Study: Laser Marketing More Effective in Reaching Used-Car Shoppers

By Richard Greene, AR NewsMagazine Editor
November 12, 2007

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LAS VEGAS — To hit the bull's eye when it comes to marketing to used-car shoppers, R.L. Polk's Lonnie Miller strongly urges that automakers and dealerships alike put down their shotgun and pick up a rifle instead.

Rather than blasting potential used-car buyers en masse and blindly hoping that shoppers will receive their marketing messages and respond by showing up at the store and buying a car, Miller said the more appropriate approach is to know your specific target audiences and selectively market to each with messages that will appeal to their particular needs.

At the recently held National Remarketing Conference, Miller, director of industry analysis for R.L. Polk & Co., presented findings from a major used-vehicle research study. According to Miller, Polk interviewed 3,200 used- and new-car buyers in September who had purchased a vehicle within the last 12 months and then compiled the results.

The study did explore comparisons between new- and used-car shoppers, but the bulk of the study focused on the differences among used buyers and what those distinctions might mean to market planners.

"In general, when contrasting new and used buyers, used buyers tend to be less satisfied with the shopping experience, are less active on the Internet in researching and shopping for the vehicle, visit more locations and consider more models before finalizing their purchase, and they're less loyal to a brand or a given model," Miller explained.

"This means you have to work a lot harder to keep those buyers if you are really trying to push the used-vehicle business," he added.

When it came to identifying characteristics, attitudes and attributes of used-car shoppers, Miller said the study surfaced four unique groups of buyers who approach the market differently, purchase distinct vehicles and respond to marketing campaigns that are relevant to them.

The buyers fell into four categories, Miller said — budget conscious/entry-level buyers, business/do-it-yourself buyers, domestic "premium aspirers," and luxury import buyers. The largest group was the budget conscious/entry-level buyers at 31 percent.

According to the study, domestic "premium aspirers" tend to purchase Cadillacs, Chevrolets or Jeeps that are on average 2.7 years old; luxury import buyers purchase Acuras, Audis, BMWs, Toyotas, VWs or Mercedes-Benz vehicles that are on average 3.6 years old; business/DIYers buy Dodge, Mazda and Toyota models that are three years old; and budget-conscious/entry-level buyers shop for Dodge and Pontiac models that are on average 3 years old.

People within each group drive their vehicles for different reasons, the study showed. The budget-conscious/entry buyers primarily use their vehicles for errands, pleasure, commuting to school or work; business/DIYers use their vehicles primarily for business, family outings and hauling materials for do-it-yourself projects; luxury import buyers drive their units for vacations and to attend to kids' needs; while domestic "premium aspirers" use their vehicles for similar reasons to the general-buying public.

Miller highlighted several key dominant demographics among the four groups. Domestic "premium aspirers" are typically 35 to 44 years old, are high school graduates, work in service or sales and make $75,000 to $99,900 a year. Luxury import buyers are 55 to 64 years old, have graduate degrees, work in management or professional professions and make more than $100,000. Business/DIYers are 45 to 54 years old, have earned a four-year college degree, also work in management and professional positions but earn $35,000 to $49,000. Finally, budget-conscious/entry-level shoppers are 24 or younger, are primarily students who have attained some college credit and are making $50,000 to $74,900.

In determining an appropriate marketing mix, Miller indicated that automakers and dealerships should develop distinctive campaigns for each group that highlight four "Ps"-product, price, place and promotion.

Ads should emphasize messages that appeal to each group, and automakers and dealerships should select the correct medium to deliver that message, Miller said.

"This obviously depends on the resources that are available to you, and I fully understand that sales staffs are under tremendous pressure to keep traffic flow going, keep shoppers engaged and hit their sales targets for the month," he explained.

"Because each group is different, it's best to not use the shotgun approach," Miller pointed out. "The beauty of market segmentation is that it allows you to do rifle and laser targeting.

"Instead of trying to appeal to all audiences at once, figure out your specific potential buyers, their needs and expectations and then develop strategies and campaigns that will attract their attention and get them into the showroom," he concluded. "That's so much more effective and will produce better results in the long run."

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