What major demographic developments and trends pose opportunities or threats to firms doing business in this product category?
Cutter Automotive can expect the following demographic changes to affect them (Ferron J)
Reduction in number of customers who buy on impulse
The customer base is decreasingly responsive to novelty , change and variety
The customer of the present generation is looking for quality , durability and appropriateness
There is an increased trade off between time and convenience to get a good buy.
The customer base is looking for the best bargain and is not loyal like the earlier generations
There is noticed increased loyalty to brands but not over all the products of that brand.
The generation of today is spending more time and money at home
There is noticed an increased focus on purchases with the future in mind.
The customer is also information savvy and can be expected to know the in and out of the products and offers.
The above list of changes can be an opportunity or a threat to the firm depending on the decisions that it implements. The firm can tailor its future business plan to take into account the changing mindset of the customer and make the shift in demographics an opportunity not a threat. The customer of the future is looking for the best bargain and is working more often than not on a budget.
The families of tomorrow are also 2 or more car families and if the dealership can convert sale into loyalty, the benefits could accrue in the form of future business. Due to the advent of the information age, the dealer can no longer rely on smooth talking sales personnel but on delivery of facts and offers. The dealership also needs to keep in mind the increase in online booking especially since the cars are mass made.
What broad cultural or sub cultural patterns affect the public’s attitude towards the firms and/or products of the firms doing business in this product category?
There exists a general perception amongst the public that car dealerships can be equated to words like “fleecing”. There also exists a perception like the dealership sells old cars made to look like new, over charges for accessories, the discounts advertised are not really discounts; customer is leeched if not careful. In a study conducted by HarrisInteractive for a project entitled Automotive Retailing today in 2004 , it was found that negative perceptions about what it is like to buy a car from a dealership is very different from actual experiences . These are sentiments handed down from generation to generation or person to person.
A sample few may have had a bad experience or the dealership attitude may have been in the projected negative mould, and this has established itself as the image associated with a car dealership. This perhaps stems from the time when manufacturers were few , the car dealer was the all knowing and important person in control of sales , there was a monopoly of sorts and the product was an expensive investment.
This situation may have given rise to the advice “ Be careful while buying a car from the dealership , they will try to fleece you”. The study also found that people did not trust car dealerships in general but trusted “their” dealership, people held the perception that buying a car from the dealer is always a bad experience but personally never had one , women are not treated as well as men in an auto dealership.
Ferron , J., an
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