its athleticism) Most brands are found to be fairly undifferentiated based on these secondary characteristics.
2. Consumers aren’t just beautifully simple in their views of automobile brands, but they are also extremely sensible too.
For the average consumer buying a brand new car is the second most important thing to a home purchase in the amount of purchase, the duration of ownership and the ability to reinforce and convey the self-esteem of an individual. Thus, people are spending a significant amount of time considering their choices. Alongside their personal direct experience, they look at various sources, from the personal reports of family members and friends as well as independent reviews from organizations, magazines as well as government agencies to manufacturers’ marketing communications, which include catalogues, newspapers and owner-sponsored events.
It’s true that certain brands’ reputations, especially those in the mass market segment do not keep up with actual changes to the products. However, in general, consumers are well-informed and their opinions are a true reflection of the performance of the products that form the physical embodiments of those brands. For instance, the cost of ownership measure of the brand’s reputation is strongly associated with the actual costs of ownership. Additionally, the perceptions of consumers of a brand’s image in terms of quality or reliability and quality (which are essential components of the overall product excellence measure) are strongly connected to the actual reliability of its vehicles.
3. The magnitude of the product’s quality and the low costs of ownership determine the brand’s worth in the market.
The majority of consumers are aware that, generally speaking, higher quality products are more expensive. The consumer chooses an automobile segment based on the quality of its attributes (cost to own or superiority) they are more enthused about. In the particular segment of choice the brands that offer higher levels of both attributes will provide greater value to consumers.