Automotive OEMs have a plethora of services and related products to offer to consumers; however, identifying customer preferences at a granular level is essential to becoming a preferred brand in the marketplace.
Automotive OEM Market Development
Traditionally, automakers have catered to the needs and desires of consumers within geographical markets, so much so that countries are known by the vehicles that people own. For example, SUVs and muscle cars are associated with the US, saloon cars are associated with the EU, and Kei cars are famous in Japan.
Strong geographical associations provide many cues to OEMs planning a market’s next vehicle. However, a large portion of the automotive industry soon will be driven by a younger and more technically savvy generation. Potentially, geographical associations may not hold true going forward as usage becomes uniquely personalised.
New Approach for New Users
Analysing where opportunities lie requires a more granular view of markets. Automotive OEMs should focus on the following to unlock new micro segments.
Automotive OEMs should break larger geographies into smaller segments based primarily on population density, economic and infrastructure development, and disposable incomes. Across these micro segments, and consumer preferences, the viability and feasibility of new business models will strongly differ.
In megacities, such as Mumbai and London, car ownership is already becoming a burden for many due to congestion, lack of parking, and traffic jams. Contrastingly, in rural areas, such as Utah or Nevada in the United States, private-car usage is the preferred means of transportation. Such granular segments will become the markers for mobility behaviour, overtaking the market’s traditional, larger geographic perspective.
Persona-based market development
Automotive OEMs should define personas based on users’ attitudes, openness to various mobility options, and their ability to use them. In addition to geographical segmentation, personas (or user groups) should include such distinguishing features as age and environmental settings.
Users could be mapped into one of the following groups:
- Digital Natives – This group is the significant driving force for new, sustainable mobility solutions.
- Technology Friendly – This group leans towards traditional vehicle usage and is slower to adopt new mobility solutions.
The percentage of people in each user group will differentiate within each granular segment. However, the ratio will trend toward Digital Natives with the passage of time.
To manage disruptors within a changing world, the automotive industry needs a clearer market vision. A granular, persona-based business model is vital for automakers designing strategies that fit the unique characteristics of a market’s geography and its consumers.