Positioning Research in Automotive Industries

What is our position in the market? Where are we now? Where do we want to be? What are feasible positions for us? These are questions asked daily by companies all over the world, regarding both company and individual brands. This article will describe which issues to take into account when finding out what your position is now and what you are able to become in the future.

When (re)positioning e.g. a new model, a number of steps have to be taken in the Strategic Decision Model. These steps are respectively:

1. Understand your customer
2. Establish your positioning
3. Communicate your strategy

Understand your customer
When purchasing a car, car buyers look for the drug that offers most value to them. We, as researchers, need to trace what it is that adds value to the product for the car buyer, and why. Added value can be found in several things:

product features (fuel economy, safety, price, engine size);
product concepts (a certain combination of product features, and of related benefits);
information sources (web sites, information hot-lines, brochures, car dealers, advertisements);
intangible characteristics (brand image, corporate image).

To understand what adds value we need to learn about the current situation first: how do the car buyers perceive brands, concepts and features; what models do they currently own, in which situations do they use their car; where do they get their information? Secondly, we have to know what brands, concepts and features are important and what benefits the car buyer can get from owning a car with these characteristics. Also, what are the car buyer's expectations regarding the price of the car, and will they get a good trade-in price for their current car? Finally, we want to know in what way these product features and their benefits fit in the car buyer's values and goals in life.

The model below shows how these aspects are related to each other and, eventually, affect profiling and positioning issues.


Figure 1: The positioning model

Establish your positioning

When doing positioning research, there are a number of questions you want answered:

Who do we target?
How do we differentiate ourselves from our competition?
How should we approach the car buyers?

These questions interact with each other, so when doing research to answer the questions, all elements should be present.

When determining the positioning, we are looking for groups of car buyers with the highest potential for the model in question. Finding out who these car buyers are can be accomplished in several ways, and should be done step-by-step:

(1a) First of all, desk research is conducted to inventory the 'players involved', technical pros and cons of the model, competition, etc.

(1b) Then, qualitative research (in-depth interviews, semi-structured interviews) is conducted to identify the purchasing process, considerations, and arguments and to elicit attributes of the models involved. Also, laddering is applied to identify the link between the car features and related benefits and personal goals.

(2a) Third, quantitative positioning research is initiated: structured interviews including Choice-Based Conjoint to identify concept sensitivity; Structured Open Association Pattern technique to validate the links between car features and benefits / goals; perceptual mapping to identify strengths and weaknesses of the competitive field and to identify opportunities. Measurement should be per individual, enabling the identification of groups showing the most potential. Since for each individual you then will have a unique data set including all variables regarding that individual, the sensitivities to car features and links between features and benefits / goals can be linked to and explained by all the other variables in the model. And all the other variables can be used to optimise the overlapping strategic marketing decisions.

(2b) Qualitative research: concept testing and tone-of-voice research (in-depth interviews or focus groups).
Communicate your strategy

The final step is to communicate the strategy you have formed. By combining the elements you have gathered in the previous steps of the process, you can create a (or several) communication message(s) which is appealing to the car buyers you want to reach. By using actual statements of car buyers (mentioned by them during the interviews) you will be even more appealing, since you 'speak their language'. Of course, a condition for this is that you have conducted interviews in which 'open ends' were included.

(3) Just before the positioning strategy is communicated, the communication is fine- tuned: ad testing, testing wording, etc. (qualitative).
Concluding ...

There are three steps you need to take to come to a structured way of defining your positioning:
Get an understanding of your customer: who are the customers, what do they want, how do they perceive the market and your product in particular?
Establish your positioning based on the understanding of your customer: is there a specific group that is interested in your product? Who are they? What are the differences between them and those that are not interested? How can you reach them?
Communicate your strategy: combine all relevant information you gathered in the first two steps of the process, and use it to create a communication message that is both appealing and effective.

Developing your positioning strategy by following these steps means taking the time to set up a proper survey. It is important to prepare well in the first phases of the survey, in order to get good quality data. Conducting a survey without preparing well will result in data of less quality, resulting in a positioning strategy, which may not be focussed on the best issues. That in turn will make the positioning less effective, resulting in lower market shares.